Oct. 15 is an IRS deadline you do not wish to miss. What to learn about your 2020 tax return

IRS tax extension deadline Oct. 15: What to know about filing your 2020 tax return

Submitting for an extension provides taxpayers further time, however there are some penalties to pay attention to. 

Sarah Tew/CNET

This yr, tax day was prolonged to Could 17, but nonetheless hundreds of thousands of taxpayers needed to rush to file their 2020 tax return. Many selected to file for an extension to get extra time to assemble their data or get skilled recommendation, and even to keep away from potential errors. Now that remaining tax extension deadline is simply two weeks away. 

If you happen to miss the Oct. 15 submitting date, you may owe late charges or extra curiosity. Bear in mind, an extension would not postpone having to pay taxes that you just owe, it simply provides you further time to file your return. The IRS remains to be offering a number of digital submitting choices, together with free file for people whose revenue is not more than $72,000. 

Most significantly, if you have not but filed your 2020 tax return, you can be lacking out on cash, like a tax refund, stimulus checks or baby tax credit score funds. If you happen to wait too lengthy to file and declare a refund, the IRS says you can danger dropping it utterly. We’ll clarify beneath the best way to know if the deadline applies to you, who will get extra time to file and what occurs when you miss the October deadline. This is the best way to observe your IRS tax refund and what to learn about refunds on 2020 unemployment advantages

How do I do know if I qualify for a tax extension? 

The IRS may have granted a submitting extension when you filed Kind 4868 (PDF) both by paper or electronically utilizing e-file earlier than the Could 17 submitting deadline. You’ll have needed to pay all or a part of your estimated revenue tax due utilizing Direct Pay, the Digital Federal Tax Cost System, or utilizing a debit or bank card, and be aware that you just had been submitting for an extension.

Some taxpayers are routinely granted extra time to file. This contains navy personnel who’re serving in a fight zone or individuals in federally declared catastrophe areas.

How can I file my 2020 tax return? 

The IRS says that taxpayers can file and schedule their federal tax funds on-line, by telephone or with the cell IRS2Go app.

If you have to discover a tax software program service to make use of, and also you make $72,000 or much less, you could find an IRS-approved free submitting service simply. You may want to assemble the next info: revenue statements (W2s or 1099s); any changes to your revenue; your present submitting standing (single, married, submitting collectively); and dependent info. If you happen to make greater than $72,000, you need to use the Free File Fillable kind.

If you have not already made a tax fee, the IRS prefers that funds be made electronically, and gives a wide range of methods to take action, together with IRS Direct Pay, which is straight linked to a checking or financial savings account. An alternative choice is by bank card utilizing the cell IRS2Go app, or by means of the Digital Federal Tax Cost System

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Did an extension put off the money I owe to the IRS? 

No. Extending your filing deadline to October didn’t delay when you had to pay taxes that you may owe. According to the IRS, you needed to estimate and pay at least 90% of your tax liability by May 17 to avoid late fees. Otherwise, you will have accrued interest on what you owe, which you’ll eventually have to pay — plus possible penalties — on top of your income taxes. 

The late-payment penalty is usually 0.5% per month of the outstanding tax not paid by the filing deadline, maxing out at 25%. The IRS can also issue a late-filing penalty of 5% of the amount due for every month or partial month your tax return is late. If your return is filed more than 60 days after the due date, the minimum late-filing penalty is either $435 or 100% of the unpaid tax (whichever is less). 

For individual taxpayers, penalties and interest will stop accruing only when your balance is paid in full. For more on penalties or to work out a payment plan with the IRS, check out their web page

Will filing my 2020 return impact my stimulus payments?

If the IRS owes you money from the first two stimulus checks — maybe you didn’t receive either check or received less than you qualified for — you can claim the missing payments through a recovery rebate credit on your 2020 tax form. This holds even if you’re not usually required to file taxes. So the longer you wait to file, the longer it’ll take to get your missing stimulus payment. 

The IRS says it will automatically evaluate your eligibility for the third stimulus check when your 2020 return is processed. If the IRS calculated the amount of your third stimulus payment using your 2019 tax return, you could qualify for more money as a so-called “plus-up payment” once the IRS receives 2020 taxes and recalculates your total. However, until you file a 2020 tax return, the IRS won’t have your new income or dependent information on file. 

The IRS plans to issue eligible taxpayers third stimulus payments and plus-up payments through the end of 2021. 

Will filing my 2020 return impact my child tax credit payments?

The IRS will use your 2020 tax return to determine how much money you qualify for as part of the enhanced child tax credit this year. Advance monthly payments started in July and will continue through December. If you’ve waited until much later to file your 2020 return, the IRS will have used your 2019 tax return to calculate your initial payments. 

If you’ve had a change in income or added a new dependent since that older return was processed, you could get less money than you qualify for this year. Here’s everything to know about the IRS Update Portal, which lets you unenroll from the advance monthly installments and update your household info. 

If you didn’t file your 2019 or 2020 tax return, and you don’t plan to, you could still be eligible for the 2021 child tax credit. You’d have to register on the IRS non-filer portal before Oct. 15. 

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Will my refund be delayed because of filing a tax extension?

The timeline for getting your income tax refund — or your refund plus outstanding stimulus money — depends on when you file. Though you have until Oct. 15 to submit your return if you’ve filed an extension, it doesn’t mean you have to wait that long to file.

The IRS is experiencing delays and has a massive backlog of unprocessed returns because of the pandemic, so in some situations, it could take much longer than the average 21 days to issue refunds. Some refunds, especially for more complicated returns or those that need corrections, are taking up to 120 days

How can I review my tax account online?

An easy way to review all your tax-related details, including your address and payment plan details, is to access your IRS account online. According to the IRS, taxpayers can use the information from their account if they need to access their adjusted gross income, find their stimulus payment amounts or review their estimated tax payments or credits. Accessing your tax transcript will give you all the records necessary if you have a tax problem or missing payment. 

If you have any additional questions you can go visit the IRS’ Interactive Tax Assistant to get help. 

For more tax information, here’s an explainer on the difference between a tax refund and a tax return, and here’s why you might want to sign up for direct deposit when you file your taxes.

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