Due to COVID-19, US taxable income deadlines were pushed back two years due to the pandemic. According to the IRS, tax returns must be filed on or before April 18, 2022. The deadline for filing 2019 income tax returns was extended until July 15, 2020, but this year it has only been extended to May 17, 2021.
Deadline for filing federal income taxes
For 2020, the IRS is extending the deadline for tax preparation and payment by one month. As a result of the COVID-19 pandemic, many taxpayers face financial hardship, and the extension is intended to provide some relief.
In addition to the regular May 17 deadline, you can request an additional extension by filing IRS Form 4868. By filing your 2020 tax return by October 15, 2021, you’ll have an additional six months to do so, but your tax payments must still be made by May 17, 2021. You can get more information from the official website IRC.gov.
Unpaid federal income taxes are generally subject to penalties and will begin accruing interest on May 17 if they are not paid.
H&R Block’s tax pros can help you prepare a digital tax return with a virtual filing. From the comfort of your own home, you can have professional tax filing done.
Winter storm relief in 2021
Individuals and businesses in Texas, Oklahoma, and Louisiana were already given an extended deadline before the May 17 extension. Earlier this year, FEMA’s winter storm disaster declarations led the IRS to extend these states’ filing and payment deadlines until June 15, 2021.
Individuals who file quarterly tax estimates are also extended to file their taxes. Self-employment taxes for 2021 do not apply to this change. It means that self-employed individuals must schedule their first quarterly estimate payment for 2021 no later than April 15.
Deadlines for filing state taxes
State income tax due dates have also been extended by their states, in addition to the IRS extension. State income tax deadlines were changed in all but five states for 2021. There is legislation pending in Arizona to move the due date to May 17. If you want to check other states’ tax deadlines, you should visit this website.
Contributions to 529 plans are deductible or credited in over 30 states. In most states, contributions must be made by December 31. The deadline for submitting taxes is also the deadline for contributing to the 529 plan in six states.
In addition, Colorado, New Mexico, South Carolina, and West Virginia allow contributions to 529 plans to be fully deductible for income tax purposes.
Extensions to other deadlines
Additionally, the IRS has extended other tax deadlines, typically fall on April 15. You can also determine the contribution deadlines for college savings plans like Coverdell education savings accounts (ESAs) and Roth IRAs.
Contributions to Coverdell ESAs are not deductible from taxable income, but earnings in these accounts grow tax-deferred. These earnings can be withdrawn tax-free if certain requirements are met. In addition, Roth IRAs approved for the tax year 2020 allow contributions of up to $6,000 ($7,000 if you are 50 or older).
A Coverdell ESA distribution, for instance, is tax-free if it is used for college and elementary and secondary education expenses. The extended deadline provides you with an extra month to save for education while maximizing tax savings.
In addition to the tax deadlines extended to May 17, 2021, the following deadlines will be extended:
- For the tax year 2020, traditional IRA contributions will be accepted
- as HSA contributions 2020
- The due date for claiming a federal tax refund 2017
The extended deadlines have been implemented to help those experiencing financial hardship due to COVID-19. Taxes should be filed as soon as possible, both federally and stately. You may be charged a penalty and interest when you miss a deadline, and your refund may be delayed.
Before the tax deadline, consider these 6 tax moves
1. Prepare your 2018 tax return
It’s not too late to claim your refund if you weren’t required to file a tax return for the 2018 tax year; make sure you submit that old Form 1040 by April 18 (tax day). Do not delay filing if you haven’t done so yet! In the case of late tax filing, your money will be kept by Treasury.
2. Maximize your 401(k) by December 31
If you contribute to a traditional 401(k), you reduce your income tax.
Take the case where you earn $65,000 a year and contribute $19,500 (the limit in 2021) to your 401(k). You will pay taxes on only $45,500 of your salary, rather than the entire $65,000 you earned. You can shield $19,500 from taxes (or even more if you’re over 50). And many employers offer matching contributions, so you can earn free money if you contribute sufficiently.
3. Establish or contribute to an IRA before tax day
Tax deductions are available for contributions to traditional IRAs. Your IRA contribution deadline for the 2021 tax year is April 18, 2022. If you are 50 years of age or older, you can contribute $7,000 to the IRA.
4. Contribute to your health savings account
Those with a high-deductible health plan can use this account to pay for out-of-pocket health care expenses in a tax-efficient manner. Tax-year 2021 contributions to an HSA need to be made by April 18, 2022. According to the HSA limits for 2021, a single HSA owner could contribute $3,650, while a family could contribute $7,200. A family coverage contribution limit of $7,300 will apply in 2022.
5. You can extend your tax deadline
The IRS Form 4868 can be filed if you cannot finish your return by the tax deadline of April 18. The tax filing deadline will be extended to October 17 for most taxpayers.
A tax extension increases the amount of time you have to file your return. It does not expand the amount of time you have to pay your taxes. The tax deadline still applies if you owe any tax or have a fair estimate of it. You may face a late-payment penalty if you do not include that payment with your extension request.
6. What to do if state taxes become due?
Check your local tax day dates. Taxpayers generally pay state income taxes, and most states with income taxes follow the federal deadlines. Find out when your state’s income taxes are due by contacting your state’s tax department. Ask about extensions if necessary.