By Beverly Brown Ward, CPA
Tax Season 2021 begins Monday January 24, 2022 with the Internal Revenue Service accepting e-filed federal income tax returns beginning that day. This is a slight change from the January 27th begin date that was provided in December by the Service.
Due dates for 2021 federal income tax filings as it stands today remain traditional, a change from the previous two filing seasons with extended seasons into the summertime.
Monday April 18, 2022 is the due date for filing personal income tax returns (form 1040 series) for 2021. If an extension of time to file your return is desired, the 18th is also the due date for that extension to be filed. Filing IRS form 4868 by April 18, 2022 extends the due date of your personal income tax return to Monday October 17, 2022. Monday April 18th is also the due date for C Corporation federal income tax filings, IRS form 1120. Filings for C Corporations may be extended to October 17, 2022 upon filing an extension request, IRS form 7004, by the April 18th due date.
Tuesday March 15, 2022 is the due date for filing common federal business income tax returns such as IRS form 1120S (for S-Corporations) and IRS form 1065 (for partnerships.) Tax filings for the 2021 tax year may be extended for both until Thursday September 15, 2022 by filing IRS form 7004 by the March 15th due date.
One important thing to remember if you are extending your tax filing due dates is that tax payments are due in full by the original due date of the income tax return.
It is important to pay close attention to the due dates. If you cannot file your tax return by the due date, make sure you file your extension by the due date. Late extension requests are not accepted by IRS for any reason. Penalties, both late filing and late payment, can add up if the due dates are not adhered to. For example, for form 1040 filers failure to file penalties are 5 % per month up to 25% of the total tax due. Failure to pay penalties are .05% per month up to 25% of the tax due.
Tax fraud for personal income tax filings continues to soar. Identity thieves are sophisticated and quick, and they usually strike early in the tax season. Years back, most personal income tax professionals counseled their client to pay on time, with the objective of filing by the extended due date to possibly reduce the chance of audit. Not anymore. It is generally advised to file your form 1040 filing as early as possible to minimize the chance of being a victim of ID theft. It is also highly recommended that your tax professional have a Power of Attorney on file with IRS for all 1040 filings they prepare for the current year. The usual tactic of identity thieves as stated earlier is to strike early and to use the actual name of the taxpayer so the tax return will not reject during IRS processing. But the ID thief will usually change the address to one he or she has access. Any correspondence to the taxpayer will go to the fraudulent address, but if a Power of Attorney is on file, correspondence will go to the tax preparer too. The Power of Attorney serves as early knowledge that a problem may exist on the taxpayer’s account.
It is also recommended that personal income taxpayers obtain an IPPIN “Individual Protection Personal Identification Number” from the IRS to provide to their tax professional to e-file their tax returns. The IPPIN is matched to the social security number for e-file purposes. If the taxpayer has an IPPIN, a return filed using the social security number only will reject at IRS. Any taxpayer can obtain an IPPIN number through the IRS website by establishing an IRS Online Services Account. There are downsides of obtaining an IPPIN such as delay in filing your returns as you are waiting on receipt of the IPPIN and possible time-consuming calls to the IRS if you have a IPPIN but cannot remember the number.
Paying attention to the tax deadlines and implementing measures to deter the fraudulent filing of your personal federal income tax return should lead to as stress-free tax filing season as possible. Happy filing!
Beverly Ward is a CPA licensed to practice in the State of Texas. She has over 15 years’ experience in public accounting with focus on all areas of taxation. In January 2020, Mrs. Ward opened her private practice, Beverly Brown Ward, CPA. Her practice focuses on small business owner bookkeeping and taxation, as well as individual taxation.
Beverly Ward is a Central Texas native and a graduate of Texas A&M University. She is married with three grown children, all of which are proud Texas Aggies.