This archive report was first published on 12 July 2020.
As the July 15 tax filing deadline approaches, many taxpayers are still waiting to hear back from the Internal Revenue Service (IRS) about their paper returns. According to the IRS commissioner, Charles P. Rettig, processing these returns is a 'high priority' for the agency.
Ms. Hockenberry, a tax expert, noted that the IRS has a significant backlog of paper returns, saying 'They have a backlog you wouldn’t believe.'
For those who have already filed a paper return, the IRS advises waiting patiently for processing. The agency's refund website states that returns will be processed in the order they were received, and advises against filing a second tax return or contacting the IRS about the status of the return.
However, there is some good news for those who file their 2019 return by July 15. Because the postponed filing date is 'disaster related,' the IRS must pay interest on refunds, calculated from April 15 until the refund is paid out. This interest is 3 to 5 percent, compounded daily, and may be paid in a separate installment.
Additionally, taxpayers have until July 15 to take steps to reduce their taxable income. Lisa Greene-Lewis, a certified public accountant and tax expert with TurboTax, suggests making contributions to an individual retirement account or a health savings account, if eligible.
For those who are still not ready to file, an automatic extension to file until October 15 can be obtained by submitting IRS Form 4868. However, it's essential to note that this extension only applies to filing, not payment. If you owe money, you still need to calculate what you expect to owe and pay it by July 15, or face penalties and interest on the unpaid amount.
