Crusader Staff Report
The time has come from Uncle Sam to hear from you.
After a three-month delay, the deadline to file your 2019 taxes is July 15. Originally scheduled for April 15, the deadline was extended to allow Americans more time during the coronavirus pandemic.
The move provided some economic and logistic relief for many taxpayers who were forced to deal with disruptions and uncertainty brought on by lockdowns, school closures and shuttered businesses. However, the new deadline is rapidly approaching.
Taxpayers must file or seek an extension by July 15, the new deadline, or face a penalty. The IRS is expecting about 150 million returns from individuals. As of last count, it had received almost 139 million.
Taxpayers who need more time can request an extension on the IRS website. That will give them until October 15 to file. However, an extension to file does not mean added time to pay. So those planning on filing later should estimate what they owe and make that payment by July 15.
The IRS is willing to set up payment plans or make other arrangements with taxpayers who cannot pay in full. Many of those can be set up online. And the penalty for failure to file will be much more expensive than the failure to pay, says Kathy Pickering, chief tax officer at H&R Block.
The IRS is still processing and issuing refunds, most within 21 days. Those receiving refunds will be paid interest, dating back to April 15, if they file on time. The interest rate is 5 percent per year through June 30. Starting July 1, it drops to 3 percent per year. The interest is compounded daily for refunds. Any refund issued after July 1 will get a blended rate.
Taxpayers can file or pay taxes online. The IRS urges taxpayers to use electronic options to support social distancing and speed the processing of returns, refunds or payments. The agency is still working its way through a backlog of mail that built up during its closure in response to the pandemic.
Accountants and tax preparation services say they have a variety of means to help people prepare their taxes without meeting face to face.
Taxpayers who make estimated quarterly tax payments have until July 15 to make the payments for the first and second quarter. Those were originally due on April 15 and June 15, respectively.
There are a host of other tax deadlines linked to July 15. Visit the IRS website or reach out to a tax professional for answers to specific questions.
One item worth noting is that July 15 is also the deadline to claim a refund for 2016 tax returns.
An estimated $1.5 billion refunds for 2016 are sitting unclaimed because people failed to file tax returns. The law provides a three-year window of opportunity to claim a refund. But if taxpayers do not file a return within that time, the money becomes property of the Treasury. There is no penalty to file a later return if a refund is due.
Now is also a good time to check in with a tax professional if you have had a major shift in income, employment or other tax situations in 2020. With all the changes stemming from the COVID-19 pandemic, there may be need for added help when it comes to taxes.
In a news release, the agency reminded taxpayers that they can request an automatic extension of time to file until October. There are also payment plans and other options available for those with financial concerns.
“The IRS understands that those affected by the coronavirus may not be able to pay their balances in full by July 15, but we have many payment options to help taxpayers,” IRS Commissioner Chuck Rettig told the Associated Press. “These easy-to-use payment options are available on IRS.gov, and most can be done automatically without reaching out to an IRS representative.”
The federal government in March pushed back the April 15 Tax Day in response to growing concerns over the economic impact of the coronavirus pandemic. Many state governments also followed suit, but the IRS reminded taxpayers to check with their state agencies for the latest information about state filing deadlines.
When the deadline was pushed back, Treasury Secretary Steve Mnuchin said the payment delay could provide $300 billion in temporary support to the economy by giving households and businesses the ability to use money they would have paid to the IRS as financial support to meet other needs during the economic emergency created by the efforts to contain the coronavirus.
