May Journal

Tuesday, May 4, 2021

May 2021 Financial Update

The 2020 tax season is … going. Going well seems to be another story.

On April 22, the Taxpayer Advocate Service published a blog post talking about the difficulties that the IRS is experiencing this year, with millions of unprocessed tax returns hanging out waiting for manual processing. A variety of things are creating delays. One is the late passage of the of laws affecting tax returns, which has complicated the forms and slowed the processing of refunds.

The result is that many taxpayers are awaiting refunds, sometimes waiting a long time, well past the IRS’s usual 21-day time frame. Complicating matters, taxpayers who call the IRS are unable to get through to ask a question about it or get a real status update, as only a small percentage of calls are ever answered. The online system often simply says a return hasn’t been processed, but not why or any further details.

So how is tax season going for accountants? That’s not much better. Reportedly, it’s “The worst.” Deadline changes plus revised and unclear guidance on legal changes have created complications. 2020 has really challenged tax preparers’ ability to process tax returns in a timely and accurate manner.

This may be an unfair question in a challenging year, but do accountants, those who enjoy the challenge of taxes, normally enjoy doing their own? Nope. Even professionals hate doing their own taxes.

Finally, do you understand how tax brackets work? Many people don’t, but this TikToker explains how it works in under a minute.

2021 Financial Calendar – May:

Taxes are now due May 17. Have you filed your taxes or an extension?

This month’s financial work involves debt. Do you owe the IRS this year? If not, maybe you have outstanding loans and credit card debts. This is a good month to figure out how much you owe and your debt-to-income ratio. That ratio is a big factor in your overall financial health. Do you have a plan for paying it back?  Many websites often a path to managing debt and tips.

2021 Tax Updates and Dates

May is 2021’s last month of tax season owing to the extended tax deadline. For a full list of tax deadline dates, see the IRS Tax Calendar:

  • May 17: Form 1040 and 1040 SR are due today, along with payment. If you file an extension, make sure to pay estimated tax.
  • May 17: First installment of 2021 estimated tax is due today.
  • May 17: Nonprofit 990 filings are due today.

Note that not all states extended the deadline, although most did. Here’s a list of state deadlines (or see below for the chart).

Government Aid in Coronatimes

Taxes are the big story for May, but the pandemic’s financial effects keep marching on. Unemployment as of March is high but dropping, and the American Rescue Plan is continuing to be rolled out. Stimulus payments continue to be processed. Localities are developing plans to use the stimulus money they are receiving as well. The Small Business Administration is rolling out a $5 billion dollar grant program to help small businesses and nonprofits especially hard hit by the pandemid

The Usual PPP Application and Forgiveness Resources

What’s Happening, in Charts

It’s a wild and crazy tax year. Did your state extend the deadline? Probably, but some have extended it even farther.

CNBC: “State income tax filing deadlines for individuals

Meanwhile, the political and financial landscape has a distinct urban flavor in America. This map shows the outsize financial impact of urban areas in America, with localities such as the New York area contributing a staggering 1.77 trillion in economic output to the national economy.

The Visual Capitalist: “3D Map: The U.S. Cities with the Highest Economic Output

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