The IRS is planning to delay its customary April 15 tax submitting deadline till Might 17, giving taxpayers some respiratory room in an unusually chaotic submitting season.
Accountants had requested the tax company to push again the deadline given the continuing challenges of the coronavirus pandemic for taxpayers and the IRS, which continues to be coping with a backlog of tax returns from final 12 months. The delay within the tax deadline was first reported by Bloomberg Information.
The Treasury and the IRS confirmed late Wednesday that the tax submitting deadline can be postponed till Might 17. The deadline for tax funds for 2020 may also be pushed again till Might 17. Nevertheless, folks nonetheless have to pay their estimated taxes for the primary quarter by April 15, with the IRS issuing a reminder about this on April 8.
“The extension to Might 17, 2021 for people to file their 2020 federal earnings taxes doesn’t apply to estimated tax funds,” the IRS mentioned on Thursday.
The American Institute of CPAs had urged the IRS to delay the submitting deadline, citing the impression of the pandemic on U.S. taxpayers in addition to the tax company itself, which continues to be making an attempt to dig out of a backlog of returns from the final tax submitting season. Lawmakers on March 17 applauded the tax company for the extension, calling it “completely mandatory.”
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“The practitioners have been saying, ‘We’re right here, however there aren’t sufficient hours within the day to get every part completed that has been put in entrance of us,'” mentioned Meredith Tucker, tax principal at accounting agency Kaufman Rossin. “It is robust to suppose we might be underneath tax season for an additional month, however we want extra time.”
Tax preparers have been assessing modifications to the tax code, together with the $1.9 trillion American Rescue Plan, which is able to impression points starting from taxes on unemployment assist to the Baby Tax Credit score, in addition to loans from the Paycheck Safety Program.
The additional time applies to particular person taxpayers, together with those that pay self-employment taxes, corresponding to sole proprietors and gig-economy employees, the IRS mentioned. It added that particular person taxpayers needn’t file any types or name the IRS to qualify for the Might 17 deadline.
Given earlier tax seasons, it is possible that half of taxpayers have but to file their returns, mentioned Curtis Campbell, president of TaxAct. He added that even with the additional respiratory room, taxpayers ought to nonetheless plan on getting their returns to the IRS sooner slightly than later.
“I might advise people to nonetheless file as quickly as they will, particularly if they’re in want of their tax refund,” Campbell mentioned. “The IRS is doing all they will to assist ship rapidly for shoppers and getting them their newest up to date info might assist tax filers get their return and potential different future financial funds quicker.”
Lawmakers applauded the IRS’ resolution to push again the deadline.
“This extension is totally mandatory to provide Individuals some wanted flexibility in a time of unprecedented disaster,” mentioned Representatives Invoice Pascrell, Jr., a Democrat from New Jersey and chairman of the Home Methods and Means Subcommittee on Oversight, and Richard Neal, a Democrat from Massachusetts, in a joint assertion. “Underneath titanic stress and pressure, American taxpayers and tax preparers should have extra time to file tax returns.”
On the similar time, the IRS is charged with distributing tens of millions of federal stimulus funds on prime of processing a backlog of returns. Final 12 months, the company shifted to distant work because of the pandemic, which triggered them to retailer paper tax returns in trailers till they may get to them.
“Even the IRS — confronted with a big mail processing backlog, a delayed begin of the 2021 tax season, inundated cellphone strains and a brand new spherical of COVID-19 aid funds — is overwhelmed,” the AICPA mentioned.
Editor’s observe: This story was up to date April 8 to make clear that the IRS deadline for folks to pay their estimated taxes for the primary quarter of 2021 stays April 15 and isn’t delayed by the extension of this 12 months’s tax submitting deadline to Might 17.
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