Economy

IRS Poised to Delay Tax Filings Until May

The Internal Revenue Service is moving this year’s tax filing deadline to May 17. The decision is made to give fillers more time to navigate the tax situation complicated by the COVID-19 pandemic.

The agency further extended the tax deadline to June 15 for people in Texas, Oklahoma, and Louisiana, who were hit hard by storms in February.

Before the change, there had been growing bipartisan support to extend the deadline, with Democratic Reps. Bill Pascrell and Jamie Raskin, and Republican Sen. Mike Crapo actively appealing for the delay.

IRS Extends Deadline Again

In a statement, Sen. Crapo noted that the taxpayers are burdened with additional paperwork as Congress made several changes to the tax system last year, including introducing stimulus payments.

“The various Coronavirus relief programs created over the last year, including the bill signed into law just last week, have resulted in a large amount of extra paperwork for taxpayers this year and have required tax preparation firms to constantly update their systems,” Crapo said.

However, even though the IRS extended its deadline, some taxpayers might still need to file by April 15, unless they file for an automatic extension. This inconvenience is a result of states’ practice of using one’s federal adjusted gross income or federal taxable income as the starting point to determine the filer’s income subject to state taxes.

So far, only Maryland has expanded its filing deadline to July 15. According to the Federation of Tax Administrators, other states are still sticking with their original filing date, April 15, with some exceptions, Hawaii – April 20; Delaware and Iowa – April 30; Virginia – May 3; and Louisiana – May 17.

Tax filings and stimulus payments are piling up at the IRS

In early March, The IRS had processed about 88% of the returns it received compared to the 96% it handled on average at the same time last year.

The IRS is also catching up with sending out the third round of stimulus checks. As of Wednesday, about 90 million of the 150 million stimulus payments have been sent out.

A $1.9 trillion COVID-19 relief bill signed by President Joe Biden additionally exhausts the IRS with duties to send out periodic payments for an expanded child tax credit in addition to handling several other changes like waiving income taxes.

While the IRS is yet to provide guidance to the jobless who have already filed their 2020 tax returns, the agency has provided instructions and a worksheet for those who have yet to complete their 2020 returns and who will report unemployment compensation.

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