Our Clients Receive Individualized Attention And Advice

It’s Tax Day Again…

On Behalf of | Jul 15, 2020 | Bankruptcy, Debt, Firm News, Tax

Extended Deadline Due to Pandemic

Today is the extended deadline to file federal U.S. income tax returns and state tax returns in Kentucky. You can apply for an extension, but remember to pay your estimated liability since any further extensions apply to filing deadlines only and not to the tax due.

If you pay quarterly estimates, first and second quarter 2020 are also due (extended from April 15 and June 15). Due to the Covid-19 pandemic, if you owe taxes you may need to contact the IRS or the state to set up a payment plan. Typically, you can set up a monthly payment plan over time or do an “offer in compromise” to pay a discounted lump sum. Either way, communication with the taxing authorities is critical if you are in financial distress and cannot pay current liabilities.

If you are experiencing unemployment or underemployment due to the current pandemic, then you need to communicate the circumstances of your current financial hardship. You should communicate directly with the taxing authorities and they can advise you of best workout option for you. Remember, as of right now, the extra $600 unemployment benefits end this month.

Taxes and Bankruptcy

It is also important to note that very recent taxes are not dischargeable in a bankruptcy proceeding. Therefore, filing a chapter 7 bankruptcy will not discharge your 2019 personal income tax liability. If you are currently working or about to go back to work shortly, you may want to consider filing for chapter 13 bankruptcy relief. This payment plan is an opportunity to pay back taxes over a (5) five-year period with applicable interest. If the payment options the IRS and state offer are not long enough, then chapter 13 bankruptcy could be a viable option for you.

About DelCotto Law Group

DelCotto Law Group is Kentucky’s asset protection law firm known for its commitment to the lifetime success of its clients. With offices located in Lexington, Louisville and Danville, DLG serves Kentuckians with complicated financial matters, especially in the areas of bankruptcy and complex litigation. For more information please call (859) 231-5800, email [email protected] or reach us on our contact page.