With the pandemic still at our heels, many Americans are still recovering from the financial effect of the virus. With the wave of layoffs and financial cutbacks, many taxpayers were left with a sizable hole in their wallets, having to drastically lower their monthly expenses. This made the approach of April 15th, when their taxes would need to be filed and sent, something many Americans dreaded.
However, in response to the pandemic and its negative effects on people’s finances, the federal government made the choice to extend the deadline to May 17th. Phil Huff from Independent Wealth Advisors stated their reasoning behind the extension:
It was mainly circled around the coronavirus and all of the changes that were put in tax codes in 2020, and really just giving them more time to work through those.
This extra time gave taxpayers more room to breathe while they completed their last-minute tax filing. Huff also stated that this will allow those who are still filing for tax returns to receive those benefits before the due date.
For those who were still unable to file their taxes before May 17th, the IRS offered to allow taxpayers to file for an extension, allowing them to move their due date to October 15th. Regardless of the reason, taxpayers would be able to apply and receive these extensions electronically.
While this may seem like a godsend, the IRS wants to make one thing clear: these extensions allow for more time to file taxes, not more time to pay them. The payment of these taxes will continue to be due at the original due date of May 17th. Failure to do so will result in the IRS charging interest on the unpaid balance.
One silver-lining to this is that if taxpayers are unable to pay their taxes this year, they will be able to file for an online payment plan. With these options in place, those who are still reeling from the effects of COVID-19 will be given more opportunities to file and pay their taxes without receiving penalties for aspects of life out of their control.