Taxes Q&A: How do I file a tax extension for 2021? How do I file my taxes online for free?

·14 min read

We have entered the final weekend of tax season. And, in these last days, USA TODAY has answers to your questions. You can submit your queries here and read answers to earlier questions below.

We will be updating the Q&A, so keep checking. But, also look to these places:

We answer your coronavirus money questions.
We answer your coronavirus money questions.

How do I file a tax extension for 2021?

To file an extension, submit IRS Form 4868 electronically by the filing deadline on May 17. You can also do it for free using any of the Free File software offered by the major tax preparation companies. These often help you estimate your tax due so you can make a payment.

Another option is to print out the form and send it to the IRS address for your state by the deadline.

Even if you file an extension, you still need to pay what you owe by May 17. If you underestimate that amount, you could end up paying interest on what you don’t pay.

More information here.

— Jessica Menton

Follow Jessica on Twitter @JessicaMenton

Who files taxes for a deceased relative?

The filing of the deceased taxpayer's final return typically falls to the executor or administrator of the estate. If neither is named, then it’s taken over by a survivor of the deceased, according to Lisa Greene-Lewis, a CPA at TurboTax.

The final return is filed on IRS Form 1040, the same one that would have been used if the taxpayer were alive. The difference is that "deceased" is written after the taxpayer's name, Greene-Lewis says.

... How do you sign?

If an executor or administrator is involved, he or she must sign the return for the decedent. When a joint return is filed, the spouse must also sign.

When there isn’t an executor or administrator, whoever is responsible for filing the return should sign the return and note that he or she is signing "on behalf of the decedent."

If a joint return is filed by the surviving spouse alone, he or she should sign the return and write "filing as surviving spouse" in the space for the other spouse's signature.

More information on dues or refunds here.

— Jessica Menton

Follow Jessica on Twitter @JessicaMenton

Why haven't I gotten my tax return?

The backlog at processing centers continues, as the IRS is dealing with staff shortages, a pile of leftover returns from last year's tax season, complex rule changes that are causing errors on many tax returns and, apparently, some shoddy equipment, too.

Among a long list of reasons for backlogs and delays in processing tax returns, the printer at the IRS could be out of ink. Seriously.

One of the more unusual excuses for the backlog of tax returns at the IRS was tucked into a report issued in May by the Treasury Inspector General for Tax Administration.

— Susan Tompor

Follow Susan on Twitter @tompor

If I did not have enough taxes withheld from my unemployment aid, will I also owe a penalty?

The Internal Revenue Service began refunding money to people in May who already filed their returns without claiming the new tax break on unemployment benefits.

The American Rescue Plan created a new tax break for tens of millions of workers who received unemployment benefits last year after businesses were forced to close and lay them off during the coronavirus pandemic.

Before the package, jobless insurance had to be reported as taxable income and many would likely owe federal income taxes on those benefits.

The law allows taxpayers who earned less than $150,000 in adjusted gross income to exclude unemployment compensation up to $20,400 if married filing jointly or $10,200 for all other eligible taxpayers. The legislation excludes only 2020 unemployment benefits from taxes.

— Jessica Menton

Follow Jessica on Twitter @JessicaMenton

I want to know if I had zero income in 2020 do I need to file to get my stimulus check?

For the first and second stimulus checks the IRS was using American's most recent tax returns available to calculate whether they would get an economic impact payment and how much – during 2020 those would be 2018 or 2019.

Submitting a 2020 return, even if you had no income, would make it possible to claim a stimulus payment because the money was an advance on a tax credit. By filing a return and showing you were eligible for the credit but didn't receive it, you can claim the stimulus.

... How to file for 2020 when I had absolutely no income, other than a stimulus checks?

It is still recommended that you file taxes to keep a record of you financial situation for the year and possible upcoming stimulus payments.

Stimulus payments could also indirectly affect what you pay in state income taxes in some states where federal tax is deductible against state taxable income, according to The New York Times.

— Josh Rivera

Follow Josh on Twitter @Josh1Rivera

How can I electronically file my taxes for free?

You can use IRS Free File to prepare and file your federal income tax online for free if your income is below $72,000. For those with income above that amount, you can access IRS' Free Fillable Forms.

The IRS' IRS2Go (iOS, Android) is a bare-bones app that lets you check your refund status and schedule payments if you owe money. It can even connect you with an IRS Volunteer Income Tax Assistant.

For simple federal filers, H&R Block, FreeTaxUSA and Credit Karma (now owned by TurboTax's Intuit) are also available. (Note that these services work for simple filers. Those with additional items to report, like an HSA, investments, have moved or are self-employed might need additional services.)

