- Tax Deadline: May 17, 2021 Is Tax Day for 2020 Taxes
- Do I have to file my taxes by May 17?
- Tax deadline for quarterly estimated payments
- 1. File your 2017 tax return (yes, 2017)
- 2. Max out your 401(k) by Dec. 31
- 3. Contribute to or open an IRA by Tax Day
- 4. Contribute to your Health Savings Account
- 5. File for an extension by Tax Day (but still pay)
- 6. When are taxes due in your state?
- How to get an extension
- Find tax software that works for your situation
- Learn how a 401(k) works
- Find out how to open an IRA
- Check out state income tax rates
- Learn how quarterly estimated taxes work
- April 15 tax deadline to be delayed until May 17
- Many called for extension
- What does Form 4868 do?
- How do you treat jobless benefits on 2020 tax returns?
- Tax season already sluggish
Tax Deadline: May 17, 2021 Is Tax Day for 2020 Taxes
Tax day is Monday, May 17, 2021. This is the tax deadline to file your federal income tax return.
The IRS has extended the deadline from April 15, 2021, according to a written statement from the chairman of the House Ways and Means Committee, though the IRS has not yet issued its own guidance.
We're updating this page as new information becomes available.
Do I have to file my taxes by May 17?
No, but there's a catch. If you request a tax extension by May 17, 2021, your tax return will be due on Oct. 15, 2021. However, your tax bill will still be due on May 17, 2021. Getting a tax extension provides more time to file your tax return, but it does not provide more time to pay your taxes.
Tax deadline for quarterly estimated payments
The IRS requires quarterly estimated tax payments from many people whose income isn’t subject to payroll withholding tax (usually the self-employed, independent contractors or people with investment earnings). For estimated taxes, the answer to “when are taxes due?” varies: The year is divided into four payment periods, and each period has its own payment due date.
» MORE: See 9 ways you can get money to the IRS
1. File your 2017 tax return (yes, 2017)
If you were due a refund for the 2017 tax year but didn't file a tax return, you only have until May 17 (Tax Day) to submit that old Form 1040 and claim your money. So if you haven’t filed, get to work! Miss the tax deadline, and the U.S. Treasury gets to keep your money.
2. Max out your 401(k) by Dec. 31
Contributions to a traditional 401(k) reduce your total taxable income for the year.
For example, let’s say you make $65,000 a year and put $19,500 (the limit in 2020) into your 401(k). Instead of paying income taxes on the entire $65,000 you earned, you’ll only owe on $45,500 of your salary.
In other words, saving for the future lets you shield $19,500 from taxes (and even more if you're 50 or older; read more here).
Many employers offer to match a portion of what you save, meaning that if you contribute enough to your account, you'll also nab some free money.
» MORE: Estimate your tax bill with our free tax calculator
3. Contribute to or open an IRA by Tax Day
Contributions to a traditional IRA can be tax-deductible. You have until the May 17, 2021, tax deadline to contribute to an IRA, either Roth or traditional, for the 2020 tax year. The maximum contribution amount for either type of IRA is $6,000 — or $7,000 if you're age 50 or older. See all the rules here.
» MORE: Learn how IRAs work and where to get one
4. Contribute to your Health Savings Account
This medical account, available to individuals who have a high-deductible health plan, provides a tax-saving way to pay for out-of-pocket costs. You have until the May 17, 2021, tax deadline to contribute to an HSA for the 2020 tax year.
The 2020 limits were $3,550 for an individual HSA owner and $7,100 for a family. For 2021, the individual coverage contribution limit is $3,600 and the family coverage limit is $7,200.
If you're 55 or older, you can put an extra $1,000 in your HSA.
5. File for an extension by Tax Day (but still pay)
If you can't finish your return by the May 17 tax deadline, file IRS Form 4868. This will buy most taxpayers until Oct. 15 to file their tax returns. See more about how extensions work.
Note: A tax extension gets you more time to file your return, not more time to pay your taxes. You still must pay any tax you owe, or a good estimate of that amount, by the tax deadline.
Include that payment with your extension request or you could face a late-payment penalty on the taxes due.
» MORE: See how to set up an installment plan with the IRS by yourself
6. When are taxes due in your state?
Be sure to find out when your local Tax Day is. Most taxpayers face state income taxes, and most of the states that have an income tax follow the federal tax deadline. Ask your state's tax department: When are taxes due? (And if necessary, ask: How do I get an extension?)
How to get an extension
See what forms you have to fill out and what an extension really gets you. Learn more.
Find tax software that works for your situation
See our picks for this year and how much they cost. Learn more.
Learn how a 401(k) works
See how these retirement plans can cut your tax bill. Learn more.
Find out how to open an IRA
Here's how to get it done quickly. Learn more.
Check out state income tax rates
You might have a state tax return to file this year, too. Learn more.
Learn how quarterly estimated taxes work
Paying this way can help avoid penalties and interest. Learn more.
Get answers about stimulus checks, debt relief, changing travel policies and managing your finances.
