Tax Deadline Delayed 90 Days
As part of the government’s efforts to help avoid a recession, Treasury Secretary Steven Mnuchin announced that the tax deadline is pushed back by a full 90 days.
Here’s what this announcement means for taxpayers:
Under normal circumstances, taxes are due by April 15. If tax filers cannot complete their taxes in time, they can request a 6-month extension without getting a failure-to-file penalty. It is easy to get a tax extension, but they don’t get the filer more time to pay any taxes due to the IRS. The extension is only for submitting their returns. Any tax money paid after the 15th is generally subject to penalties and interest.
What Changed?
This year, things have changed. Taxes must still be filed by April 15 unless an extension is requested, as usual; however, the IRS will not be requiring taxpayers to pay their 2019 taxes until July 15. There will also be no penalties or interest for this delayed payment.
Why the change?
The administration believes this move will be a welcome relief for the millions of taxpayers whose income streams have been adversely affected by the COVID-19 outbreak. They are also hopeful that this delay, which will leave an estimated $300 billion in the battered economy, will give it a better chance at recovery.
What if you are expecting a refund?
For tax filers who are anticipating a refund this year, it may not pay to request an extension and file late. An extra pile of cash, no matter how small, can come in handy for those who are out of work. Signing up for direct deposit of refunds can help struggling taxpayers get that much-needed money as quickly as possible.
Federal taxes, but not state taxes.
It’s also important to note that, while the federal government has granted this nationwide extension on tax bills, state taxes remain subject to the deadlines of their governments. In light of the upheaval caused by the coronavirus outbreak, many states are offering extensions.
While the Federal tax deadline is delayed don’t wait until it is too late. Get those taxes filed and get your refund, or enjoy the extra time to pay if you owe. If you liked this post, check out our other MoneySmart Tips.
