Tax season isn’t typically something that people look forward to. Unless you’re expecting a rather substantial refund, you may find yourself dreading the whole experience year after year. It’s understandable that you might feel that way. Taxes are often complicated and time-consuming. Hiring an accountant can be an expensive proposition and making a mistake on your taxes can be even more costly. Unfortunately, things have been complicated even more this year, thanks to COVID-19 and the worldwide economic repercussions that have occurred as a direct result. You may have heard a number of news reports regarding how you should file your taxes this year. If you’re like most individuals, you’re overwhelmed with everything that’s happening and you need some clear-cut answers. Fortunately, you’ve come to the right place.
What Should You Know About Filing Your 2019 Taxes in 2020?
There are a number of factors that will likely affect you this year. Several people have questions about filing deadlines, state taxes and tax refunds. As previously mentioned, the subject of taxes can be rather complicated. As such, let’s look at each one of these things individually.
Filing Date Changes
The date to file your federal tax return is typically April 15th. Because of COVID-19, the deadline for this year has been moved to July 15th. You don’t have to file for an extension or do anything else if you can file and pay the amount owed by mid-July. You will simply file your taxes as you normally would, only three months later. Of course, you can still file now if you choose to do so. In fact, the IRS recommends it, especially if you’re getting a refund.
Speaking of Refunds…
Many people have the refund from their tax return earmarked for something specific. If that’s the case with you, you should go ahead and file now. The IRS is currently processing new tax returns and you will get your refund as you normally would if you file now. Choosing to wait until July will not cause any issues with your refund but you will end up waiting an additional three months in order to get it.
What About State Taxes?
Some states have decided to change their filing deadlines as well, so they have the same deadline as the federal taxes. However, you should not automatically assume that your state has changed its deadline. Check with state officials in order to determine the filing deadline for the location where you live.
How Do Stimulus Checks Affect Your Taxes?
In short, they don’t. If you get a stimulus check, it will not impact your taxes for either 2019 or 2020, as the money received is not considered taxable income. However, if you haven’t received a refund electronically for your 2018 taxes and haven’t filed your taxes for 2019 yet, you will have to wait for a paper check to be mailed to you in order to receive your stimulus check. Depending on where you fall in that category, it could take weeks or even months for you to see the money.
How Will Next Year’s Tax Returns Be Affected?
That remains to be seen. If things return to some sense of normalcy sooner as opposed to later, it would be reasonable to assume that tax day for 2021 will return to mid-April. However, it isn’t yet clear whether or not there will be additional tax breaks incorporated into next year’s taxes as a direct result of the virus and all its consequences.
If you normally file your own taxes, you can still do that this year, regardless if you file now or in July. If you are due a refund or you can comfortably pay the amount you owe, you don’t need to do anything extra, even if you aren’t filing until July. If you do need more time to pay your taxes, you will be able to file an extension when you file your taxes. Of course, additional fees and penalties will be charged. That is something you can avoid if you can pay by July 15th, so it may be worth looking into.