April 15 tax deadline to be delayed until May 17
Frustrated taxpayers and CPAs are about to get some breathing room when it comes to filing those complicated 2020 tax returns.
The Internal Revenue Service announced late Wednesday afternoon that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15 to May 17.
“This continues to be a tough time for many people,” said IRS Commissioner Chuck Rettig.
“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.”
The IRS continued to encourage taxpayers to consider filing as soon as possible, especially those who are owed income tax refunds.
A House Ways and Means Committee news release issued Wednesday applauded the decision by the IRS to “extend the federal tax-filing deadline from April 15 to May 17.” May 15 is a Saturday, and May 17 is a Monday.
“This extension is absolutely necessary to give Americans some needed flexibility in a time of unprecedented crisis,” according to a statement made by Chairman Richard Neal, the Massachusetts Democrat, and oversight subcommittee chairman Bill Pascrell Jr., the New Jersey Democrat.
“Under titanic stress and strain,” the statement said, “American taxpayers and tax preparers must have more time to file tax returns. And the IRS itself started the filing season late, continues to be behind schedule, and now must implement changes from the American Rescue Plan.”
Neal and Pascrell had earlier called on the IRS to give already strained Americans flexibility to file their 2020 taxes.
The IRS noted that individual taxpayers can postpone federal income tax payments for the 2020 tax year due on April 15 to May 17, without penalties and interest, regardless of the amount owed.
“This postponement applies to individual taxpayers, including individuals who pay self-employment tax,” the IRS said.
Penalties, interest and additions to tax will begin to accrue on any remaining unpaid balances as of May 17. Individual taxpayers will automatically avoid interest and penalties on the taxes paid by May 17.
This relief does not apply to estimated quarterly payments that are due on April 15, 2021.
We have no news yet from the state of Michigan about whether the state income tax deadline will be extended as well.
The IRS said taxpayers will have to check with their state tax agencies to see whether any extensions will be granted there. Taxpayers file state income tax returns in 42 states plus the District of Columbia.
“We will review changing the state income tax deadline once the IRS issues an official notice,” said Ron Leix, a Michigan Department of Treasury spokesperson earlier Wednesday afternoon before the IRS made its official statement.
Accountants in Michigan, though, speculated that it's highly probable that the state eventually would extend its deadline as well, just in 2020.
The idea of a one-time, across-the-board extension makes a great deal of sense when you consider the extra long list of challenges and changes relating to the filing of 2020 tax returns.
One tax professional told me earlier this year that there's absolutely nothing clear and simple about this tax season.
The COVID-19 pandemic continues to put a limit on office hours and in-person appointments for tax preparation. Fortunately, a great deal of tax preparation can be done remotely. So that's a help.
Many called for extension
The American Institute of CPAs was calling for extending the filing and payment deadline until June 15.
Democrats on the House Ways and Means Committee already requested that Rettig extend the tax return filing season beyond April 15.
“It has come to our attention that, due to the ongoing pandemic, many Americans continue to face the same challenges that necessitated extending the filing season last year,” according to a letter dated Feb. 18. The letter did not suggest a date for a new filing deadline.
What does Form 4868 do?
Taxpayers can file a Form 4868 to receive an automatic six-month extension to file a return. But Form 4868 doesn’t extend the time to pay taxes. If you don’t pay the amount due by the regular due date, the IRS notes, you’ll owe interest. You may also be charged penalties.
Such a form now doesn't need to be filed for a one-month extension if you can complete your taxes by May 17.
How do you figure out the taxes due, though, when many rules changed only recently?
The IRS is still figuring out how to handle some big, last-minute changes, including a new waiver that allows consumers to avoid paying federal taxes in 2020 on a limited amount of jobless benefits. The IRS said some more updates will be coming soon to IRS.gov.
Small businesses are dealing with a host of payroll tax credits, as well as other COVID-19 relief, that can affect their taxes, too.
“We don't even know we can calculate the right amount of tax,” said Jan Lewis, a member of the AICPA Tax Executive Committee.
“We are working as hard as we ever had to get these returns out,” said Lewis, who is a CPA at Haddox Reid Eubank Betts in Jackson, Mississippi.
An extension, she said, would enable the IRS to give more clarity to a variety of issues, particularly those concerning small businesses. Much guidance and information simply isn't available now to file complete and accurate returns, given the changes and the circumstances, she said.
The 2019 tax deadline was extended three months until July 15, 2020, without penalties and interest, because of the massive economic shutdowns that went into place to stem the spread of the coronavirus.
Last year's extension was announced on March 21, after President Donald Trump's emergency declaration associated with the spread of COVID-19 in the United States.
This year, thankfully, isn't as rattling as last March. Many but not all businesses are up and running. A vaccination effort is ongoing. Many people are more willing to be out and about, even though the pandemic continues.
How do you treat jobless benefits on 2020 tax returns?
Still, we're dealing with some pretty important tax changes that were part of three COVID-19 relief packages passed by Congress — one last spring, another in late December and now, the American Rescue Plan that went into law March 11.
