If you haven’t done your taxes yet, there’s some good news for you. The federal government recently pushed Tax Day back a month, giving you until May 17th to file.
But before you take taxes off your to-do list for a while, there are a couple of things to consider. Filing early will get your refund in your bank account early, but with COVID stimulus payments still coming, you may find that filing early benefits you there, as well.
Here’s what you need to know about getting your taxes in on time in 2021.
When federal taxes are due
You can file your taxes anytime before the tax-filing deadline, as long as you have your W-2 and 1099-INT forms. But in most tax years, the deadline falls on April 15th, or the next business day if the 15th falls on a weekend.
But the pandemic led to some extensions. In 2020, Tax Day was moved back to mid-July to give everyone extra time to file. Although things are starting to look up, the IRS recognizes that taxpayers are still struggling. To help out, the agency pushed the 2021 deadline back a month, to May 17th.
You don’t have to do anything to get the extension, it’s automatic. It also means that if you owe money, you won’t owe it until May 17th. Even if you file ahead of time, you can pay monies owed up until the deadline each year.
When estimated taxes are due
The deadline extension doesn’t apply to estimated tax payments. Many business owners and independent contractors don’t have taxes withheld, which means they have to pay taxes on their own. The first 2021 estimated payment is due April 15th, regardless of the Tax Day change.
Below are the due dates for 2021’s quarterly tax payments.
Payment period Due date
Jan. 1-March 31 April 15
April 1-May 31 June 15
June 1-Aug. 31 Sept. 15
Sept. 1-Dec. 31 Jan. 18, 2022*
*Jan. 15th falls on a weekend, and Jan. 17th is a holiday, so your payment will be considered on time if it’s postmarked by Jan. 18th.
When state taxes are due
The federal deadline extension only applies to federal returns. You’ll need to check with your own state to see if the deadline has been extended. Some states have already moved their tax deadlines to match the federal extension.
For example, if you live in Virginia or Arkansas, your governor has already extended the filing deadline. Since many taxpayers file both returns at the same time, it’s likely many other states with income tax will extend theirs, as well.
Why file early?
Despite the extra few weeks, the IRS urges taxpayers to go ahead and file. There are a couple of good reasons for that.
One is the same incentive that applies every year. If you’re due a refund, the sooner you file, the sooner it will be in your account. You may not know for sure whether you’re getting a refund until you file, but luckily, if you owe, you can still wait to pay the amount until May 17th.
But in 2021, there’s another reason to file early: your stimulus checks. If any of the 2020 checks didn’t make it into your account, when you file, you can claim them and get your money.
If your income dropped in 2020, you have another reason to file early. The $1,400 stimulus check is based on your 2020 tax return. If you haven’t filed yet, the IRS will go back to your 2019 adjusted gross income. Since there’s an income limit, a lower income in 2020 will benefit you. If your income has increased, holding off until you have that payment might help.
Filing amid COVID-19 concerns
As with the 2020 tax season, taxpayers are concerned about visiting a tax preparer’s office during a pandemic. Many tax preparers will let you drop off your taxes or submit them electronically. If you have very few forms to scan, ask your preparer if there’s a secure portal for you to upload everything.
Another option is to file your return electronically. Popular software platforms like TurboTax have permanently expanded their offerings to include videoconferencing. TurboTax now lets you turn your return over to an expert who will prepare your return for you. Or you can let the software walk you through the steps of inputting the information. At the end, a tax expert can review things before your return goes to the IRS.
Tax refund delays
Even if you file early, you may not get your refund as quickly as in previous years. The IRS has been bogged down with two stimulus payouts in the past few months in addition to tax season. Processing didn’t even begin until February 12th.
In mid-March, the IRS reported a backlog of nearly 7.6 million returns. For comparison, last year at the same time, the IRS estimated 2.7 million tax returns had been received but not processed. COVID-era staffing issues and outdated technology have been cited as causes for the increase in delays.
If you’ve already filed, the IRS’s Where’s My Refund? tool will give you the most up-to-date information on your return’s status. You’ll just need your Social Security number or ITIN, your filing status, and your exact refund amount.
As always, filing your return electronically is best, but this year it’s especially important as the IRS has announced a delay in processing mailed returns.
As with everything the past year, tax season in 2021 will look different than in prior years. But filing as early as possible and selecting direct deposit as your payment method will ensure you get your refund, as well as future stimulus payments, as quickly as the IRS can process them.