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Legal holidays' effects on tax filing deadlines

Keep-calm-it-s-a-holiday-monday
It's Columbus Day.

Stop. Before you start with the emails, yes, I know this second Monday in October is a controversial holiday. 

In recent years, many jurisdictions beyond the federal government have opted to spend today commemorating the original inhabitants of our country.

That's why you'll read and hear about Indigenous Peoples' Day events today.

But, like it or not, today still is officially Columbus Day, a celebration of Christopher Columbus' accidental discovery of North America.

And it's still a federal holiday in the United States. 

Holiday tax effects: A federal holiday can mean many things to many people depending on their personal circumstances and which groups or events they choose to celebrate.

Holidays also can affect taxes when it coincides with a tax deadline.

Thanks to the Uniform Monday Holiday Act, this sometimes happens.

The Internal Revenue Service says it considers our tax returns and payments as filed in a timely manner, meaning they are subject to any penalties, if they are sent or completed by the tax event's deadline.

For paper filings, that means a U.S. Postal Service postmark on the envelope on the deadline day. For e-filings, it means transmitting on the due date.

Note that for e-filing, the timing when the IRS says you can hit "send" varies depending on the type of transaction, so if you're pushing your electronic compliance to the very last minute, be sure to check with your tax pro or the IRS.

These deadlines, however, get shifted when they fall on a Saturday, Sunday or a legal holiday. In these cases, the due date is the next business day.

Legal vs. federal holidays: Take note of the term legal holiday.

Most of us tend to think of this meaning a federal holiday that is recognized by Uncle Sam and on where his offices, and other places, typically are closed.

The most widespread federal holiday effect is no mail delivery.

Sometimes, though, state and local government offices also are shuttered on these days.

In our consumer-focused world, federal holidays also mean lots of sales (got your mattress bargain yet?).

Columbus_Day_2019_Sale

And some non-government workers even get the federal holiday off from work, too.

But in the eyes of the IRS, the term legal holiday means any legal holiday in the District of Columbia.

That's why Emancipation Day, a Washington, D.C., holiday that's not widely celebrated across the United States, sometimes comes into play at April tax filing time.

Mark your calendars: Generally, the IRS recognizes the following legal holidays. The dates in parentheses are wen they fell or will occur in 2019.

  • New Year's Day (January 1)
  • Birthday of Martin Luther King, Jr. (January 21)
  • George Washington's Birthday (February 18; yep, that's the official holiday, not Presidents Day)
  • District of Columbia Emancipation Day (April 16)
  • Memorial Day (May 27)
  • Independence Day (July 4)
  • Labor Day (September 2)
  • Columbus Day (October 14)
  • Veterans Day (November 11)
  • Thanksgiving Day (November 28)
  • Christmas Day (December 25)

There is an exception to the next-business-day rule for certain excise taxes. If you pay these, you can find details in the IRS' Excise Tax Calendar.

State holidays and taxes: You also need to be aware of and possibly make tax adjustments for certain statewide legal holidays.

In general, a statewide legal holiday delays a due date for filing a return only if the IRS office where you're required to file is located in that state.

This typically comes into play for Maine and Massachusetts taxpayers, whose states observe Patriots' Day. This state holiday commemorates the battles of Lexington and Concord, which were fought near Boston in 1775. Patriot's Day annually is celebrated on the third Monday of April.

And sometimes, that third Monday in April also is federal Tax Day.

Since the IRS has campuses in Maine and Massachusetts, Uncle Sam allows taxpayers in those two states until the next business day to file their federal tax returns. Their state returns already get that automatic extension.

But in most cases, state holidays won't have any effect on our federal tax filings.

And, reminds the IRS, a statewide legal holiday doesn't delay a due date for making a federal tax deposit.

Don't procrastinate: I'm guilty of putting off things, including taxes, whenever I can.

But generally, it's smarter to take action — especially tax-related action — before you're facing an absolutely final deadline.

If you miss a tax due date, you'll probably end up owing a penalty as well as interest on any overdue taxes.

And while this admonition is itself pushing the limit, I still have to encourage you to spend this Columbus/Indigenous Peoples' Day working on your extended return instead of waiting until tomorrow's Oct. 15 deadline.

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