The IRS plans to extend its usual tax filing deadline from April 15 to May 17, which will give taxpayers some breathing space in an unusually chaotic filing season.
Accountants have asked the tax agency to postpone the deadline, given the ongoing challenges of the coronavirus pandemic for taxpayers and the IRS, which is still lagging behind last year’s tax returns. The delay in the tax period was first reported by Bloomberg News.
The Treasury and the IRS confirmed late Wednesday that the tax filing deadline will reopen by May 17. The deadline for tax payments – such as quarterly tax on self-employment or underpaid tax amounts – will also be extended to 17 May.
The U.S. Institute of CPAs urged the IRS this week to file the deadline, citing the impact of the pandemic on U.S. taxpayers as well as the tax agency itself, which is still trying to dig out a backlog of recent taxes. filing season. Lawmakers praised the tax agency on Wednesday for the expansion, calling it “absolutely necessary.”
“The practitioners said, ‘We are here, but there are not enough hours in the day to get everything done in front of us,'” said Meredith Tucker, chief tax officer at Accountants Kaufman Rossin. “It’s hard to imagine we’ll be another month below the tax season, but we need more time.”
Tax preparers have reviewed changes to the tax code, including last week’s $ 1.9 billion US rescue plan, which has an impact on issues ranging from tax on unemployment benefits to the child tax credit, as well as loans from the Paycheck Protection Program.
The extra time applies to individual taxpayers, including those who pay taxes for self-employment, such as sole proprietorships and workers with large economies, the IRS said. It added that individual taxpayers do not have to file any forms or call the IRS to be eligible for the May 17 deadline.
Given previous tax seasons, it is likely that half of the taxpayers will still have to file their returns, said Curtis Campbell, president of TaxAct. He added that taxpayers, even with the extra breathing room, still plan to get their proceeds from the IRS sooner rather than later.
“I would advise people to still file as soon as possible, especially if they need their tax refund,” Campbell said. “The IRS is doing everything in its power to help consumers deliver quickly, and getting their latest updated information to them can help taxpayers get their returns and potential other future economic payments faster.”
Lawmakers have welcomed the IRS’s decision to move the deadline back.
“This expansion is absolutely essential to give Americans the flexibility they need in a time of unprecedented crisis,” said Bill Pascrell, Jr., a New Jersey Democrat and chairman of the House Ways and Means Subcommittee on Oversight, and Richard Neal. , a Massachusetts Democrat, in a joint statement. “Under great stress and strain, U.S. taxpayers and taxpayers need more time to file tax returns.”
At the same time, the IRS is being accused of spreading millions of federal stimulus payments on top of processing a backlog of returns. Last year, the agency switched to remote work due to the pandemic, which caused them to store paperwork in trailers until they could reach them.
“Even the IRS – which is facing a significant backlog in mail processing, a delayed start to the 2021 tax season, flooded telephone lines and a new round of COVID – 19 relief – is overwhelmed,” the AICPA said.