In March, the IRS, along with the Treasury and federal government, announced several date changes to the 2019 tax filing season. This announcement was in addition to the Coronavirus Aid, Relief and Economic Security Act (CARES), a $2 trillion stimulus package to provide financial relief to individuals, families, and businesses.
Despite the changes to the filing season—discussed in detail below—the IRS has reported that the average tax refund for those who have already filed are about the same as last year. Through March 13, the average tax refund was $2,973, nearly identical to last year’s average of $2,957. For those who used direct deposit to receive their refund, the average this year so far amounts to $3,105, while last year it was $3,065.
If you haven’t already filed your federal income tax return, you now have until July 15, 2020, to file and to pay any federal taxes you owe. You don’t need to file for an extension to file past April 15—the July 15 extension automatically applies to all taxpayers.
If you are a small business owner, whether you file as an individual or C corporation, you are allowed to defer your 2019 federal income tax payments until July 15. Penalties and interest are also being waived on deferred tax payments until July 15. Estimated quarterly payments usually paid by April 15 may be deferred until July 15. At this time, no other instructions have been given regarding how other quarterly deadlines could change.
And there’s even more good news: you also now have until July 15 to make 2019 contributions to your IRA.
Taxpayers are encouraged to file their taxes as soon as possible, especially if you expect a refund. The tax deadline extension won’t delay your refund, and that cash could help you stretch your budget. The IRS expects to continue to issue 90% of refunds in 21 days or fewer from acceptance with e-file and direct deposit.
A large number of states are matching the new July 15 tax deadline. Check your state government website for details.
Filing for an extension
With the new deadline, you should be able to file for an extension to October 15. However, you still have to pay your estimated taxes by July 15.
The CARES Act will result in a stimulus check of up to $1,200 for eligible individuals, $2,400 for those who file jointly, and $500 for each qualifying child. Eligibility is based on most recently reported tax filings. If you haven’t filed your 2019 tax return yet, your eligibility will be based on your 2018 return. The amount paid to you now will be reconciled on next year’s tax return.
If you used direct deposit to receive a tax refund in 2018 or 2019, your stimulus check funds will be electronically deposited into the same account.