Tax Day is now May 17
It's official. The IRS has yet again extended the tax filing deadline for individuals to May 17, 2021. Officials with the IRS say more information will be issued in the coming days. Among the questions we're waiting to hear more about, the deadlines for estimated payments and whether or not those are also extended. Among the reasons for the change in the filing date:
The IRS still has some 6.5 million 2019 tax returns that haven't been processed and most employees have not yet returned to work. Now, though, the IRS is asking for its employees to volunteer to return to work. Many went home (with pay) just about a year ago due to COVID and haven't been back since.
Last week's passage of the American Rescue Plan Act, which includes the $1,400 stimulus payments to most Americans, also included a lot of changes to tax law, like an expansion of the Child Tax Credit, changes to unemployment taxability, EIDL loan taxability, etc. The forms to address these changes don't even exist yet and the State of Colorado hasn't issued any guidance as to how it plans to have taxpayers address the changes.
While the IRS is encouraging taxpayers to file ASAP, we don't quite understand why. As we said, the forms to address these changes don't yet exist. For our clients, in many cases, we are waiting for further guidance from the IRS before completing and filing tax returns - rushing to complete returns may result in a higher tax preparation bill from our office should an amendment be necessary and that's not something we're comfortable with. We understand some clients are expecting refunds. Clients in dire straits should call our office so we can come up with a good plan for you - weighing the possibility of paying for an amended tax return against getting your refund a few days sooner. If you can wait, thank you for your patience. As ever, we are working through returns in the order in which they are received. We will reach out to you with any questions as we work through your returns, and we'll let you know when your returns are done and ready for your review. Though circumstances out of our control have put us in a holding pattern in many ways, we are still working hard. Many of the returns we've already completed, including some that have actually already been filed, will need changed, so we're evaluating that situation right now as well. You can stay updated on the latest changes impacting us and your tax return preparation by visiting our blog often. We do our best to keep it updated as soon as we receive verified, credible information. Just because the deadline has been extended to May 17 does not mean we don't need your tax documents sooner rather than later. This is because we don't know how long it will take to change our processes and recover our workflow, or how long it will take the IRS and State to address the changes, so you may still be extended despite the extra time. Remember, it's an extension to file, not to pay, so we still need your tax docs in-house so we can make an estimate by May 17 on what tax you may owe and get it in the mail so you don't incur penalties.
A FINAL NOTE: The third round of stimulus payments ($1,400 per eligible person) have already started arriving. It may be via direct deposit, paper check, or pre-paid card. We're expecting the same level of inconsistency with this payment, so our best advice is to OPEN ALL YOUR MAIL.