Ah, August. In normal times (remember those?), we'd be complaining about the late-summer heat, parents would be counting down days until school started, and tax geeks would be looking at things they should do this month.
Well, things are decidedly not normal. It's been abnormally hot in much of the country already. Some schools are reopening, but with more COVID-19 precautions than they had planned since the virus has re-emerged with a vengeance due to the Delta variant.
Those August tax moves, though, they're still around, of course with some coronavirus twists. And today, Aug. 2, the first Monday of the new month, is the deadline for some important tax tasks.
Tax Day for some southern taxpayers: COVID-19 isn't the only things that messed up taxes this year. A series of major natural disasters prompted the Internal Revenue Service to give affected filers more time to take care of their usual tax tasks.
Today, Aug. 2, is the new Tax Day for 2020 tax returns for some individuals and businesses in parts of Alabama and Tennessee. Today's new due date also applies to the first quarter individual estimated tax payment (normally due on April 15), the second quarter estimated tax amount (normally due on June 15), and a variety of business filings and payments.
The change was made after Federal Emergency Management Agency (FEMA) declared parts of the Yellowhammer State major disaster areas due to severe storms, straight-line winds, and tornadoes that began on March 25. The affected Alabama taxpayers live or have a business in Bibb, Calhoun, Clay, Hale, Jefferson, Perry, Randolph, and Shelby counties.
Similarly, the same Aug. 2 (today!) deadline applies to Volunteer State residents and business owner hit by severe storms, tornadoes, and flooding between March 25 and April 3. The affected Tennessee taxpayers live or have a business in Campbell, Cannon, Cheatham, Claiborne, Clay, Davidson, Decatur, Fentress, Grainger, Hardeman, Henderson, Hickman, Jackson, Madison, Maury, McNairy, Moore, Overton, Scott, Smith, Wayne, Williamson and Wilson counties.
If you can't finish your 2020 tax year return by today, either sending it electronically or getting in the U.S. Postal Service system so that it's postmarked Aug. 2, you need to file for an extension. That will give you until Oct. 15 to file your Form 1040.
As for your estimated taxes, sorry. There's no way to extend those payment any longer. You need to get what you owe, again electronically or by mailing a 1040-ES voucher with the tax due, today. Miss the deadline, and you could face penalty and interest charges on the late amounts.
Stop August Advance Child Tax Credit: The American Rescue Plan Act (ARPA), the latest coronavirus relief law, increased the 2021 amount of the Child Tax Credit and made half of the tax break available this year.
The IRS started sending out the early payments — $300 for each eligible child age 5 or younger, $20 for children ages 6 to 17 — last month. The monthly payments, calculated using taxpayer 2019 or 2020 tax data, will continue to eligible families through the rest of this year.
Some folks, however, have discovered that changes this year in their lives mean changes to the amount of the Child Tax Credit they can claim. The IRS' use of old tax info means that they will have to pay back some or all of the early payments when they file their 2021 taxes next year. To avoid that, they can opt out of the AdvCTC payments.
To stop the August (and subsequent) distributions, the IRS needs to know by 11:59 p.m. Eastern Time today, Aug 2. Take note of the time zone designation and adjust accordingly if you live in the more western three-quarters of the United States.
Tax holiday planning: Today obviously is crunch time for many filers. Others have a bit more breathing room, but still need to make some tax moves this month.
They include those looking forward to upcoming sales tax holidays. A dozen states are holding sales tax holidays in August, most of them advertised as back-to-school tax-saving events.
Get your tax-free shopping list ready if you live in Arkansas, Connecticut, Iowa, Maryland, Massachusetts, Missouri, New Mexico, Ohio, Oklahoma, South Carolina, Texas, and Virginia.
More monthly tax moves: Want more tax tasks? Then check out the August Tax Moves over in the ol' blog's right column.
They're just below the August Tax Moves header that's under the clock counting down the days until the Oct. 15 filing extension deadline. Yes, getting to that filing before that final deadline is one of this month's suggested tax moves.
I know we're going through another round of pandemic stress and it's tempting to just chill during these last lazy, hazy days of summer.
But when it comes to taxes, it can pay off to be more active and proactive than the lazy Pembroke Welsh Corgi puppy that's atop the sidebar August Tax Moves list.