For over a year, COVID-19 generated significant, widespread implications for businesses and individuals, and the effects of the pandemic have seeped into taxes. Filing taxes is one of the most complex aspects of running a business, and abnormal deadlines can make filing on time even trickier. In the content below, we outline the 2021 tax filing extensions to help businesses navigate the evolving and extended repercussions of COVID-19.
What Are The 2021 Filing Extensions? Everything You Need to Know
In short, there are two available filing extensions. The first applies to filing and payments and is an automatic extension, meaning you do not have to apply to receive the benefit.
The automatic extension changed the federal income tax filing deadline from April 15, 2021 to May 17, 2021.
Taxes filed after April 15, 2021 (until May 17, 2021) will not undergo penalties or interest, and the same applies to money owed.
What If You Still Needed More Time?
If you are unable to file taxes before May 17, 2021, another extension could apply – this extension, however, requires a more work.
Form 4868 allowed for a filing extension to October 15. This form applies to filing only. Payment must still be made by May 17. However, not everyone will be able to capitalize on this second extension, as April 15 marked the deadline to submit the form.
Who Do the Extensions Apply To?
The 2021 filing extensions apply to all tax paying entities, including individuals, estates, and businesses, regardless of the amount owed.
Do the Extensions Apply to State Taxes?
No. The 2021 filing extensions apply to federal taxes only.
State tax deadlines vary by state and many kept their normal deadlines in place. Other extended filing deadlines beyond the federal extensions.
The Federation of Tax Administrators provides a complete list of state tax agency websites for reference. For quick reference, we’ve grouped U.S. states into 2021 state income tax deadlines.
- May 17, 2021 Deadline: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Utah, Vermont, Virginia, West Virginia, and Wisconsin
- April 20, 2021 Deadline: Hawaii
- June 1, 2021 Deadline: Iowa
- June 15, 2021 Deadline: Louisiana and Oklahoma
- July 15, 2021 Deadline: Maryland
- No State Return Required: Wyoming, Washington, Texas, Tennessee, South Dakota, New Hampshire, Nevada, Florida, and Alaska
Do Extensions Affect Tax Refunds?
Though it is somewhat rare, businesses can receive tax refunds. For example, if your organization overpaid on sales tax, you may receive a refund.
Will the 2021 federal extensions affect when you might receive your refund? Not directly.
While the extensions could correlate to receiving a refund later than “normal,” refunds are typically given within a few weeks to a couple months of filing taxes, depending on the method of filing. Thus, if you choose to file later due to the extension, your refund will come later. However, taxpayers and businesses are eligible to file in January!
Regardless of the extension, the sooner you file, the sooner you will receive your refund.
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. 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.
Will Tax Filing Extensions Be the New Normal?
In 2020, filing and payment for 2019 taxes was extended from April to July. This year, the automatic extension pushed the deadline from April to May. Will extensions continue being the new normal?
The future is impossible to predict. However, the process of filing taxes this year is more “normal” than last year. If the upward trajectory continues, next year should feel even more familiar, reducing the need for filing extensions. Of course, this is mere speculation and only time will tell.
However, business owners can capitalize on this insight! Because we know that the only thing certain is change, now is the time to identify trustworthy financial specialists to care for fiscal welfare of your organization.
If you aren’t equipped – or simply don’t have the time – to handle important financial tasks, handing those duties to specialists will allow you to focus on the areas of business management you thrive in and ensure the financial welfare of your organization is in good hands.
MyRQB: Trusted Bookkeeping Professionals
At MyRQB, we are dedicated to simplifying the financial management side of your business. As bookkeeping professionals, we are always aware of policy changes – such as tax filing extensions, acting quickly and expertly for the good of our customers.
Need to talk to a specialist? Give us a call at 866-567-4258 or complete our online contact form! We will respond promptly.