2021 is turning out to be one of the most difficult tax filing seasons ever. The IRS is way behind in its work, and the average taxpayer isn't doing much better. Congress has made matters even worse by making several last-minute retroactive changes to the tax laws.
After widespread calls to delay the 2021 tax filing deadline, the IRS finally cried uncle. It has announced 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.
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. Penalties, interest, and additions to tax will begin to accrue on any remaining unpaid balances as of May 17, 2021.
This postponement applies to all individual taxpayers, including independent contractors who pay self-employment tax.
In short, you now have until May 17, 2021, to file your 2020 tax return. If you owe the IRS any taxes for 2020, you have until May 17 to pay what you owe. After May 17, you'll have to pay interest and penalties on unpaid 2020 taxes.
What if you need even more time to file your return? You can still get an automatic extension until October 15, 2021, by filing Form 4868. You can easily file this form yourself using tax software or the Free File link on IRS.gov. You can also file the form by postal mail. Your tax professional can also do it for you.
Note carefully that filing Form 4868 gives you until October 15 to file your 2020 tax return but does not extend the time to pay the IRS any taxes you owe for 2020. These are still due May 17, 2021. You'll need to estimate what you owe on Form 4868 (if anything) and pay it to the IRS.
This postponement only applies to your 2020 taxes. It does not apply to 2021 estimated tax payments that are due on April 15, 2021. These payments are still due on April 15.
The federal tax filing deadline postponement to May 17, 2021, only applies to individual federal income returns and taxes, not state income tax returns or payments. Most states have an April 15 income tax deadline, but not all. If you live in one of the 42 states that has state income taxes, you should check with your state tax agency to determine if it is postponing its tax filing deadline as well (it's likely all or most will do so).
Despite the postponement, if you're owed a refund, you should file your 2020 return as soon as you can. The sooner you file, the sooner you'll get the refund. Also, file your return electronically. The IRS is still trying to process millions of paper returns filed in 2019. Filing a paper return by postal mail could seriously delay your refund.