Millions of people have already received the third stimulus check, and millions more will get the payment soon. Similar to last year, the IRS could send some taxpayers a bit more money than just the coronavirus stimulus checks, if the IRS delays your tax refund.
Last year, the IRS sent over $3 billion extra to taxpayers in the tax refunds, and the same could happen this year as well. As per a Yahoo report, by late January, the agency was still processing 6.7 million returns from the 2019 tax year.
Yost Partners was up 0.8% for the first quarter, while the Yost Focused Long Funds lost 5% net. The firm's benchmark, the MSCI World Index, declined by 5.2%. The funds' returns outperformed their benchmark due to their tilt toward value, high exposures to energy and financials and a bias toward quality. In his first-quarter letter Read More
Also, the IRS got about 35 million more returns after the agency started accepting 2020 tax returns from February 12. Owing to such a backlog, it is likely that many people will get a little extra money from the IRS in the form of interest on their tax refund.
The agency pays interest on the tax refund amount if it takes more than 45 days after the filing deadline to process your tax return. Owing to the workload, the IRS is expected to pay interest on tax refunds this year as well.
After the start of the pandemic last year, the IRS, like other employers, also asked its employees to work from home. However, the agency wasn’t able to keep pace because of its outdated and paper-based system. There were reports last year that the IRS ran out of space to keep the paper tax returns sent in by tax payers.
This means, if the IRS still hasn’t processed your 2019 tax refund, then apart from the coronavirus stimulus checks, you will get a little bit extra from the agency for their delay in sending out the tax refund.
Moreover, the same could happen with the 2020 tax return as well. If the agency delays your 2020 tax refund, you will get interest as well, but sometime later this year. However, these interest payments won’t be much, so don’t have too high of expectations. On average, the interest payment last year was $18.
IRS Extends Tax Filing Deadline
In March, the GAO (Government Accountability Office) noted that such interest payments have been rising over the years. Also, the organization said that such delays would continue to cost billions of dollars until the agency modernizes its operations.
Probably this why, to make up for the backlog, the IRS extended the tax filing deadline to May 17 from April 15. Last year, the agency extended the 2019 tax deadline by three months to July 15, 2020, without penalties and interest, owing to the coronavirus pandemic.
Though you have until May 17 to file your tax return, it is recommended that you file your return as early as possible, especially, if you qualify for more payment on the basis of your 2020 income, than the 2019 income.