Filing and Paying Taxes During COVID-19 – What You Need To Know

On March 21, 2020, the Treasury Department and Internal Revenue Service (IRS) announced that the federal tax filing due date is extended from April 15, 2020, to July 15, 2020. Taxpayers can defer federal income tax payments to July 15, 2020, without any penalties. The Applicable Postponed Payment Amount is up to $1,000,000 regardless of filing status. This extension applies to all taxpayers, including self-employed individuals. 

“Americans should file their tax returns by April 15 because many will receive a refund. Those filing will be able to take advantage of their refunds sooner,” said Treasury Secretary Steven T. Mnuchin. We encourage you to file returns as soon as possible, but this filling and payment relief is automatic. Taxpayers don’t need to file any forms or call the IRS to qualify for the deferred deadline date of July 15. 

To keep up with the latest news on filing and paying taxes during COVID-19, please visit IRS.gov

Can You Still File Now?

Yes, you can still file your taxes now. Filing online is the safest option due to social distancing. You can file your taxes online using self-file tax services like Turbo Tax. The IRS offers a multitude of resources for e-filing your taxes. If you make under $69,000 annually, you can go to the IRS website to use their free tax preparation and filing software.

Another option is a curbside drop-off to a trusted certified public accountant (CPA). You can drop off all the necessary paperwork and set up a phone appointment to go over your filing. Ask the CPA, you may even be able to send all your paperwork electronically! From there, you can have your CPA set up your electronic filing and direct deposit. E-sign software like DocuSign will allow you to securely sign the official tax filing documents electronically. 

Will You Get a Refund Now or Later?

The IRS is working hard to get the money back into the pockets of every America who is owed a refund. The expected refund turnaround time is 21 days, but it could be sooner with an electronic file and direct deposit. IRS Commissioner Charles Rettig released the following statement:

“Even with the filing deadline extended, we urge taxpayers who are owed refunds to file as soon as possible and file electronically. Filing electronically with direct deposit is the quickest way to get refunds. Although we are curtailing some operations during this period, the IRS is continuing with mission-critical operations to support the nation, and that includes accepting tax returns and sending refunds. As a federal agency vital to the overall operations of our country, we ask for your personal support, your understanding – and your patience. I’m incredibly proud of our employees as we navigate through numerous different challenges in this very rapidly changing environment.” 

What If I Don’t File By July 15, 2020?

With the economy slowing to a standstill as the coronavirus pandemic continues, we can expect hardship to continue for a bit. You can learn about options for government relief the COVID-19 section of our blog, including this post. If you find yourself in a situation where you are unable to file by the July 15, 2020 deadline, you can request an extension. 

For individual extensions, you need to file Form 4868 with your tax professional or tax software.  If you are a business owner and you need additional time, you must file Form 700. You can use the free file link at the IRS webpage to electronically request a tax-filing extension. To be eligible for the extension, you have to estimate your tax liability and pay any amount due such as penalties. Once you have been approved for the extension, you have until October 15 to file a return. 

Find more information about filing an extension here

Tax Preparations During Coronavirus Pandemic 

Speak with a tax professional about the necessary steps to take during this pandemic to ensure your financial security. If you are due a tax refund, we recommend you file them sooner rather than later. Having those additional funds is worth it to get your taxes done and get money in your hands. If you make $69,000 or less a year, you can file for free with the IRS free file software.

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