WASHINGTON (WCBD/AP) – Have you filed your taxes? A reminder that your state and federal income taxes are due on Wednesday.
The federal government postponed the annual tax deadline from April because of the coronavirus pandemic, giving more people time to file and pay their taxes.
If you are not ready, taxpayers must file for an extension, which would be October 15th, or face a penalty. Those extension forms are also due on Wednesday, July 15th.
Taxpayers who filed paper returns may not get their funds for a while. There is a backlog of paper tax returns with so many IRS employees working from home.
Yes. In most cases, you must file and pay your taxes by July 15.
Taxpayers who need more time can request an extension on the IRS website. That will give them until Oct. 15 to file. However, an extension to file does not mean added time to pay. So those planning on filing later should estimate what they owe and make that payment by July 15.
I can’t pay now, what do I do?
Go ahead and file your taxes even if you cannot pay.
The IRS is willing to set up payment plans or make other arrangements with taxpayers who cannot pay in full. Many of those can be set up online. And the penalty for failure to file will be much more expensive than the failure to pay, says Kathy Pickering, chief tax officer at H&R Block.
What about refunds?
The IRS is still processing and issuing refunds, most within 21 days.
Those getting refunds will be paid interest, dating back to April 15, if they file on time. The interest rate is 5% per year through June 30. Starting July 1, it drops to 3% per year. The interest is compounded daily for refunds. Any refund issued after July 1 will get a blended rate.
I don’t want to go anywhere. Can I do this online?
Yes, you can file or pay your taxes online. The IRS urges taxpayers to use electronic options to support social distancing and speed the processing of returns, refunds or payments. The agency is still working its way through a backlog of mail that built up during its closure in response to the pandemic.
Accountants and tax preparation services say they have a variety of means to help people prepare their taxes without meeting face to face.
What about estimated taxes?
Taxpayers who make estimated quarterly tax payments have until July 15 to make the payments for the first and second quarters. Those were originally due on April 15 and June 15 respectively.
There are a host of other tax deadlines linked to July 15. Check out the IRS website or reach out to a tax professional for answers to your specific question.
Editor’s note: Portions of the Q&A are from the Associated Press.