- The Treasury Department and Internal Revenue Service of the United States have announced to extend the taxation due date from April 15 to May 17, 2021. The change comes after calls from accountants and lawmakers to put off the due date as new legislation and pandemic-related work changes disrupt taxpayer plans.
- There is no need of requesting the extension, it is automatic, and it applies not only to filing the returning of the taxes, as well as tax payments.
- According to the announcement by IRS, the postponement is applied to every individual taxpayer, including people who pay self-employment tax. The relief does not apply to the first-quarter 2021 estimated tax payments that many small business owners owe.
- The formal guidelines related to the returning and payment of taxes will be uploaded soon by the IRS in the next upcoming days.
- 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.
- Among the changes this tax season are last-minute amendments to the $1.9 trillion stimulus bill signed into law earlier this month that give filers a new tax exemption on up to $10,200 of jobless benefits. The individual tax return, Form 1040, is also the mechanism for people to claim any missing $1,200 or $600 stimulus payments from last year.
- Individual taxpayers who need additional time to file beyond the May 17 deadline can request a filing extension until Oct. 15 by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. This form doesn’t guarantee any time extension for paying the on-due taxes. Therefore, the final deadline is believed to be May 17 to avoid any interest or penalties.
- Taxes must be paid as taxpayers earn or receive income during the year, either through withholding or estimated tax payments.
- It is quite skeptical to believe that everyone would agree to May 17 either. However, one can even decision from now on whether to file on time (i.e., by May 17) or extend until October. This delay by IRS is overall to give taxpayers subsequent amount of time to file the returns and be able to pay any outstanding levies.
- The extension is agreed and supported extensively by Neal and Pascrell who in a statement explained why this decision is necessarily beneficial to the American taxpayers. They expressed their interest over the 30-day extension because of this they would be able to continue monitoring upon the developments that causes during this hectic filing season.
- IRS took care of this massive task by processing a third round of direct payments to households, this time for $1,400 each. The IRS explained on Wednesday how it has gone so far sending about 90 million payments in overall aggregating to $242 billion.