Earlier in the week, Treasury Secretary Steven Mnuchin announced that the deadline for paying 2019 tax bills was being pushed back three months to July 15. Today, he announced that taxpayers are getting more time to submit their federal tax returns as well, as the filing deadline itself is being moved to July 15.
That's good news for filers who have too much on their minds right now to gather paperwork, scramble to find receipts, and concentrate on taxes at a time when their incomes are dropping, their kids' schools are closed, and health concerns are preying on their minds.
Should you wait until July to file your taxes?
Getting more time to pay your tax bill could be a lifeline if your income is sluggish right now and you're worrying about making ends meet. But if you think you're due a refund from the IRS, then waiting until July to submit your return is a bad idea. In fact, if you're sure you're owed money, you should actually file as soon as possible to get that cash back into your pocket sooner.
How do you know if you're due a refund if you haven't tackled your return? Well, you don't, but you can use last year's taxes as a benchmark. If your total income (including earnings from a side job or investment gains) has largely stayed the same, you never adjusted your withholding one way or another, and you got a sizable refund in 2019, then there's a decent chance you'll be due some amount this year. If that's the case, you really shouldn't hesitate to get your hands on that money.
The IRS typically issues refunds for returns that are filed electronically within three weeks. For paper returns, you're looking at about double the turnaround. You can expedite your refund even more by signing up for direct deposit. Just make sure to enter the correct bank account details; if you put in the wrong account or routing number, you'll risk having your refund delayed.
What if you can't finish your taxes by July?
If you don't expect to be able to complete your tax return by July 15, you can still request an extension that will give you until Oct. 15 to get it done. That option is on the table every year, but keep in mind that extensions don't give you more time to pay a tax bill; they only give you more time to submit an actual return. As such, if you owe the IRS money this year, you must pay that sum by July 15 to avoid penalties and interest on that debt. If you can't pay your total bill right away, you can see about getting on an installment plan.
What about state taxes?
Some states are changing their respective filing deadlines due to the COVID-19 crisis. California, for example, is giving filers until July 15 to get their taxes in and paid.
The impact of COVID-19 has been astounding thus far. We may see even more adjustments on the tax side if the crisis continues to batter the economy as it's done thus far.