The year is around and it is once again the time to file your taxes to avoid late filing and potential late payment penalties.
With the new administration and the Covid-19 pandemic sweeping across the nation, there are several things you should know to ensure you file your 2020 income taxes correctly.
Among other things, the IRS has decided to push the deadline for filing and paying federal income taxes to May 17 [note that there are some exceptions which are mentioned below], CNN Business reported.point 446 |
While the previous deadline was set at April 15, the officials have extended the window to allow accountants and filers to adjust to the changes.point 121 | 1
This means that unless you request a five-month extension – which will allow you to file and pay your taxes until October 15 – you are required to file and pay your taxes before the May 17 deadline. Similarly, filing for an extension has to be done prior to the May 17 deadline.
Exceptions To The Deadline
Residents of Louisiana, Oklahoma, and Texas have seen the federal tax deadline extended to June 15 due to the devastating storms that hit these states in February.
Meanwhile, the original April 15 deadline still applies to anyone, including small businesses, who pays estimated taxes.
State Taxes
When it comes to state taxes, things get a bit more complicated. While the majority of states decided to extend filing deadlines, some have stuck to original plans.
The states that moved the deadline for filing state taxes to May 17 include: Alabama, Arkansas, California, Colorado, Connecticut, Georgia, Illinois, Kansas, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Jersey, New Mexico, New York, North Carolina, North Dakota, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Virginia, West Virginia, and Wisconsin.
Meanwhile, Maryland extended the deadline to July 15, while Oklahoma extended it to June 15. In Louisiana, the deadline has been moved to May 17, whereas the residents from areas affected by the February storm – or those with tax preparers from affected regions – have the time to file taxes until June 15.
While other states chose to proceed with the original April 15 deadline, Hawaii’s deadline is April 20, DC’s deadline is July 15, Iowa’s deadline is April 30, and Delaware’s deadline is April 30.
How About Refunds?
As the IRS pointed out, the fastest way to get a refund is by filing taxes electronically and proceeding with a direct deposit, whereas mailed documents will take more time to process.
In general, the refunds can be expected sometime within three weeks after the IRS receives your return.
Taxes Vs. Unemployment Benefits And Stimulus Payments
While unemployment benefits are generally taxable, a provision detailed in President Biden’s Covid relief package makes it clear that the first $10,200 in unemployment benefits are exempt from federal taxes. However, note that this exemption only applies to households whose last year’s income was below $150,000.
Meanwhile, rest assured knowing that stimulus payments you might have received so far are not taxable.
Individuals who were eligible to get their hands on the first two rounds of payments but didn’t get the chance will reportedly be able to receive the cash owned by claiming the refundable Recovery Rebate Credit in their tax returns.
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