Tax filing extension: Should I file now anyway?
March 23, 2021
U.S. taxpayers will have extra time this year to file their taxes, with the government pushing the filing deadline from April 15 to May 17, 2021.
The move comes as a response to the COVID-19 pandemic in the United States and recent legislation related to it, giving U.S. taxpayers more time to file and pay federal taxes.
Keep in mind, though, filing your taxes before the new filing deadline could help to lessen the chance of becoming a victim of tax-related identity theft.
That’s when someone files a tax return in your name to claim a refund. After you file your tax return, the IRS will block any further attempts to file a return in your name.
What about state income taxes?
The federal government's announcement only holds for federal income taxes. Individual states are not required to change their tax filing deadline under the new order.
This doesn't mean that individual states won't make this move, too. The IRS recommended that taxpayers check with their local state governments before skipping the April 15 tax deadline for their states. According to the IRS, 42 states and the District of Columbia require taxpayers to pay state income taxes.
What about estimated tax payments?
As of March 22, 2021, taxpayers who work as contractors, are self-employed, or work on a freelance basis must make quarterly tax payments each year, making estimated payments in the middle of April, June, September, and January. The next round of quarterly tax payments will be due on April 15, 2021.
Should you file anyway?
The government's move doesn't mean that you can't file your taxes before May 17, 2021. In fact, you can file them any time before that date if you'd like.
As noted, lessening the chance of becoming a victim of tax-related identity theft is one reason to file your taxes before the new deadline. There are other reasons, too.
When does it make sense to file by April 15 as in any other year? If you are due a refund. That way, you can gain access to their money faster.
Remember, if you don't file your federal income taxes until May 17, 2021, you won't get any refund you are due until after that date. If an infusion of cash would be helpful, it makes sense to send in those federal income taxes by April 15, even with the tax-filing extension.
If you owe money on your federal income taxes, it might make sense to wait to file until the new deadline. The tax filing extension can be especially helpful if you are struggling to pay your other bills as a result of the coronavirus pandemic. The tax extension could provide at least some financial relief.
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