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On March 17, the Internal Revenue Service announced that the federal tax-filing deadline is postponed from April 15 to May 17, 2021.
What does this mean for you?
Individual taxpayers can now postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, no matter what amount is owed. The postponement applies to individual taxpayers, including people who pay self-employment tax. Penalties, interest and additions to tax will start to accrue on any remaining unpaid balances as of May 17, 2021.
Taxpayers won’t need to file any forms or call the IRS to qualify for the automatic federal tax filing and payment relief. Individuals who need extra time to file beyond the May 17 deadline can ask for a filing extension until Oct. 15 by filing Form 4868.
Filing Form 4868 gives taxpayers until Oct. 15 to file their 2020 tax return, but doesn’t provide an extension of time to pay any taxes that are due. Taxpayers should pay their federal income tax due by May 17, 2021, so as to avoid extra interest and penalties.
The relief doesn’t apply to 2021 estimated tax payments that are due on April 15. Those payments are still going to be due on April 15. Taxes have to be paid as taxpayers earn or receive income during the year, either via withholding or estimated tax payments. Typically, estimated tax payments go out quarterly to the IRS from people whose income isn’t subject to income tax withholding, including self-employment income, interest, dividends, alimony or rental income. Most taxpayers automatically have their taxes withheld from their paychecks and sent to the IRS by their employer.
The federal tax-filing deadline postponement to May 17 only applies to 2020 individual federal income returns and tax (including tax on self-employment income) payments otherwise due April 15, 2021, not state tax payments or deposits or payments of any other type of federal tax. Taxpayers will still need to file income tax returns in 42 states plus the District of Columbia. State filing and payment deadlines can vary and aren’t always the same as the federal tax deadline. The IRS is asking taxpayers to check with their state tax agencies for those kinds of details.
The Laciak>cpa team is closely monitoring the situation and will continue to provide updates as soon as we have them. Should you have any questions in the meantime, please don’t hesitate to give us a call.
