Coronavirus and Your Taxes—Why You Should Still File Before April 15
by Susannah McQuitty
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Updated March 31, 2020
On March 20, Treasury Secretary Steven Mnuchin announced that taxpayers will have an additional 90 days to both file and pay their taxes. For individuals, which covers pass-throughs and small businesses, payments up to $1 million can be deferred, while corporations can defer up to $10 million.
The reprieve means that any tax returns filed or payments sent before July 15 will not be penalized for being late; the payments will be accepted interest-free and penalty-free. Most states will likely follow suit, but that’s up to each state.
An extended deadline may look like an opportunity to hold off on filing your return, but here are some reasons why you should go ahead and finish your taxes if you are able.
Let the IRS know whether you’d like your stimulus payment as a direct deposit (or check, if that’s how you roll)
Your stimulus payment, also referred to as an economic impact payment, is a small but significant silver lining in the midst of the Coronavirus pandemic.
Payments will arrive either as checks through the USPS, or they’ll be directly deposited to your bank account. Direct deposit is the way to go if you want your payment quickly.
If you haven’t filed your 2019 tax return yet, the IRS will use the information on your tax return from 2018 to determine whether to send you a check or a direct deposit. But wait a minute – what if you opted for a check that year, or you owed taxes and didn’t get a refund at all?
Filing as soon as you can with your bank account information means letting the IRS know you’d like your economic impact payment the fastest way possible – direct deposit. The IRS is working on a Get My Payment tool where you can track your Economic Impact Payment and update your delivery preference to have that payment directly deposited. The portal should be available by April 17.
Due for a refund? File sooner to get that check
If you are getting a tax refund this year, you wouldn’t be charged penalties for filing late, anyway, so the waived fees aren’t much incentive to put off the filing process.
On top of that, putting off filing just means unnecessarily delaying your refund, since you can’t be given that money until you actually file your tax return. If you are healthy and able, finishing your taxes means getting a refund deposit to your bank account sooner. That refund check can certainly help weather the storm.
Owe taxes? Get an exact number and use the extra time to budget
If you’re not in the refund crowd, filing before April 15 is still the best option if you are healthy and able. Why? Because you don’t know exactly what you owe until you work through your tax return. Get through your taxes sooner and you’ll have more time to budget for your taxes owed.
Waiting until the last minute means less time between figuring your bottom line and coming up with the payment. Avoid the added stress and get your tax return filed as soon as you can.
What about quarterly estimated tax payments?
Self-employed persons and freelancers, take note – this relief also includes quarterly estimated tax payments that are due on April 15 and June 15, 2020. Those deadlines have been extended to July 15, so you won’t have penalties added as long as you make both payments by mid-July.
Get it done the smart and simple way
We’ll keep the filing process short and simple, no matter when you get it done – and we aren’t boosting our price as the deadline gets closer, like some other companies are doing. With 1040.com, you can file for just $25, including state returns (and since each state is handling the Covid-19 tax relief differently, do yourself a favor and get it done early with your federal return). It’s just one way we’re working to keep your stress down during this chaotic time. Stay safe and healthy.
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