In this article, I'll tell you what the deadline extension means for you, and I'll have some tax-filing tips from money expert Clark Howard and the IRS.
When Is the IRS Tax Deadline for 2021?
The deadline to file your 2020 federal tax returns has been moved from April 15 to Monday, May 17, 2021.
The IRS extension only applies to your federal taxes, so check with your state tax agency to see if it will extend the tax-filing period to match the federal deadline.
Why Was the IRS Tax Deadline Extended?
As you might have guessed, it’s because of the COVID-19 pandemic.
"This continues to be a tough time for many people, and the IRS wants to continue to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic, while also working on important tax administration responsibilities," IRS Commissioner Chuck Rettig says in a news release.
3 Tax Tips You Need To Know
To put your best foot forward, here are some tax tips that might save you frustration, worry and even some money.
File Your Taxes Early
The thing with deadlines is that they sneak up on you. When it comes to filing taxes, that’s one deadline that can have terrible consequences if you’re late.
Not only will doing your taxes early take away the anxiety some of us feel as the deadline approaches, it will also give you more time to check over your work to make sure there are no mistakes on your return.
But here’s another reason to file early: tax identity fraud. That’s when someone pretends to be you and files a false income tax return in your name. Not only can they steal your money, but it may take months to straighten it all out with the IRS.
“The earlier you file, the more likely you are to beat a fraudster from doing that,” Clark says.
File Your Taxes for Free (if You Can)
While it might not be prudent in every case, Clark says many Americans may be able to file their taxes for free.
"If you have a pretty simple tax situation, you don't even need to pay for tax-prep software. The IRS has a program they've had for years called IRS Free File."
“The software’s really simple. It covers most American taxpayers. You’ll see the limits and how to proceed,” he says.
You can also look into tax prep software at Credit Karma and TurboTax, which both offer free services for some filers.
Resource: Here's a List of Free State and Federal Tax-Filing Programs
File Electronically for a Faster Refund
If you’re due a refund, the quickest way to get your money is to file electronically and choose direct deposit.
Also, if you were eligible for — but didn’t receive — either of the 2020 pandemic-related federal stimulus payments, you’ll be able to get credit for it on your federal tax return.
Final Thoughts
The Treasury Department and IRS say that they will provide guidance in the coming days related to your federal income tax filing. Stay up to date at IRS.gov.
In the meantime, if you’ve received a big tax refund or are expecting one, Clark wants you to think about changing your tax withholding for next year. Why?
“The IRS is paying you no interest on that money,” Clark says. “They’re using it as a method of forced savings.”
More Tax Resources From Clark.com:
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