“You hear that tax day is being postponed to May 17th, so many people will go to their preparer on April 30th,” Stewart said. “Unfortunately, the estimated payment for the first quarter is late.”
The conference and other groups representing tax professionals had urged the government to postpone the estimated tax deadline as well. In a statement by the Congressional Committee in March, IRS Commissioner Charles P. Rettig said the estimated tax deadline had not been changed as it would actually mean a “break” in interest and penalties for wealthy people who would invest the money rather than the ones Government to pay.
But those filing estimated taxes also include sole proprietorships and modest income gig economy workers, accountants say. Many people who lost their jobs in the pandemic switched to work delivering meals and groceries ordered through mobile apps, said Melanie Lauridsen, senior manager of tax policy and advocacy at the American Institute of Certified Public Accountants.
“There is the need,” said Ms. Lauridsen.
The separation between filing and the estimated tax deadlines means that tax advisors are urged to file the tax return within the traditional deadline anyway. “It puts a tremendous burden on tax advisors,” said Rhonda Collins, director of tax content and government relations for the National Association of Tax Professionals.
Generally, applicants need to estimate and round up their debts to reduce the risk of underpayment. “It feels like it’s a guess,” said Ms. Collins.
Should you get a fine when filing your tax return next year, you can apply for a reduction. Often times, the IRS is lenient with first-time mistakes, it said, especially when extenuating circumstances exist.
It’s also important to keep an eye on your income in 2021, say tax professionals. Many people had lower than usual incomes due to the 2020 pandemic and could see them rise in 2021 when the pandemic subsides as expected and the economy expands. If your income turns out to be higher than expected, you may need to increase your estimated payments later in the year.