Earlier this week, the I.R.S. made the announcement that the federal tax-filing deadline will be pushed back a month, to May 17th instead of the usual April 15th. (May 15th is a Saturday so it gets pushed to Monday).
It’s not too much of an extension compared to last year’s when it was pushed to July 15, but it should help relieve some time crunch.
“This continues to be a tough time for many people, and the I.R.S. 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.
May 17th is New Tax Day for 2021
Not only will this new date help taxpayers, but it will also help the agency as well.
As the I.R.S. has been mailing out stimulus checks at the same time, they’ve been slowed down in processing submitted tax returns, which ultimately delays refunds. They’re also handling missing stimulus claims, which are linked to taxes. (Yes, they stay busy!)
However, if you haven’t submitted your tax return yet, they still recommend you to do so as soon as possible. “Even with the new deadline, we urge taxpayers to consider filing as soon as possible, especially those who are owed refunds. 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.”
It will also give time for people to contribute to an individual retirement account or health savings account.
2020 Unemployment Benefits
Those who collected unemployment benefits in 2020 will get a tax break for that year only.
As part of the American Rescue plan, the new law makes the first $10,200 of unemployment benefits received last year tax-free for people on incomes of less than $150,000.
File Electronically If You Can
Taxpayers who file electronically can get their refund the fastest due to direct deposit. Generally, you can expect to receive any refund within 21 days or sooner.
You can also opt-in to use Free File, an I.R.S. program that lets you prepare and file your federal income tax online for free.
And lastly, if you didn’t know already, stimulus payments are not treated as income, so they cannot be taxed.
Remaining Deadlines to Know:
April 15 – First estimated tax payment for 2021 due
May 17 – Deadline to file 2020 tax return
June 15 – Second estimated tax payment for 2021 due
Sept 15 – Third estimated tax payment for 2021 due
Oct 15 – Extended deadline to file 2020 tax return