Earlier this month, US Treasury Secretary Steven Mnuchin announced that taxpayers are getting a three-month extension on having to file and pay their income taxes. As part of the federal government’s coronavirus response, the IRS is providing special relief to individuals and businesses. The filing deadline for 2019 income tax returns has been moved from April 15, 2020 to July 15, 2020. This means that the IRS is giving taxpayers 90 additional days to file and pay their income taxes. Now, individuals have until July 15, 2020 to pay in full.
This is an automatic extension. Taxpayers do not need to file any additional forms or contact the IRS to qualify for this relief. Late payment penalties and interest will not begin to accrue until after the new filing and payment deadline, on July 16, 2020.
Even with the extension in place, the IRS is still encouraging taxpayers to file as quickly as possible, especially if you are due a refund and need cash. In order to receive your tax refund, you need to file your income taxes. As of the beginning of March, the IRS has already processed more than 65 million income tax returns. About 52 million of those taxpayers received refunds that averaged $3,012.
If you are unable to pay your income taxes by the extended July 15, 2020 deadline, it is still a good idea to file your income taxes on time. Owing a substantial amount of money is a bad enough situation, but owing additional penalties and interest can make those financial hardships even worse.
If you do not file your tax return by July 15, the late filing penalty equals 5% of the outstanding tax balance for each month you’re late, with the maximum penalty being 25% of your unpaid tax bill.
If you file your return by the July 15, 2020 deadline but do not pay your income taxes, you will owe a late payment penalty of 0.5% of the outstanding tax balance for each month you’re late, up to 25% of the unpaid balance. This is a significantly smaller penalty, but it still puts you in a bad financial situation.
How the Tax Attorneys at Wiggam & Geer Can Help
Each year, the IRS reports about $1 billion in unclaimed tax refunds from approximately 1 million taxpayers. In these uncertain times, it doesn’t make sense to leave money on the table – even if you feel like you’re unable to pay your income taxes in full right now. The tax attorneys at Wiggam & Geer can help you correct your tax liability issues or request relief through one of the IRS’ payment plans or abatement programs. If you need help or you’re interested in learning more, please give us a call at (404) 609-1300 or contact us via our website.