The Treasury Department and Internal Revenue Service announced that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021 to May 17, 2021. The IRS will be providing formal guidance in the coming days.
Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021 to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Penalties, interest and additions to tax will begin to accrue on any remaining unpaid balances of May 17, 2021. Individual taxpayers will automatically avoid interest and penalties on the taxes paid by May 17.
Individual taxpayers do not need to file any forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the May 17 deadline can request a filing extension until October 15, 2021 by filing Form 4868 through their tax professional or tax software. Filing Form 4868 gives taxpayers until October 15 to file their 2020 tax return, but does not grant an extension of time to pay taxes due. Taxpayers should pay their federal income tax due by May 17, 2021, to avoid interest and penalties.
This relief does not apply to estimated tax payments that are due on April 15, 2021. These payments are still due on April 15. Taxes must be paid as taxpayers earn or receive income during the year, either through withholding or estimated tax payments. Estimated taxes for the 1st quarter of 2021 are usually calculated when your 2020 returns are prepared. If your return is extended and you normally pay estimates, please contact BWTP and we can supply you an estimate voucher based on the prior year. We may be able to overpay on the 2020 return and have overpayment applied to 2021 estimates – waiting on additional guidance from IRS.
This extension only applies to individuals – not corporations or trusts which are still due on April 15, 2021. Again, with more guidance expected, this may also change.
BWTP is making every effort to get returns completed by the May 15th extended deadline. Many of the tax law changes, PPP loans, and COVID has put us behind – this extension is only a short reprieve. Please continue to get your information to us as soon as possible to allow us sufficient time to prepare and process your returns. Information for individual income taxes not received by April 9th may require that the return will be extended until October 15th.
On a different subject, out building is under remodeling, so there is no access to the main level entrance to our building on Saturday, March 20th. If you are dropping information off at our office this Saturday, you will have to use the ground level entrance at the back of the building.