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The New Coronavirus Tax Extension: What You Need To Know

There’s finally some good news coming out of this coronavirus scare, particularly if you owe taxes: You now have three more months to file and pay.

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For those with tax debt, COVID-19 couldn’t have appeared at a worse time. With tax day right around the corner, you may have been worried about coming up with the cash to pay Uncle Sam. Thanks to a new extension, though, you now have a bit of breathing room to keep him off your back.

Here are some of the main things you should know about the new tax extension:

You Now Have Until July 15 to File

If you’re expecting a tax refund, you’ll probably want to file your tax return as soon as possible so you can get your hands on those funds. This is especially true during this time of need when many people cannot work due to lockdowns and quarantines.

Unlike other years where such a global health crisis wasn’t present, you’ll want to preserve this year’s refund for bills instead of luxuries. And if you have enough money to meet your monthly expenses and are still working, there’s no better time than now to apply that refund towards your emergency fund.

On the other hand, if you owe money to the IRS, the new July 15 filing date gives you three extra months to get your finances in order without paying a penalty.

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DO YOU NEED FINANCIAL ASSISTANCE

Stop! If you need financial assistance such as money to pay bills, a personal loan, or debt relief. See what resources are available to help you today.

Resources for Me

Refunds Are Still on the Way

While the tax filing deadline is now pushed back from April 15 to July 15, there’s no need to worry about getting your refund. There’s no sign of delays in the processing of refunds at the moment, so the quicker you file, the faster you can see your money.

Since the IRS reports that the average 2020 tax refund is just over $3,000, it may be the funding you need to stay afloat until things get back to normal.

File, Even If You Can’t Pay

The thought of being in debt to the IRS can be scary, but don’t let this fear keep you from filing if you owe and can’t make a payment.

When you file and can’t pay, penalties equal 0.5 percent per month of your owed taxes. If you don’t file, however, the penalty jumps to five percent per month, which could make your tax debt spiral out of control.

If you do owe taxes and cannot pay them in July, don’t feel bad, as you certainly won’t be alone due to the COVID-19 economic impact. File your taxes on time and contact the IRS to work out a payment plan. It can keep you out of trouble and keep your tax payments as manageable as possible.

The Coronavirus Extension Only Applies to Federal Taxes

Do you live in one of the 43 states that charge an income tax? If so, know that this July 15 IRS extension does not apply to your state taxes.

In other words, you’ll need to see if your state’s income tax deadlines have remained the same. If so, you may have to pay them before you write a check to the IRS when July 15 rolls around.