The IRS recently extended the tax filing deadline for individuals. These extensions will make filing taxes easier for individuals, and if you’re eligible you’ll have a little extra breathing room to finalize your taxes.
Although there are extensions in the tax deadline for some taxpayers, other taxpayers won’t qualify. Here’s what the extended tax deadline means for you.
Federal Tax Deadline Extension
In early March, the IRS announced a tax deadline extension for federal taxes. For the 2020 tax year, the federal tax deadline for individuals moved to May 17, 2021. Previously, the tax deadline was April 15, 2021.
The IRS will automatically extend this deadline to May 17, so there’s no need to request an extension. The automatic extension will allow taxpayers to avoid interest and penalties for 2020 taxes on any amount owed.
There’s another option available if you can’t make payments by the May 17 deadline. Individual taxpayers can request an extension to October 15 by filing Form 4868.
However, Form 4868 doesn’t allow an extension to pay taxes you may owe. You’ll have the May 17 deadline to pay federal income tax to avoid both interest and penalties.
If you think you’ll receive a refund on your federal tax returns, you should still file as early as possible. If you file online using the e-file option and you’re eligible for a federal tax refund, you’ll receive your tax refund within 21 days.
Self-Employment Tax Deadline Extension
If you’ll need to pay self-employment tax, you’ll also receive an extension until May 17, 2021. The IRS will allow you to pay this tax with no interest or penalties until after the extended deadline.
If there are unpaid balances on or after May 17, you’ll accrue additions to the tax, interest, and penalties.
As with federal taxes, you also have the opportunity to apply for an extension if you’ll pay self-employment tax. You’ll file Form 4868 and you’ll receive an extension until October 15.
This extension only applies to filing self-employment taxes, not paying self-employment taxes. You’ll still have until May 17 to pay self-employment taxes without additional interest or penalties.
Finally, there’s another deadline applicable if you live in Louisiana, Oklahoma, and Texas. Earlier in the year, the Federal Emergency Management Agency (FEMA) issued a disaster declaration.
Taxpayers in these states now have until June 15, 2021 to file business and individual tax returns. This June deadline also applies to make payments. The extension for federal taxes to May 17 doesn’t affect the June deadline for taxpayers in these states.
What the Tax Extension Doesn’t Apply To
While the tax deadline applies for federal taxes and self-employment taxes, you won’t receive a tax extension for certain tax payment situations.
Quarterly Estimated Taxes
First, the deadline won’t apply for taxpayers who’ll pay estimated taxes. These taxes are due quarterly, and for the first quarter, the deadline will remain the same. This means you’ll need to pay your Q1 estimated quarterly taxes by April 15, 2021.
You’ll pay estimated taxes if your income isn’t subject to tax withholding.
Second, if you owe state taxes, the tax deadline will remain the same. Filing and payment deadlines vary by state, and these dates aren’t always consistent with federal tax due dates. You’ll want to check with your state tax agencies to determine the exact due date.
Stay Updated with Tax Deadline Developments
As the tax season begins for some and ends for others, it’s important to remain updated with the latest developments and news. That way, you can avoid additional interest and penalties.
You’ll want to stay up to date with the latest information and work with professionals that can help you. Work with the professionals at 1-800Accountant for tax deadlines and other tax needs.