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What we’ll cover:
On March 21, 2020, the US Treasury Department and IRS announced that the federal government is officially moving Tax Day from April 15 to July 15.
This change is in response to the COVID-19 virus and is intended to give taxpayers additional time to file their federal returns and make any necessary tax payments, if they haven’t already done so.
The three-month extension is automatically applied to all taxpayers, so you do not have to file an extension request to qualify. Because who needs more paperwork, right?
If you haven’t completed your taxes yet, you may still want to file as soon as you can despite this extension. Why? Two reasons: It has to be done sooner or later. And if you’re expecting a refund, the sooner you file your return, the sooner you’ll get your money back.
Let’s take a closer look at what the new July 15 date means for taxpayers.
Federal Tax Day is usually on April 15 – the original deadline for taxpayers to file their individual returns, pay any income taxes owed (including estimated taxes) and submit a filing extension request. By officially moving Tax Day to July 15, the federal government is giving taxpayers three extra months to get these things done.
It’s important to meet these new deadlines. If you don’t file or pay your taxes on time, the IRS can impose penalties and charge interest.
If you do owe taxes this year, the IRS has already made clear that any outstanding payments will begin to accrue interest and penalties on July 16 (see Notice 2020-18).
If you can’t meet the July 15 deadline, you may request an extension by filing Form 4868.
Good to know: Moving the federal Tax Day to July 15 does not officially change the deadlines for when state taxes are due. Those deadlines are set by individual states – not the federal government. However, in response to the US Treasury’s decision, many states have agreed to move their filing deadlines to July 15 as well. To see if there are any changes to your state tax deadlines, check in with your state’s tax collection department or consult with a tax professional.
Even though taxpayers are getting a three-month extension, the IRS is encouraging everyone to file their taxes as soon as possible (and preferably electronically).
If you’re getting some money back this year, the sooner you get your returns in, the sooner the IRS can process and issue your refund (generally within 21 days). Keep in mind that the quickest way to get your refund is by filing your return electronically and choosing direct deposit.
Here are a few interesting statistics – as of March 13, 2020:
These are uncertain times, and filing taxes is probably the last thing you may want to do or even think about. If you’re among the millions of people who are looking for ways to cushion the financial impact of this national emergency, getting your taxes done and potentially receiving a refund could help ease some of the stress that we’re all experiencing.
Think about it this way: Once your taxes are filed, you can cross one big item off your to-do list and feel good about your accomplishment. Not to mention, if you’re getting a refund, the extra cash might help you avoid dipping into your emergency fund for a little while longer, providing a measure of relief if you’re expecting financial uncertainties ahead.
If you have any questions regarding your personal taxes and finances, don’t hesitate to contact your tax preparer and/or financial advisor. They may be able to offer insights and strategies to help put your mind at ease. Be well.
This article is for informational purposes only and is not a substitute for individualized professional advice. Individuals should consult their own tax advisor for matters specific to their own taxes and nothing communicated to you herein should be considered tax advice. This article was prepared by and approved by Marcus by Goldman Sachs, but does not reflect the institutional opinions of Goldman Sachs Bank USA, Goldman Sachs Group, Inc. or any of their affiliates, subsidiaries or division. Goldman Sachs Bank USA does not provide any financial, economic, legal, accounting, tax or other recommendation in this article. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice. Information contained in this article does not constitute the provision of investment advice by Goldman Sachs Bank USA or any its affiliates. Neither Goldman Sachs Bank USA nor any of its affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of the statements or any information contained in this document and any liability therefore is expressly disclaimed.