Julie Jason:
Changes in IRS deadlines.
When the IRS changed the filing date for 2020 tax returns (from April 15, 2021, to May 17, 2021), it also adjusted some other important deadlines. It’s important to note that these deadlines have not been adjusted on the IRS website if you search by topic. Look instead at IRS Notice 2021-21 (tinyurl.com/3fye6bx9).
You have until May 17, 2021, to make 2020 contributions to your individual retirement accounts (IRAs and Roth IRAs), Coverdell education savings accounts (Coverdell ESAs), health savings accounts (HSAs) and Archer Medical Savings Accounts (Archer MSAs).
Also postponed to May 17 is the reporting of and paying the 10% additional tax on “amounts includible in gross income from 2020 distributions from IRAs.”
The deadline to provide taxpayers Form 5498, an important document related to IRAs and other retirement plans (and something that we discussed in January in relation to required minimum distribution rollovers), has been moved from May 31, 2021, to June 30, 2021. Notice 2021-21 states that penalties for those IRA trustees or issuers who fail to file the forms “will begin to accrue on July 1, 2021.”
Another deadline that moved from April 15 relates to tax preparers, particularly those who are interested in participating in the Annual Filing Season Program (AFSP) for the 2021 calendar year. They now have until May 17 to file an application. The AFSP is described by the IRS as a “voluntary program designed to encourage non-credentialed tax return preparers to participate in continuing education (CE) courses.” More information on the program can be found at tinyurl.com/yd35ckn9.
If you want to claim a refund related to your 2017 federal income tax return, the three-year window is also extended to May 17, 2021. (Under the Internal Revenue Code, there is a three-year window to claim a refund. See tinyurl.com/esxm6w.) For 2017 refunds, you have until May 17, 2021, to mail in your tax return — be sure to properly address the mailing. If you miss this deadline, no refund. Those moneys become the property of the U.S. Treasury.
Finally, for those who are required to file IRS Form 1040-NR for 2020, which relates to foreign trusts and estates that have federal income tax filing or payment obligations, the deadline is now May 17, 2021.
What did not get postponed? The April 15, 2021, deadline for estimated tax payments. You might not think about the fact that throughout the year, taxes must be paid as taxpayers receive income. For most people, that occurs when their taxes are automatically withheld from their paychecks and are sent to the IRS by their employer. Of course, there are others who make quarterly estimated tax payments to the IRS because their income is not subject to income tax withholding. This includes selfemployment, interest, dividend, alimony and rental income.
You can find more IRS updates related to Coronavirus Tax Relief at tinyurl.com/xytn939e.
On another note, the Treasury Department and the IRS announced on March 30 that they anticipated Economic Impact Payments would begin to be issued to Social Security recipients and other federal beneficiaries who do not normally file a tax return, with the majority of the stimulus payments projected to be sent electronically and received on April 7.
According to the announcement, the update applied to “Social Security, Supplemental Security Income (SSI) and Railroad Retirement Board beneficiaries who did not file a 2019 or 2020 tax return or did not use the Non-Filers tool.” The announcement went on to note that the IRS “continues to review data received for Veterans Affairs (VA) benefit recipients and expects to determine a payment date and provide more details soon.”
On another matter, if you are interested in the basics of estate planning, join me for a virtual presentation, “Estate Planning in Retirement.” It will be held on Wednesday, April 7, at 1 p.m. EDT, and is sponsored by the Greenwich (Connecticut) Library. To register, go to tinyurl.com/34t2c6dx or contact Yang Wang, 203-622-7924, ywang@greenwichlibrary. org.
Julie Jason, JD, LLM, a personal money manager (Jackson, Grant of Stamford) and author, welcomes your questions/comments (readers@juliejason.com). Her awards include the 2020 Clarion Award, symbolizing excellence in clear, concise communications. Her latest book, a curated collection of Julie’s columns, is “Retire Securely: Insights on Money Management From an Award-Winning Financial Columnist.” To hear Julie speak, visit juliejason.com/events.