We’ve all heard the news. As of last Friday, tax day for the 2019 tax year was officially changed from April 15 to July 15. You now have an extra three months to file your 2019 federal tax return, submit any payment owed and contribute to an IRA for the 2019 tax year.
Yes, it sounds like great news, and it is. But there’s still a lot of fine print.
Why the delay?
On Friday, Treasury Secretary Steve Mnuchin made the call to delay tax day until July 15. By this new date, an individual filer (filing up to $1 million in taxes) must present their 2019 tax returns, their Q1 prediction for 2020, and their potential payment to the IRS.
Why the delay? Pushing back tax day is part of a larger governmental effort to stimulate the economy and ensure that Americans are able to access funds in these precarious economic conditions, explains Dina Pyron, EY Tax Chat Leader. By delaying tax day, Americans are able to keep more money in their pockets.
For those who are unable to work from home or who have been laid off from their jobs, this is great news. The government wants to do everything it can to ensure Americans are feeling financially stable right now.
If you don’t owe — or are expecting a tax refund — the IRS is urging you to file sooner rather than later, Pyron says. The IRS wants to get your money back to you so you can use it (read: stimulate economic growth). If you have the resources to get it in earlier and you’re expecting a refund, filing early is the right move — both for your wallet and for the economy, says Pyron.
What if you already paid?
For people who already filed and paid, you might be wondering what’s happening with your funds. Unfortunately, if you’re strapped for cash and sent in a check via mail (AKA the old fashioned way), there’s no way to get back your money. Your check has likely already been cashed and your payment has been made.
If you filed and paid online, there is a chance to get those funds back into your account. As of Monday, the IRS says that you can call a US Treasury Financial Agent (1-888-353-4537) or head to irs.gov/directpay to cancel the payment you already submitted. In order to pay by the new due date, you can send a check in the coming weeks or months to arrive on July 15, or schedule a new wire transfer online for your funds to be paid in July.
Check on your state tax filing deadline
The federal government is not alone in changing tax day. Multiple states had previously pushed back their due dates. For example, California already changed its tax due date to June 15. It’s crucial to follow the news, ask questions, and keep up with your state’s tax day decision so you know when you need to file. Check your state tax agency for the latest.
Although a postponement of a day that almost none of us look forward to may seem like great news, it will have lasting implications. Pyron predicts that the entire 2019-2020 tax year will see delays, even past July, and a lot hinges on how long we remain in the state of social distancing.
If you haven’t filed your taxes yet and you’re worried about having enough money to weather this downturn, Pyron recommends taking advantage of the option to e-file so you have the ability to reschedule your payment if it comes to that. (See what to do if you can’t pay your tax bill.)
The bottom line? “If you can keep your money longer, keep your money longer. It’s a good thing,” says Pyron. But if you’re expecting a refund, get those returns in fast. The government wants you to have as much money as possible right now, so take advantage of what they are doing to help.
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