With fears of COVID-19 taking over most people's existence and changing the way Americans live their lives, it's easy to let something like taxes fall by the wayside. And while the April 15 tax-filing deadline is nearly a month away, there's already talk of extending it in light of the current state of the country.
But even if you do end up getting more time to file your taxes this year, it actually pays to get moving on your return sooner rather than later if you think you'll be due a refund. In today's uncertain times, having that money in your pocket is more important than ever.
How will COVID-19 affect your finances?
Many Americans are already feeling the financial impact of COVID-19. Investment portfolio balances are dropping. The cost of common households goods is increasing as panic shoppers drive up demand. And as school closures grow increasingly widespread, a growing number of working parents will no doubt be forced to take time off from their jobs, possibly without pay, due to a lack of child care. The same holds true for workers whose jobs can't be done remotely, or those who work for small businesses that are already feeling the pain of less foot traffic -- or none at all.
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The point? If you're owed money from the IRS in refund form, the sooner you file your 2019 tax return, the sooner you can expect it to hit your bank account. And that could be a lifeline if your paycheck disappears or gets slashed for a number of weeks, or even months.
Another thing: The IRS is already operating with limited human (and financial) resources. If the agency is forced to cut hours for safety purposes, or shift more workers to at-home arrangements, it could slow down the process of issuing refunds, thereby putting some desperate Americans in a position where they need to wait even longer for their money.
Also, let's not forget that Americans are being advised to stock up on essentials like food, household supplies, and medication as they prepare for what could be many weeks of self-isolation. But doing so requires money -- money those living paycheck to paycheck may not have.
That's why now's a good idea to get your tax return in order. Having extra money in your bank account could help make an otherwise stressful situation just a bit more manageable.
Not only should you aim to finish your tax return quickly, but you should also make sure to file it electronically. Refunds for electronic returns are typically processed in half the time it takes to address paper returns, which means you'll generally get your money much sooner, and if you file electronically, you're less likely to make a mistake on your taxes that delays your refund. And given the need for social distancing today, filing electronically will save you a trip to the post office -- a small but notable benefit given our current reality.
