May 17 (UPI) -- Monday is Tax Day in America -- the delayed deadline for most U.S. taxpayers to file their 2020 federal return, but individuals can still consider asking for an extension.
The Internal Revenue Service delayed the filing deadline for about a month this year because of COVID-19, similar to last year's delay. The IRS postponed tax season this year because it was busy processing COVID-19 stimulus payments.
If you file an extension, you aren't required to file until Oct. 15 -- but that doesn't give you five more months to pay any outstanding taxes. If you owe, you still have to pay your estimated taxes by Monday or the IRS will charge you interest on the unpaid balance.
Taxpayers who don't file on time will be charged a late filing or late payment fee. The failure to pay penalty is 5% of the unpaid taxes for each month a tax return is late. That can mean penalties of up to 25% of your unpaid taxes, according to the IRS.
Taxpayers can file for an extension by sending the IRS Form 4868 electronically by Monday. The major tax preparation companies provide software that will send the form for free and many of these also help you estimate your tax to avoid the penalty.
Taxpayers also can print out the form and send it by mail.
If you can't pay your taxes, the IRS offers an installment plan that allows taxpayers to pay off the balance over time, but with interest if it is a long-term plan, according to the IRS.
Taxpayers should note that stimulus payments received last year are tax-free.
For households with adjusted gross income below $150,000 in 2020, the first $10,200 in unemployment benefits for each taxpayer are exempt from federal income tax.
Some Americans, however, will have a little extra time to file and pay any owed taxes.
The IRS said last week that some residents in Tennessee who were victims of the spring storms and tornadoes have until Aug. 2 to file various individual and business tax returns and make tax payments.
The IRS is providing the relief to taxpayers affected by storms, tornadoes, and flooding that took place between March 25 and April 3 in parts of Tennessee.
Also, residents of Texas, Oklahoma and Louisiana who were hit by winter storms in February also have a longer extension to file, June 15.
Most states also have extended their tax filing deadlines to May 17 -- Alabama, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Virginia, West Virginia and Wisconsin.