Procrastinators, your day has arrived. As you probably are well aware, the usual deadline for filing one’s taxes — April 15 — was moved up this year to July 15.
So if you still haven’t done your taxes, and you’re wondering what you need to know about Tax Day 2020, here are answers to your top questions.
Why Is Tax Day on July 15?
As you’ve undoubtedly heard, there is currently a global pandemic going on. Over half a million people around the world have died from the coronavirus and millions are sick, and with all the confusion and stress back in the spring, when everybody was learning phrases like social distancing and sheltering in place, the federal government decided to move tax day from April 15 to July 15 — to give people extra time to prepare their taxes.
What if I Haven’t Taken Advantage of That Extra Time?
The good news is that you can always fall back on that old standby and file an extension on your taxes, so you can put off preparing them until October 15.
One important thing to note: The extra time doesn’t mean that you shouldn’t pay taxes that you owe. You should.
I Haven’t Prepared My Taxes and I Don’t Know How Much I Owe. So How Can I Pay My Taxes?
You can guess. Make an estimate and send the money to the Internal Revenue Service.
On its website, the IRS notes, “An extension of time to file your return does not grant you any extension of time to pay your taxes. You should estimate and pay any owed taxes by your regular deadline to help avoid possible penalties.”
If you guess too high, you’ll eventually get the money back as a refund, and if you guess too low, you’ll pay more taxes when you do file the taxes, but you’ll owe less in penalties.
Do You Have Any Tips for Filing an Extension?
Kristine Stevenson Seale, an IRS enrolled agent and the owner of Advocate Financial Coaching in Temple, Texas, has some advice.
“If you have not yet filed your personal income tax return and think you won’t be able to make the extended July 15 deadline, a good option is to file an extension to Oct. 15 by using Form 4868. Businesses file Form 7004,” Seale says.
She also says that you can use the IRS website’s Free File system to file an extension.
Of course, tax preparation software programs will file extensions for you, too. If you plan to use tax preparation software, it would file it for you. So would a tax preparer.
[Read: What’s My Tax Bracket?]
Can I Swing by My Local IRS Office and Get Some Help?
Probably not a good idea, not without calling ahead first. Your local IRS office is likely closed due to the pandemic, with its employees working from home. In fact, even calling may not be such a good idea.
On June 30, 2020, the IRS website stated, “To protect the public and employees, and in compliance with orders of local health authorities around the country, certain IRS services such as live assistance on telephones, processing paper tax returns and responding to correspondence continue to be extremely limited. While some volunteer tax preparation sites are operating at a reduced capacity, most remain closed until further notice.”
The IRS website recommends using electronic options for filing taxes and extensions.
What if I Don’t Have the Money to Pay What I Owe?
“If you cannot pay in full, pay something. Even as little as $50,” Seale says. “With every payment, the balance is reduced, which in turn reduces penalties and interest.”
She adds that you can always request a payment plan by filing Form 9465, which will allow you to take as long as 72 months to pay.
When I Prepare My Taxes and Attempt to File by July 15, Is There Anything Else I Should Be Thinking About?
Now that you ask, yes.
Don’t forget about state taxes. It might be helpful to know that the July 15 deadline only refers to when you need to file your federal taxes. Fortunately, many states are also requiring state taxes to be filed by July 15, but a few states are doing it differently. Idaho, for instance, extended its deadline to June 15, while Iowa, on the other hand, has extended its deadline to July 31.
Self-employed estimated tax date has changed. If you aren’t self-employed, you can skip this part. If you are, you know that typically you would report your estimated tax payment on June 15. Both the April 15 and June 15 dates were extended until July 15. So you should report your estimated tax payments that you typically would have done by April 15 and June 15 by July 15.
You might be able to quickly put more money in your individual retirement account. You have until July 15 to put up to $6,000 (or $7,000 if you’re 50 or older) into an IRA and have that money count for 2019.
[Read: How to File Back Taxes.]
If I Hire a Tax Preparer on July 14, Can He or She Get My Taxes Filed by July 15?
Not likely.
Rafael Alvarez is the CEO of ATAX, a national tax preparation and business services franchise. While on the bright side, you aren’t alone in your procrastination (“There are still millions of individuals and small business owners that have yet to file their taxes,” he says), time is running short.
“We are expecting the next two weeks to be crazy, so if you have questions and want help, it would behoove you to file before the masses to enjoy one-on-one time with a CPA,” Alvarez says.
He adds that making matters more pressure-filled for taxpayers, certified public accountants and tax preparers is that “The stimulus check as well has caused a lot of questions, so we have to factor in the time spent helping taxpayers navigate their finances in that respect.”
Unemployment questions and Paycheck Protection Program questions have also likely taken up a lot of tax preparers’ and accountants’ time.
So if you plan on hiring a professional, you’ll want to try and find one soon. The reality, however, is that most tax preparers at this point will only do your taxes if you agree to file an extension. There’s only so much time in the day.
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Tax Day in July? What to Know About Tax Day 2020 originally appeared on usnews.com
