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Blog - Tax Related

Updated Tax Filing Date 2021
29
Mar

Updated Tax Filing Date 2021

Written by Alex Mendoza and Marina Stolbovaia Be the first to comment!

       In response to the pandemic, the IRS pushed the 2020 federal tax filing deadline. The Treasury moved the deadline from the expected date of April 15th to the following month, May 17th, 2021, to accommodate the “most vulnerable individuals” this tax season. For our DMV locals, Washington, D.C, Maryland, and Virginia have also adopted the filing day of May 17th.

       There is significant confusion between the new filing deadline of May 17th and the first 2021 estimated quarterly tax deposit, which remains unchanged as April 15, 2021. Although the date to file has changed, the due date for estimated quarterly tax deposits has not. The 2021 estimated tax deposit applies to individuals owing more than $1,000 for income taxes for the year.  For business owners, this means that the first-quarter estimated tax payments are still subject to the original estimated deposit date. Indeed, this can create some confusion.

 

       Our recommendation at MendozaCo is to file the 2020 tax returns as soon as possible, and as for the 2021 estimated quarterly tax deposits to apply one of the “Safe Harbor” tests:

  • 90% of the tax shown on the individual’s tax return for the current year (2021), or;
  • 100% of the tax shown on the prior year’s return (2019) for adjusted gross income (AGI) less than $150,000 for married filing jointly (AGI less than $75,000 for single individuals) or;
  • 110% if your previous year’s adjusted gross income was more than $150,000.

 

If you satisfy one of the three tests, you won’t have to pay the estimated tax penalty.

       This tax season may be the most complicated yet. The unforeseen circumstances of the COVID-19 pandemic have brought both leniencies and more confusion into the equation. Starting sooner than later is the best way to avoid facing penalties or overpaying for your taxes- don’t wait until the last minute to file! Call MendozaCo to schedule an appointment today.

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