Did You Know: 2020 Tax Filing Deadlines and Stimulus Payments
The federal government and most states have extended the due date to file your 2020 tax return to May 17, 2021. If you are concerned about the filing and payment deadlines in your state, then ask your tax preparer or you can find the link to your state’s revenue department website here.
While you have until May 17 to pay income taxes due for 2020, it did not change the deadline for making first-quarter 2021 estimated tax payments. If you are making estimated tax payments for 2021, then the first-quarter deadline remains April 15. Dates for the remaining 2021 estimated tax payments are June 15, 2021, Sept 15, 2021 and Jan 18, 2022.
The extended 2020 filing deadline may provide some taxpayers with more time to potentially reduce their income taxes for 2020. You can still make contributions to IRAs, Roth IRAs and HSAs for 2020 up until the extended deadline of May 17. If eligible, deductible contributions to IRAs or and HSA accounts may help reduce your 2020 taxable income. Make sure you clearly note the tax year the contribution refers to so it gets applied to the correct year.
Reducing your 2020 taxable income may allow you to claim stimulus money as well. The third round of stimulus payments ($1,400 for the filer and eligible dependents if your adjusted gross income (AGI) is up to $75,000 filing singly or $150,000 filing jointly) will be based on the most recent tax return if it has been processed by the date that the government processes your stimulus payment. The IRS is behind in processing returns so it makes sense to file your 2020 as soon as possible only if your 2020 income is less than 2019 and your 2020 return may qualify you for a stimulus payment.
If you are one of the millions of taxpayers missing a check from the first two stimulus payments, then you still have time to file for a Recovery Rebate Credit on your 2020 tax return. The many scenarios where this may be the case are beyond this commentary, but if you’re claiming any of the $1,200 or $600 from the first two stimulus payments, then you could receive a larger tax refund for 2020 or a smaller bill if you own taxes. Do not forget to provide your tax preparer with the dollar amounts of the two stimulus payments you received.
Perhaps you or someone you know does not file taxes due to limited income. An individual may have been eligible for stimulus payments and never received them because they needed to register with the IRS to claim the stimulus. The May 17 deadline may be helpful – they can still file a 2020 income tax return using the IRS’s free tax-filing service and claim their missing stimulus payments through the Recovery Rebate Credit.
The extension of the 2020 tax filing deadline in combination with the three rounds of stimulus payments has created confusion and a more complicated tax filing season for many taxpayers. Reach out to your tax preparer for answers and guidance if you have questions.
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