With the May 17 tax filing deadline just days away, many Americans are rushing to get their forms and documents together.
To help answer any last-minute questions you may have, CNBC Make It compiled its coverage from this tax season all in one place, with answers to some of the most common tax questions.
Why is Tax Day later this year?
Tax Day is traditionally April 15, but was pushed back to May 17 for a slew of pandemic-related reasons, including that the Internal Revenue Service (IRS) was busy sending out stimulus checks to tens of millions of Americans and is still working through a large backlog of 2019 returns.
For most Americans, the latest you can file your federal tax return is May 17. Many tax offices, including H&R Block locations, will be open through Tax Day to help Americans get their taxes in on time. If you’re planning on mailing in your tax documents, you’ll need to ensure the package is postmarked by May 17.
What happens if I file my taxes late?
The answer depends on if you owe taxes to the IRS or if you expect to receive a refund.
If you owe money, the penalty for not filing your taxes on time is 5% of your unpaid taxes for each month that the return is late, maxing out at 25%. If you file but fail to pay, the IRS will charge you 0.5% a month, up to 25%.
If you expect to receive a tax refund, there is no punishment for not filing your federal return, but you are depriving yourself of the funds that the IRS has set aside for you.
I received both 2020 stimulus checks. Do I need to pay taxes on that money?
No. None of the 2020 stimulus checks are taxable. The IRS has records of the stimulus checks in their system, so you don’t have to take any action. Just make sure you don’t accidentally list your checks as income, or you may end up paying more in taxes when filing your return and will eventually need to receive a refund from the IRS.
Read all about the tax implications of the stimulus checks here.
What if I lived in multiple states last year?
Every state has its own policies surrounding taxes, and things can get complicated if there is a conflict with the policies from another state you worked from remotely. It’s important to know the rules of each state where you worked, because depending on where you went and where you came from, you could be required to pay taxes to two states on the same income.
The best way to do this is to visit your city or state’s tax department website. In most states, this is called the “Department of Revenue,” but some places may dub it the “Department of Taxation.” Look for the section on Covid-19 information; most of the sites have a prominent banner up top. Be on the lookout for references to “non-residents telecommuting” or language relating to remote work.
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