When the COVID-19 outbreak hit the U.S., the initial shock was enough to send the stock market plummeting into bear market territory and drive millions of workers into unemployment. Realizing that Americans did not have the capacity to deal with taxes at a time when a major crisis was unfolding, the IRS made the wise decision to push back the April 15 tax-filing deadline all the way to July 15. But now that the deadline is only one month away, it's time to get moving on your taxes if you haven't done so already. In fact, the sooner you get your return submitted, the sooner you'll get any refund the IRS owes you. Here are a few tips for tackling your tax return during these very unusual times.
1. Don't assume you can't get help
It may not be safe to cram into your tax preparer's tiny office to review your documentation, but that doesn't mean you have to go it alone on the filing front. Many tax professionals are able to work with clients remotely and have secure online portals that allow you to share paperwork that contains sensitive information. If your tax situation is complex and you feel you need help with your return, contact a tax preparer at once, but don't delay -- the longer you wait, the more you risk getting closed out.
2. Make sure you have all the forms you need
There are different tax forms and records you'll need on hand to get your return done. These include, but may not be limited to:
- Your W-2 listing your employee wages for 2019
- 1099 forms listing your freelance, interest, or investment income
- Your 1098 form showing how much mortgage interest you paid last year, which you'll need if you're itemizing on your tax return
- Copies of medical receipts, if you're itemizing and claiming a medical expense deduction
- Records of charitable contributions, if you're itemizing
Don't wait to gather this information, because if something is missing and you realize it soon, you'll have an opportunity to get your hands on it before your tax return is due. For example, if you find that you're missing a 1099 form from a client you worked for on a freelance basis, you'll have time to reach out and ask that client to issue one.
3. Skip the paper return this year
Despite the ease and convenience of electronic returns, some people are just in the habit of filing taxes on paper. But if you fall into that category and are due a refund, you may want to rethink it.
The IRS stated earlier this year that it was effectively hitting pause on processing physical returns due to the COVID-19 situation, which means that if you send your taxes in by mail, you could end up waiting months for a refund to hit your bank account, or for a refund check to arrive in the mail. A better bet is to file electronically, which will not only get you your refund faster, but also significantly reduce your chances of making an error. Keep in mind that if your income is $69,000 or below, you're entitled to file your taxes electronically for free.
Though you may be dealing with your share of financial and emotional challenges right now due to the COVID-19 crisis, neglecting your taxes could make an already stressful period even harder. Carve out some time to tackle your taxes, especially if you're expecting a refund and could really use the money right now.