What You Need to Know About the New Tax Deadline

What You Need to Know About the New Tax Deadline

in Tax Info, Tax News
What You Need to Know About the New Tax Deadline

Tax Day always falls on or shortly after April 15– but not this year. Last month, Treasury Secretary Steven Mnuchin announced that the federal tax deadline for individuals and businesses would be moved to July 15 due to the coronavirus pandemic. This three month tax extension allows American taxpayers additional time to deal with their taxes during this challenging time in our history.

Details on the New Tax Deadline

The movement of the tax deadline was made possible by President Donald Trump’s Emergency Declaration. President Trump’s Emergency Declaration, issued on March 13, instructed the Secretary of the Treasury, “to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency, as appropriate.” Following this emergency declaration, the Treasury Department and the Internal Revenue Service announced that individuals and businesses would have until July 15 to file their federal tax returns and pay any tax due. They also announced that no late-filing penalty, late-payment penalty, or interest would be due on taxes filed and paid by the new deadline.

More recently, on April 9, the IRS and the Treasury Department announced that this tax relief would be extended to more returns, IRS actions, and tax payments. Their announcement stated that, generally, the new tax deadline would now also apply to any taxpayer that has a filing or payment deadline that falls on or after April 1, 2020 and before July 15, 2020. This includes individuals, trusts, estates, and corporations who may have had a previous filing or payment deadline that fell within this timeframe.

What to Do Now Due to the New Tax Deadline

Tax Day may now be on July 15, but there are still some things you should consider right now to make sure you’re prepared to have your taxes (and your refund) in order before tax day.

File Soon if You’re Expecting a Refund

While the tax filing deadline is now extended to July 15, it may not be in your best interest to wait to file if you’re expecting a tax refund this year. If you’re owed a refund, you’ll only receive it once your income tax return is filed. Additionally, it’s possible that the coronavirus pandemic could cause returns and refunds to be processed more slowly. So to ensure you receive your tax refund as quickly as possible, file as quickly as possible. We recommend that you also file electronically and opt for direct deposit if you’d like to receive your return more quickly, as this is generally the fastest method for receiving a refund.

Don’t Wait to Do Your Taxes if You Think You Owe

If you think you’ll owe taxes this year, it’s best to not put off preparing your taxes. While the three month filing extension could provide some much needed breathing room for tax filers who do owe taxes, it’s wise to figure out what you owe well before the deadline. This can give you valuable time to plan for how you’ll pay your tax bill before July 15.

Remember Your State Tax Return

The federal tax due date has been extended to July 15. However, state tax deadlines can vary on a state-by-state basis. Some states have extended their tax deadlines to July 15, while others have not. Be sure to check the current tax deadline in your state to make sure your state return is filed on time and your state income taxes are paid on time.

Think of Your Tax Preparer’s Timeline

Like all Americans, tax professionals are dealing with changes and stresses brought on by the coronavirus. Many tax preparers may be adjusting to a new routine working from home, and they may need extra time to ensure their clients’ state and federal income tax returns are prepared accurately and securely. Additionally, tax preparers may need extra time to figure out how the last-minute tax filing changes could affect their clients’ returns and how the IRS may be receiving and processing returns this tax season. So, with that said, be patient with your tax preparer at this time and remember to give them ample time to prepare your return before the new filing deadline.

Final Thoughts on the New Tax Deadline and COVID-19

The new tax deadline has offered much needed tax relief to many American taxpayers who need more time to deal with their taxes during the coronavirus. But still, we know that there may be many Americans who will find themselves dealing with IRS or state tax issues during this challenging time. If you have tax problems that require resolution, please note that Tax Defense Partners is still operational during the coronavirus outbreak. If you need assistance with your IRS or state tax issues, reach out to Tax Defense Partners today. Our team of dedicated licensed CPAs, IRS Enrolled Agents, and tax attorneys can help you reach a permanent tax resolution, while ensuring you pay the lowest amount of taxes allowed by law.