In response to the COVID-19 pandemic, the U.S. Department of the Treasury has decided to extend the tax deadline for 2020. Tax returns are ordinarily due in April, but in an effort to stimulate the economy and keep the American public safe, this year's tax deadline has been moved back significantly.
When is Tax Day 2020 now?
The short answer is that Tax Day has been moved from April 15, 2020, to July 15, 2020, for the 2019 tax year. In other words, you'll have an extra three months this year to file your 2019 tax return and pay any balance that you owe. Any payment delayed until this time will not accrue any interest or penalties.
The delay also applies to estimated tax payments for the first quarter of 2020, which are ordinarily due in April as well. And, this is an automatic extension -- you don't need to do anything to take advantage. If you need even more time, the usual tax extension until October 15 is still available, but you'll need to fill out a form to get that.
There are a few reasons the Treasury Department decided to do this. For one thing, it temporarily helps ease the financial burden on millions of Americans who owe money. Even more importantly, Americans who rely on a certified public accountant (CPA) or other paid tax preparer might not be able to safely meet with them prior to April 15.
It's worth mentioning that even though the deadline has been moved to July, you can still file your taxes as soon as you're ready. If you are owed a tax refund, the IRS is still processing refunds as scheduled (it takes about 21 days from the time you submit your return). Filing early can also help you avoid identity theft, as only one return can be filed per Social Security number, so filing yours earlier blocks would-be scammers from filing a false return in your name.
What about your state tax return?
Many states have moved their tax deadlines to July 15 as well. However, there's no federal mandate that forces each state to do this, so check with your state's tax authority to determine your state tax deadline for 2020.
What do property owners need to know?
The Treasury Department's action extended the due date for filing and payment of federal income taxes. And as I just mentioned, many states did the same when it comes to state income taxes.
However, the operative word here is income. If you are due to pay another type of tax, assume you still have to pay it unless your state or local government has specifically said otherwise. For example, property taxes are due in California on April 10, and that deadline still applies as of this writing. And in South Carolina, where I live, my vehicle tax bill has a due date of April 30, and that hasn't changed.
What don't we know?
To be clear, there are a few things the new tax deadline could affect that we simply don't know about yet.
For example, contributions to IRAs and health savings accounts (HSAs) for the previous calendar year are typically due on April 15, the tax deadline. In other words, if you haven't yet made your 2019 IRA contributions, the deadline was April 15, 2020. Now that the tax filing deadline has been moved to July 15, the IRA contribution deadline may be extended as well, but the Treasury Department hasn't yet provided guidance.
The bottom line is that this is still a very fluid situation, and details will continue to emerge over the coming days and weeks. However, one thing is for certain -- you now have until July 15 to file your federal income tax return and pay any tax you owe.
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