Smart Tax Planning

Tax Day is now July 15. Why you should get your return in even sooner

Key Points
  • Treasury Secretary Steven Mnuchin tweeted on Friday that the tax filing deadline would be pushed out to July 15. Taxes owed for 2019 and the first quarter of 2020 are due then, too.
  • Need cash now? Get your return in as soon as possible so you can get your refund.
  • The IRS has processed 59.2 million refunds as of March 13, issuing an average check of $2,973.
US Treasury Secretary Steven Mnuchin arrives to testify during a House Ways and Means Committee hearing about the Fiscal Year 2021 budget request on Capitol Hill in Washington, DC, March 3, 2020.
Saul Loeb |  AFP | Getty Images

You now have until July 15 to file your taxes.

However, if you're expecting a refund, finish up your 2019 tax return now.

Treasury Secretary Steven Mnuchin tweeted on Friday that the tax filing deadline would be extended to July 15.

The announcement places the due date for 2019's income tax returns on the same day as the recently extended deadline for tax payments.

While accountants and tax preparers are celebrating the extra time they get to file returns for their clients, one thing remains clear: If you're expecting a tax refund, get your tax return out the door immediately.

Even Mnuchin emphasized this point on Friday in another tweet.

Indeed, the IRS has received 76.2 million individual income tax returns as of March 13. Of these, 59.2 million filers received refunds, with the taxman sending an average check of $2,973.

"Everyone still wants their return," said Dan Herron, CPA and principal of Elemental Wealth Advisors in San Luis Obispo, California. "People need money. We're still cranking 11 to 12 hours a day to get it done."

Taxpayers often depend on that money to pay down credit card balances and to shore up their savings accounts.

That check from Uncle Sam is even more important now, as individuals and businesses are reeling from the economic impact of coronavirus.

Congress is still hashing out the details of a cash infusion, as workers brace themselves for the prospect of layoffs and furloughs amid recession worries.

Getting a refund of your overpayment in taxes from last year might go a long way in uncertain times.

"I would think the person who makes $30,000 a year and needs the refund probably needs it faster than those who don't solely rely on the refund," Herron said.

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Watch CNBC's full interview with Treasury Secretary Steven Mnuchin

While it's expected that the states will follow the federal government's lead on changing the tax deadline, you should still check in with your state authority and your tax professional.

"It's going to be challenging because the states aren't all consistent," said Eileen Sherr, senior manager for tax policy and advocacy at the American Institute of CPAs. "If you have income in different states, you'll have to follow what each state does."

The AICPA has been tracking states' approach to tax deadlines here.

IRA contributions for 2019

One issue that's still up in the air is whether the deadlines for 2019 contributions to individual retirement accounts and health savings accounts have also been pushed back to July 15.

You have until the due date of your tax return, normally April 15, to contribute to the account and have it apply to the prior year.

It's not immediately clear whether the Treasury is officially pushing back the date for these contributions. However, if you have the flexibility in your budget and you're wrapping up your return, you may as well save in those accounts now.

Traditional IRA contributions and HSA contributions are deductible on your tax return. Putting money in your IRA could also make you eligible for the saver's credit, depending on your adjusted gross income.

"Do it before April 15 just in case, especially if you're going to lower your tax liability and wind up getting a tax refund," said Lisa Greene-Lewis, CPA and tax expert at TurboTax. "It's a win all over."