The IRS is delaying the April 15 tax deadline to May 17. FOX Business’ Jackie DeAngelis with more.
This IRS this week delayed the main April 15 tax-filing deadline until May 17, giving most Americans more time to prepare their filings this tax season amid a slew of pandemic-related policy changes.
But the reprieve only benefits some taxpayers — millions will still need to pay their taxes by April 15 in order to avoid penalties or interests.
That's because the automatic extension applies to individual returns and payments for 2020 that were initially due on April 15, the IRS said Wednesday. It does not apply to 2021 estimated-tax payments, which are used to pay levies in quarterly installments on income that is not subject to withholding, such as earnings from self-employment, alimony, dividends and capital gains.
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The exclusion mostly affects freelancers, gig workers and self-employed individuals, as well as those with small businesses including sole proprietors, partners and S-corporation shareholders. More than 9.5 million returns included estimated tax payments during the 2018 tax year, according to the American Institute of Certified Public Accountants, an industry group.
“While we appreciate the IRS’ recognition that a filing deadline postponement is indeed necessary, the announcement is far too selective in who is receiving relief,” Barry Melancon, AICPA CEO and president, said in a statement. “In fact, the taxpayers who are most likely to benefit from this additional time are taxpayers who are able to meet the original filing deadline.”
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The IRS extended the tax-filing deadline from April 15 to July 15 last year for individual returns and payments. It eventually delayed the deadline for the first of four estimated payments until July 15 as well. But there was a catch: The agency did not push back the remaining three scheduled payment dates, meaning taxpayers had to make two quarterly payments on July 15.
By not including estimated tax payments, the IRS essentially nullifies the postponement benefit for millions of Americans because calculating estimated tax payments required individuals to complete other tax work, AIPAC argued.
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“This selective decision by the IRS unfortunately creates more bureaucracy and confusion and is out of sync with real-world stresses that taxpayers, tax practitioners and small businesses are dealing with,” Melancon said.
The IRS says that most people who owe less than $1,000 after accounting for their withholdings and credits will avoid any penalty. Individuals who owe more must pay the IRS at least 90% of the tax for the current year, or 100% of the tax for the prior year, whichever is smaller.
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March 19, 2021 at 08:03PM
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Some Americans still need to pay taxes by April 15, despite new deadline - Fox Business
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