What To Know About Tax Day (If You Filed For an Extension)

Next Month’s Deadline

April 15 is traditionally known as tax day. But for a record 19 million taxpayers that filed for an extension this spring, the new date to be aware of is October 17. With just over a month to go, many individuals and accountants say they’re busy.

Throughout the summer and with fall approaching, it seems procrastination has plagued many when it comes to taxes. It’s not to say there aren’t any legitimate excuses. Amid the pandemic due dates were routinely shifted, and tax laws were changed as a result of COVID-19.

For anyone who failed to file for the 2019 or 2020 tax year, late filing fees have been waived per a recent IRS decision. That said, many experts don’t expect that courtesy to be extended for 2021 returns.

Filing and Paying

In 2020 as the pandemic set in, the IRS pushed the filing deadline to July 15, and then did the same last year, pushing tax day to May 17. No such change was made this year, meaning people who weren’t ready to file had to submit a Form 3868 extension request by April 18.

It’s important to note that the looming October 17 extension applies to filing your return, and not the actual payment of taxes. Taxpayers were still required to pay 100% of the taxes owed by April 18, while the looming deadline lets you submit the actual return without incurring extra fees or penalties.

So, if you haven’t paid your 2021 taxes yet it’s fair to expect penalties, which can potentially go up to 25% of your total unpaid amount.

Best Practices

Tax professionals say there are a series of guidelines to keep in mind if you are filing on extension. The most basic advice is to file electronically if possible, while also choosing direct deposit. This can speed up refunds dramatically.

Also, if you still owe money, it’s better to pay as soon as possible. Everyday you delay adds on penalties and interest. Finally, keep in mind COVID-related payments like stimulus checks and child tax credits, which routinely cause mistakes on returns. With just under a month before the deadline, it’s crunch time.

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