What You Need To Know
So, 2021 is here and it seems that it did not magically make all the problems of 2020 go away. It’s like the date of the new year is totally arbitrary, or something. There is some good news, though; the date for filing your 2021 taxes is extended. Our friends at Dragon Financial in Portland, Oregon want to let you all know what’s what in this extension.
2021 Tax Deadline Extended to May, or June
The full and complete details of the extension can, as always, be found on the IRS website, but let’s give a little rundown of what it all means.
First, the deadline for filing your taxes is now May 17 instead of April. This extension was authorized to give some extra relief to people affected by the coronavirus outbreak. Furthermore, due to the massive winter storms in Texas, Oklahoma, and Louisiana, those states have an additional extension to June 15.
Does Not Apply to State Taxes
This extension is only for federal taxes. Your state taxes are still due on April 15 as usual, however individual states may propose their own extensions, or have different deadlines. The FTA has helpfully provided a list of all states and their tax commission websites where you can check for the specific details if you don’t already know them.
The Payroll Protection Program put forward by congress in 2020 allowed businesses to take out loans to help cover payroll and keep people employed during the pandemic. This is especially important for the tax deadline, as the PPP was a loan, not a grant. Loan forgiveness is available, but it requires very careful documentation of your expenses using the loan money. If you don’t provide the correct documentation to qualify for loan forgiveness, you will have to pay the loan back at 1% interest.
The extension is there to help people affected by the pandemic and the harsh winter storms, but do not take it as an excuse to procrastinate. It’s easy to put off filing your taxes until the last minute, leaving you scrambling to get it done on time. The extension is meant to ease your stress, but if you wait too long, then you’ll still be in a rush to file it before the extended deadline. If you haven’t already been getting your tax information together, now is the time to definitely get it done. If you have an accountant, get all of your documentation to them as soon as you can so they can be sure to have all the time they need to prep your documents.
Doing your taxes early is the best way to make sure you don’t make any mistakes. The rush to get it done at the last minute leaves you with no time to search for everything if you’ve misfiled documents. Better to get ahead now than panic later. You’ll be glad you did.