Some Important Tax News

Question of the Week

Some Important Tax News

Happy Friday all!

Lots and lots of tax news lately and I want to keep you up to date.

The new tax deadline is May 17th

This week the Treasury Department and Internal Revenue Service (IRS) 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.

You can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. You don’t need to file any forms or call the IRS to qualify for this automatic federal tax filing and payment relief. If you need additional time beyond May 17th, you are still able to get an extension until Oct. 15 by filing Form 4868.

One super important note for you self-employed people out there: this relief does not apply to estimated tax payments that are due on April 15, 2021. I repeat – your estimated tax payments are still due on April 15th. In general, estimated tax payments are made quarterly to the IRS if your income isn’t subject to income tax withholding, including self-employment income, interest, dividends, alimony or rental income.

Additionally, this extension only applies to federal returns, not state tax payments or deposits or payments of any other type of federal tax. Although many states follow the federal deadlines. You can check with your state tax agencies for those details.


Stimulus Payments have gone out this week

The IRS also started sending out stimulus payments via direct deposit this week. Additional batches of payments will be sent in the coming weeks by direct deposit and through the mail as a check or debit card. The vast majority of these payments will be by direct deposit.

You don’t need to take any action to get the money; the payments will be automatic and, in many cases, similar to how you received the first and second round of Economic Impact Payments in 2020, if you qualified. You can check the  Get My Payment tool on to see the payment status of the third stimulus payment.

In general, most people will get $1,400 for themselves and $1,400 for each of their qualifying dependents claimed on their tax return. The third round of Economic Impact Payments (EIP3) will be based on your latest processed tax return from either 2020 or 2019. So make sure to file carefully.

The income levels in this new round of stimulus payments have changed. Payments will begin to be reduced if you make $75,000 or above in Adjusted Gross Income as an individual or  $150,000 for married filing jointly. The reduced payments end at $80,000 for individuals and $160,000 for couples filing jointly.

For additional information, see More details about the third round of Economic Impact Payments.


The Paycheck Protection Program (PPP) loans are likely to be extended

As I mentioned a couple of weeks, the Biden-Harris administration revamped the PPP loan program, with the most significant change allowing Schedule C filers to use gross income to calculate the loan amount rather than net. However, the current deadline for loans is March 31st, which has not given banks enough time to adjust.

This week, the House of Representatives passed the PPP Extension Act of 2021 by a 415-3 vote, which extends the program until May 31. The Senate is set to vote on it early next week. So stay tuned!


Quote of the Week

“A deadline is negative inspiration. Still, it’s better than no inspiration at all.” – Rita Mae Brown


Task of the Week

Take some time to relax! These are all welcome changes that hopefully allow you to breathe a little easier and engage in some self-care this weekend. Enjoy it!