The IRS Says You Can Now Wait Until May 17 to File Your Taxes—but Should You?
The IRS is giving Americans another month to file their taxes, here's what to know.
As if tax season 2021 wasn't unusual enough, with the third round of stimulus checks, delayed start date, adjustments to taxes owed on unemployment benefits, and more, there's yet another shift: The IRS has postponed Tax Day until May 17, 2021. Announced March 17, the shift gives taxpayers an additional month to file their tax returns or make federal income tax payments for the 2020 tax year.
According to the IRS news release announcing the shift, the federal income tax filing due date will be automatically extended. Individual taxpayers can also postpone their federal income tax payments for the 2020 tax year until May 17 without penalties or interest. As in years past, those needing more time to file their taxes can file for an extension until October 15, but no action needs to be taken for the May 17 deadline: If you have not filed yet, you have until May 17 now with no action on your part. The IRS statement says the agency will be providing formal guidance on the change in the next few days, but for the standard taxpayer, the shift should be pretty straightforward.
"Even with the new deadline, we urge taxpayers to consider filing as soon as possible, especially those who are owed refunds," IRS Commissioner Chuck Rettig said in a statement included in the IRS announcement. "Filing electronically with direct deposit is the quickest way to get refunds, and it can help some taxpayers more quickly receive any remaining stimulus payments they may be entitled to."
In other words, just because you can wait to file your federal income taxes doesn't mean you should. Filing earlier (even just to ensure you get a stimulus check) means you'll get your refund (if applicable) earlier, and it makes it more difficult for someone to file a return on your behalf, defrauding you of your refund money.
There are plenty of other reasons to file early (or at least well before the May 17 deadline). The IRS extension only applies to individual federal income returns and tax—state taxes, unless your state announces an extension, may be due before May 17. In states with an income tax, deadlines sometimes vary from the federal deadlines anyway: Before you decide to wait until May 17 to file all your taxes, check your state filing deadline to ensure you don't miss the due date, as most people file federal and state taxes at once.
Estimated tax payments—for those with income from self-employment, interest, dividends, alimony, or another source that isn't subject to income tax withholding and who make estimated tax payments quarterly—that were originally due on April 15 are still due on that date. These tax payers do not get an extension for their quarterly estimated payments.
This is the second year in a row that Tax Day—typically April 15—has been moved. Last year, in the early months of the coronavirus pandemic, the tax filing deadline was moved to July 15, giving everyone more time to file and process their returns. This year, with the one-month extension, filers have a little more time to get their tax affairs in order—but not as much as they had last year.
From the delayed start of this year's tax season on February 12, accounting experts, advocates and legislators—including the AICPA, or the American Institute of CPAs—have called for a tax filing extension. There's no guarantee the deadline won't be postponed again as we near the new May 17 Tax Day, particularly as the AICPA has already put out a follow-up statement calling for the IRS to postpone the deadline for estimated tax payments, as well, and to further shift tax filing due dates to June 15. Whenever Tax Day finally hits, though, there are plenty of good reasons to file as soon as you're able.