Tax Day is quickly approaching. The IRS moved the deadline from April 15th to July 15th because of the coronavirus pandemic.
If you are filling out those IRS forms, here are some tips and things to look out for next year.
“If you make less than $69,000, you are entitled to the IRS Free File program” according to CBS News business analyst Jill Schlesinger. Schlesinger says those free tax filing software programs can be found at irs.gov.
If you need more time to file, you can get an extension until October 15th, but there’s a catch. “An extension to file is not an extension to pay,” according to H&R Block’s Chief Tax Officer Kathy Pickering. “So if you're in a situation where you owe taxes, you're still gonna need to estimate how much your tax payment needs to be and make that payment by July 15th in order to avoid any penalties or interest," she says.
If you don’t have the money now, you can apply for a payment extension of up to 120 days, or you can ask the IRS to set up an installment plan.
And for the millions who lost their jobs during the pandemic, it’s not too early to think about next year. Both state and federal unemployment benefits are taxable and will have to be paid next year. “You can actually ask to have taxes withheld from your check, but it doesn't happen automatically. You have to ask to have that done,” says Pickering. There are six months left this year to make that adjustment to avoid a big tax bill in 2021.
If you’ve already filed your taxes, you can still make an IRA retirement contribution, but it has to be in by July 15th.