Over the taxes last few weeks, federal governments announced that tax filing deadlines have been extended across North America to respond to the impacts of COVID-19. In the United States, the deadline for tax filing and payments has been moved to July 15th, 2020. To help taxpayers understand these changes, H&R Block has created a fact sheet on understanding the coronavirus (COVID-19) tax payment deadline changes.
In Canada, the tax filing deadline has been extended to June 1st, 2020, and taxpayers will have until September 1st, 2020 to pay any amounts owed. To learn more about the changes to tax deadlines, credits available, and get more information on top-ups, read more about how the federal government announcement affects you and your taxes.
Although filing your taxes might not be top of mind right now, we’ve looked into the top reasons why filing your taxes now can benefit you, your business, and others.
1) Quicker access to your refund
This is the most obvious and beneficial reason to get your taxes filed. The faster your return is filed, the quicker you’ll receive your refund—meaning more money in your pocket during this time of need.
The IRS estimates it should take less than three weeks to receive your refund if submitted electronically, and even less time if you select direct deposit. For more information on filing your taxes with the IRS, read what to expect with your refund this year.
The CRA is issuing refunds to online tax filings in as little as 8 business days. For more information about filing your taxes with the CRA, read how you can get set up online.
2) Cash flow management
Filing your taxes earlier will help you manage your cash flow. By figuring out your tax liability for 2019, you’ll be able to calculate what the minimum amount of quarterly tax estimate payments are for 2020. It’s important to stay on top of your 2020 quarterly tax estimate obligation as it may be accumulating.
3) Discover issues and tax savings before the deadline
The earlier you prepare your taxes, the more time you’ll have to resolve any bookkeeping issues or find any missing receipts, records, and statements. If you need help getting your taxes in order, a tax filing service like Wave Advisors offers professional advice where you need it most. Wave Advisors can help identify tax issues, find deductions you may have missed, and provide tax saving solutions.
4) It’s only a temporary deferral
While tax deadlines have been moved to provide assistance during this difficult time, keep in mind you’ll eventually need to file and pay any amount owed. If you’re able to file your taxes as planned, it will alleviate any concern about forgetting to do it in the future.
5) Avoid spending money that will need to be paid later
Having extra money set aside to pay income taxes between now and the new deadline can lead to the illusion of “excess” cash. But don’t forget you’ll need to make your payment sooner than later, and paying now will spare you from not having those funds when you need them.
6) Put your focus back on running your business
If you’re able to get your taxes filed sooner than later, take advantage while you can. Checking this task off your long to-do list will give you more time to run your business, which is more important than ever for entrepreneurs.
If you’re looking for help filing your taxes, H&R Block has options available to fit with your small business needs.
7) Filing your taxes now could help others
Paying your taxes allows the federal government to redistribute a portion of your tax dollars to those in need as quickly as possible. We know that everyone has been affected by COVID-19 in some way, and filing your taxes as planned could help those who are counting on government funding get it.