Important Update About the Tax Deadline
The Internal Revenue Service (IRS) recently announced that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021. The state of Vermont has just announced that the Vermont personal income tax filing due date for tax year 2020 is also extended to May 17, 2021.
The extension gives taxpayers much needed breathing room to meet their tax obligations in what is becoming one of the most complicated tax seasons in decades.
The complications are a direct result of the unusual circumstances related to the pandemic including:
- Tax season was delayed from the start as the IRS began to accept and process tax returns on Feb. 12, which was a two-week delay from previous years.
- Last-minute amendments to the $1.9 trillion stimulus bill signed into law earlier this month that give filers a new tax exemption on up to $10,200 of jobless benefits. The individual tax return, Form 1040, is also the mechanism for people to claim any missing $1,200 or $600 stimulus payments from last year.
- The extension gives the IRS time to issue much needed guidance on the recent amendments.
- The tax law changes will mean some filers will have to wait for updated forms and resubmit their returns.
- State guidance is still pending on the many federal tax law changes that have occurred since 2019. Several states have not addressed how those changes will affect their state taxes for 2020 – including Vermont.
It is important to note that this extension does not apply to estimated tax payments that are due on April 15, 2021. These payments are still due on April 15. Taxes must be paid as taxpayers earn or receive income during the year, either through withholding or estimated tax payments and this applies to both federal and state estimated payments.
Davis & Hodgdon Associates CPAs has been assisting individuals and businesses throughout Vermont and New England for more than 30 years so please reach out to us in Williston (802-536-1831) or Rutland (802.775.7132) to talk or schedule a meeting. You can also email us at email@example.com. As always, we are dedicated to carefully reviewing each and every tax return to ensure your return's accuracy and uncovering all possible tax savings opportunities. Please reach out to us if you have any questions.