— Josh Rivera and Jennifer Jolly

Follow Josh on Twitter @Josh1Rivera and Jennifer @JenniferJolly.

Am I allowed to skip a required minimum distribution for 2021?

Under the CARES Act, required minimum distributions for 2020 were waived. However, RMD is back on for 2021.

If you don't take a RMD you might get a penalty of 50% of the shortfall, on top of whatever taxes are due on the original amount.

RMDs are based on the balance in your traditional IRAs, 401(k)s and other retirement-savings plans as of Dec. 31, 2020, and an IRS life-expectancy factor based on your age.

The SECURE Act, passed in late 2019, raised the age to start taking the required withdrawals to 72. For 2022, the IRS released new tables for all three life expectancy tables affecting RMD.

— Josh Rivera

Follow Josh on Twitter @Josh1Rivera

How do I file my taxes if I didn't receive a Notice 1444?

... I received one of the stimulus checks in 2020 and one in 2021, do I report both in 2020 taxes or on the years received?

Brittany Benson, senior tax research analyst, The Tax Institute at H&R Block, said even if you don’t receive, or didn't keep a Notice 1444 for a stimulus payment, you should still enter the amount you received in advance payments to accurately calculate your recovery rebate credit. You can use an IRS online account and go to the "tax records" tab to see the amount of EIPs received.

The IRS suggests that you can check your IRS account online for the stimulus amount received, if you misplaced Form 1444 or Form 1444-B.

The IRS only began mailing out Form 1444-B for the second stimulus payments the first week of February. So there's a shot that form will show up in the mail soon. Don't throw it out.

— Susan Tompor

Follow Susan on Twitter @tompor.

Can I claim stimulus payments if I just graduated college?

For both of the last two rounds of stimulus checks, payments were available for adults and for child dependents under the age of 17. Unfortunately, anyone who was claimed as a dependent on someone else's return wasn't eligible for a check of their own. As a result, many college students were ineligible.

The IRS thought they were still dependents based on their parents' old returns, but they were adult dependents so no money was sent for them.

Submitting a 2020 return will make it possible to claim a stimulus payment because the money was an advance on a tax credit. By filing a return and showing you were eligible for the credit but didn't receive it, you can claim the stimulus funds you're due.

— Christy Bieber

The Motley Fool

I never got my second stimulus check, even though it says it was mail. Can I claim it on my taxes?

If you are eligible for a stimulus check and it was lost, stolen or destroyed, you should request a payment trace so the IRS can determine if your payment was cashed. (You can do that here.)

If a trace is initiated and the IRS determines that the check wasn't cashed, the IRS says it will credit your account for it but the IRS cannot reissue the payment. Instead, you will need to claim the Recovery Rebate Credit on your 2020 tax return if eligible.

"If you are filing your 2020 tax return before your trace is complete, do not include the payment amount on line 16 or 19 of the Recovery Rebate Credit Worksheet," the IRS says. "You may receive a notice saying your Recovery Rebate Credit was changed, but an adjustment will be made after the trace is complete.If you do not request a trace on your payment, you may receive an error when claiming the Recovery Rebate Credit on your 2020 tax return."

— Josh Rivera

Follow Josh on Twitter @Josh1Rivera

How do I sign up for direct deposit for the stimulus payments if I don't have to file a tax return?

Unfortunately, the IRS's Non-Filers tool is no longer available. It might behoove you to still file your 2020 taxes so you can claim the stimulus on your 2020 tax return as the Recovery Rebate Credit.

— Josh Rivera

Follow Josh on Twitter @Josh1Rivera

Can the IRS take my stimulus money to offset previous year’s tax penalties?

The IRS says it will not garnish stimulus checks for back taxes.

— Josh Rivera

Follow Josh on Twitter @Josh1Rivera

How do I file taxes if I only received unemployment in 2020?

Unemployment benefits are taxable income. If you received unemployment benefits at any point you should have receive a Form 1099-G reporting the 2020 total to the IRS. If you didn't receive the form, most state unemployment sites will have the form available to download once you log in. If you had any taxes withheld from the benefits those should appear on the form.

— Josh Rivera

Follow Josh on Twitter @Josh1Rivera

When is the deadline for 2020 tax filing?

The IRS pushed back the tax filing deadline by a month to May 17 instead of April 15 as the agency grapples with staffing issues and outdated systems at a time when it’s also implementing sweeping tax code changes from the COVID-19 relief packages. In 2020, the deadline was extended to July 15.

Here you’ll find a list of every state that’s extended its individual income tax due date to align with the federal deadline, along with states that didn’t extend theirs at all (which means you’re already late), ones that moved their deadline later than May 17 and those that don’t collect income taxes at all.

