Many Americans were thrown for a financial loop this year when the coronavirus pandemic hit back in March. Thankfully, the IRS recognized the need to give filers more time to submit their taxes, and so the agency pushed back the normal April 15 filing deadline to July 15, giving taxpayers an extra three months to get their returns in.
If you didn't manage to complete your tax return by July 15, you may have requested an extension. Normally, a tax extension gives you six months from the filing deadline to submit your return, during which time you'll still incur interest and late payment penalties on any unpaid tax debt you have from the previous year, but you'll avoid the costly failure-to-file penalty that applies if you miss the deadline without asking the IRS for more time.
Now because the 2019 tax-filing deadline was moved back to July 15, you might assume that if you got an extension, you have until January 15 to get that return completed. But actually, that six-month period dates back to the original April 15 filing deadline, which means that if you received an extension but haven't yet gotten your return done, you only have another 15 days to knock it out.
How to get your taxes in order quickly
There's no penalty for being late with a tax return if the IRS owes you money. But if you underpaid your taxes in 2019, the longer it takes you to file your return, the more interest and penalties you'll accrue on that bill. Plus, you'll be penalized even more for being late with your return, so if you haven't yet gotten the ball rolling, now's the time to get moving.
To file your 2019 taxes, you'll first need to decide if you're itemizing or taking the standard deduction, because that will determine what paperwork you'll need to complete your return. For the 2019 tax year, the standard deduction is $12,200 for single tax filers, or $24,400 for married couples filing jointly. If you think you can itemize your deductions and arrive at a high enough total to exceed these limits, then itemizing makes sense. Otherwise, you can claim the standard deduction and minimize your documentation.
Either way, to file your taxes, you'll need:
- A copy of your W-2 summarizing your wages and taxes for the year
- All 1099 forms you may have received, including those that summarize income for freelance work, interest income, and dividend income
If you're itemizing, you'll also need:
- Your mortgage interest statement
- Your state and local income tax information
- A total of all charitable donations you made
- A list of business expenses you're eligible to deduct, if applicable
- A list of medical expenses you incurred last year, since you may be able to claim some of your costs on your taxes
Once you have your documentation in order, you'll need to choose the right tax software for filing your return. Filing electronically could help you avoid costly errors on your taxes, so it pays to stay away from a paper return if possible. And if your 2019 income is $69,000 or below, you can file your taxes for free through the IRS.
Don't miss that deadline
Many people had no choice but to postpone their tax filings this year. If you took advantage of a tax extension, now's the time to prioritize that 2019 return. The sooner you complete it, the sooner you'll give yourself one less task to worry about.