Just a reminder to those who have not yet filed their 2020 federal tax return that thanks to the IRS extending the filing due date, May 17, 2021 is the due date to either file your return and pay any taxes owed, or file for the automatic extension and pay the tax you estimate to be due for 2020.
See Relax Tax’s Tax Audit Assistance at relaxtax.com/audit
In addition, the May 17, 2021 deadline also applies to the following:
- Tax year 2020 balance-due payments – Taxpayers that are filing extensions are cautioned that the filing extension is an extension to file, NOT an extension to pay a balance due. Late payment penalties and interest will be assessed on any balance due, even for returns on extension. Taxpayers anticipating a balance due will need to estimate this amount and include their payment with the extension request.
- Tax year 2020 contributions to a Roth or traditional IRA – May 17 is the last day contributions for 2020 can be made to either a Roth or traditional IRA, even if an extension is filed.
- Individual refund claims for tax year 2017 – The regular three-year statute of limitations expires on May 17 for the 2017 tax return. Thus, no refund will be granted for a 2017 original or amended return that is filed after May 17. Caution: The statute does not apply to balances due for unfiled 2017 returns
Congress considers our tax system a “pay-as-you-earn” system. To facilitate that concept, the government has provided several means of assisting taxpayers in meeting the “pay-as-you-earn” requirement. These include Payroll withholding for employees; Pension withholding for retirees; and Estimated tax payments for self-employed individuals and those with other sources of income not covered by withholding.
Individual estimated tax payments for the first quarter of 2021 – Caution – The IRS did not extend the deadline for the first installment of the 2021 estimated tax payments, which continues to be April 15, 2021. Even though the filing due date for individual returns has been extended, in many cases the amount of estimated tax payments required for 2021 is predicated on tax determined for 2020. So, although your individual return for 2020 is not due until May 17, it may be necessary to estimate your 2020 tax liability prior to April 15 in order to determine your first 2021 quarterly estimated payment which is due April 15.
If this office is holding up the completion of your returns because of missing information, please forward that information as quickly as possible in order to meet the deadlines. Keep in mind that the ending days of tax season are very hectic, and your returns may not be completed if you wait until the last minute. If it is apparent that the information will not be available in time for the May 17 deadline, then let the office know right away so that an extension request, and 2021 estimated tax vouchers if needed, may be prepared.
Is your return completed but you are unable to pay your tax liability? Please call to discuss your options.
If your returns have not yet been completed, please call right away so that we can schedule an appointment and/or file an extension if necessary at 551-249-1040.
Dennis Harabin at Relax Tax is an expert in taxes, insurance, and debt. Contact him today!