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Did you know that the Treasury Department and Internal Revenue Service extended the federal income tax filing due date for people filing for the 2020 tax year from April 15, 2021, to May 17, 2021? That’s because the IRS wants to help you file your taxes while you are figuring out the pandemic uncertainties. Just remember that filing electronically using direct deposit is the fastest route to getting your refund and your latest stimulus payment!
May 2021 Extension
If you normally file Form 1040 (which is an individual federal tax return), you will have until May 17, 2021, to get your tax return filed and pay any outstanding income taxes you might owe. This applies to taxpayers who are individuals as well as if you are self-employed and report your income and expenses using a Schedule C form. Sidenote: the extended federal tax filing deadline only applies to individual federal income returns and tax (including a tax on self-employment income) payments, but not state tax payments, deposits or payments.
Essentially this extension means you, as an individual taxpayer can put off your federal income tax payments for the 2020 tax year from April 15, 2021, to May 17, 2021, without succumbing to penalties and interest, no matter how much you owe or whether you pay self-employment tax.
Contributions
The extended filing time also allows you some extra time to contribute to your individual retirement account (IRA), contribute to a Health Savings Account (HSA) or even request a 2017 tax refund. These contributions can often lower your taxes, raise your refund, and allow you to boost your retirement and health care funds. In short, you can make contributions to both your regular IRA and Roth IRA contributions until the May 17 deadline.
Also, if you need more time to file after May 17, you can ask for a filing extension until Oct. 15 in one of three ways by filing Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return) through a tax professional, using your tax software of choice or just using the Free File link on IRS.gov. However, please note that you’ll still have to pay the federal income taxes due by May 17, 2021, if you want to keep from having to pay interest and penalties later. The good news is, filing quickly means your tax refund using e-filed returns is usually issued within 21 days.
Please note that if you receive income from the following, you typically must pay taxes on them:
- Self-employment
- Interest
- Dividends
- Alimony
- Rental income
These are often paid quarterly if your income doesn’t have tax withholding (normally being withheld from your paycheck and sent to the IRS by your employer).
Disaster Relief
Please note that taxpayers who received winter storm disaster relief in the states of Louisiana, Oklahoma and Texas were issued by the Federal Emergency Management Agency (FEMA), you have until June 15, 2021, to file your individual and business tax returns to make your tax payments.
We hope this information helps you as you navigate your way through the 2021 tax filing season. Our Corporate Capital team is pleased to be a one-stop-shop for creating corporations and LLCs across the country. Whether you are seeking to start a business or are a longtime entrepreneur, we have licensed professionals and legal experts who are ready to help you tackle your goals successfully. Our team knows just how important your business is to you and we are here to assist! We welcome you to reach out to our highly experienced business management team in Las Vegas, Nevada, to learn how we can help you with your business needs!
Sources:
https://www.irs.gov/newsroom/tax-day-for-individuals-extended-to-may-17-treasury-irs-extend-filing-and-payment-deadline
https://www.forbes.com/advisor/taxes/what-the-may-17-tax-deadline-means-for-your-taxes/