Last updated 4/17/20
With the ongoing COVID-19 outbreak, taxes may not be at the top of your mind. Even if they are, you may not want to travel outside your house for tax preparation help. Here’s what you need to know to file your taxes in 2020.
1. Many Americans qualify for an Economic Impact Payment (Stimulus Check)
Economic Impact Payments –commonly referred to as “stimulus checks” or “recovery rebates”– are a key provision of the Coronavirus Aid Relief, and Economic Security (CARES) Act legislation that Congress passed to help reduce the financial burden of Covid-19 on individuals and their families. The payments are an advance of a temporary credit for 2020 (which you file taxes for in 2021).
2. The Federal Tax Deadline is now July 15
If you already filed this season—great! Your taxes will be processed normally and anything you owe will be due by July 15th without interest or penalties. If you haven’t filed, you now have a 90-day extension to do so.
For many, COVID-19 is already affecting livelihoods and finances. If you think you will receive a refund this tax season, especially if you qualify for valuable tax credits, you may want to prioritize filing soon to get that boost from a tax refund.
This extension only applies for Tax Year 2019. If you need to file an amended return or claim for a refund to be filed for Tax Year 2016, the regular deadline of April 15, 2020 applies.
It is important to note that states have different rules.
3. Some states are extending their tax deadlines
Some states have started to extend the tax deadlines due to Coronavirus concerns. The American Institute of Certified Public Accountants is tracking state tax deadlines that are changing due to COVID-19 relief measures.
Even though the federal deadline is now July 15, you may still have an April 15 filing deadline for your state taxes. Make sure you know when your state taxes are due, so you don’t incur penalties. If you are unsure, check your state tax agency.
4. You can file for a tax extension
If you need more time to file your taxes, you can file for an extension. Usually, the extension provides an additional six months to submit your tax return. If you file for an extension in 2020, your taxes will be due by October 15, 2020. This extension gives you an additional three months to file your taxes.
To file for an extension, complete Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. You can submit this form online using a free tax filing program (see number 4) or by mail. If you mail the form, get a Certificate of Mailing, or other documentation that shows you mailed the form by July 15.
It is important to note that filing an extension does not mean you get an extension on payments. You are still required to pay any taxes you owe by July 15.
5. The IRS has will provide some relief if you currently owe taxes
Considering the challenges of COVID-19, the IRS has announced an initiative to provide relief to those who owe taxes.
Here are some of the changes they are enacting:
- Payments due between April 1 and July 15 are suspended. If you are currently under an installment payment, your payments during this period are suspended. The IRS will not default any Installment Agreements during this period. However, interest will still accrue.
- Offers in Compromise guidelines are loosened. An Offer in Compromise (OIC)is an agreement between you and the IRS that reduces your tax liability if you can’t afford to pay. You now have until July 15 to provide additional information to support a pending request. You also have the option to suspend payments on OICs until July 15, 2020, though interest will still accrue.
- Delinquency and property seizure rules are loosened. The IRS will not seize or make claims against your property for tax debt during this period. Delinquent accounts won’t be sent to private collection agencies during this period.
For a full list of changes, visit the IRS’ People First Initiative.
6. You can file your taxes virtually
If you’re comfortable using computers and confident preparing your own taxes, consider using a free online tax software. IRS Free File is one option available if your income is $69,000 or less. If you choose to use one of the programs that are part of this coalition, be careful to read the fine print. (Each program has slightly different criteria for their software). In addition, some companies offer free state tax returns, while others don’t.
MyFreeTaxes is another online tool that helps you file your taxes for free. Unlike Free File, MyFreeTaxes does not have an income limit. However, if you need to file Schedule C for business income, then you will not be able to use the free software.
7. You can find tax support virtually (and it’s free)
Code for America, in partnership with Volunteer Income Tax Assistance (VITA, an IRS-sponsored free tax preparation program), has created a fully virtual intake process for free tax assistance. Visit Get Your Refund to connect with an IRS-certified volunteer who will help you file your taxes.
Your local VITA site may also have virtual options. Some VITA programs provide a drop-off site, where you can drop off your tax forms to have a tax preparer complete your return and contact you when it is ready to review before it is sent to the IRS. Look up your local VITA program and call to see if this is a service they provide.