TURBOTAX - Reminder - Many Retirees Need To File Taxes Today Despite IRS Deadline of May 17 - TURBOTAX - InvestorVillage


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Msg  480 of 482  at  4/15/2021 9:38:14 AM  by

rlp2451


Reminder - Many Retirees Need To File Taxes Today Despite IRS Deadline of May 17

 

Some unlucky Americans still need to file their taxes by April 15, even though the IRS last month delayed the main deadline until May 17.

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. But 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.

The exclusion mostly affects retirees, 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.

The due date marks a change from last year, when the IRS extended the tax-filing deadline from April 15 to July 15 for individual returns and payments and 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.

WHEN WILL THE EXTRA $300 IN UNEMPLOYMENT BENEFITS BEGIN?

"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."

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.

But because making estimated payments requires taxpayers to know their income from the previous year, these individuals will likely still need to submit their 2020 income taxes by April 15. Taxpayers need to project their income for the year or have their previous year's income handy in order to calculate their estimated payment.



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