When it comes to the pandemic, we are starting to see the light at the end of the tunnel. Hopefully, this progress is sustainable. And while things are starting to look more optimistic, many small businesses are still reeling from the economic ramifications of the pandemic. Now more than ever, business owners are concerned about the upcoming tax deadlines.
Mandatory shutdowns have put a lot of stress on small business owners across the country. With undue financial struggle, many small businesses are still trying to put the pieces back together. To account for this struggle, the IRS recently announced they would extend the 2021 tax deadlines. Here’s what you need to know.
When Is The 2021 Tax Deadline?
Historically, tax day falls on April 15th. However, with the recent pandemic, the federal government elected to give taxpayers some reprieve and allow them to file their tax returns at a later date. Last year they extended the tax deadline to July 15th. This year they extended the federal tax deadline to May 17th. Now, federal tax returns will be due on May 17th instead of April 15th. However, Louisiana, Oklahoma, and Texas residents all have until June 15th due to the catastrophic storms that devastated their states in February.
What Tax Deadlines Are Extended This Season?
So far, the 2021 tax deadline extension applies to 2020 federal tax returns. Under this extension, taxpayers will have a little more time to prepare, file, and settle their tax bills. However, it is important to note that the federal tax extension does not automatically apply to state taxes, as each state can impose its own tax regulations. That said, the IRS encouraged states to delay their tax deadlines, and many have already done so.
Which States Delayed Their Tax Deadlines?
As mentioned above, each state can impose its own tax regulations, state tax rates, and state tax deadlines. With the federal 2021 tax deadline extension’s announcement, many states have fallen suit by extending their state tax deadlines. States that extended the tax deadline to May 17th include:
- Arizona – p
- California Colorado
- Idaho – p
- Massachusetts – p
- New Mexico
- North Carolina
- North Dakota
- South Carolina
- West Virginia
A Few States Enacted Later Tax Deadlines:
- Louisiana – June 15th
- Maryland – July 15th
- Oklahoma – June 15th
- Washington D.C. – July 15th
If you do not see your state on the list, you may not reside in a state that imposed a change to the tax deadlines or state income taxes. These states include Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
What About Estimated Taxes?
The 2020 tax extension also included an extension for estimated taxes. However, the IRS did not yet announce an extension for this year’s estimated taxes. As of right now, Q1 estimated tax payments are still due on April 15th. Having said that, if the last year has taught us anything, it is that things are always subject to change, including tax deadlines. The IRS may issue more guidance over the next couple of days, so stay tuned.
What If I Still Need More Time?
This last year has been a roller coaster. It seems like the pandemic has affected every aspect of our lives, including timelines. Preparing and filing your tax returns without important tax documents can make preparing and filing your tax return on time impossible. In this case, you may need to file an extension to have more time to file your taxes. Be sure to file for a tax extension before the new May 17th deadline, which gives you until October 15th to prepare and file your tax return. Be advised if you choose to file an extension, your tax bill is still due by May 17th. If you need more time to pay, set up a payment agreement with the IRS before the deadline to avoid penalties and interest payments.
Get Help With Your Taxes
While the IRS extended tax deadlines for another month, it is still a good idea to get your taxes prepared as early as possible. The earlier you file, the more time you’ll have to pay your tax bill and have peace of mind knowing you filed your taxes on time. And your tax return is less likely to contain errors if you don’t rush through at the last minute. But if you cannot file your taxes because you don’t have all of the information you need, be sure to file your extension before the deadline. If you need help, a tax advisor can help accurately file your taxes on time. Schedule a strategy session today. For more tax tips and updates, subscribe to our newsletter below.