Self-Employed file by January 31st, 2021?

[chamberlainke]

I hear the first date to file is Feb 12, 2021, but self-employed people are allowed to skip the January 15th estimated tax payment if they file by January 31st. Will the IRS accept my return on January 31st?

[Mike9241]

no, the irs is generally not accepting returns until 2/12/2021.  if you won't owe without the 1/15 payment then don't pay it. if you'll owe and know how much only pay that amount. you don't have to mail in an estimate if you owe.  you can use IRS Direct Pay https://www.irs.gov/payments  

there won't be any underpayment penalties if the amount you have withheld by 12/31 and pay in on estimates by 1/15/2021 are 90% of your 2020 tax. 

or 100% of 2019 tax (110% if 2019 AGI over $150,000)

[chamberlainke]

Perhaps I wasn't clear. I did not pay any amount on Jan 15th because I planned to file by January 31st as I am allowed to do by law without penalty. If I cannot file by January 31st then in not making my January 15th payment I will be considered late and I will owe penalty. If I make the payment now and file on February 12th, I will be considered late and I will owe penalty. AFAIK the law did not change, the only thing that changed is that the IRS is just not ready to accept returns on January 31st, is this correct?

[ErnieS0]

Yes @chamberlainke. The due date for the fourth estimated payment did not change. It has been January 15. The IRS e-filing season is opening later this year. Last year the IRS began accepting e-filed returns on January 27.

You can always file by mail if you do not wish to wait.

[AmeliesUncle]

It is possible you could avoid the penalty by filing by mail, and mailing by January 31st.  But I recommend against that, as the IRS is still backed up with processing things by mail.

Another possibility is that after you receive the penalty notice, respond to that notice describing the situation, and it is possible they would waive the penalty.

If the penalty is small (which is likely, especially if you pay it now), it might be easier to just pay the small penalty rather  than deal with the hassle of things.

[Opus 17]

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@chamberlainke wrote:

Perhaps I wasn't clear. I did not pay any amount on Jan 15th because I planned to file by January 31st as I am allowed to do by law without penalty. If I cannot file by January 31st then in not making my January 15th payment I will be considered late and I will owe penalty. If I make the payment now and file on February 12th, I will be considered late and I will owe penalty. AFAIK the law did not change, the only thing that changed is that the IRS is just not ready to accept returns on January 31st, is this correct?

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I suggest making an estimated payment now.  There are so many last minute tax law changes this year, and the IRS is backlogged from making stimulus payments, that we really have no idea when the IRS will actually start processing returns, or when Turbotax will have all the forms ready (because that requires IRS review and approval).

The late payment penalty is 1/2% of what you owe, plus interest at a variable rate of about 3% APR.  So pay now to minimize the payment, and then take your time to file to make sure everything is proper and correct with both your own facts, with Turbotax, and with the IRS.

Then, if you are assessed a penalty, you can request a waiver under several different IRS policies.  There is a first-time abatement, if you never paid a penalty before, and there is also reasonable cause abatement, and I think this would qualify, since you were prepared to file and the IRS wasn't ready. 

https://www.irs.gov/businesses/small-businesses-self-employed/penalty-relief-due-to-first-time-penal...

https://www.irs.gov/businesses/small-businesses-self-employed/penalty-relief

The only way to file "on time" is to mail your return, registered mail, by January 31, and include your check, but I would have no confidence that the IRS will get the return, or process it timely.  If you can e-file, that seems much preferable, even if you have to wait. 

[chamberlainke]

Thank you for your help. I did go on EFTPS and pay the amount I owed as of the date I posted this question, so all I need to do is file my return, but TT says the forms are not ready yet so don't know if I will even be able to file electronically by Jan 31. Plus now I notice on the 2210 worksheet, which is not ready according to TT, it has that I overpaid by $39. Then on my state, which I have only been living in since end of June, TT has that I owe penalty for not paying estimated taxes in July. I made my regular estimated payments in April and June to another state. I am apprehensive about the whole situation and think I am going to a professional and forget TT this year.

[JoannaB2]

Yes, you may file your income tax return, but it will be stockpiled.  There are federal forms that may still not be available.

The deadline for making a payment for the fourth quarter of 2020 is January, 15, 2021.

The IRS starts accepting application by February 12, 2020. On this date, IRS will also starts processing stockpiled returns on a first in, first out basis. 

See link, e-file question, for additional information.

[Opus 17]

If you file each of the part-year state tax returns correctly, neither state should assess a penalty, and if they do, you will have good cause to appeal.  The amount you paid for the fourth-quarter should be entered into TurboTax on the page for “estimates and other taxes paid.“ If that turns out to have been an overpayment, your return will claim a refund of the difference.

[chamberlainke]

@JoannaB2Thank you for taking the time to reply. However, this thread already says what is in your reply.

[JoannaB2]

oK.  So sorry.  I didn't see it. My apology.

[chamberlainke]

@Opus 17Thank you for both of your replies. My interest and penalty will not be small (at least to me) and I get very few breaks from the IRS. I think I will complete and mail the return myself otherwise I won't be able to verify that I was ready to file when they were not and I will avoid the mess that Turbo Tax has made of my returns this year.

"If you file each of the part-year state tax returns correctly, neither state should assess a penalty, and if they do, you will have good cause to appeal."

Of course. And there is no over-payment. Again, this is all Turbo Tax filling out the forms inaccurately, not me.

Thank you everyone again for your replies to my question, I consider this matter closed for me and will no longer be monitoring or replying.