The upheaval caused by the coronavirus pandemic has caused disruption to most Americans' lives, and for some of us, that disruption has unfortunately also affected our finances.
Thankfully, the IRS extended tax filing deadlines to July 15 this year in a bid to help Americans coping with unexpected changes. But with July 15 now rapidly approaching, some of us might still be scrambling to file our taxes and wondering how to get an extension.
While Treasury Secretary Steven Mnuchin said last week his department was considering delaying the 2019 tax filing deadline again, the IRS and Treasury announced Monday that there would be no further postponement. However, the agencies said taxpayers who cannot meet the July 15 due date can request an automatic extension of time to file until October 15.
"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," said IRS Commissioner Chuck Rettig. "These easy-to-use payment options are available on IRS.gov, and most can be done automatically without reaching out to an IRS representative."
If you can't file by July 15, you should request an extension. A filing extension allows you to file by Oct. 15, but only if you formally request to do so. Keep in mind, however, that your taxes are still due in full by July 15, so any tax balance owed may accrue interest and/or penalties, even if a filing extension is requested. That's why you should pay as much as you can by July 15, even if you can't pay in full. Remember that these deadlines only apply to your federal taxes; state tax filing deadlines may vary.
How to file an extension
- If you prepare your taxes using tax filing software or via a tax-preparer, you'll need to download and file IRS Form 4868 to formally request an extension. Individual tax filers may also request an extension via the IRS' E-File service.
- Estimate how much you owe in taxes. You don't need to know the precise amount, but will need to submit an estimate of taxes owed when you file for an extension. Consider using a free tax estimate calculator to aid in the calculation.
- Next, determine how much you can afford to pay now (before the July 15 filing date), and submit payment as soon as possible. Remember, anything owed after July 15 is subject to interest and penalties.
- You may apply for an Installment Payment Plan if you cannot afford to pay any remaining balance in one lump sum. A short-term payment plan (lasting 120 days or less) is free to set-up; long-term plans carry a $31 set-up fee. Monthly payments can be made via debit or credit card, direct debit from your checking account, or money order.
- Finally, don't forget to submit completed taxes by the Oct. 15 extension. If your actual taxes differ from your estimated taxes, you may file to amend your Installment Payment Plan, or submit payment for any difference.
This year's later tax-filing deadline for 2019 taxes is an excellent opportunity to begin thinking ahead to next year's 2020 tax-filing season. Start considering ways now to organize documents you'll need for next year's filing. If you're having trouble paying taxes on time this year, consider ways to plan and save now, find additional deductions or otherwise reduce your tax liability for 2020, such as by harvesting any losses on your investments this year.
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