5 tax moves to make this June
Tuesday, June 01, 2021
We did it! Survived Tax Day 2021 … unless you're among the millions who got an extension to file or live in a state where the deadline to submit 2020 tax returns was even further delayed.
In that case, one of the things you need to take care of this month is filing your taxes.
Here more on that and four other tax moves to make this June.
1. File your 2020 tax return: Yes, most U.S. taxpayers had to get their 2020 returns to the Internal Revenue Service by May 17. But not everyone.
The IRS gave residents of seven states more time to file because where they live in places hit earlier this year by major natural disasters. For residents of five of those states, Tax Day 2021 is this month. The new June filing deadlines and locations are —
- June 15 for all taxpayers in Louisiana, Oklahoma, and Texas, which were for the most part shut down in mid-February by an historic winter storm; and
- June 30 for taxpayers in certain storm-struck counties in Kentucky and West Virginia.
If you live in one of these disaster areas, don't miss your new filing deadline. Either get your Form 1040 to the IRS by the new date, or send in a Form 4868 to get until Oct. 15 to finish your filing. Note, though, that the additional time only is for completing forms. If you owe any taxes, you must make the payment or a close estimate of it when you file for the extension.
Speaking of extensions, millions of taxpayers decide every year that they need more time to finish their annual returns. That happens even in years like this one, where COVID-19 concerns pushed Tax Day from mid-April to mid-May. These folks decided they needed until mid-October.
That's cool. It's better to get more time to do your taxes right.
But there's also no requirement that you wait until October to file, especially if you didn't pay all you owe when you got your extension. The penalties and interest have been adding up since May 18 on your unpaid tax debt.
2. Pay your estimated taxes: In addition to being regular Tax Day for those given a disaster-related delay, June 15 also the due date for estimated tax payments. These are the amounts the IRS expects to get on earnings that aren't subject to payroll withholding. This payment is for the second quarter of 2021, i.e., money received in April and May. Yes, the IRS calendar is, like a lot of tax related things, a bit different. My earlier post has the scoop on estimated taxes and timetables.
3. Make work-related tax touch-ups: If you're making estimated tax payments because you picked up some gig work to make up for salary lost during coronavirus pandemic, now's a good time to make sure your estimates are accurate.
Similarly, if your former employer now is now rehiring, when you're back on the job you should re-evaluate the amount of income taxes that will come out of your regular paychecks. The IRS' online estimator can help you more accurately adjust your payroll withholding.
4. Clean up your house and taxes: You say you didn't get around to spring cleaning this year? Hey, I'm not a diligent housekeeper, so no judging from me. But if you're now ready to go full Marie Kondo, your home decluttering could produce some tax breaks. Donated clothing and household goods you no longer use could be tax deductible if you itemize and accurately claim their fair market value.
5. Get ready for Mother Nature: Severe weather can strike year-round, as noted by the delayed tax deadlines due to early-in-the-year storms. And today is the start of the annual Atlantic hurricane season, which Mother Nature decided for the seventh straight year to kick off early. That means there's no time to waste. Start making your hurricane (and other storm) preparations now.
More June tax moves: I know this is a lot of tax stuff at a time when you're looking forward to a more normal summer, thanks to COVID limitations being eased as more of us get vaccinated.
But you need to take care of applicable tax tasks first. Not only could they keep you from owing additional taxes (and penalties), some could save you some tax dollars.
And if you want even more June Tax Moves, you can find them over in the ol' blog's right-hand column. They're in their normal (that word again) spot, under the red June Tax Moves image, which itself is just below the countdown clock ticking off the days and hours left until arrival of the Oct. 15 filing extension deadline.
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