Tax Deadline Extension: What Is Extended For 2021
The IRS gave residents and businesses of Texas, Oklahoma and Louisiana extra time because a severe mid-February winter storm left millions without power and water.
On March 17, 2021, the IRS officially extended the federal income tax filing deadline from April 15 to May 17. That means taxpayers who owe money dont need to file a tax return until this date, and if they owe money they dont need to make payments until then.
This extension applies to all filers, including individuals, businesses, trusts, estates and more. It applies regardless of the amount you might owe, and payments will not incur additional penalties or interest up until May 17. This extension is automatic, meaning taxpayers do not need to file any additional forms to take advantage of it.
The May 17 extension could provide some significant benefits for taxpayers looking to save for retirement through an IRA. Thats because the normal April 15 income tax deadline is also the IRA contribution deadline. In turn, the new May 17 due date would simultaneously push back the 2019 IRA contribution deadline.
For reference, the 2020 standard IRA contribution limit is still $6,000, or $7,000 if you are 50 or older. If youve already maxed out your contribution for the 2020 tax year, you can contribute toward the 2021 tax year, for which the limit is also $6,000.
This extension does not apply to 401 retirement savings accounts.
How Will The Tax Deadline Extension Affect Taxpayers
Whether youre filing as an individual, a business, a trust, an estate or anything else, your 2020 tax year federal tax filing and payment deadline is now May 17. You wont need to take any action in order to take advantage of this extension.
However, the federal government recommends that taxpayers file their taxes as soon as possible, particularly those who are expecting tax refunds. Earlier in the year, U.S. Treasury Secretary Steve Mnuchin said that he wanted those refunds to get into peoples hands as soon as possible. This influx of cash is a great way for people to cushion the financial hit from the pandemic.
Remaining Deposit Dates For The Child Tax Credit Payments
The IRS has three more rounds of advance partial payments to send to those who qualify. Here are the payment dates to keep track of November through December 2021 and in 2022:
- Tax season 2022
After you receive whatever monthly payments the IRS sends you this year, the remainder of your money will come with your tax refund in 2022, after you file your 2021 tax return next spring. While the IRS did extend the 2020 and 2021 tax filing dates due to the pandemic, you typically have from the end of January to April 15 to file.
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Whats The Deadline To Pay Your Taxes
If youâre sending your return in via snail mail, the IRS considers your return âon timeâ if itâs addressed correctly, has enough postage, and is in the mail before the end of business on your filing deadline.
Otherwise, you can e-file your return before midnight on your tax filing deadline day.
If youâre self-employed, your business probably pays taxes in four sums throughout the year, rather than on one day. These are called estimated tax payments. The due date for these 2021 payments are April 15, June 15, September 15, and January 15 .
If youâd rather have someone else handle your bookkeeping and federal income tax filing, check out Bench.
Weâll set you up with a dedicated team of bookkeepers and a tax team to provide year round tax advice and file your taxes for you. With these teams, youâll have a tax planning session to ensure you are more prepared for next year. Weâll take both headachesâbookkeeping and taxesâoff your hands, for good.
Where Do I Send My Taxes
If you file online, there’s nothing to print out or mail, but we recommend you save an electronic copy for your records regardless. This could be especially useful if a third stimulus check is approved, since for the first two rounds of checks, your eligibility was based on your tax returns.
Otherwise, you’ll need to mail your return to the IRS. The specific mailing address depends on which tax form you use and which state you live in. The IRS has published a list of where to file paper tax returns this year here. Be warned, however: The IRS says that due to staffing issues, processing paper returns could take several weeks longer this year.
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How To File An Extension
To file an extension, submit IRS Form 4868 electronically by the filing deadline on May 17. You can also do it for free using any of the Free File software offered by the major tax preparation companies. These often help you estimate your tax due so you can make a payment.
Another option is to print out the form and send it to the IRS address for your state by the deadline.
Even if you file an extension, you still need to pay what you owe by May 17. If you underestimate that amount, you could end up paying interest on what you dont pay.
