CHARLOTTE, N.C. — Money experts say a new tax deadline will create another crazy tax year -- following the Internal Revenue Service's decision Wednesday to push back the filing deadline for 2020 returns from April 15 to May 17, 2021.
The change is intended to give tax filers more time to get their returns in order after a year that wreaked havoc on many people's finances.
“Even though the deadline has been extended I still strongly recommend that you try to meet the April 15 deadline," Bernadette Joy, founder of Crush Your Money Goals -- a financial education and media company -- told WCNC Charlotte.
Don't wait until the deadline.
Joy said to delay the inevitable is to create additional stress, so why wait?
"This is especially important if you’re looking to get a refund if you end up owing," she explained. "If you end up owing, then you’re going to have less time to figure out how to pay back that money.”
The more time you have to come up with the money, the less likely you are going to bust your budget or drain your emergency fund.
If you've never hired a tax professional, this is the year to do it.
2020 was an unusual year for many reasons -- including taxes. There are new deductions and credits with the Coronavirus Aid, Relief, and Economic Security (CARES) Act -- along with several new government policies.
"A lot of people will hem and haw about having to pay for a tax professional because they think it's going to cost them more," Joy told WCNC Charlotte. "But in reality, if you had any of the things like a stimulus check, unemployment, owning a small business, or other nuisances that didn’t apply previous years, you are in a good spot to hire someone."
Joy added this year you are in more danger of doing your own taxes incorrectly and could end up paying more than you need.
Don't celebrate too much if you get a refund.
No one will argue it's better to get a refund than to owe Uncle Sam, but Joy said a large refund from the IRS means you've been lending the government your money.
“If you got a refund it means that you loaned money to the government for free — without any interest. You could’ve used that money to do things like pay off debt, build an emergency fund, or to plan for something fun."
Bottom Line: The sooner you start your tax return, the more time a tax pro can help you document and claim all of your potential credits and deductions.
“Even though I’m a money expert, I have someone doing my taxes," Joy said.