American taxpayers now have precisely two weeks to get their finances in order after the Internal Revenue Service (IRS) confirmed the tax filing and payment deadline of July 15 will not be extended again.
With the original April 15 deadline for federal tax returns having already been pushed back three months to allow for the challenges taxpayers faced in filing during the coronavirus outbreak, speculation had been growing that a second extension could be on the agenda.
Fueling the suggestion were comments recently made by Treasury Secretary Steve Mnuchin, who admitted he had been “thinking about” another delay to give Americans even more time to reacquaint themselves with the best tax software and meet their filing obligations.
Now, however, the IRS has put any conjecture to bed, announcing in a statement that the deadline of July 15 “will not be postponed”. And to avoid any further confusion, the Treasury Secretary endorsed the decision with a statement of his own, saying “we have decided to have taxpayers request an extension if more time is needed” rather than approving another formal delay.
What should tax filers do now?
With July 15 now set in stone as tax day, it is imperative that anyone who is yet to file starts preparing now. However, while some taxpayers would be well-advised to work towards July 15 as a final end point to get everything straight, for others, the extra time that Steve Mnuchin alludes to - and is available to those that request it - might still be the best option.
Those who should file today…
If you are confident that two weeks is enough time to get your finances in check, then you should probably look to file as soon as you can, and treat July 15 as your absolute target date. As well as getting what most people agree is a tiresome task out of the way, the main reason is that you are giving yourself a better chance of receiving any tax refund you might be owed back as quickly as possible. For 2018, three-quarters of filers received a refund from the IRS to the average tune of $3,000.
However, with COVID-19 affecting the IRS as indiscriminately as it does anyone else, processing backlogs have been building this year, meaning those who are last to file their returns are likely to have a considerable wait to get any money they are owed back.
Should anyone believe they are owed a refund for 2016, July 15 is also the absolute deadline for claiming that money. If this is you, filing a prior tax year return in the next two weeks is essential.
A final reason to file now could be if you are still waiting for your coronavirus stimulus check to arrive. While there are a number of reasons why your payment may have been delayed, it could simply be that the IRS requires you to file either your 2018 or 2019 tax return so that it can be approved.
...and those who want to delay
Equally, however, there will be those who need more time to prepare and file their tax return, and under IRS rules, individual taxpayers unable to meet the July 15 due date can request an automatic extension of time to file until October 15.
Importantly, anyone seeking more time to file must still take some action by July 15, and contact the IRS either via its website, through your tax preparer, or by mailing Form 4868 - the best tax software will have an electronic version of this form available.
Even more crucially, those facing hardship are reminded that the extension provides additional time to file the tax return – it is not an extension to pay any taxes that you owe. Indeed, when filing for an extension, taxpayers must estimate their tax liability on the extension form and pay any amount due.
What to do if you're struggling financially
That said, the IRS acknowledges there will be people facing hardship, including those impacted by COVID-19. In this instance, the advice is for them to pay what they can to avoid interest and penalties, and make use of the various payment options that are available to help.
IRS Commissioner Chuck Rettig, said: “The IRS understands that those affected by the coronavirus may not be able to pay their balances in full by July 15, but we have many payment options to help taxpayers.
“These easy-to-use payment options are available on IRS.gov, and most can be done automatically without reaching out to an IRS representative.”
Whether you’re looking to file your taxes now or delay for another three months, the best tax software can help you every step of the way. Alternatively, if you’re concerned about paying your tax bill, and maybe struggling with debt, the best debt consolidation companies might be able to steer you towards a more stable financial future.