After a three-month delay due to the COVID-19 pandemic, Wednesday is Tax Day in America.
Taxpayers have until the end of the day to file their tax returns or request an automatic extension, which would defer paperwork — but not payments for taxes owed — for another three months.
According to the IRS, nearly 134 million taxpayers have already filed returns for 2019, including about 119 million who filed electronically.
The Internal Revenue Service announced in March that it pushed the typical April 15 tax deadline back to July 15. It made the move to aid Americans dealing with economic hardship brought on by the health crisis, as millions of workers were laid off or furloughed.
The IRS had considered moving back the tax deadline again, but ultimately decided against it, primarily because taxpayers can receive the automatic extension. Those who do must file their returns by October 15.
If you owe tax and cannot pay the amount in full, experts say it’s best to still file your tax return. The IRS is willing to make payment arrangements, which would avert costly penalties.
The government waived interest and penalties prior to the extended deadline, but they will begin to accrue on Thursday.
Payments can be made on the IRS website using debit or credit cards, direct bank transfers or Electronic Fund Withdrawal.
Taxpayers can also mail estimated payments with Form 1040-ES, pay by phone, or use the IRS2Go mobile app.
In addition to filing taxes, taxpayers also have until the end of Wednesday to make contributions to an individual retirement account, or IRA, for 2019.
IRA contributions can be tax-deductible and lower the amount of tax you’re liable for.
The maximum contribution for traditional and Roth IRAs for most Americans is $6,000, but those over the age of 50 can contribute an additional $1,000.
Some taxpayers may be forced to file paper returns by mail, due to an unanticipated glitch related to an online tool the IRS set up in the spring to distribute stimulus payments to Americans, as part of the $2 trillion coronavirus relief package.
The agency established the tool for Americans for whom they didn’t have banking information, and who didn’t earn enough to file a tax return. The IRS set up the tool to get payments to these Americans quicker, but it created an unintended problem.
The system treated their submitted financial information as an actual tax return — so for those taxpayers who now must file a return electronically, the system will reject it, thinking they have already filed one.
“If you did this and you’re now trying to file for 2019, your tax return e-file will be rejected,” H&R Block said in a notice on its website.
H&R Block recommends that taxpayers who used the IRS non-filer tool to file a return listing income of $0 or $1 to send a new paper tax return through U.S. mail with “Amended EIP Return” written or printed at the top.
Those who filed with $2 or more of income should file their 2019 taxes using Form 1040-X to amend the return.
“A tax return that is filed after a stimulus registration is seen by the IRS as a duplicate, because there is already a tax return with that Social Security Number on file and will be rejected,” Ashley McMahon, a spokeswoman for TurboTax-maker Intuit, told the Detroit Free Press.
Photo Credit : https://en.wikipedia.org/wiki/United_States_Department_of_the_Treasury