April 15 (UPI) -- While most Americans don't have to file their taxes by Thursday, which is the traditional Tax Day in the United States, there are millions of people who still have to make the April 15 deadline.
Last month, the Internal Revenue Service extended the deadline by about a month, due to the ongoing affects of the COVID-19 pandemic. Federal and most state taxes are now due on May 17 for most filers. Experts say the change, however, might cause some confusion -- and problems.
For self-employed freelance and gig workers, small business owners and Americans who earn income from interest, dividends, rent and alimony -- who must make payments to the IRS each quarter -- tax payments are still due Thursday because April 15 marks the quarterly deadline that covers Jan. 1 through March 31.
Another reason to file early, experts say, is to avoid a delay in receiving a tax refund. The IRS said this month it had issued more than 62 million income refunds by April 3, a 16% decrease from the same period a year ago. The average refund was almost $2,900.
In 2020, the IRS shifted the tax deadline from April 15 to July 15 for all filers, but didn't move the second quarter deadline -- meaning quarterly payers had to make a double payment on July 15 if they waited until the end.
Taxpayers who fail to pay their estimated tax payment on Thursday will face a small penalty.
The American Institute of CPAs says not extending the deadline for estimated payments basically eliminates any benefit for some taxpayers.
Jan Lewis, a member of the institute's tax executive committee, told USA Today that the IRS' refusal to extend the deadline for quarterly payers is a "classic example" of the agency "not understanding that for small businesses this may result in unnecessary penalties and a burden on the self-employed.".
"At the IRS underpayment rate of 3%, the maximum penalty will be .0025 for a month. So a $10,000 quarterly estimate that is due on April 15, but is not paid until May 17, would cost a taxpayer $25 in penalty," she added.
IRS Commissioner Charles Rettig has said the 2021 tax deadline was extended for the most vulnerable individuals and those having issues with obtaining their tax information. He said some wealthy taxpayers have used the delay in making estimated payments to make investments.
"And we're not going to give them a break of interest and penalties to do so," Retting told a congressional hearing in March, according to USA Today.
Quarterly payers in Texas, Louisiana and Oklahoma, though, have a life line. Filers in those states have until June 15 to make their first quarterly payment, as the IRS agreed to move the deadline for those states following severe storms this past winter.