The IRS is leaving taxpayers some room to organize their filings this year, pushing the deadline from April 15 to May 17. The extra month will allow people more time to prepare their taxes, gather documentation, and consult with tax professionals where necessary.
The decision was pushed by lawmakers, as well as professionals in the financial industry who said that the previously extended deadline was still too soon, considering all the challenges that people have faced with the Coronavirus Pandemic and associated shutdowns in the previous year.
A Large Group of House Representatives Requested the Extension
The decision to extend the deadline was likely swayed, at least in part, by a request from more than 100 lawmakers in the House of Representatives. In an open letter sent to the IRS, signed by mostly Democratic lawmakers, it was stated that individual taxpayers, businesses, and tax professionals would need an extension to the deadline.
This letter followed an earlier one sent to the IRS by a group of just eight Democratic lawmakers. With more support in Congress, the IRS likely had little choice but to move the deadline ahead.
It was the right decision, even for the department itself. The IRS has been under pressure with disrupted working hours and a decentralized workforce, due to COVID-19 restrictions. The recently signed $1.9 trillion stimulus package would have also been a factor in the decision. It allowed several tax-code changes and benefits, which have added to the complexity of this year’s filings.
One example of a new benefit for the IRS to calculate is the waived federal income tax on the first $10,200 of income reported by people who received jobless benefits in the last year.
The IRS is also handling economic impact payments, of which 90 million have already been distributed. The workload is immense, so an extra month will help federal staff members to handle this unique tax season.
This year’s extension follows a similar one allowed last year, where the deadline was pushed back to July 15.
State Tax Aren’t Included
The IRS warned taxpayers that the extension only applies to federal taxes and that any state taxes must be handled within existing deadlines, according to state laws. Anyone currently preparing their taxes, especially investors with diverse income streams, should consult with their preparers immediately to ensure that they are ready for both state and federal filings, and to avoid any late penalties.
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