Thanks to the confusing forms, shifting policies and ever-present threat of an audit, doing your taxes is stressful even under the best of circumstances. Add in the fact that there’s a pandemic unfolding, and it may feel like straight-up chaos.
The financial implications of the coronavirus outbreak seem to change by the hour, affecting everything from the stock market to credit card payments. The 2020 tax season has been impacted, too. The federal government has pushed back Tax Day by 90 days, preparers are adjusting their methods, and some states have moved their own deadlines as well.
Here’s everything you need to know about taxes in the time of the coronavirus.
What happened with the April 15 deadline?
Treasury Secretary Steve Mnuchin announced Friday that the government is extending the federal tax deadline to July 15, noting that “all taxpayers and businesses will have this additional time to file and make payments without interest or penalties.”
Before Mnuchin’s declaration, the IRS had previously extended the payment deadline for individuals (allowing them to defer up to $1 million of what they owed) and corporations (up to $10 million). But that didn’t affect the filing deadline. Now both are postponed to July 15.
So it’s safe for me to keep procrastinating on my taxes?
Theoretically. But if you’re expecting to get a refund, you probably want to file sooner rather than later. This doesn’t have much to do with the pandemic — it’s just a good practice in general, because a refund is an interest-free loan to the government. Even Mnuchin urged people to “file now to get your money.”
If you need even more time to do your taxes, you can, as always, request an extension by filing Form 4868. Typically, this gives taxpayers an extra six months to file. However, as of Monday morning, the IRS had not said whether the extension deadline would remain Oct. 15 or if that would be extended, too.
Is this going to affect my refund?
Doesn’t seem like it.
“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,” IRS Commissioner Chuck Rettig said in a Saturday news release.
The average federal refund so far is more than $2,900, which is a nice chunk of change. If you’re worried about your cash flow during the coronavirus crisis, that might be yet another reason to get moving on your taxes. Most refunds are issued within 21 days of filing.
What about state taxes?
The delay applies to federal taxes, but 43 states have their own income tax requirements. Several have announced revised dates due to the coronavirus crisis, including South Carolina, which pushed its state income tax deadline to July 15, and Iowa, which postponed until July 31. But as of Monday morning, some — like New Jersey — still had April 15 deadlines.
Advocates have started using Mnuchin’s announcement to call for other states to change their calendars, too.
“States which do not extend their own filing deadlines to July 15 will negate much of the benefit of the federal extension, because taxpayers would still have to prepare much of the relevant tax information — a great deal of it drawn from their federal 1040s — by the earlier date,” the Tax Foundation’s Jared Walczak wrote in a blog post.
Depending on where you live, you might have two tax deadlines to contend with. The American Institute of Certified Public Accountants is detailing all state tax deadline changes here.
What are tax preparers doing?
Cindy Hockenberry, the director of tax research and government relations for the National Association of Tax Professionals, tells Money that some are proceeding with business as normal while others have eliminated IRL (in real life) appointments.
“Everyone that I have spoken to regarding this is using all available technology to continue to serve their clients — secure email for sending documents, even snail mail,” she says.
Indeed, H&R Block CEO Jeffrey Jones posted a letter saying it’s “open for business and ready to help you get every credit, deduction and refund you deserve.” Customers can visit an office, drop off documents or complete their taxes online. TurboTax owner Intuit emailed customers recently to say it had “taken actions to ensure continued service” to customers.
I’ve used a tax preparer/accountant for decades. How the heck do I file my taxes online?
First, call your tax pro and ask what options they have available. There’s a chance they might still be able to take care of everything for you — you’ll just have to drop off your tax documents as opposed to physically sitting with an expert as they prepare your return.
If do you end up doing your taxes online for the first time, Hockenberry has some tips:
- Read all the instructions very carefully.
- Take advantage of the website’s help features or look up the rules if you’re confused about deductions, credits and so on.
- If your life hasn’t changed drastically since last year — you didn’t start a business, get married, sell a bunch of stocks, et cetera — use your 2018 return as a guide. (That way, you don’t forget anything important.)
- Re-check all entries before you hit the “submit” button.
Is there anything else I need to know?
Money published a guide to what’s new for your taxes in 2020 here. For additional updated information on tax season and the coronavirus, you can check out the IRS’s coronavirus tax relief webpage here and the Department of Treasury’s here.