April 15 often fills taxpayers with dread. This year? Not so much.
Earlier this year, the IRS extended the deadline for federal 2020 tax returns until May 17, 2021. The automatic extension gives filers more time during the pandemic. So if you were rushing to get your returns done before midnight, you can breathe a sigh of relief that you still have another month until they are due.
Federal estimated tax payments are still due
However, the automatic extension does not apply to federal estimated tax payments for self-employed workers. So if you are self-employed, estimated tax payments are still due on April 15.
“Taxes must be paid as taxpayers earn or receive income during the year, either through withholding or estimated tax payments. In general, estimated tax payments are made quarterly to the IRS by people whose income isn’t subject to income tax withholding,” the IRS says.
Most taxpayers automatically have their taxes withheld from their paychecks and submitted to the IRS by their employer and do not need to pay quarterly estimated tax payments.
State tax returns
As for state tax returns, the Indiana Department of Revenue extended the deadline to May 17 to align with the federal deadline.
According to the Indiana DOR:
Individual tax returns and payments, originally due by April 15, 2021, are now due on or before May 17, 2021. All other tax return filings and payment due dates remain unchanged.
Individuals who are not able to file by the May 17, 2021, deadline can file an extension directly with DOR or with the Internal Revenue Service (IRS). If the IRS extension is granted, the Indiana extension is automatically granted. A timely filed extension moves the federal tax filing deadline to October 15, 2021, and the Indiana filing deadline to November 15, 2021.
It is important to note that the extension only shifts the filing deadline and not the payment deadline. Ninety percent of the taxes owed are still required to be paid by May 17, 2021, to avoid penalties.
Image Credit: 401(K) 2012, Flickr