6 Tips for Last-Minute 2021 Tax Filing
Consider these strategies in the weeks leading up to the May 17 federal tax filing deadline.
Article originally published on May 8, 2020 and refreshed on March 29, 2021.
With the coronavirus pandemic still disrupting daily life in 2021, Federal Income Tax Day has once again been delayed.
To help taxpayers navigate the unusual circumstances of the pandemic, the federal government has extended this year’s tax filing deadline to May 17. That means taxpayers have one extra month to deal with their 2020 taxes without incurring interest or penalties.
In 2020, taxpayers were given three extra months to file their taxes in response to the coronavirus outbreak. That marked the first time in 65 years the tax deadline was meaningfully extended. The last time it had previously been delayed was in 1955 when the government permanently moved Tax Day from March to April, reportedly to help Americans deal with the increasingly complex tax code.
While the May 17 tax deadline likely won’t endure past 2021, here are six tips to consider before Tax Day 2021.
2021 Tax filing tip #1: Don’t wait to get your refund
Many people are taking advantage of the extra time to file their taxes. The IRS reports that the number of individual income tax returns received is down nearly 10% from 2020. But just because you have the extra leeway this year, doesn’t mean you should put off filing your taxes. The average tax refund in 2020 was about $2,700 — money that could come in handy for many people.
2021 Tax filing tip #2: Claim a refund for 2017, 2018 or 2019
Many people don’t know that you can claim a tax refund within three years of the return due date. That means if you were due a refund in 2017 but didn’t file a tax return, you still have until May 17 to file and claim your money. Same goes for 2018 and 2019. If you don’t file before the three years has passed, the IRS gets to keep your money.
2021 Tax filing tip #3: Know your state’s tax deadlines
2021 Tax filing tip #4: Consider a contribution to your HSA or IRA
One possible way to reduce your 2020 taxable income is by contributing to a health savings account (HSA) or individual retirement account (IRA) before Tax Day of the following year. So, the last day to contribute to an IRA or HSA for 2020 is May 17, 2021.
For 2020, individuals can contribute up to $3,550 in pretax funds for qualified medical expenses, while families can set aside up to $7,100 for HSA coverage.
Similarly, IRA contributions can be tax deductible and help lower your tax burden. Of course, you’ll want to check with a qualified tax professional to discuss your individual situation. The 2020 maximum contribution amount for either type of IRA is $6,000, or $7,000 if you’re age 50 or older.
2021 Tax filing tip #5: Extension or not, pay owed taxes by May 17
If you can’t finish your return by the May 17 tax deadline, file IRS Form 4868 or free file a tax extension at IRS.gov. That will give you until Oct. 15, 2021, to file your taxes.
Remember, the tax extension gets you more time to file your return, not more time to pay your taxes. You should estimate and pay any owed taxes by the tax deadline to help avoid possible penalties.
2021 Tax filing tip #6: Explore free filing and tax assistance options
Most individuals and families filing a simple return need not pay to file. Visit the IRS free file website for free filing information.
Additionally, taxpayers earning less than $57,000 per year may qualify for free tax assistance from a certified volunteer. Visit Utah Tax Help to make an appointment with a volunteer in Utah, or go to Boise State’s Volunteer Income Tax Assistance program web page for information on tax help in Idaho.
Content is offered for informational purposes only and should not be construed as tax, legal, financial or business advice. Please contact a professional about your specific needs.
Kallee Feuz is a Public Relations officer for Zions Bank.