You can still save on your 2020 taxes. Here are some options that give you the chance to reduce the money you owe or increase your refund and save on fees. Use this year’s filing extension now, May 17, to trim however you can.
Contribute to an IRA.
Contributing to an IRA can help you lower your taxable incomes, which then can bust your refund. This includes any new, even those you opened after January 1 and continued to contribute until the filing date of May 17.
Check out the IRS website to see if you may qualify for a full or partial deduction.
Avoid tax penalties: File for an extension.
The pandemic affected basically every aspect of life in 2020, including taxes. Back in 2020, the tax due date of April 15 was extended to July 15, and now in 2021, it has been extended to May 17. To avoid any penalties and interest, you have two options.
- File by May 17. If you are mailing your return, make sure the envelope is addressed, postmarked, and in the mailbox by May 17. Or submit electronically by that same date.
- File for an extension. That would give you until October 15, 2021. Use Form 4868 to do so by July 15. But be aware: An extension delays when you submit your return. If you owe taxes, you still pay by July 15, or you could get hit with penalties. And if you miss the original May 17 file date and don’t file for an extension, you may face a late-filing monthly penalty of 4.5% per month of the tax owed and a late penalty of 0.5% per month of the tax due.
The IRS has more details on getting an extension.
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