Tax Day for individuals extended to May 17: Treasury, IRS extend filing and payment deadline
WASHINGTON — The Treasury Department and Internal Revenue Service announced today that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021. The IRS will be providing formal guidance in the coming days.
“This continues to be a tough time for many people, and the IRS wants to continue to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic, while also working on important tax administration responsibilities,” said IRS Commissioner Chuck Rettig. “Even with the new deadline, we urge taxpayers to consider filing as soon as possible, especially those who are owed refunds. 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.”
Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Penalties, interest and additions to tax will begin to accrue on any remaining unpaid balances as of May 17, 2021. Individual taxpayers will automatically avoid interest and penalties on the taxes paid by May 17.
Individual taxpayers do not need to file any forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the May 17 deadline can request a filing extension until Oct. 15 by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Filing Form 4868 gives taxpayers until Oct. 15 to file their 2020 tax return but does not grant an extension of time to pay taxes due. Taxpayers should pay their federal income tax due by May 17, 2021, to avoid interest and penalties.
The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds associated with e-filed returns are issued within 21 days.
This relief does not apply to estimated tax payments that are due on April 15, 2021. These payments are still due on April 15. Taxes must be paid as taxpayers earn or receive income during the year, either through withholding or estimated tax payments. In general, estimated tax payments are made quarterly to the IRS by people whose income isn’t subject to income tax withholding, including self-employment income, interest, dividends, alimony or rental income. Most taxpayers automatically have their taxes withheld from their paychecks and submitted to the IRS by their employer.
State tax returns
The federal tax filing deadline postponement to May 17, 2021, only applies to individual federal income returns and tax (including tax on self-employment income) payments otherwise due April 15, 2021, not state tax payments or deposits or payments of any other type of federal tax. Taxpayers also will need to file income tax returns in 42 states plus the District of Columbia. State filing and payment deadlines vary and are not always the same as the federal filing deadline. The IRS urges taxpayers to check with their state tax agencies for those details.
Winter storm disaster relief for Louisiana, Oklahoma and Texas.
Earlier this year, following the disaster declarations issued by the Federal Emergency Management Agency (FEMA), the IRS announced relief for victims of the February winter storms in Texas, Oklahoma and Louisiana. These states have until June 15, 2021, to file various individual and business tax returns and make tax payments. This extension to May 17 does not affect the June deadline.
For more information about this disaster relief, visit the disaster relief page on IRS.gov.
Tax Deductible Donations
Rules for Giving to Charity, How to Get a Deduction & 3 Tips to Save
Donate, document and don’t forget the little stuff.
Tax deductible donations are contributions of money or goods to a tax-exempt organization such as a charity. Tax deductible donations can reduce taxable income. To claim tax deductible donations on your taxes, you must itemize on your tax return by filing Schedule A of IRS IRS Form 1040 or 1040-SR.
For the 2020 tax year, there’s a twist: you can deduct up to $300 of cash donations without having to itemize. This is called an “above the line” deduction. In 2021, the deduction rises to $300 per person rather than per tax return, meaning a married couple filing jointly could deduct up to $600 of donations without having to itemize.
How much can I deduct?
In general, you can deduct up to 60% of your adjusted gross income via charitable donations (100% if the gifts are in cash), but you may be limited to 20%, 30% or 50% depending on the type of contribution and the organization (contributions to certain private foundations, veterans organizations, fraternal societies, and cemetery organizations come with a lower limit, for instance). IRS Publication 526 has the details.
- The limit applies to all donations you make throughout the year, no matter how many organizations you donate to.
- Contributions that exceed the limit can often be deducted on your tax returns over the next five years — or until they’re gone — through a process called a carryover.
- For the 2020 tax year, you can deduct up to $300 of cash donations on a tax return without having to itemize. This is called an “above the line” deduction. In 2021, the deduction rises to $300 per person rather than per tax return, meaning a married couple filing jointly could deduct up to $600 of donations without having to itemize.
- The CARES Act eliminated the 60% limit for cash donations to public charities.
if you need more information about how to deduct charities on your 2020 taxes, call Medeiros Souza at 407-326-8484 to book an appointment!
Taxes and Accounting
Important Accountant Services
Medeiros Souza Tax offers support for the establishment of legal entities in the United States, Brazil, the Caribbean, Europe and Asia. See below what our specialized services can do for your business.
Preparation and delivery of income tax returns and other obligations in the United States and Brazil, including the delivery of auxiliary Forms to the IRS, as well as delivery of the Brazilian Capital Declaration Abroad (DCBE).
For individuals and legal entities in the United States aiming at the correct registration and filing of documents and transactions to allow correct accounting.
PERSONAL INVESTMENT COMPANIES
Accounting support and compliance with accessory tax obligations for companies located in jurisdictions with favored taxation (eg Bahamas, BVI, Cayman Islands, Bermuda, etc.) also aiming to meet the obligations provided for by the countries of residence of its partners.
Contact Medeiros Souza today through one of our channels:
Getting ready to file taxes
What to do before the tax year ends There are things taxpayers can do before the end of the year to help them get ready for the 2021 tax filing season. Below are a few of them.
• Donate to charity There is still time to make a 2020 donation. Taxpayers who don’t itemize deductions may take a charitable deduction of up to $300 for cash contributions made in 2020 to qualifying charities. Cash donations include those made by check, credit card or debit card. Before making a donation, people can check the Tax Exempt Organization Search tool on IRS.gov to make sure the organization is eligible for tax-deductible donations.
The Coronavirus Aid, Relief, and Economic Security Act changed this law. The CARES Act also temporarily suspends limits on charitable contributions and temporarily increases limits on contributions of food inventory.
• Report any name or address change Taxpayers who moved should notify the IRS of their new address. They should also notify the Social Security Administration of any name change.
• Renew expiring ITINs Certain Individual Taxpayer Identification Numbers expire at the end of this year. Taxpayers can visit the ITIN page on IRS.gov for more information on which numbers need renewal.
• Connect with the IRS Taxpayers can use social media to get the latest tax and filing tips from the IRS. The IRS shares information on things like tax changes, scam alerts, initiatives, tax products and taxpayer services. These social media tools are available in different languages, including English, Spanish and American Sign Language.
• Find information about retirement plans IRS.gov has end-of-year find tax information about retirement plans. This includes resources for individuals about retirement planning, contributions and withdrawals. The CARES Act retirement plan relief waived required minimum distributions during 2020 for IRA or retirement plan accounts. Also, eligible individuals can take a coronavirus-related distribution of up to $100,000 by December 30, 2020 and repay it over three years or pay the tax due over three years.
• Contribute salary deferral Taxpayers can make a salary deferral to a retirement plan. This helps maximize the tax credit available for eligible contributions. Taxpayers should make sure their total salary deferral contributions do not exceed the $19,500 limit for 2020.
• Think about tax refunds Taxpayers should be careful not to expect getting a refund by a certain date. This is especially true for those who plan to use their refund to make major purchases or pay bills. Just as each tax return is unique to the individual, so is each taxpayer’s refund. Taxpayers can take steps now to get ready to file their federal tax return in 2021.