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Update from IRS on 05/17 Extension Applying to 04/15 Estimate

dascpa
Level 8

Previously posted to this board - I have used for years to include the 1st qtr estimate built into the tax extension.  That way if the prior year numbers are off we have extra paid in to avoid penalty and if correct, we carry over the balance to the next year.

Yesterday the IRS Commissioner testified that for this year, an extension payment on 05/17 will not be applied as if paid on 04/15 for the 1st qtr 2021.  Only extension payments paid by today would count.  Therefore you could be charged interest for making a 05/17 payment and applying it to 04/15.  Congress was not happy with the Commissioner on this and on not delaying the 1st qtr estimate and discussed making a law change.

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4 Replies 4
Skylane
Level 8
Level 8
One never knows..... do one?
BobKamman
Level 14

"Congress was not happy with the Commissioner on this"

Did they take a vote?  

There may have been a handful of committee members at the hearing or watching on Zoom.  Everyone likes to look pro-taxpayer on April 15, but did they amend ARPA before it was enacted and they could actually do something about it?

IRonMaN
Level 15

"Therefore you could be charged interest for making a 05/17 payment and applying it to 04/15"

They are still processing 2019 returns and are gearing up to be making advance payments for the 2021 child credits.  If they have time to go ahead and process interest bills for $12.95, go for it.  CAGMC

I'm keeping this job. But I am selling surplus anvils on the side. If you are interested please call 867-5309
BobKamman
Level 14

The Dow is up 55% since last April 15.  I have a client who asked me last year whether it's better to stimulate the economy by investing in the stock market, where blue chips were paying 3% dividends -- or to pay the government a pittance for delaying quarterly payments.  What could I say?