Tax season 2020 won’t be like any tax season that’s come before – and as a result, there are some essential things to know about filing your tax return during the COVID-19 pandemic. The big thing to discuss is the tax deadline pushback: What does it mean for you?
What Does the Tax Deadline Pushback Mean for Taxpayers?
Here’s some key information: The deadlines to file and pay federal income taxes are extended to July 15, 2020. We’ve compiled some things you should know if you decide to use the July 15 deadline instead of the traditional April 15 deadline:
- Taxpayers who choose to push back their payments until July 15 will not be penalized.
- Taxpayers who choose to push back their payments until July 15 will not be charged interest.
- You do not need to file an extension to file past April 15 this year.
- Extending your filing date will also extend your refund date.
There is also a new deadline for contributing to your IRA that accompanies the change. You have until July 15 to make a 2019 contribution.
You may be wondering if the decision to extend the federal tax deadline will impact your state taxes. Yes, many states are extending their filing deadlines for 2020. However, no change has been made across the board in regards to state deadlines. You’ll need to find out what officials in your specific state have decided.
What If You Can’t File by the New Deadline?
The usual late-payment penalties and interest will apply if you fail to make a tax payment by July 15 of this year. You can, however, file for an extension if you’re concerned that you won’t be able to make July’s deadline. This will push your new filing date to October.
Being granted an extension doesn’t mean you have more time to pay what you owe – you’ll still need to make your tax payments by July 15 of 2020 even if you haven’t finished filing. This is the same policy that is in place every year.
Why Should Taxpayers Still File as Soon as Possible?
The decision to push back the filing deadline for 2020 will help many Americans during what is an unnerving and confusing time. The extended deadline has been implemented to ensure that Americans are not penalized for failing to meet a tax deadline that will land right in the middle of the COVID-19 situation.
Of course, the fact that the COVID-19 tax deadline pushback has been put in place doesn’t necessarily mean that it’s your best option.
The reality is that it’s probably not advisable to wait to file your taxes beyond the standard deadline of April 15 if you don’t anticipate owing a lot of money. Most individuals and businesses will find that simply filing by April 15 will allow them to maintain better organization when doing financial planning for the rest of 2020.
The big reason to file as soon as possible is that you’ll receive your refund much sooner. The funds that you receive from your tax return could be extremely useful going forward – waiting until July 15 to file means that you’re deciding to postpone receiving your tax refund by months.
There’s a simple way to do the math to figure out if waiting to file until the new July 15 deadline would be beneficial for you. Start by taking a look at last year’s refund total. Is it greater than what you think you’ll owe at tax time this year? It’s wise to go ahead and file now if what you’ll get back is greater than what you’ll pay. Someone who made roughly the same income in 2019 as they did in 2018 will almost certainly be better off just filing by April 15.
Get All Your Questions Regarding the COVID-19 Tax Deadline Pushback Answered
It’s likely that you have questions regarding how the new COVID-19 deadline will impact your personal or business taxes specifically. The team at Tax Group Center is staying on top of the latest changes to ensure that our clients can file correctly by the correct deadline. We provide tax preparation services for both individuals and businesses, and we can even help you file electronically to get the quickest turnaround time for your refund possible. What’s more, our tax relief resources are available if you’re concerned that you may not be able to make payments on time this year. It may even be possible to set up a payment plan. Don’t hesitate to reach out today if you need help with your 2020 taxes!