Did you, for example, receive unemployment benefits during the sweeping shutdowns in the economy in 2020?
Typically, all unemployment benefits would be taxable.
But the American Rescue Plan provided that many taxpayers now are not required to pay taxes on up to $10,200 in unemployment benefits received last year. Yes, the changes are retroactive and went into place after some people already filed their 2020 federal income tax returns. Yes, it's confusing because this change went into place a month after the tax season began.
The exclusion is up to $10,200 of jobless benefits per person. You and your spouse, for example, can each exclude up to $10,200 of unemployment compensation if filing a joint return.
It is not a simple change. For example, if one spouse received $15,000 in jobless benefits but the other received just $1,000 in unemployment compensation in 2020, then the exclusion for tax purposes that the couple would receive would be $11,200 — not $16,000.
The special provision to waive taxes on some unemployment income applies to those who made less than $150,000 in adjusted gross income in 2020.
Warning: This new tax break applies only to unemployment benefits received in 2020 — not 2021. Plan to pay federal income tax on the full amount of jobless benefits received in 2021.
The latest change is a major tax break on 2020 tax returns for those who lost their job last year or faced a furlough. But how, exactly, are you going to be able to accurately file a 2020 tax return to claim it?
More: Who gets the third stimulus check, and when? Your COVID-19 relief questions, answered
Tax software programs were not updated as of Monday to reflect the money-saving change relating to jobless benefits. The IRS did release a worksheet with some instructions for the “New Exclusion of up to $10,200 of Unemployment Compensation.”
When you're able to avoid claiming some jobless benefits as income, your adjusted gross income drops too. So other parts of your tax return could change. Some taxpayers could qualify for extra tax credits a lower income, and possibly even a bigger stimulus payout.
And that's just one of the many glitches and potential gotchas.
On Friday, the IRS stated: “The IRS is reviewing implementation plans for the newly enacted American Rescue Plan Act of 2021.
Additional information about a new round of Economic Impact Payments, the expanded Child Tax Credit, including advance payments of the Child Tax Credit, and other tax provisions will be made available as soon as possible on IRS.gov.
The IRS strongly urges taxpayers to not file amended returns related to the new legislative provisions or take other unnecessary steps at this time.”
Federal income tax returns, as well as Michigan returns, are due April 15. But a national group of CPAs is asking the Internal Revenue Service and the U.S. Treasury for a two-month extension. Photo: An income tax sign in Marine City, Michigan. (Photo: Susan Tompor, Detroit Free Press)
Taxpayers must figure out what kind of money they received in their stimulus payments. The first one went out last year but the second one was sent out beginning in January.
CPAs continue to ask tax filers for information on how much money was received in those two stimulus rollouts, as that is needed to calculate any possible remaining Recovery Rebate Credit that is available on 2020 tax returns.
Tax season already sluggish
The tax season was delayed from the start. The IRS didn't even begin to accept and process tax returns until Feb. 12, which was already more than a two-week delay.
As of March 5, the IRS had processed nearly 25% fewer tax returns than it did through March 6, 2020. There were 40 days in the filing season through March 6 last year, and 22 days of the filing season this year through March 5.
The IRS received 55.7 million returns through March 6, down 18% from the year-ago time period.
James O’Rilley, CPA and tax director for Doeren Mayhew in Troy, said tax filings could be down for several reasons.
Some people who received unemployment benefits may owe taxes and are waiting to file their returns.
Others could have been waiting to file their tax returns until the American Rescue Plan was passed by Congress in March. Others have COVID-19 fatigue and find it harder to deal with their taxes.
And some held onto the hope, he said, that the tax filing deadline will be extended for all.
The IRS issued 36.05 million tax refunds through March 5, down 31.6% from the year-ago period through March 6, 2020.
The IRS said Wednesday that its May 17 deadline does not change earlier emergency extensions granted for disaster victims of the February winter storms in Texas, Oklahoma and Louisiana. Those states have until June 15 to file various individual and business tax returns and make tax payments.
Should people procrastinate a bit here simply because they can? Not really.
The best advice remains to gather your forms, track down what you still need and start working on getting your taxes done.
But it's also essential to recognize that if, for example, you received unemployment benefits last year, the tax rules changed earlier this year and your tax software would not have been updated in February or early March. So you might need to wait a bit to file those returns as that software is expected to be updated soon.
IRS officials said Monday that more guidance will be available soon, for example, about what taxpayers need to do if they've already filed a federal income tax return but had jobless benefits last year that could now be exempt from some taxes. The IRS said taxpayers should not file amended returns just yet.
We're looking at yet another amazingly strange tax season — and there's not much any of us can do about that, except maybe use our time wisely now that we have a bit more time to figure all of this out.
Contact Susan Tompor: firstname.lastname@example.org. Follow her on @tompor. To subscribe, please go to freep.com/specialoffer. Read more on business and sign up for our business newsletter.
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