Welcome to Spring and, for us, Tax Season! This year, more twists, turns, and loop-de-loops in both federal and state tax regulations than ever. As always, we want to smooth the ride for you. Here are some of the significant changes and benefits that you won’t want to miss.
The IRS Delays Filing Deadline!
The IRS has set May 17, 2021, as the new filing deadline for 2020 tax returns. That means individuals can postpone their payments formerly due on April 15 to May 17 as well.
Please take note –there is no extension for estimated tax payments due on April 15. For details, check out: https://www.irs.gov/newsroom/tax-day-for-individuals-extended-to-may-17-treasury-irs-extend-filing-and-payment-deadline
If you need an extension, contact us today! Maryland residents: read on for state-related extensions.
Need an extension? Cohen CPA Strategies LLC will file all extensions by May 7
The IRS’s last-minute deadline-extension announcement has thrown a wrench in the post-April 15 vacation plans of tax planning professionals across America. We will be filing all extensions by May 7. This means any projected 2020 Federal tax due will need to be set up to pay (or be paid) by May 7. Please make a note of this and feel free to contact us so we can handle your tax planning accordingly.
Don’t Miss Three Benefits of the COVID-19 Relief Bill (The American Rescue Plan Act of 2021/ARPA)
If you are a taxpayer, have children, and/or collected unemployment benefits during 2020, there are three important ARPA tax-related items you won’t want to miss.
Benefit 1 – Economic Impact Payments (EIP) are on their way.
Individuals earning up to $75,000 and joint filers earning up to $150,000 (based on 2019 federal tax returns) will receive a third-round EIP of $1400. To see if you are eligible, visit: https://www.irs.gov/newsroom/questions-and-answers-about-the-first-economic-impact-payment-topic-a-eligibility
There Is a Limit.
Individuals who earned more than $99,000 and couples who earned more than $198,000 jointly will not receive payments.
Is your check in the mail?
In its first round, the IRS made direct deposits to the bank accounts of about 90 million Americans and mailed checks to 150,000 more. Were you one of them? Find out at https://www.irs.gov/coronavirus/get-my-payment
Benefit 2 – Benefits for Children Increase.
The ARPA increases the per-child tax credit to $3000 and $3600 for children under six. Note that the ARPA also makes dependent adults (your college student!) eligible to receive stimulus payments.
Benefit 3 – The Exemption on Increased and Extended Unemployment Benefits Increases.
The ARPA increases benefits to individuals by $300 per week through Labor Day. Also, it eliminates taxes on the first $10,200 of benefits for individuals earning less than $150,000 in gross income in 2020 and $20,400 of benefits for couples.
Maryland Tax Filing Deadline Extended
In February, Governor Hogan signed the RELIEF Act (Recovery for the Economy, Livelihoods, Industries, Entrepreneurs, and Families Act). That Act provides numerous benefits to both individuals and businesses that require revisions to both types of tax forms. To give the state time to make those revisions:
Income tax returns otherwise due between 1/1/21 and 7/15/21 are now due on or before 7/15/21. The extension applies to individuals, corporate, pass-through entities, and fiduciaries.
Interest and penalties for late payment of taxes for the tax year 2020 otherwise due between 1/1/21 and 7/15/21
Unlike the IRS (see above), Maryland has extended the deadline for first and second-quarter estimated payments (4/15 and 6/15, respectively) to July 15. The due date for sales and use tax returns for sales taking place in March, April, and May of 2021 is extended to July 15.
If you think you or your business might be eligible for these and other benefits under Maryland’s RELIEF Act, check out https://interactive.marylandtaxes.gov/Relief.
The IRS and the State of Maryland may make more changes, so we encourage you to stay in touch with us before and after you file your 2020 returns. Every day we work to deserve the trust you have placed in us, and we can assure you, that’s one thing that will never change.