Benefits
The Tax Blotter – March 31, 2021
The Tax Blotter is a round-up of recent income tax news.
Mar. 30, 2021
The IRS announced on March 17 that it was extending the April 15 filing deadline for 2020 returns to May 17. Subsequently, on March 29 the agency provided additional guidance (IR-2021-67).
No estimated tax reprieve. The filing extension also gives individual taxpayers more time to meet their 2020 tax payment obligations. No penalties, interest or additional tax will be imposed as long as you pay the required amount by May 17. However, the IRS has clarified that the extension does NOT apply to estimated tax payments for the first quarter of 2021. Those payments are still due on April 15—no exceptions.
More time for IRA contributions. Normally, you must make IRA contributions by April 15 to qualify for the tax year ending December 31. For instance, the due date for 2020 IRA contributions was April 15, 2021. But the IRS now says that the filing postponement to May 17 also extends the IRA contribution deadline to May 17. Caveat: Even if you obtain the regular six-month filing extension to October 15, the IRA deadline remains May 17.
Collect past tax refund. Are you owed a tax refund from a prior year? Normally, you have a three-year window of opportunity to claim the refund. However, the IRS has clarified that the April 15 deadline to claim a refund on a 2017 return has also been extended to May 17, 2021. If you don’t file a return by the deadline, the money becomes property of the U.S. Treasury.