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Archive for March, 2021

Tax Day is Now May 17 For Individuals

Posted by taxguru on March 17, 2021

After a lot of teasing us with “will they or won’t they,” IRS has decided to give most of the country until Monday, May 17 to file 2020 tax returns or extensions.

Tax Day for individuals extended to May 17: Treasury, IRS extend filing and payment deadline

While we should all appreciate any extension of the filing deadline, just moving it back by one month seems a bit half-assed.  While most people were expecting another July 15 Tax Day, I was betting on June 15, which would have brought everyone else in sync with Texas, Louisiana and Oklahoma,

Of course, there is a possibility that one month from now, IRS may move Tax Day out by another month or two, adding even more confusion to the process of preparing and filing tax returns.

It’s another crazy Tax Season.

Update 3/19/21:  There are a lot of critics, such as the AICPA, of this limited filing delay because it doesn’t cover businesses, which have a lot of new confusing issues to deal with from the pandemic, and the fact that IRS supposedly still wants people to send in their first estimated (ES) tax payment for 2021 by April 15.  Again, this is very much like the confusion we went through at this time last year, when for a while, IRS was requiring the second ES payment for 2020 to be made by June 15, while the first wasn’t due until July 15.  IRS is a master at complicating what should be a simple across the board delay for everyone.    

Posted in IRS, TaxDay | Comments Off on Tax Day is Now May 17 For Individuals

ARPA Tax Related Items

Posted by taxguru on March 16, 2021

Continuing a long tradition of assigning names to legislation that mean exactly the opposite of what they actually are (Affordable Care Act, etc.), our rulers in DC have just enacted a spending monstrosity they tagged as the American Rescue Plan Act of 2021.  As it was working its way through Congress, I could swear that I saw references to it being 600 plus pages.  However, this official PDF copy of the law that I just downloaded is only 242 pages.

Even that is too much text to have to wade through, especially during this busiest time of the year; so I rely on summaries that are produced by the tax reference services.

As I have mentioned on several occasions, my number one go-to for tax answers is TheTaxBook.  Once again, they did an excellent job of distilling the tax related items in those 242 pages, and have released a 25 page analysis, as well as a much more concise three page summary.  They also created this two-page client handout version of the summary.

The effective dates of the new tax items are varied.  Some are just for 2020, some are just for 2021, and others are for several years.  As we know all too well, any or all of these changes can be changed again at the whim of our out of control rulers in DC.

Luckily, I didn’t notice any changes that affect 2019 tax returns, so there won’t be any need to amend those years.  However, people who filed their 2020 returns early may need to amend if they qualify for either of the two very generous new tax breaks that only apply to 2020:

Up to $10,200 of tax free unemployment benefits

Waiver of the requirement to repay any excess Premium Tax Credits that were received during 2020 as reductions in the cost of health insurance.

As I like to do, I will be posting other useful analyses and summaries of this new law, as I come across them.

Posted in NewTaxLaws | Comments Off on ARPA Tax Related Items

Delayed Tax Day for Three States

Posted by taxguru on March 12, 2021

While we are all waiting for IRS to announce a nation-wide extension of the filing deadline for 2020 tax returns, they have officially given a two month delay – until June 15 – to three States which had some nasty weather recently.

Victims of Texas winter storms get deadline extensions and other tax relief

IRS announces tax relief for Oklahoma severe winter storm victims

IRS announces tax relief for Louisiana severe winter storm victims

 

The insane two trillion dollar “stimulus” bill that was signed into law yesterday has some tax related items that will require modifications to the IRS’s computers, as well as to the software we practitioners use.  Trying to get all of that up to speed with an April 15 filing deadline will just make an already crazy Tax Season even more so.

While everyone will still have the option to file for their own extensions, until October 15, there is a big difference between that approach and IRS delaying the initial filing deadline.  If IRS doesn’t give us all extra time, we will have to do some tax calculations and submit payments for any expected taxes due by April 15. 

If IRS gives us the extra time like we had last year, those payments won’t be due until the new Tax Day, which will hopefully be July 15 for everyone.  It would also delay the deadline for some other tax return related events, such as when money could be deposited into an IRA account and be deducted on the 2020 returns.

Posted in IRS, TaxDay | Comments Off on Delayed Tax Day for Three States

Another Uncertain Tax Season

Posted by taxguru on March 10, 2021

It’s impossible not to have déjà vu feelings related to last year, when at this same point in time, there was a confusing “will they or won’t they” tension in the country in regard to IRS extending the official filing deadlines for 2019 tax returns.  We are currently in the midst of exactly that same debate for 2020 returns, with calls for July 15 to be Tax Day again this year.

Of course until IRS makes its official declaration of a later tax filing deadline, we have to operate as if the normal due dates of March 15 and April 15 are still our targets.

Very interesting analysis of the current status of how behind IRS currently is in this article from Accounting Today:

Momentum builds for delaying tax deadline

Posted in IRS, TaxDay | Comments Off on Another Uncertain Tax Season