ICYMI: Reminder for April 15 Deadlines – Estimated Tax Payments and FBAR Filings
Self-employed individuals, retirees, investors, businesses, corporations, and others who pay their taxes quarterly are reminded that the payment for the first quarter of 2021 is due Thursday, April 15, 2021.
The extension to May 17, 2021 for individuals to file their 2020 federal income taxes does not apply to estimated tax payments.
Income taxes are pay-as-you-go. This means, by law, taxes must be paid as income is earned or received during the year. Most people pay their taxes through withholding from paychecks, pension payments, Social Security benefits or certain other government payments including unemployment compensation.
Most often, those who are self-employed or in the sharing economy need to make estimated tax payments. Similarly, investors, retirees and others often need to make these payments because a substantial portion of their income is not subject to withholding. Other income generally not subject to withholding includes interest, dividends, capital gains, alimony (for some taxpayers), and rental income. Paying quarterly estimated taxes will usually lessen and may even eliminate any penalties.
Exceptions to the penalty and special rules apply to some groups of taxpayers, such as farmers, fishermen, casualty, and disaster victims, those who recently became disabled, recent retirees and those who receive income unevenly during the year.
U.S. citizens, resident aliens and any domestic legal entity are also reminded that the deadline to file their annual Report of Foreign Bank and Financial Accounts (FBAR) is still April 15, 2021.
The extension of the federal income tax filing due date and other tax deadlines for individuals to May 17, 2021, does not affect the FBAR requirement.
However, filers missing the April 15 deadline will receive an automatic extension until October 15, 2021, to file the FBAR. They do not need to request the extension.