Tax Day For Individuals Extended To May 1: Treasury Irs
The due date for providing the 2020 Form 1095-B and 2020 Form 1095-C has been extended from February 1, 2021 to March 2, 2021. New Form 1099-NEC. Form 1099-NEC, Nonemployee Compensation, is used beginning with tax year 2020 to report nonemployee compensation.
Tax Return Now! If you miss the April 15 – May 17, 2021 – deadline to prepare and e-File a 2020 Tax Return or you e-Filed an extension by that date, you can e-File your 2020 Taxes until October 15, 2021. You won’t face any late filing penalties if you’re expecting a refund, don’t owe taxes, or if the IRS accepted your 2020 Tax Extension.
To request an extension to file your federal taxes after May 17, 2021, print and mail Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. We cant process extension requests filed electronically after May 17, 2021.
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What If You Miss A Date
You’ll probably be hit with a financial penalty, if only an extra interest charge, if you don’t submit a tax return and make any payment that’s due by its appropriate deadline. The late-filing penalty for a 1040 return is 5% of the tax due per month as of tax year 2020, up to a cap of 25% overall, with additional fees piling up after 60 days. The IRS says you should file your return as soon as possible if you miss a deadline.
Tax Day For Individuals Extended To May 1: Treasury Irs Extend Filing And Payment Deadline
IR-2021-59, March 17, 2021
WASHINGTON The Treasury Department and Internal Revenue Service announced today that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021. The IRS will be providing formal guidance in the coming days.
“This continues to be a tough time for many people, and the IRS wants to continue to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic, while also working on important tax administration responsibilities,” said IRS Commissioner Chuck Rettig. “Even with the new deadline, we urge taxpayers to consider filing as soon as possible, especially those who are owed refunds. Filing electronically with direct deposit is the quickest way to get refunds, and it can help some taxpayers more quickly receive any remaining stimulus payments they may be entitled to.”
Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Penalties, interest and additions to tax will begin to accrue on any remaining unpaid balances as of May 17, 2021. Individual taxpayers will automatically avoid interest and penalties on the taxes paid by May 17.
New Tax Rules For The Foreign Earned Income Exclusion During The Covid
As Coronavirus safety concerns and travel bans increased, some Americans living abroad decided to return to the US. Many had intended to stay abroad but cut their plans short because of the pandemic. Taking into account these unique circumstances, the IRS decided to adjust the requirements to qualify for the Foreign Earned Income Exclusion.
Under the revised rules, if you reasonably expected to meet the eligibility requirements of the FEIE during 2019 or 2020 but failed to do so because of the Coronavirus pandemic, you can still claim the tax exclusion. However, you must have left your country of residence within a specified date range. The date range is determined by when the period of adverse conditions began in different regions.
Therefore, you can still qualify for the FEIE if you left these regions after the dates below:
The period for this exception will end on July 15, 2020, unless the Treasury Department and IRS choose to extend it. This means that, if you left China between December 1, 2019 and July 15, 2020, you could still qualify as physically present or a bona fide residentso long as you expected to meet the requirements if not for the COVID-19 Emergency.
To determine the maximum available exclusion you can claim, youll need to prorate the FEIE amount based on the percentage of the year that you lived outside the US.
Heres how you would calculate the maximum FEIE exclusion for 2020 based on our example above:
There Are Some Groups Who Still Have Time To File
- Special deadline exceptions may apply for certain military service members and eligible support personnel in combat zones. Several resources are available for service members and their families who may be eligible for these exceptions.
- People who have a valid extension and are in or affected by a federally-declared disaster may be allowed more time to file.
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How Do I File My Taxes Online
CNET has rounded up the best tax software, featuring vendors such as TurboTax, H& R Block and TaxSlayer. These companies can make the tax filing process much easier, from reporting your taxable or self-employed income to setting up direct deposit to going through your itemized deductions.
