What to Know
- The deadline to file 2020 income taxes for residents of Texas, Oklahoma and Louisiana is June 15 due to the February winter storm
- You do not need to file an extension to file June 15, the extension for residents of the affected states is automatic
- Texas residents also have until June 15 to make 2020 IRA contributions
While most Americans must file and pay their federal income taxes by the IRS's extended May 17 deadline, Texas residents have about another month to go before their due date.
The IRS granted a one-month extension from April 15 to May 17 for all individual taxpayers due to the ongoing coronavirus pandemic. After the unprecedented February winter storm and electricity disaster complicated things further, residents in Texas earned another extension, along with our neighbors in Oklahoma and Louisiana.
The IRS's disaster declaration postpones "certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area," which, in Texas, includes all 254 counties.
News from around the state of Texas.
"For instance, certain deadlines falling on or after February 11, 2021, and before June 15, 2021 are postponed through June 15, 2021. This includes 2020 business returns, normally due on March 15 and individual and business returns normally due on April 15. It also includes the special March 1 filing and payment deadline for farmers and fishermen who forgo making estimated tax payments," the IRS said on their website.
Taxpayers also have until June 15 to make 2020 IRA contributions.
You do not need to file an extension to take advantage of the later filing date -- the extension is granted automatically based on your residency and no paperwork is required. However, the IRS said that "if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date that falls within the postponement period, the taxpayer should call the telephone number on the notice to have the IRS abate the penalty."
For those living outside of Texas, if you still need extra time to file you can file an extension for free that will give you until Oct. 15 to get your taxes filed. But, just a warning, you'll rack up 0.5% in penalties each month unless the estimated amount of tax due is paid by May 17.
According to CNBC, the penalty for not filing your taxes on time is 5% of your unpaid taxes for each month that the return is late, maxing out at 25%. For every month you fail to pay, the IRS will charge you 0.5%, up to 25%. For any month that you owe both penalties, the failure to file amount is reduced by the failure to pay the amount. Interest also builds up daily, equal to the federal short-term rate, plus 3%.
If you expect to receive a tax refund, there is no punishment for not filing your federal return on time, but you are depriving yourself of the funds that the IRS has set aside for you, CNBC warned.