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Fairfield University. Jan 30, 2023

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2021 Tax Facts

John S. Kiernan, WalletHub Managing Editor

 Excerpt reposted with permission from WalletHub.

No one likes Tax Day, except for accountants and Uncle Sam. Tax Day 2021 figures to be especially messy, too, as governments across the country struggle to cover shortfalls stemming from the COVID-19 pandemic, millions of people look for income to actually pay taxes on, and protesters urge us to rethink how our tax dollars are being used. But even with the continued difficulties of the pandemic, there will be a Tax Day this year as always, proving that taxes truly are among the few things in life that are unavoidable. Tax Day will be delayed until May 17 for most people due to COVID-19, and until June 15 for people impacted by winter storms.

For context and perspective, WalletHub consulted with a panel of experts including Professor Kathi M. Mettler, CPA, Director, Graduate Accounting Programs, and Instructor of the Practice, Accounting, at Fairfield DOLAN School of Business.

How is Tax Day 2021 different from past years? 

What is most unusual about Tax Day 2021 is that we have been dealing with the COVID-19 pandemic for over a year now, which has affected many taxpayers negatively from an economic perspective. There have been Coronavirus relief measures passed since the beginning including the CARES Act in March 2020, Consolidated Appropriations Act in December 2020, and the latest American Rescue Plan Act 2021 effective March 2021. These have provided some welcome relief for taxpayers, while also adding complexity to the tax return filing process. This was evident from the delayed filing season and now extended filing season for individual taxpayers.

Has the amount of time and money spent on preparing tax returns changed in recent years? What are some tips for reducing time and money spent? 

I believe that our tax system is so complex that more taxpayers should be willing to pay a tax advisor to complete their tax return to take advantage of all exclusions, deductions, and credits available. The IRS offers free tax preparation services through their Voluntary Income Tax Assistance (VITA) program, and we run one on campus at Fairfield University. Taxpayers can save themselves time and fees by keeping adequate records and providing documentation to support their tax return since they have the burden of proof.

Due to the severe winter storms and power outages earlier this year, the IRS has postponed the Tax Day from April 15 to June 15, for affected residents. What other measures can be taken to ease the burden on taxpayers with difficulties in meeting tax reporting or payment obligations?

The relief provided to affected residents of those natural disasters is welcome, as is the extension of the filing season for individual taxpayers until May 17, 2021. Unfortunately, this does not extend the time to pay taxes owed. The IRS does provide the opportunity of a payment plan.