Tax season deadline extended. What you need to know.
The IRS and our home state of Illinois have announced postponing the deadline for all individual tax returns from April 15 to May 17 this year in realizing the hardship that many taxpayers are still experiencing as a result of the Covid-19 pandemic. It's important to note that the first quarter 2021 estimated income tax payments due April 15 have not been extended for both the federal and the state and must still be paid on time. For that reason, we would like to reassure you that we are still aiming to work through your 2020 returns through the original deadline of April 15. You will however, have until May 17, 2021 for payments due on your 2020 taxes without incurring additional interest or penalties. We are on hand to answer any questions as it relates to the new filing deadline and its effect on your home state.
2020 Unemployment Benefits - Non-Taxable
The IRS has released informal guidance on the American Rescue Plan Act's changes, which retroactively affect 2020 returns by making the first $10,200 in unemployment benefits tax-free for qualified taxpayers. Although the IRS has released the updated worksheet used to exclude the income for those who have not filed, additional guidance is promised as we are awaiting to hear from various individual states on their treatment. IRS continues to advise against amending tax returns already filed with taxable unemployment income.
The House of Representatives has now voted to extend the Paycheck Protection Program (PPP) deadline to May 31, 2021, and this is likely to be approved by the Senate and become law. Moreover, the new guidance allows sole proprietors to use their gross receipts rather than gross profit for calculating their PPP funds. This could add thousands of extra dollars into struggling sole proprietors' businesses (those who file Schedule C on their 1040). Good news all around!
We are on hand navigating the constant tax law changes by staying at the pulse of the information. We will let you know as soon as additional guidance is issued. In the meantime, please contact us with any questions.
Stay safe & healthy,
The CJBS Team