The IRS announced Wednesday that it will extend the April 15 deadline to May 17.
Accountants had urged the IRS to push back the deadline.
Tax season didnt start until Feb. 12, about two weeks later than usual.
This article was published in March 2021. For the most up-to-date info, check out ourrecent tax articles.
Here are seven things you should know if youre trying to decide whether you should take advantage.
The IRS wont penalize you as long as you file by May 17.
Same goes for if you know you owe money and you might afford to pay it.
Most online returns are processed within 21 days, according to the IRS.
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But whatever you do, DO NOT file a paper return.
The IRS is still working through a monstrous backlog of 2019 returns submitted by mail.
If you file on paper, youll likely be waiting for them to process your return for months.
Parents of children born in 2020 will also get more money for filing.
That means you now have until May 17, 2021, to max out yourRoth IRAortraditional IRAcontribution for 2020.
Did you know?
In 2020, individuals can contribute up to $3,550, while families can contribute $7,100.
Those limits rise to $3,600 and $7,200, respectively for 2021.
People 55 and older are allowed to save an extra $1,000 for each tax year.
you could still contribute for 2020 even if youve already filed.
This is easiest if youre funding a Roth IRA.
Your contributions arent deductible, so you dont have to report them on your return.
Its more complicated, though, with deductible contributions to a traditional IRA or HSA.
If youve already filed, youd need to submit an amended return to take advantage.
Check your states tax agency website to see if your deadline has been moved.
If you owe taxes, youll start incurring penalties after May 17.
What Should You Do if You Cant Afford Your Taxes?
If youcant afford your tax billnow, be honest with yourself.
Do you think your financial situation will be dramatically different in two months?
If the answer is no, it really doesnt make that much sense to put off filing.
you might submit your return, even if you cant afford to pay anything.
The bottom line: Whatever you do, never attempt to hide from the IRS.
Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder.
She writes the Dear Penny personal finance advice column.
Send your tricky money questions to[email protected].
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