Steven Mnuchin, U.S. Treasury secretary, speaks during a Senate Small Business and Entrepreneurship Committee hearing in Washington, D.C., U.S., on Wednesday, June 10, 2020.
Al Drago | Bloomberg | Getty Images
This tax season may look more like a tax year, as Treasury Secretary Steven Mnuchin weighs delaying the July 15 deadline once again.
“As of now, we’re not intending on doing that, but it is something that we may consider,” he said in a June 23 interview at the Bloomberg Invest Global 2020 virtual summit. He said he was considering another delay to Sept. 15.
Treasury has already pushed the April 15 deadline for federal income tax returns to July 15, giving individuals and professionals some relief as they grappled with coronavirus and stay-at-home orders in the spring.
On that day, federal income returns for 2019, as well as taxes owed, are due. The IRS also pushed a series of other deadlines — including taxes for the first and second quarter — to July 15.
Be aware that your state may have different deadlines.
For tax professionals, a further delay of the tax season would be a mixed blessing.
Accountants are hustling 2019’s tax returns out the door, as well as dissecting the Paycheck Protection Program and all of its tax-planning implications for small-business clients.
The PPP, a federal forgivable loan program established by the CARES Act, has many moving parts, and guidance on obtaining forgiveness continues to evolve.
“It’s a catch-22,” said Joshua B. Standley, an enrolled agent with DKK Accounting in Duluth, Minnesota.
“There has been no downtime,” he said. “We have to keep up on bookkeeping and payroll compliance, but now we’re jumping back and forth between things.”
While more time to process returns would help — especially as coronavirus cases begin to tick up in multiple states — pushing the deadline out too far could potentially affect year-end planning and the 2021 tax season.
“What happens next year?” asked Standley. “Do you extend 2021’s date now because people are still working on this?”
Don’t wait until July 15
Getty Images | filadendron
Many Americans have already filed their income tax returns. The IRS received 136.5 million individual income tax returns as of June 12, which is down from 144 million in the year-ago period.
If your return is straightforward and you’re expecting money back, get to it. The taxman distributed an average tax refund of $2,767 as of June 12, according to the IRS.
“I would encourage all Americans, if you can file, go ahead and do it, particularly if you think you have a refund,” Mnuchin told Bloomberg.
Filers who don’t think they’ll turn in their paperwork within the next three weeks can request an extension.
That would give them until Oct. 15 to submit returns, but they’ll still need to pay any taxes owed by July 15.
You also shouldn’t wait until July 15 to scoop up tax savings opportunities. Here are a few to get on your radar:
• Tax extenders. Each year, legislators must renew a package of tax breaks. These write-offs include a $4,000 deduction for tuition and fees for your college student — and you don’t have to itemize on your taxes to get this one.
• Health savings accounts. People in high-deductible health plans can save money in their health savings account and have it count for 2019.
You normally save in an HSA on a tax-deductible or pretax basis and have your money grow tax-free over time. If you use the proceeds to cover qualified medical costs, you can do so tax-free.
For 2019, the maximum contribution is $3,500 for self-only coverage ($7,000 for family plans). Accountholders turning 55 can throw in an extra $1,000.
• Individual retirement accounts. You have until July 15 to save up to $6,000 in your individual retirement account (plus $1,000 if you’re age 50 and over), and have the contribution count for 2019.
Many savers can also claim a tax deduction for making that IRA contribution, based on their modified adjusted gross income for 2019, even if they had a retirement plan at work.