The federal income tax filing deadline for individual taxpayers, including those who pay self-employment tax, has been extended to May 17 for the 2020 tax year. There is no need to file any forms for this automatic federal tax filing and payment relief.
Individual taxpayers will automatically avoid interest and penalties on the taxes paid by May 17. However, penalties, interest and additions to tax will begin to accrue on any remaining unpaid balances as of that date. The extended tax return due date applies to any individual who files a federal individual income tax return or has a federal tax payment reported on one of the forms that would otherwise be due April 15, 2021: Forms 1040, 1040-SR and 1040-PR. Additionally, foreign trusts and estates with federal income tax filing or payment obligations that file Form 1040-NR now have until May 17, 2021.
The extended deadline also applies to schedules, returns and other forms that are filed with a Form 1040 or are required to be filed by the due date of the Form 1040, such as Schedules H, Schedule SE and Forms 965-A, 3520, 5329, 5471, 8621, 8858, 8865, 8915-E and 8938.
This extended deadline does not apply to any other type of federal tax or any federal information returns, including estates, trusts, corporations and other businesses. Nor does it apply to quarterly estimated payments related to self-employment income, dividends and rental income, all of which were due April 15.
File as soon as possible for refunds
Even with the new deadline, however, taxpayers should consider filing as soon as possible, especially those who are owed refunds. Filing electronically with direct deposit is the fastest way to get refunds and can help some taxpayers receive any remaining stimulus payments they may be entitled to.
Individual taxpayers who need additional time to file beyond the May 17 deadline can request a filing extension until Oct. 15, 2021, by filing Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. If you think you need an extension, please contact the office as soon as possible.
Filing Form 4868 gives taxpayers until Oct. 15 to file their 2020 tax return; it does not grant an extension of time to pay taxes due. Taxpayers should pay their federal income tax due by May 17 to avoid interest and penalties.
Contributions to IRAs
and Health Savings Accounts
The May 17 extended deadline also applies to individuals making 2020 contributions to their individual retirement arrangements (IRAs and Roth IRAs), health savings accounts (HSAs), Archer Medical Savings Accounts (Archer MSAs), and Coverdell education savings accounts (Coverdell ESAs). The date for reporting and payment of the 10% additional tax on amounts included in gross income from 2020 distributions from IRAs or workplace-based retirement plans is also automatically postponed until May 17, 2021.
Estimated tax payments
This relief does not apply to estimated tax payments that were due on April 15. These payments were 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. In general, estimated tax payments are made quarterly to the IRS by people whose income isn’t subject to income tax withholding, including self-employment income, interest, dividends, alimony or rental income.
Most taxpayers automatically have their taxes withheld from their paychecks and submitted to the IRS by their employer and do not need to pay estimated taxes.
State tax returns
The extended federal tax filing deadline of May 17 only applies to individual federal income returns and tax (including tax on self-employment income) payments that are normally due April 15. As such, taxpayers also will need to file income tax returns in 42 states plus the District of Columbia. State filing and payment deadlines vary and are not always the same as the federal filing deadline and it is up to individual states to decide whether to extend tax return deadlines.
Unclaimed refunds deadline
extended to May 17
There is a three-year window of opportunity to claim a refund on prior-year tax returns. If taxpayers do not file a return within three years, the money becomes property of the U.S. Treasury. For tax year 2017 Federal income tax returns, the normal April 15 deadline to claim a refund has also been extended to May 17. Taxpayers must properly address, mail, and ensure the tax return is postmarked by the May 17, 2021, due date.
Taxes are complex and mistakes can be costly. This column should not be taken as advice. Consider retaining a tax professional for assistance.
Norm Grill, CPA, (N.Grill@GRILL1.com) is managing partner of Grill & Partners, LLC (www.GRILL1.com), certified public accountants and consultants to closely held companies and high-net-worth individuals, with offices in Fairfield and Darien, 203-254-3880.