Yes. In most cases, you must file and pay your taxes by July 15. Taxpayers who need more time can request an extension on the IRS website. That will give them until Oct. 15 to file. However, an extension to file does not mean added time to pay. Those planning on filing later should estimate what they owe and make that payment by July 15.
What if I can’t pay now?
File your taxes even if you cannot pay. The IRS is willing to set up payment plans or make other arrangements with taxpayers who can’t pay in full. The penalty for failure to file is much more expensive than the failure to pay, says Kathy Pickering, chief tax officer at H&R Block.
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What about refunds?
The IRS is still processing and issuing refunds, most within 21 days. Those getting refunds will be paid interest, dating back to April 15, if they file on time. The interest rate is 5% per year through June 30. Starting July 1, it drops to 3% per year. The interest is compounded daily for refunds. Any refund issued after July 1 will get a blended rate.
Can I pay or file online?
Yes, you can file or pay your taxes online. The IRS urges taxpayers to use electronic options to support social distancing and speed up the processing of returns, refunds or payments. The agency is still working its way through a backlog of mail that built up during its closure in response to the pandemic.
Accountants and tax preparation services say they have a variety of means to help people prepare their taxes without meeting face to face.
What about estimated taxes?
Taxpayers who make estimated quarterly tax payments have until July 15 to make the payments for the first and second quarter. Those payments were originally due on April 15 and June 15 respectively.
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There are a host of other tax deadlines linked to July 15. For example, July 15 is also the deadline to claim a refund for 2016 tax returns. An estimated $1.5 billion refunds for 2016 are sitting unclaimed because people failed to file tax returns. The law provides a three-year window of opportunity to claim a refund. But if taxpayers do not file a return within that time, the money becomes property of the Treasury.
With all the changes stemming from the coronavirus pandemic, there may be need for added help when it comes to taxes. It’s a good time to check in with a tax professional if you have had a major shift in income, employment or other tax situations in 2020.
“Reach out to (your tax professional) about what 2020 is going to look like,” says Michael Eisenberg, a CPA and attorney at Squar Milner in Los Angeles.