Traditionally, April 15 is tax day. Prior to the rise of digital filings, the post office would often have long lines on the 15th or the next business day if the 15th fell on a weekend. The Internal Revenue Service (IRS) expects that all Americans file an annual return reporting their income and the taxes they paid.
Knowing how much you owe and filing your taxes on time is important, as any delay in the filing process leaves you vulnerable to penalties and fees. In recent weeks, in part due to massive social disruption, the IRS has been under pressure for adjusting the rules for the filing of 2019 income taxes. Now, per an official announcement from the IRS, the tax day for filing 2019 taxes in the year 2020 will be July 15.
What exactly will this delay involve for the American taxpayer?
The delay announced will apply to both the actual filing of the deadline and the payment of any outstanding taxes from 2019. People who haven’t yet filed can continue working on their returns or setting aside funds to pay their taxes until as late as July 15, 2020.
Typically, you have a legal obligation to file your taxes for the previous year and pay any amount due in full by April 15. Failing to pay them in full and on time can mean incurring substantial penalties and fees, as well as interest. Although the IRS does allow people to make payments on their outstanding tax debt, paying everything by the deadline is the ideal.
What does this delay in filing mean for you?
The decision to push back the filing date for taxes was not a minor change, but it is one that could have implications for many Americans. Particularly for those who owe taxes and do not expect a refund, the additional three months of time will allow them to make the payments necessary to fulfill any outstanding tax obligations from 2019 without incurring any kind of penalties or interest.
The IRS is notorious for high interest rates and penalties that may exceed the amount of tax initially owed. Those three extra months could mean that some people manage to successfully avoid paying penalties and interest on taxes that they owed for their income in 2019.