Will the 2021 tax deadline be extended again?
In the face of the coronavirus pandemic, the Internal Revenue Service extended a number of filing deadlines for taxes. What’s the current position?
Covid-19 has forced millions in the United States to file for unemployment, led to people losing their jobs or having their hours cut, forced individuals to find new work, and also led to taxpayers being eligible for new tax credits, all of which has meant that people may find that filing their taxes may be a bit, or a lot, more complicated than in previous years.
IRS delays Tax Day
Like in 2020, the US Internal Revenue Service (IRS) has preemptively pushed back Tax Day (the day on which individual income tax returns are due to be submitted to the federal government) to give those in the United States more time to file. The delay will also help tax professionals and the IRS adjust their systems after pieces of the American Rescue Plan made changes to the US tax code in early March. Unlike 2020, the deadline has only been pushed back a month this time around, to May 17. For taxpayers who would like more time to file, the IRS has released guidance on how make that request.
At present there is no indication that the IRS is going to extend the filing deadline again, so expect May 17 to be the final deadline, however individuals who need more time can ask for it.
Requesting an additional extension from the IRS
According to the IRS, individuals who would like an extension can do so by submitting “Form 4868 through your tax professional, tax software or using Free File.” Free File “is a public-private partnership between the IRS and many tax preparation and filing software industry leaders who provide their brand-name products for free.” By sending an electronic request using Free File, individuals can have their filing deadline postponed to October 15, 2021.
Be aware though, filing Form 4868 gives the taxpayer an extension on filing, but not on payment of taxes due. Late payment, after the extended deadline of May 17, will incur interest and penalties. Clearly some taxpayers filing for the extension to October 15 for filing will not know the actual amount due on May 17. In that event making a reasonable estimate of the amount due and paying that to the IRS should minimize penalties and interest. If in doubt, always contact a tax professional.
Those taxpayers “serving in a combat zone or a qualified hazardous duty area” or those “living outside of the United States”, should be aware that they may be subject to different rules.
Exceptions for Louisiana, Oklahoma, and Texas because of severe weather
As of April 14th, individuals in Louisiana, Oklahoma, or Texas, who were impacted by severe winter storms in February, can delay filing their taxes until June 15, though our advice would always be to file as soon as you can collate all the necessary paperwork.
No extension to first quarter estimated tax payments
For individuals and businesses who need to make estimated tax payments for first quarter 2021 the IRS have decided not to extend the deadline. These amounts are due on Thursday 15 April. Check who must pay estimated tax.
The IRS has indicated that small business taxpayers could ask for relief from penalties if the cannot pay by April 15, that though of course leaves the decision on relief in the hands of the IRS.