Extended tax deadline Wednesday, local small businesses thankful for extra time
GRANGER, Ind. - Right now that pandemic extension is almost over you have until midnight Wednesday night to get your state and federal income taxes filed and any money you owe paid.
While many have already paid their taxes and received their return already, a local tax expert says the extended deadline tomorrow brings some much-needed relief to small businesses in our area.
For hairdresser and self-employed business owner Jodi Ferenczi, this tax season has been... “it’s definitely a little more complicated.”
Being out of work for months on end and now is just as hard.
“A lot of clients are still a little apprehensive to come in," Ferenczi said.
It makes for a difficult tax season, especially for small businesses like hers who have to pay taxes quarterly.
“It would pretty much impossible to catch yourself up again because of certain clients that don’t want to come in and that is your income so if you don’t have the income to pay for your taxes, it’s a catch 22," she said.
So when the tax deadlines were extended, it was a saving grace.
“Having the extended helps you get those clients that want to come in. Helps you stay caught up or get caught up," she said.
And it helps taxpayers stay away from any penalties.
“It definitely gives you a little bit more of a cushion into where you don’t have to pay the penalties because paying penalties in taxes is pretty detrimental if you’re a small business owner," she said.
“That's just extra money that, you know, people don't have right now," Ryan Fair, a local CPA or tax advisor for Korhorn Financial Group
Fair said the benefits of paying before tomorrow are great.
“You've got to do something. So take action, you need to either file your return by tomorrow or file an extension by tomorrow and then make sure you make your payment due by tomorrow, in order to avoid any delays. Late payment penalties," he said.
And even his job has shifted to focus on cost reduction.
“With the businesses that businesses down for the first part of 2020. You know, we've had to adjust estimates so that, you know, hey, doesn't look like you're gonna have to pay in as much as you did last year. So let's reduce those," he said.
But when it comes to next year's tax season, Ferenczi isn’t too optimistic.
“I feel like things are going to be shut down again," she said. "If you can and able get you a nest egg just for emergency taxes and everything like that.”
The pandemic has touched every part of our lives. Thousands of people have been laid off, thousands of businesses closed and it really affects their bottom line.
“This tax season. There's been lots of hurdles and struggles throughout the year. Obviously, we're in the middle of the pandemic. So cash is tight for most taxpayers. The government has really stepped up and extended these deadlines. So that gave all of these taxpayers that extra three months that would have had balances due back in April now that are doing in July," Fair said.
Three months for businesses to get on their feet, get more customers and be able to pay those taxes.
Fair said that most individuals have paid their taxes already and that this extended deadline is more geared towards small business owners since they pay taxes quarterly and others who owe the government money.
However, there are ways to still save and fair says he’s helping his clients do just that.
“IRA contributions can still be made right now, that will still save you on 2019 taxes. The same thing for health savings accounts, you can still make those contributions until your tax filing deadline. Many small businesses you can still depend on what kind of retirement plan you have, you could still be eligible to make 2019 tax-deductible retirement plan contributions," he said.
Again, the tax deadline is Wednesday, July 15th and if you don’t get them done on time it could cost you more money through penalties.