Due to the usual COVID-19 delays, the usual tax deadline of April 15 was thankfully extended to May 17 – yesterday!
But even if you missed that deadline, do not hesitate filling out, sending in, and paying your taxes as soon as possible.
Penalties and interest will start to accrue, and it is of course good to get ahead of that headache. Needless to say, the longer you procrastinate, the more the penalties grow.
According to personal finance publication Kiplinger, “The late-filing penalty is 5% of the tax due for each month (or part of a month) your return is late. If your return is more than 60 days late, the minimum penalty is $435 (for tax returns required to be filed in 2021) or the balance of the tax due on your return, whichever is smaller. The maximum penalty is 25%.”
If you have an honest reason for filing or paying late, you may get an extension. It’s true that during COVID-19 the IRS may be a little more understanding. So you might be able to avoid some penalties if you file as soon as you can (but expect to still pay some interest). Attach a statement to your tax return explaining your reason for filing or paying late, if you want to request a penalty waiver.
And another layer added to the usual yearly tax filing annoyance is that, if you received Pandemic Unemployment Assistance (PUA) last year and had tax taken out, you may get some of that back later. But for now, definitely file with the information you have, as there is still some confusion as to what is happening with planned PUA refunds.
The good news is if you are expecting a tax return, you will not be penalized for filing a late return.
As far as state tax returns, there are of course different rules with different states. Most states due date was also May 17, except for Iowa (June 1), Louisiana (June 15), and Maryland (July 15)
As usual, when it comes to taxes, double check the important information before submitting to avoid fees and headaches down the line.