By this point in the year, tax season is usually long behind us.
But just as the coronavirus has changed how many of us will be celebrating the Fourth of July this year — with socially-distanced fireworks and responsibly-sized barbeques — it has also changed how we’re filing taxes; namely, with an extended deadline. And if you haven’t filed for 2019 yet, that deadline is fast approaching.
Here are some key things to know about the tax deadline extension for 2019.
WHAT IS THE 2019 TAX DEADLINE EXTENSION?
Normally, the deadline to file your taxes with the IRS is April 15, also known as Tax Day. But the economic fallout from the response to the coronavirus prompted the government to extend the deadline this year to Wednesday, July 15. If you haven’t filed, that’s when you’ll need to finalize your tax return, file and make any payments that may be due.
The extension also applies to estimated tax payments that would have been due on April 15 or June 15. If you delayed making estimated payments that normally would have been due on those dates, you will have to make them by the July 15 tax deadline.
WAYS YOU CAN TAKE ADVANTAGE OF THE EXTENDED TAX DEADLINE
The July 15 tax filing deadline also comes with another big benefit: The opportunity to top off your 2019 IRA and healthcare savings account (HSA) contributions. Normally, this deadline coincides with the regular filing deadline (April 15), but it was also pushed out to coincide with the new July 15 deadline.
If you have some extra money at your disposal, then putting that unallocated money to work in your retirement account or HSA can be smart. If you are under age 50, your total 2019 IRA contributions can be up to $6,000; if you are 50 or older, you can contribute up to $7,000.
For an HSA, contribution limits are a little different. If you’re eligible to make contributions for the 2019 tax year, you can put up to $3,500 aside for one person or $7,000 for a family if you are under 55 years old. If you are 55 or older, then you can increase your contributions by $1,000.
Even better: If you filed your taxes earlier in the year, but hadn’t yet hit your contribution limits to these accounts, you can go back and make those contributions. However, if you do that, you will need to refile your tax return.
If you are making contributions to a Roth IRA, then your tax situation should remain the same: You’ve already paid income tax on the money you’re contributing, so these contributions don’t lower your taxable income. But if you are making contributions to a traditional IRA or an HSA, you are effectively lowering your taxable income for 2019, and may qualify for an additional refund.
WHAT ABOUT STATE RETURNS?
That depends on where you live. Some states kept their state-filing deadline as April 15, while others gave taxpayers more time. You can find information about individual state filing deadlines here.
If you’ve missed your state’s filing deadline, you should file your state income taxes as soon as possible to avoid or limit potential penalties.
WHAT TO DO IF YOU STILL CAN'T FILE YOUR TAXES
Both individual taxpayers and businesses can request an extension beyond the July 15 deadline. If granted, you will have until October 15 to file your tax return. Individuals can request the extension by submitting Form 4868 through either their tax software or tax professional, while businesses need to submit Form 7004.
The IRS does make clear, though, that an extension to October 15 to file does not equate to an extension to pay any taxes due. If you owe taxes for 2019, you’ll have to estimate how much and make a payment by July 15 in order to avoid late fees and interest charges.
This article is not intended as legal or tax advice. Northwestern Mutual and its financial representatives do not give legal or tax advice. Taxpayers should seek advice regarding their particular circumstances from an independent legal, accounting or tax adviser.