If you’re like millions of other Americans and feeling the stress of paying taxes after what has probably been one of the most hectic and economically stressful years of your life, I have good news for you! This morning the IRS announced they will postpone the typical April 15th tax-filing deadline for individual’s 1040 filing (only) to May 17th.
What the Deadline change Means for YOU
There are essentially 9 major takeaways from this important IRS notice and may NOT be what you expected.
- The month-long extension is automatic for personal 1040 tax returns for the tax year 2020. No need to file any additional forms or requests to receive this Special Extension.
- As an individual taxpayer, you can also delay payment of any money owed to the IRS under your 1040 tax return until May 17th, WITHOUT penalty or interest.
- You can still file a 5-month extension (with Form 4868) on May 17th, allowing you to file your actual 1040 tax return up until October 15th, 2021.
- This Extension applies to small business owners paying self-employment taxes on their 1040 for the tax year 2020
However, UNTIL further notice from the IRS, this Deadline also means:
- Your Estimated Tax deposits for 2021 are still due on April 15th (Form 1040ES).
- Contribution deadlines for HSAs, Traditional IRAs, Roths, and Coverdells DID NOT Change and is still April 15th
- The April 15th Deadline to fund 2020 SEP IRAs or Solo 401ks for Sole-Props (unless extended) still applies
- C-Corporation 1120 Tax Returns are still due or must be extended by April 15th
- Estate & Trust 1041 Tax Returns are still due or must be extended by April 15th
You may be tempted to sit back, relax, and enjoy this gift from the IRS, but I would highly suggest you file as soon as you are able. In fact, if you owe taxes on your 1040 and foresee that you won’t be able to pay by May 17th, see my other article: “What to do if You can’t Pay Your Taxes by May 17th?”
WATCH OUT FOR STATE DEADLINES! It’s important to also note that this Special Extension to file your 1040 tax return until May 17th ONLY applies to PERSONAL FEDERAL 1040 returns. State deadlines are not always the same as federal deadlines, so make sure you double-check with your State. You can find that information here on various State tax deadlines and the necessary Forms to file.
What if I’m due a Refund or Want my Stimulus Money?
If you are due a refund OR haven’t received the most recent Stimulus Check of $1,400 – Don’t delay! File your tax return as quickly as possible to obtain your refund. You don’t HAVE to wait until May 17th, ONLY if you want to.
Also, if you still have questions about your Stimulus Check and/or its status. Nolo.com published an excellent article with updates and numerous recourses for taxpayers: “What to Do If You Haven’t Received Your Stimulus Check or It’s for the Wrong Amount?”
Business Owners and Quarterly Deposits
Again, it is IMPORTANT to note that this Special Extension is for individual taxpayers and DOES NOT apply to any business tax return deadlines OR estimated first-quarter 2021 tax payments that you may owe. If you have a payment due this quarter, the IRS is still expecting that on April 15th!
What to do come October 15th
Finally, if you aren’t able to pay by October 15th, you’re in a whole new set of rules and options. Many people think they can ‘settle for pennies on the dollar’, or if they don’t file the penalties won’t change, OR the extension covers them past October 15th. ALL of those assumptions are wrong. Please see my article “What to do If I can’t Pay My Taxes by October 15th?”
In sum, if you are stressing over your taxes, I hope this news brings you some much-needed relief. If you are in a predicament and missed a deadline, or owe any taxes whatsoever, get professional help and be cautious of radio or tv ads that ask for money upfront. Please contact an attorney or CPA in our office that can discuss your situation with you if you need further assistance.
* To sign up for Mark’s weekly Free E-Newsletter and receive his Free E-Book “The Top 10 Best Tax Saving Secrets Everyone Should Know” visit www.markjkohler.com.
Mark J. Kohler is a CPA, Attorney, co-host of the Radio Show “Refresh Your Wealth” and author of the new book “The Business Owner’s Guide to Financial Freedom- What Wall Street isn’t Telling You” and, “The Tax and Legal Playbook- Game Changing Solutions For Your Small Business Questions”. He is also a partner at the law firm Kyler Kohler Ostermiller & Sorensen, LLP and the accounting firm K&E CPAs, LLP.