It’s true what they say, that nothing is for sure but death and taxes. However, this year we get a little reprieve from the latter. Due to the global COVID-19 pandemic, the IRS has extended the tax filing deadline from April 15 to May 17, giving filers an additional month to get their financial affairs in order.
While the procrastinators amongst us might be rejoicing (and no shame in that), could it help to file before the tax filing extension? Does this extension give taxpayers more time to file state taxes? What incentive is there to get your taxes wrapped up?
That’s what we’ll cover in this guide: Tax Deadline Delayed Until May 17 — Should I Wait or File Now?
Why did the tax filing date change?
While the original tax filing date was slated for April 15, in keeping with most years, the Treasury Department and Internal Revenue Service announced on March 17, 2021, that this year’s tax filing deadline would be extended to May 17.
The announcement was made to give taxpayers recovering from the global coronavirus pandemic more time to get their taxes in order.
“This continues to be a tough time for many people, 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,” said IRS Commissioner Chuck Rettig in a press release from the agency.
What does that extension mean?
It means that taxpayers filing federal income tax payments will not face penalties until May 17.
Can taxpayers file before that day?
Yes. The IRS will happily accept your tax payment before May 17. They can do so using taxpayer software or snail mail, depending on their preference.
Should taxpayers file before May 17?
While the choice to file early is up to every individual taxpayer, there are benefits to getting federal income taxes turned in ahead of the May 17 deadline. Those include:
Get a Faster Refund
Waiting until May 17 will only prolong the wait for a potential tax return. Filers who do so ahead of schedule can expect to see a refund sooner.
Receive Owed Stimulus Money Sooner
For those individuals who might have not received stimulus money or not enough of such money, there’s the Recovery Rebate Credit. The only way to receive this money is through filing taxes which could earn a family up to an additional $1,800 per taxpayer considering both the 2020 stimulus payments.
Your State May Have an Even Longer Extension
Due to this winter’s severe storms, individuals who live in Texas, Louisiana, and Oklahoma have been given an even longer extension to file their taxes. They have a deadline of June 15, 2021, to get them in. However, you can file earlier, should you choose, and potentially enjoy the two previously mentioned benefits.
While filing by May 17 delay my refund?
The IRS reports that refunds are being sent within 21 days and that should not change should you choose to take the extra time and file on May 17. However, if you file earlier, you can start counting down those 21 days the minute you file.
What if you need an extension beyond the extension?
The IRS understands that even with an extra month, for some taxpayers that won’t be enough time to pay their tax bill. That’s why the agency allows extensions. To file an extension, the IRS says taxpayers can “request a filing extension until Oct. 15 by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov.”
What about state taxes? Have those deadlines been extended as well?
State tax laws vary from state to state. However, many states are following the federal extension and giving taxpayers more time to get their taxes filed this year. To be sure, it’s best to seek out state guidelines depending on the state you live or have earned income from and file accordingly to avoid a penalty.
What about quarterly estimated taxes? Did those get an extension too?
The short answer: No. The deadline to pay the first quarter estimated taxes was still April 15. And since the date has already passed, it’s imperative that taxpayers who owe estimated taxes and missed the deadline take care of their payment as soon as possible to avoid any tax penalties
Looking for further clarity on this year’s tax year? Reach out to an accountant who can help review your earnings, look for the best tax breaks, and file on time before or on the date of the extended tax deadline to avoid costly penalties.