Tax Day is July 15: What if You Need More Time?
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What is the new 2020 tax filing deadline and why was it moved to July 15?
Here's your money briefing for Monday, July 13th. I'm J.R. Whalen for The Wall Street Journal. The deadline to file your taxes is this Wednesday, the 15th. Americans got a three-month break because of the pandemic. And while that gave everyone some extra time to get their paperwork in order, millions of people are still hurting financially and might not have the extra funds to pay any taxes they owe. But don't just not file. Doing nothing can result in severe penalties.
The IRS is the most powerful creditor in the United States. It takes precedence over everybody else. It can do all kinds of things. It can put a lien on your assets that wipes out your credit or messes it up.
How can I get an automatic extension to October 15 and what form do I file?
They can seize assets. They can seize part of your bank account. They can garnish or seize your wages or parts of your wages.
But there are options. Our tax reporter Laura Saunders will be here to explain. She'll discuss extensions and which excuses for late payment are more effective than others. That's after the break.
Everyone knows tax day is normally April 15th, but this year, because of the pandemic, that got pushed back to July 15th, just a couple of days from now.
Does filing an extension stop interest and penalties on taxes I owe?
But what if you don't have the funds to cover any unpaid taxes? And what if you need more time to file? Our tax reporter Laura Saunders is here with some answers. You know, Laura, the IRS hasn't announced any official extension beyond July 15th. But if somebody needs more time, is there a way to do that, you know, within IRS rules?
If you're very stressed and if you are having a hard time getting your taxes done this year, you can get an extra three months to prepare the paperwork and file the return from July 15 to October 15.
What actions can the IRS take if I don’t file or pay my taxes?
You just file Form 4868 by the end of July 15. You can mail it in. I would get a certified. IRS doesn't have to receive it. by July 15. You only have to mail it by July 15. So that will give you three extra months to prepare the return. It does not give you three extra months to pay what you owe, even if you don't know what it is. But still, it's important to know that and to file something by Wednesday.
But if you get an extension and you owe money, would that turn off the clock on interest that the IRS charges you?
it doesn't turn off the clock on interest and it doesn't turn off the clock on certain penalties it turns off the clock on one big very potent penalty called failure to file if you don't file your return and say you don't file it for a year and you owe $1,000, the penalty on that is at least $435, say if you owed $1,000. So it's way more than credit card interest or anything like that. Those penalties can be really, really rough.
And what sorts of actions can the IRS take if somebody does nothing, you know, not file a return or not pay at all?
I would tell people pay attention to what I'm going to say. The IRS is the most powerful creditor in the United States. It takes precedence over everybody else. It can do all kinds of things. It can put a lien on your assets that wipes out your credit or messes it up. They can seize assets. They can seize part of your bank account.
When is it better to borrow money rather than use an IRS payment plan?
They can garnish or seize your wages or parts of your wages. And it just goes on and on. And the IRS is very hard to escape. The former taxpayer advocate, Nina Olson, used to say that she knew that if you ignore the IRS, if you put your head in the sand like an ostrich, it will come back at the very worst moment of your life. These things don't go away.
I know the IRS used to offer payment plans to let people pay off their taxes they owe over time. Are they still doing that?
Oh yes, and I guess we were talking about those penalties. There's failure to file, there's failure to pay, there are estimated tax penalties, interest runs on all of it, and they just build and build and build. And so you can stop some of the worst penalties just by doing something by July 15. And the more you can do, the better off you'll be. For instance, say you can pay part of your taxes, but not all of your taxes. The best thing to do would be to borrow that money from someplace else.
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Chapters
7 chapters
1
What is the new 2020 tax filing deadline and why was it moved to July 15?
0:05–0:48
2
How can I get an automatic extension to October 15 and what form do I file?
0:48–1:21
3
Does filing an extension stop interest and penalties on taxes I owe?
1:21–1:54
4
What actions can the IRS take if I don’t file or pay my taxes?
1:54–3:36
5
When is it better to borrow money rather than use an IRS payment plan?
3:36–4:45
6
What is the Offers in Compromise program and are third‑party ‘offer mills’ trustworthy?
4:45–6:14
7
Which excuses (like pandemic hardship) might the IRS accept to waive penalties?
6:14–7:50
Speakers
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