That noted, the IRS provides a list of free online tax prep software offered by many of those same providers. You can use this service if you meet certain criteria and have a relatively simple tax situation. Requirements include: You make less than $72,000 annually, you don’t itemize deductions and you don’t own a business. This will likely be helpful for people who do not typically have to file taxes but need to do so this year to claim missing stimulus money.
If you want to itemize deductions or have a more complex financial situation — you run a business, have investments or generate rental income — you’ll have to pay for a higher tier of service, which can run a couple hundred dollars. Still, for most people, even the most deluxe online package is far less expensive than hiring an authorized tax pro. And if you prefer to keep it old-school, the IRS’ online tax forms handle some but not all of the calculations for you and still allow you to e-file or print and mail.
A number of online tax software providers will help you file for free.
Does This Extension Also Give Me More Time To Contribute Funds To My Hsa Or Archer Msa For 2019
Yes. Similar to the extended time granted for making retirement account contributions, you may also make contributions to your HSA or Archer MSA by July 15, 2020 for the 2019 tax year. Keep in mind that to ensure accuracy on Form 8889, its often best to make any contributions prior to filing your tax return.
Dont worry about knowing which tax forms to fill out when you are self-employed, TurboTax Self-Employed will ask you simple questions about you and your business and give you the business deductions you deserve based on your answers. TurboTax Self-Employed uncovers industry-specific deductions. Some you may not even be aware of.
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What About Child Tax Credit Payments
As a result of the American Rescue Plan, many parents have been receiving monthly checks as part of the expanded child tax credit program since July. If you haven’t filed a 2020 tax return yet, the IRS is using your 2019 return to calculate how much to send you each month .
The agency is encouraging any families that had a baby in 2020 to file their 2020 taxes as soon as possible. If your return is processed by Nov. 1, you may still receive the November and December payments for the baby born last year. And if your return is processed by Nov. 29, the IRS says you “may be eligible” for the December payment.
Coincidentally, Friday is also the day the October child tax credit payments are being sent out. If you didnt opt out of the payments, you should receive yours on Friday through direct deposit, and a few days later if youre waiting to receive a paper check in the mail. Here’s the full list of the payment dates. Anyone who does not receive their full child tax credit payments this year will get what they’re owed after filing taxes next year, for the 2021 tax year.
I Have Questions About My Taxes Can I Call The Irs
There are numerous ways to contact the IRS. The agency no longer offers live online chatting, but you can still submit questions through its online form. If you prefer to talk to a person, the IRS maintains a number of dedicated phone lines that are open Monday through Friday, from 7 a.m. to 7 p.m. . Individuals can call 800-829-1040 and businesses can call 800-829-4933. Note, however, that the IRS says “live phone assistance is extremely limited at this time.”
And there’s always the Interactive Tax Assistant, an automated online tool that provides answers to a number of tax law questions. It can determine if a type of income is taxable, if you’re eligible to claim certain credits and whether you can deduct expenses on your tax return. It also provides answers for general questions, such as determining your filing status, whether you can claim dependents or if you even have to file a tax return.
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Greenback Team Is Here To Help
The Greenback Team is fortunate to be a 100% remote team distributed around the world 11 countries and 12 states to be exact. And as many of us are expats ourselves, were here to keep you up-to-date and help you navigate all the changes related to your taxes.
We currently recommend that you file your expat taxes as soon as possible, particularly if you think you may be owed a refund. If you do owe taxes, you can file now and hold off on making a payment until the new extended deadline. Planning ahead will help you manage finances and reduce stress during this uncertain time.
Events and circumstances have been changing rapidly, and it is best to stay on top of taxes to take advantage of potential benefits coming your way. Were here to answer any questions you may have during this confusing time, especially regarding US tax deadline in 2021 for citizens living abroad. Please get in touch with us today.
Can I File My State Taxes Online
Many states have their own online tax platforms, which are usually free to use. TurboTax, H& R Block and other online tax tools can also help you file your state return and can import most of the information from a federal return they’ve already prepared, though they usually charge a fee. Check out CNET’s comparison of tax software and services to see which is best for you.
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The above article is intended to provide generalized financial information designed to educate a broad segment of the public it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.