On a similar note...
On a similar note...
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March 20 update: The U.S. government is extending the tax-filing deadline to July 15 as well. Taxpayers now have an extra three months to both file and pay their taxes. More details are here.
The U.S. government is giving millions of individuals an extra 90 days to pay their federal tax bills for 2019, in a move to provide taxpayers some relief amid the economic fallout caused by the coronavirus outbreak. Tax returns will still need to be filed with the IRS by April 15.
People and small businesses that file as individuals will be able to defer up to $1 million in taxes owed, Treasury Secretary Steven Mnuchin said at a White House news conference Tuesday. Other categories of small businesses, sole proprietors and corporations can defer up to $10 million.
"All you have to do is file your taxes," Mnuchin said. "You’ll automatically not get charged interest and penalties."
A statement posted by Republicans on the House Ways and Means Committee reiterated what the secretary said: "Taxpayers should file by April 15 as normal and the deferral will be applied automatically."
The Trump administration announced the move as part of a series of steps aimed at easing the economic pain caused by the spread of the coronavirus. Although further details about the deferment aren't yet public, there are a few things taxpayers should know right now.
1. Taxpayers should not wait to file
Even though they now have extra time to pay what they owe, taxpayers should still be gathering paperwork and preparing to file their returns by April 15. Those who are expecting a refund probably should file as quickly as possible, says Chris Whalen, a certified public accountant in Red Bank, New Jersey. The IRS is continuing to process returns and issue refunds.
"Even if [the government] extended for two years, that doesn't matter to me. We want to get those refunds in your pocket to help your family survive financially," he says.
If you are expecting a refund, you're likely to get it faster if you file your return electronically and opt for direct deposit.
2. Check when your state return is due, too
Depending on where you live, you might still have to pay taxes owed to your state by April 15, or on some other date now.
"While the Feds have given an extension to pay, we have yet to get any guidance from states on whether they will piggyback the federal [deadline change]," says Gary DuBoff, a certified public accountant at MBAF in New York.
For example, last week California pushed its deadline to file to make certain payments to June 15 — and that might change again. The American Institute of Certified Public Accountants is keeping a list of the deadline changes by state.
"A few states have already provided some guidance, like California, but it might be a while before we have a consensus, or for that matter, consistency," he says.
3. Be patient with your tax preparer
Tax preparers are dealing with the stresses many Americans are facing in light of the coronavirus. Many are working from home, and now they’re also figuring out how these last-minute changes affect their clients and the mechanics of tax filing.
"We are waiting for additional information from the IRS," DuBoff says.
"We are taking the approach that we should continue to prepare tax returns and better understand what our clients’ liabilities or refunds are. If they are due refunds, there is no reason to wait," he says.