Uncle Sam has listened to their requests for more time to file their taxes, and they have been denied.
The Treasury Department and the IRS will meet the July 15 deadline for 2019 income tax returns and taxes due for that year, the agencies said.
The announcement came less than a week after Treasury Secretary Steven Mnuchin said bringing the deadline forward was “something we could consider.”
People who cannot send their documents in two weeks can obtain an extension until October 15. However, this is only an extension to file, not an extension to pay.
“The IRS urges people who owe taxes, even if they have a filing extension, to carefully review their situation and pay what they can before July 15 to avoid penalties and interest,” the agencies said in a statement.
Returns and taxes from last year aren’t the only items due in two weeks. Quarterly taxpayers must also pay taxes for the first two quarters of 2020 before July 15.
The news that the IRS met the deadline sparked mixed reactions from tax professionals. Many of them are guiding small business customers through the Paycheck Protection Program and competing with quick updates from the Treasury and the IRS.
On top of that, accountants are also grappling with the coronavirus that is emerging in multiple states, meaning they still don’t meet with customers and resume business as usual. Many are dealing with the same issues that plague remote workers today, including lack of child care.
“It’s kind of upsetting because life gets in the way,” said Nicole Davis, CPA and founder of Butler-Davis in Conyers, Georgia. “My workload has tripled and I am working long hours to meet deadlines for people who want to file on time.”
“Many companies have strict deadlines,” he said. “For us, it’s July 1. So if you can’t get it by then, then it could end in the extension.”
Asking for more time
The extension this year will give you three more months to gather your documents.
But it’s worth the extra work if you think you might miss the July 15 deadline.
The fine for not submitting an application is 5% of the unpaid tax that you owe, assessed for each month or part of a month of delay, up to five months.
Failure to pay your taxes on time can also hurt.
In that case, the IRS will assess a 0.5% tax penalty that will not be paid before July 15. The tax collector will continue to charge fines and interest on the outstanding balance until the debt has been crushed.
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There are many valid reasons why people may want to ask for more time to file, including the possibility that they have complex tax returns.
At the same time, many taxpayers continue to struggle to organize in order to hasten their return through the door.
“What bothered me is that even though it’s July 1 tomorrow, some clients call me and say they don’t have their documents together,” said Sheneya Wilson, CPA and founder of Fola Financial in New York.
“You had time to plan and you knew what was expected,” he said.
Knock out the paperwork
Still sitting on the sidelines with two weeks to go? Here are some suggestions to move on.
• Contact your tax professional. Don’t wait until July 15 to speak to your CPA. Companies can set deadlines before that date to make sure they have enough time to process returns.
Also, your CPA will still need to cut the numbers to find out how much you owe the IRS before July 15.
• Do you have a refund to come? File now. You cannot get your cash until you turn in the paperwork. The average refund issued as of June 19 was $ 2,763.
• Do you owe him Uncle Sam? Create a payment plan. In addition to fines, tax balances due accrue interest. As of July 1, the interest rate for underpayment is 3%.
Visit IRS.gov/payments to review the different agency fee plans.
There are no zero set-up fees for short-term payment plans, 120 days or less, but you are still responsible for penalties and interest accrued until you have paid the tax.
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