En español | Taxes may be inevitable, but older Americans can face heightened risks if they seek in-person tax help during the COVID-19 pandemic. Fortunately, the Internal Revenue Service (IRS) is giving taxpayers more time to file their taxes — and to get help if they need it. The IRS has extended the tax filing deadline to May 17.
Bill Sweeney, AARP's senior vice president for government affairs, sent a letter on Feb. 22 to key members of the House Ways and Means Committee, asking to postpone the tax deadline, as was done in 2020.
"Many older Americans, who are most at risk from COVID-19, require assistance in preparing their tax returns and may not have access to or familiarity with online platforms to fill out their forms over the internet,” Sweeney wrote. “To protect public health and ensure all tax filers, including older Americans, receive the time and assistance they need to file their taxes, Congress should extend the tax filing deadline and waive all interest and penalties resulting from any such extension."
Sweeney also expressed concerns that IRS resources continue to be strained by the COVID-19 pandemic. “Reports indicate the IRS is experiencing overwhelming demand on their phone lines, making it challenging for people to get answers to their questions,” Sweeney wrote. A recent Politico report said the IRS was answering about one call for every 11 attempted calls.
Last year, in response to the coronavirus outbreak that emerged during the heart of tax season, the IRS moved the filing deadline to July 15, 2020.
Disaster victims already have extended deadlines
The IRS normally grants tax filing extensions to those living in disaster areas. Texas residents affected by recent severe winter storms, for example, have until June 15 to file their 2020 federal income taxes. Because the entire state was declared a disaster area by the Federal Emergency Management Agency (FEMA), all Texas residents are entitled to the extended tax filing deadline.
Texas storm victims will also have until June 15 to make a 2020 individual retirement account (IRA) contribution. And those who normally have to make quarterly estimated tax payments on April 15 will have until June 15 to do so. The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Taxpayers do not need to contact the agency to get this relief.
You can find the complete rundown of tax disaster benefits at the IRS website.
Even if Congress doesn't act, you can still get more time to file
Penalties for failing to file income taxes are 5 percent a month, up to 25 percent of the amount owed, and the clock starts ticking the day after taxes are due. You can get an automatic filing extension to Oct. 15 by submitting Form 4868, “Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.” You can also use the IRS Free File program to get an automatic extension.
One hitch: You need to pay your full tax liability when you ask for an extension. Your estimated tax bill must be within 90 percent of the amount you owe. In addition, you need to file your request for an extension by the normal due date for taxes — which, for most Americans, is traditionally April 15. And remember: Your state's tax deadline may be different than the federal deadline.
John Waggoner covers all things financial for AARP, from budgeting and taxes to retirement planning and Social Security. Previously he was a reporter for Kiplinger's Personal Finance and USA Today and has written books on investing and the 2008 financial crisis. Waggoner's USA Today investing column ran in dozens of newspapers for 25 years.