— Jayme Deerwester

Follow Jayme on Twitter @jaymedeerwester

Will I owe taxes on stimulus checks?

No, stimulus checks aren't considered income by the IRS. They are prepaid tax credits for your 2020 tax return, authorized by two relief bills passed last year that aimed at stabilizing the struggling U.S. economy in the wake of the pandemic. Because the stimulus payments aren’t considered income by the tax agency, it won’t impact your refund by increasing your adjusted gross income or putting you in a higher tax bracket, for instance.

When it comes to getting paperwork ready, you'll want to dig up the IRS Notice 1444 for the stimulus payment amount you were issued in 2020. And the second round of payments would be outlined in Notice 1444-B.

— Jessica Menton and Aimee Picchi

Follow Jessica on Twitter @JessicaMenton and Aimee @aimeepicchi

What if I never received a stimulus payment?

“If you didn't receive the full payment you were entitled to, then it's possible that when you are filing your 2020 tax return you may end up getting more money,” says Eric Bronnenkant, head of tax at financial services firm Betterment.

“If your economic situation changed – let's say you qualified based on 2018 or 2019 income because it was lower, but your economic situation improved for 2020 – the IRS actually can't ask for any of that money back,” Bronnenkant adds. “Your situation can't get worse in that scenario.”

Taxpayers will need to file a 2020 federal income tax return to claim the Recovery Rebate Credit if they didn't get their Economic Impact Payments or they received less money than they're eligible to get, such as if a child's credit wasn't included in the payout.

The Recovery Rebate Credit is listed on Line 30 of the 1040 Form for the 2020 tax year.

— Aimee Picchi and Susan Tompor

Follow Aimee on Twitter @aimeepicchi and Susan @tompor.

What if I collected unemployment compensation in 2020?

The tax season shocker for many jobless people will be that their tax refund could be far smaller than expected, or they might even owe taxes.

Taxes aren't withheld automatically from unemployment benefits. If you are unemployed in 2021, and receiving unemployment compensation, you may want to take action to have federal taxes withheld in the future.

Look out for Form 1099-G, Certain Government Payments, to show how much unemployment compensation was paid to you in 2020. See Box 1 for the taxable income you must report on Line 7 on Schedule 1 of the 1040.

See Box 4 for any taxes that you might have withheld from your unemployment benefits during the year. You'd report those withholdings on Line 25b of the 1040.

— Jessica Menton and Susan Tompor

Follow Jessica on Twitter @JessicaMenton and Susan @tompor.

What if I lost my job during the pandemic?

Tax filers will be able to choose whether they want to use either their 2019 or 2020 earned income to calculate the Earned Income Tax Credit on their 2020 income tax returns, thanks to a one-time lookback provision. The lookback will help financially challenged people qualify for the refundable portion of the Child Tax Credit, which is allowed even if you do not owe any tax.

Unemployment compensation is taxable income. Since many did not have taxes withheld, they could face a tax bill. A generous payout for the earned income credit could offset some taxes that will be owed and even contribute to a tax refund.

The earned income credit will vary. The maximum credit is $6,660 for those filing a 2020 tax return but applies only to tax filers who have three or more qualifying children. By contrast, the maximum credit is $538 for someone who has a limited earned income but no children.

The maximum adjusted gross income allowed to obtain the earned income credit is up to $15,820 for those who are single with no children.

The highest cutoff is $56,844 for married couples filing a joint return with three or more qualifying children. The cutoff is an adjusted gross income of $41,756 for those who are single, widowed or head of household with one child.

— Susan Tompor

Follow Susan on Twitter @tompor.

My income changed since I last filed my taxes. What should I do?

In that case, you should use the recovery rebate worksheet to calculate how much you are owed and claim that amount on Line 30 on their 2020 tax return. You'll receive the stimulus payments in your refund check.

— Aimee Picchi

Follow Aimee on Twitter @aimeepicchi.

What if I donated to a food bank or another charity during the pandemic?

Food banks and others found themselves in need of contributions as the country dealt with skyrocketing unemployment. Many of us heard the call and wrote out checks that can now be used as a tax deduction.

See Line 10-b on the 1040 return for 2020 to take an above-the-line deduction for charitable contributions. Cash donations of up to $300 made to qualifying organizations before Dec. 31, 2020, are now deductible when you file your tax return, thanks to a special provision enacted earlier last year.

— Susan Tompor

Follow Susan on Twitter @tompor.

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This article originally appeared on USA TODAY: Taxes Q&A: How can I file free online? Do I owe taxes on unemployment?