In normal years, the due date for filing individual federal income tax returns is April 15th. This year, the IRS moved the deadline to July 15th due to the coronavirus pandemic. Fortunately for taxpayers, this 90-day extension of the deadline will not cause any interest or penalties. This relief also applied automatically to all taxpayers. Unlike a normal extension, no additional forms were required.
Need more time? You can get an extension.
If you can’t file your return by the July 15th deadline, you can still get an automatic extension until October 15th by using IRS Form 4868. This form can also be filed electronically. Filing for an extension until October 15th will not prevent penalties and interest. The IRS encourages to pay in full with the extension request. If that isn’t possible, information on payment options are available on www.IRS.gov.
Always file a return, and pay what you owe.
One of the biggest tax mistakes you can make is to not file a return because you owe money to the IRS. If your return shows you owe tax, always file on time and pay by the due date if possible. If you can’t pay the entire amount, file your return, pay what you can, and make arrangements with the IRS to pay the difference. You may owe interest and penalties on the unpaid tax, but filing your return on time will help you avoid additional penalties. It will also give you the option to work with the IRS to pay the unpaid balance.
Having a few extra months for tax filings was a welcome bit of good news amid the pandemic. That extra time is almost over, and tax day is right around the corner. Be sure to file on time, pay on time, and don’t let taxes derail your financial plan.
Matthew A Treskovich | CPA/PFS, CITP, CMA, CFP®, AEP®, MBA, CLU, ChFC, FLMI
Chief Investment Officer