Businesses and individuals will have 90 more days to file their income tax for 2019, according to a press conference led by Treasury Secretary Steven Mnuchin on July 7.
Normally, income taxes should be filed before April 15, but as part of the government's responses to the pandemic, filers will be able to defer payments of up to $1 million and corporations can defer up to $10 million without incurring any penalties or interest.
However, according to Mnuchin, taxpayers should still file their federal returns by July 15. Mnuchin stated that Americans can file their respective taxes and are encouraged to do so before the deadline because they are anticipating giving tax refunds, as reported by Business Insider.
Taxpayers can still request an extension of up to 6 months to file returns, like they could in any other year and in any other circumstances. The new deadline that was announce applies to federal tax income payments only and it is up to each state to set their own deadlines.
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Filing taxes
If your income for 2019 was less than $69,000, then you can file your state and federal tax return for free. The IRS has posted 10 different guides on its lookup tool in their site. There are some companies that will let you prepare your tax return and file them for free if you have a simple tax situation.
You will need a W-2 form or a Wage and Tax Statement to submit your tax return. You can get if from your employer if you worked in 2019. If you are a freelancer then you will need 1099 forms.
Tax extension
If you are not ready to file your taxes before the given deadline, then you can request for a tax extension with the IRS.
This will give you more time to get everything sorted and it will push back the deadline to October 15. Remember that just because you asked for an extension, it does not mean that you are off the hook for unpaid federal income taxes that you owe, according to Business Insider.
This year, because of the coronavirus pandemic, the IRS has decided to extend the deadline for tax returns and payments until July 15. If you have not requested for an extension, then your due date is on July 15.
The result of underpaying taxes is a tax bill, so either your employer did not withhold enough money from your paycheck to cover your taxes or if you are self-employed, it is possible that you did not pay enough quarterly taxes.
What's the penalty for paying taxes late?
Due to the pandemic, the IRS is making an exception this year. The IRS are giving taxpayers until July 15 to pay their balance without any penalty fee and interest fee.
However, if you do not pay your tax bill in fully by the said deadline, whether you file an extension with the IRS or not, you will be penalized. It is usually 0.5% to 1% of any unpaid tax that you owed and it will be charged every month that the tax remained unpaid.
Aside from that, an interest will also be added on top of any tax and penalties that are due on Tax Day. The penalty is waived for taxpayers who file an extension and paid at least 90% of their tax liability throughout 2019.
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