The Tax Deadline for Individuals was extended by the IRS; let’s talk about it.
Welcome to Tax Tip Tuesday, with me, Bette Hochberger, CPA, CGMA. I want to discuss the big announcement that the IRS delayed the tax filing deadline for individual tax returns. If you have déjà vu, it’s because the IRS did something similar last year. This year, they didn’t move it to May 15th because that was on the weekend, so the 17th is Monday. We get an extra month to file our personal tax returns. The cool thing is that you’re also getting an extension to pay those taxes that are due. So if you were getting a little nervous, how would I come up with that money in the next couple of weeks? You get an extra month to do that. The flip side of that is not so great because they did not extend any of the 2021 estimated payments.
So that first quarter is still due in April. So you might be pushing off your 2020, 4th estimated payment, but your 2021 first is still due April 15. Now I’ve been asked a couple of times, what about things like IRA contributions? The May 17th extension now applies to those and goes along with the individual extended tax deadline. So if you were hoping to get in contributions, IRAs, HSAs, things like that, you do have an extra month to get those done. There is no extension form to file to get this May 17th extension. But, if you’re not going to file by May 17th, you do need to file an extension to bring you all the way out to October 15th. That’s the standard extension deadline. So if that’s not enough time, that extra month, go ahead file an extension, and you’ll get a few more months to take care of things. So that’s my tax tip for today. Just remember the new tax deadline gives you an extra month only for individual returns.
Part of what inspired us to launch our Starter Package was that staying on top of every tax deadline takes up time every month, a trivial amount of time for a tax firm, but a significant amount of time for average small business owners. By reviewing your books monthly and tracking all of your filing deadlines, we can avoid penalties, reduce interest, and simplify the lives of our tax and accounting clients.
By getting extensions in on time, filings on time – either the original tax deadline or the extended one – we can help you save money, reduce stress and build your wealth.