October 29, 2020

Filing Your Taxes Deadline: Questions and Answers for July 15th

This is something I’ve never said before: Now that Independence Day is behind us, tax day is fast approaching.

Because of the coronavirus pandemic, the Treasury Department postponed the traditional April 15 federal tax filing deadline until July 15. And this time, there’s no wiggle room. Last month, the Internal Revenue Service announced that there would not be another blanket filing delay.

So if you haven’t filed your return yet — or if you’ve filed but haven’t yet paid the taxes you owe for 2019 — the deadline is Wednesday.

“It’s just like April 15, but in July,” said Cindy Hockenberry, director of tax research and government relations for the National Association of Tax Professionals, a trade group.

About 142 million taxpayers had filed returns as of July 3, according to I.R.S. statistics, but the agency has struggled to process returns because of reduced staffing during the pandemic. (In addition to its usual duties, the agency sent out about 160 million stimulus payments this spring, as part of the federal pandemic aid program.) The agency had processed about 131 million returns as of July 3 — 10 percent fewer than the same time last year.

And some taxpayers are facing long delays in getting the refunds they’re owed, according to a report from Erin Collins, the new national taxpayer advocate, who represents filers.

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Updated 2020-07-12T10:24:24.672Z

Some returns were mistakenly flagged by tools aimed at detecting fraud. Some fraud filters are wrong more than half the time, the report said. Once a return is flagged, the I.R.S. often asks filers to mail extra documents — but the agency hasn’t opened or processed all the mailings, delaying the refunds. The report said the delays “notably” affected people who claimed the earned-income tax credit or the additional child tax credit, both of which mostly help low- and moderate-income filers.

Many families rely on the refunds to pay bills. The average refund as of June 26 was about $2,800.

While most people file tax returns electronically, people who filed on paper and are expecting refunds “may be in for a long wait,” the report said. As of May 16, the agency had an estimated backlog of 4.7 million paper returns.

“They have a backlog you wouldn’t believe,” Ms. Hockenberry said.

Working through the paper returns is a “high priority” for the I.R.S., its commissioner, Charles P. Rettig, recently told the Senate Finance Committee. The agency is reducing the backlog by about one million a week.

If you’ve already filed a paper return, the I.R.S. refund website says, it will be processed in the order it was received. Its advice? Sit tight. “Do not file a second tax return or contact the I.R.S. about the status of your return,” the agency said.

A bit of good news: Because the postponed filing date is “disaster related,” the I.R.S. must pay interest on your refund, calculated from April 15 roughly until it is paid out — as long as you file your 2019 return by July 15, an agency spokesman said. Depending on the timing of the refund, the interest is 3 to 5 percent, compounded daily. Interest payments may come in a separate installment.

Also, you have until Wednesday to take steps that may help reduce your taxable income, said Lisa Greene-Lewis, a certified public accountant and tax expert with TurboTax. You can make contributions to an individual retirement account, which may be tax deductible depending on your income, or to a health savings account, if your health plan qualifies.

Here are questions and answers about tax day in July 2020:

What if I’m still not ready to file?

If, despite the extended deadline, you still aren’t prepared to file your federal return, you can get an automatic extension to file until Oct. 15 by submitting I.R.S. Form 4868. You can do it at no charge, using the I.R.S. Free File website.

But be warned: An extension to file is not an extension to pay, Ms. Hockenberry emphasized. If you owe money, you still need to calculate what you expect to owe and pay it by Wednesday, or face penalties and interest on the unpaid amount.

If you can’t pay what you owe, the I.R.S. may give you a little break: You can pay what you can and request an installment plan for the rest, although you’ll still have to pay penalties — at half the usual rate — and interest.

“The I.R.S. understands that those affected by the coronavirus may not be able to pay their balances in full by July 15,” Commissioner Rettig said in a statement.

People who are self-employed, or who didn’t have enough tax withheld from their paychecks, may also need to make estimated tax payments by Wednesday. The quarterly deadlines in April and June were also postponed, but that time is now up.

If someone owes 2019 taxes, plus two quarterly 2020 tax payments, “it could be a lot of money owed right now,” said Susan C. Allen, senior manager for tax policy and advocacy at the American Institute of Certified Public Accountants. “It’s a unique year, to say the least.”

It may also be wise to make estimated tax payments if you received unemployment benefits this year and didn’t elect to have taxes withheld, Ms. Allen said. Many people don’t know that the benefits are taxable, and could end up with a surprise bill at tax time next year.

Where can I get help with my return?

Many volunteer sites that usually help low-income or older taxpayers shut down because of the pandemic, but some have reopened; services vary by location. AARP Foundation Tax-Aide is providing modified, in-person help by appointment at limited sites; it also offers help delivered by phone or online. If you don’t have internet access, call 1-888-227-7669.

A few locations of the I.R.S.’s Volunteer Income Tax Assistance program are also open, but it’s best to call first. To search for a site near you, use the agency’s locator tool.

Are state filing deadlines also extended to July 15?

State deadlines vary. Most also extended their deadlines by three months, but some didn’t; others allowed even more time. The Tax Foundation has a state-by-state chart.

State deadlines for quarterly estimated tax payments vary as well, according to the foundation.