With COVID-19 dominating the news and millions of Americans grappling with unemployment, it's easy to ignore the tax return you still haven't filed for 2019. And since the IRS pushed back the filing deadline by three months, there's technically no harm in putting off your taxes since you have until July 15 to both get your return in on time and pay the IRS any amount you might owe. But actually, the sooner you deal with your tax return, the better, and here's why.
1. Your refund could come in handy for immediate needs
If you've lost your job or have seen your income get cut because of COVID-19, you may be entitled to unemployment benefits -- but those benefits may not be enough to replace the paycheck you once collected. Furthermore, while there may be a $1,200 stimulus payment coming your way, if you're struggling financially, that lump sum may not suffice in helping you cover your bills.
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That's why it pays to file your taxes sooner rather than later. If you're due a refund, the IRS will generally send you that money within three weeks of receipt of your electronic return or within six weeks of a paper return. But the longer you wait, the more your money will be delayed.
2. You'll have more time to make a plan for paying a tax bill
At a time like this, the last thing you want is to owe money to the IRS. But if that's the case, the sooner you know about that tax debt, the sooner you can come up with a plan for paying it off. If you're still working, you can try to cut back on some expenses in the coming weeks to scrounge up that cash. If you're not working or working less and you don't have savings, paying that tax bill may not be doable, in which case you can reach out to the IRS and ask to get on an installment agreement.
Either way, you should know that you're allowed to file a tax return and then pay the bill associated with it later. In other words, if you complete your taxes in early May, you're not responsible for paying your tax bill until the new July 15 deadline, so don't think the IRS will come after you right away for that money.
3. Filing your taxes could score you a stimulus check
Finally, completing your 2019 taxes could spell the difference between getting a stimulus payment or not. Eligibility for that payment hinges on having a low enough adjusted gross income (AGI). If your 2018 AGI is too high to collect a stimulus but you earned less money in 2019, getting that tax return in could help you snag that one-time payment.
Right now, a lot of people are hurting emotionally and financially because of COVID-19, and in that scenario, it's easy to let taxes fall by the wayside. But while you may not quite have the patience to tackle a tax return right now, the sooner you get it done, the sooner you may have a refund or stimulus check coming your way, which could serve as a lifeline right about now.
Also, filing your taxes means having one less potentially unpleasant task to worry about. So if you knock out your return this weekend, you may lower your stress load at a time when that's an important thing to do.
