With everything going on presently, including people losing their jobs because businesses, like restaurants for instance, have been forced to close to quell the spread of the coronavirus, many are thinking about how to hold onto their money and how they will pay their bills during such an uncertain time. Any other concerns, at this point, seem like added stress.
With that in mind, the government has chosen to extend the upcoming tax deadline from April 15 to July 15. If you heard about that move, it sounds like a much-needed break, but what exactly does this extension mean for taxpayers, and who does it benefit most?
“It’s for individuals, self-employed, businesses, and it’s extending the deadline to file,” said TurboTax CPA and tax expert Lisa Greene-Lewis. “They also announced the extension to pay, so if you owe money, that was also extended to July 15. If you make your payment by July 15, you won’t incur any penalties or interest. So you have until that date to start paying if you owe. If you can’t file by July 15, you need to file an extension for the October deadline. That’s the final extended deadline that we usually always have.”
The decision to extend the tax deadline for everyone, according to Greene-Lewis, is an opportunity to provide relief with so much else going on right now. She said she’s seen the government choose to give tax extensions in the past during natural disasters and says they are good for all. Nevertheless, the certified public accountant encourages people to not wait to file if they can, as the financial benefits could go a long way presently.
“The majority of taxpayers do receive a tax refund.,” she said. “Last tax season, about 72 percent of taxpayers received a tax refund quote for $3,000 and that’s a lot of money that taxpayers could use right now.
That being said, refunds are still set to come relatively quickly. There would be no delays because of the current pandemic.
“The IRS states that they’re still planning to issue nine out of 10 tax refunds within 21 days or less of acceptance if you e-file with direct deposit,” she said.
As for those who may find that they owe this year, as stated, you would have more time to decide how you want to start paying. She says installment agreements with the IRS will still be in place to allow you to fork over what you can within six years. However, you may not have to pay at all if you meet certain criteria when it comes to deductions.
“Once you go online and you start seeing all the credits and deductions you might be eligible for, you might not owe any money,” she said.
If you don’t fall into that category, there is some good news to consider. Other relief options are on the way for those who have had their work situations turned upside down because of the coronavirus.
“Last week they passed the Families First Coronavirus Response Act. It provides paid sick leave, emergency sick leave if you’re impacted by the coronavirus,” she said. “Also, there are some new tax credits in that bill, so self-employed and small businesses, if they were impacted by the coronavirus, say for instance, if you’re self-employed and had to take care of your kid because their school or daycare was closed, there is going to be a credit for self-employed taxpayers.”
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Though all of this won’t be able to alleviate all the concerns people currently have, it is certainly a welcomed reprieve in an already stressful state of affairs. For more information on what this tax deadline change means for you, check out TurboTax’s blog. And if you have a simple tax filing situation, as in you have a W-2 with standard deductions and you have kids, you can obtain free access to TuboTax agents and CPAs to get help completing your taxes until April 4. Take advantage.