The latest data from the IRS shows almost 60 million tax returns have been filed with refunds averaging $3,064. While many companies are seeing both supply and demand effects from the coronavirus outbreak, your refund likely won’t be delayed. A Treasury Department spokesperson told Yahoo Finance that “there are currently no delays and we do not anticipate any at this point.”
Barbara Weltman, author of “J.K. Lasser’s Your Income Tax 2020,” says electronic filing lowers the potential for a virus-related problems this tax season. “A lot of information is transmitted electronically, scanning and sending materials. So in-person is not necessarily the way to go now,” Weltman told Yahoo Finance’s “On the Move.” “The IRS makes it easy with software products and paid preparers to submit returns electronically.”
Responding to crisis with filing extensions
April 15 is the deadline to file tax returns; though the IRS has the option to change it. “Whenever we have a kind of disaster, the IRS can, in fact, extend a tax filing deadline. So we just have to wait and see,” she said.
But individuals don’t need a crisis or even an excuse to file for an extension. “All you have to do is submit your request by April 15,” Weltman says. Most people can apply for an extension online with tax software or file a form 4868 with the IRS. But Weltman warns anyone seeking an extension to “pay what you think you might owe to minimize or avoid any underpayment penalties.” She also points out that the April 15 deadline to put money into an IRA or health savings account remains even with an extension.
Do it yourself
More filers are preparing taxes on their own this year than last instead of using a professional tax preparer. The numbers could change as millions more tax returns are filed in the coming weeks. But Weltman says the 2017 Tax Reform and Jobs Act makes it easier to file on your own. “We have preliminary data for the 2018 returns showing that 88% of individuals took the standard deduction and did not itemize,” she says.
Prior to tax reform about a third of filers itemized their deductions when filing their returns. Weltman says people who make generous charitable contributions or have out-of-pocket medical expenses may still do better by itemizing. “The law that was passed late in December kept the 7.5% of adjusted gross income threshold for itemizing medical expenses on your 2019 return. It was supposed to be higher, but they kept the lower threshold,” which Weltman says will help more people.
The IRS has issued more than 45 million refunds so far this year – about 2% less than it did during the same period last year; more than 155 million returns were filed in 2019 and coronavirus or not, just under 100 million returns are still expected to be filed this year. The average refund is roughly the same amount as it was last year.
Adam Shapiro is co-anchor of Yahoo Finance’s “On the Move.”