What the New Tax Deadline Means for Your Refund, Who It Applies To, and More
April 15th is synonymous with one thing for most Americans: taxes. This day marks the typical deadline to file (and pay) income taxes for the majority of individuals and businesses. But things are a little different this year.
In light of the global outbreak of COVID-19, the IRS recently announced that the deadline for filing 2019 taxes and tax payments has officially been extended to July 15th, 2020. This change marks a 90-day extension to file income taxes.
Of course, the most important thing to know about the deadline change is that individuals and small business owners now have until July 15th to file and pay their taxes. But who does this extension apply to? What does this mean for refunds?
A change like this can spark a lot of questions. That’s why we’re answering some of your most pressing questions about the new tax deadline below.
Who does the new tax deadline apply to?
The new tax deadline applies to all federal income tax returns (and payments) due on April 15th, 2020. It also applies to all types of federal income tax filers: individuals, trusts and estates, corporations and those who pay self-employment tax.
The new tax deadline applies to all federal income tax returns (and payments) due on April 15th, 2020.
Are there any taxes that the new deadline does not apply to?
If you or your business have a filing or payment date other than April 15th, 2020 this extension does not apply to you. The extension also does not apply to payroll and excise taxes or estate and gift taxes. For full details, consult the FAQs on the IRS website.
Do I need to do anything differently to qualify for filing my taxes on the new deadline?
According to the IRS, “taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief.” Because this change impacts the deadline for all federal tax returns due on April 15th, 2020, there’s nothing you need to do to “qualify” for the new deadline. It is automatically applied.
“Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief.”
You may not need to do anything to qualify for the new deadline, but we recommend you make the most of it by using the time to maximize your deductions.
What does this mean for my refund?
The IRS has not indicated that taxpayers should expect delays in refunds. In fact, IRS Commissioner Chuck Rettig “urges taxpayers who are owed refunds to file as soon as possible and file electronically.” Accepting tax returns and issuing refunds is considered “mission-critical” for the IRS and those operations are still up and running at this point in time.
The sooner you file your return the faster you’ll get your refund. Keep in mind that e-Filing and using direct deposit is the quickest route to receiving your refund.
Of course, the sooner you file your return the faster you’ll get your refund. Keep in mind that e-Filing and using direct deposit is the quickest route to receiving your refund.
What if I had a tax payment due April 15th?
If you had a federal income tax payment due on April 15th of this year, breathe easy. You can defer those payments without any penalties or interest to July 15th, 2020 no matter how much you or your business owes. Just like the new deadline, this deferment option is available to all types of taxpayers.
What about estimated tax payments?
Many businesses or self-employed people pay taxes using 4 installments or estimated tax payments. These payment deadlines are typically due April 15th, June 17th, September 16th, and January 15th (of the following year).
While the April 15th deadline has been pushed to July 15th, the June payment date has not been adjusted yet. So the first estimated tax payment for 2020 will be due June 15th, then July 15th, and so on.
What if I still need more time to file?
Just like with the typical tax deadline, taxpayers and businesses still have the option to file for a deadline extension. If you’re an individual taxpayer you’ll need to file using Form 4868. Businesses who need an extension will need to use Form 7004. You will need to file for an extension by July 15th, 2020 to avoid any penalties.
What about state taxes?
It’s important to note that the shift in the federal tax deadline does not automatically carry over to state income tax. While many states have filed similar extensions, deadlines vary by state. For information on revisions to your state’s tax deadline, check out this guide from the Tax Foundation.
“The shift in the federal tax deadline does not automatically carry over to state income tax.”
While the new tax deadline may spur a lot of questions, it’s important to remember that this change is intended to provide relief to taxpayers. Having more time to file and pay your taxes should provide some much-needed relief in a time of economic uncertainty.
As the situation continues to evolve, the best place for up-to-date information on tax deadlines and questions is the IRS website.
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