What was different in 2020 and 2021?

In 2020, in response to the first Covid-19 outbreak, the IRS extended the filing deadline for tax returns for the tax year 2019 from April 15th to July 15th, 2020. This extension applied automatically to all individual returns, trusts, and corporations, and the intention was to provide relief from the economic impacts of the pandemic. 

The following year, 2021, saw another, shorter extension of tax filing deadlines, this time to May 17th, 2021. Between the ongoing ramifications of Covid-19 and changes to the tax code enacted by pandemic relief legislation, this was among the most complex tax seasons in the nation’s history. In this case, the extension helped the taxpayer navigate the complexities of how unemployment income and stimulus payments affected their tax return. 

What will be different in 2022?

As mentioned above, next year’s tax calendar is likely to return to normal. Although the pandemic remains present and unpredictable, an extension is not expected at this time. That means Tax Day will fall on Monday, April 18th, 2022

If you want to get ahead of things next year, you can start early; the IRS typically begins accepting tax returns in mid-February, and filing usually starts in January. 

In fact, given rules changes on things like charitable contributions and tax breaks for educational expenses, which go into effect in 2022, and other potentially confusing factors like 2021’s expanded child tax credit payments, there are plenty of good reasons to get a head start. 

Additionally, as I recently discussed on this blog, the landmark Bipartisan Infrastructure Investment and Jobs Act contains some tax provisions you may want to consider. Some include the early termination of the Employee Retention Tax Credit and new requirements on cryptocurrency exchanges. 

What other deadlines do I need to know?

Here are some additional tax-related dates and reminders for your reference:

  • January 31 — W-2s are due from your employer. Forms 1099 are due from payers of interest, dividends, and other specified types of income. If this date falls on a weekend, file the Monday after. 
  • February 15 — If you were exempt from income tax withholding for 2020, you must file a new Form W-4 to continue your exemption for the next tax year.
  • Tip earners — By the 10th day of each month, report the amount of tips of $20 or more you made during the previous month. You must report the amount in writing to your employers. This includes tips paid with cash, checks, and credit cards.

You can use Form 4070A in Publication 1244 or any other daily record to record your tip income for the month. If the 10th falls on a weekend or holiday, the due date is the next business day.

  • Farmers and fishermen — If at least 2/3 of your total gross income come from farming or fishing; you should pay your required estimated tax using Form 1040-ES on or before January 15. Then, you have until May 17 to file your return. You might need to file your return and pay your taxes on or before March 1 to avoid a penalty. Make sure to file by March 1 to avoid the penalty of estimated tax if both of these apply:
    • You farm or fish, and at least 2/3 of your total gross income comes from these activities.
    • You make no estimated tax payments.

If you miss the March 1 tax deadline for filing due to severe weather or resulting power outages, you can request a waiver of any estimated tax penalties. You don’t have to be in a state or federally declared disaster area to receive the tax relief. Complete Form 2210-F: Underpayment of Estimated Tax by Farmers and Fishermen to request the waiver. You can file it with your return.

What if I miss a deadline?

First, the good news: You can still file. The sooner you do, in fact, the more you’ll save in penalties. Furthermore, if you missed the deadline, but the IRS owes you a refund, there is no penalty — you have up to three years to claim your refund. 

Now the bad news: If you owe the government money, you will incur penalties and fees for missing the deadline (and once the deadline passes, it’s too late to file for an extension). Exactly how large your penalty ends up being may vary depending on how late you are and how much you owe. They are generally charged every month (although the IRS will prorate them for a portion of a month) and can accrue significantly over time. 

In any event, the same rule of thumb applies here: You’ll be better off the sooner you file. 

When are estimated taxes due?

“Estimated taxes” are taxes paid quarterly by taxpayers who have income that is not subject to automatic withholding, such as income from self-employment, interest, dividends, alimony, rentals, capital gains from the sale of assets, prizes, and awards. 

While it is very common for taxpayers to have their taxes withheld from their paycheck by an employer, this is not the case for some people, like sole proprietors, partners, and S corporation shareholders. These individuals must make quarterly filings to pay an estimate of the amount they expect to owe for that period. 

I dove deeper into the subject of estimated taxes and how to minimize associated penalties in this recent blog entry

Quarterly payment dates for estimated taxes are as follows:

Payment Period   Due Date
January 1 – March 31 April 15
April 1 – May 31 June 15
June 1 – August 31 September 15
September 1 – December 31 January 15 of the following year.
Fiscal-Year Taxpayers If your tax year doesn’t begin on January 1, see the special rules for fiscal year taxpayers in Chapter 2 of Publication 505
Farmers and Fishermen See Chapter 2 of Publication 505

In closing…

After the past two years of extensions and changes to the tax code, it’s understandable to be a little confused about when taxes are due in 2022.

However, with the information contained in this post, you’ll be able to avoid penalties, fees, and interest payments with the one surefire tactic: paying on time!

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