The IRS and Treasury Department postponed the April 15 tax-filing deadline to May 17, the agencies announced this week.
“This continues to be a tough time for many people, and the IRS wants to continue to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic, while also working on important tax administration responsibilities,” said IRS Commissioner Chuck Rettig.
Taxpayers can also delay payment of any money owed to the IRS until May 17, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including those who pay self-employment tax.
The extended deadline applies only to federal income returns and taxes. Taxpayers will need to check to see if due dates for state taxes have been changed because not all states follow the same filing deadline as the federal government.
Want to know more about filing your taxes in 2021? Read our free, comprehensive guide.
Details on Tax Day 2021
Tax Day, the day when most Americans are required to file their federal income tax return, has become almost an anti-holiday. Extenuating circumstances can cause Tax Day to be changed. Last year, Tax Day was pushed back three months to July 15 due to the coronavirus pandemic. And if Tax Day falls on a weekend, it’s usually moved to the following Monday.
“Even with the new deadline, we urge taxpayers to consider filing as soon as possible, especially those who are owed refunds,” Rettig said. “Filing electronically with direct deposit is the quickest way to get refunds, and it can help some taxpayers more quickly receive any remaining stimulus payments they may be entitled to.”
Keep in mind that the IRS allows taxpayers to file for an extension beyond the normal tax-filing deadline. You can receive a six-month extension for practically any reason simply by filing IRS Form 4869, giving you until October 15 to file your return.
However, receiving an extension only extends the due date for filing your tax return. It doesn’t extend the due date for paying any taxes that may be due — you still must pay these by May 17, 2021. If you don’t, you could face late-payment penalties on top of the amount of tax that is due.
When Are Estimated Taxes Due?
Most people who work for an employer have federal taxes withheld from their gross wages each pay period. For them, Tax Day mainly involves filing an income tax return and paying additional taxes due (if there are any) or claiming a tax refund.
But some people don’t have taxes withheld from wages by an employer — this includes independent contractors, self-employed individuals and those who earn money from tips or receive investment earnings. These individuals usually must make estimated tax payments according to a quarterly or monthly estimated tax schedule.
The Tax Day relief does not apply to estimated tax payments. These payments are still due on April 15.
In 2021, quarterly estimated tax payments are due on the following dates:
- First quarter: April 15, 2021
- Second quarter: June 15, 2021
- Third quarter: September 15, 2021
- Fourth quarter: January 15, 2022
If estimated taxes aren’t paid by the deadline, late-payment penalties could be assessed on the amount of taxes that’s due. Individuals who don’t pay their quarterly estimated tax by January 15, 2021, but file their 2020 tax return early, however, will not be assessed a penalty. This date is extended to January 31, 2021, for self-employed individuals.
Read More: Tax Prep as an Entrepreneur
Start Preparing for Tax Day Now
Even with the extension, it’s not too early to start preparing for Tax Day 2021. Be sure to speak with your tax advisor and personal financial planner for guidance in your specific situation.
Paying your taxes is only one aspect of personal finance. To stay on top of your finances, you can manage your money with free, online financial tools. Millions of people use Personal Capital’s free dashboard to see all of their financial accounts in one place. Using the technology, you can:
- Budget your money with the Savings Planner
- Stay on track toward your long-term goals with the Retirement Planner
- Analyze your investments with the Investment Checkup
- Uncover hidden fees in investments with the Fee Analyzer
As Tax Day comes upon us, you’ll know exactly where you stand financially.
Personal Capital compensates Brian E. Leyde (“Author”) for providing the content contained in this blog post. The information and content provided herein is general in nature and is for informational purposes only. Individuals should contact their own professional tax advisors or other professionals to help answer questions about specific situations or needs prior to taking action based on this information. Tax laws and authorities are subject to change, either prospectively or retroactively, and any subsequent change could have a material impact on your situation.