Two Taxation Developments: Filing Deadline Pushed to May 17, and Biden Administration Eyes New Taxes

New tax filing deadline: To assist our members with fulfilling their obligations as leaders of organizations, we flag that the Internal Revenue Service has extended the deadline to file taxes from April 15 to May 17, 2021. Note, however, that “The federal tax filing deadline postponement to May 17, 2021, only applies to individual federal income returns and tax (including tax on self-employment income) payments otherwise due April 15, 2021, not state tax payments or deposits or payments of any other type of federal tax. Taxpayers also will need to file income tax returns in 42 states plus the District of Columbia. State filing and payment deadlines vary and are not always the same as the federal filing deadline. The IRS urges taxpayers to check with their state tax agencies for those details.”

White House eyes tax policy reform: As reported by ASAE: “The Biden administration is looking to raise taxes to help rein in federal deficits and fund future pieces of the president’s domestic agenda, such as the multitrillion-dollar infrastructure and jobs package being discussed by the White House and congressional Democrats.

Like earlier COVID-19 relief proposals, the $1.9 trillion stimulus bill signed into law last week was financed entirely by additional federal borrowing. But as the White House works with Congress on the details of the next phase of economic recovery, dubbed the ‘Build Back Better’ plan, there’s a desire to get deficits under control and also to correct inequities in the tax system that Democrats say benefit wealthy Americans.

President Biden remains opposed to an outright wealth tax, as championed by Sen. Elizabeth Warren (D-MA) and others but will likely seek to repeal portions of President Trump’s 2017 tax law that benefited corporations and wealthy taxpayers. Earlier this week, White House press secretary Jen Psaki said the president remains committed to his campaign pledge not to raise taxes on anyone earning less than $400,000 per year.

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While discussions in the White House are ongoing, proposals on the table include raising the corporate tax rate from 21% to 28%; scaling back tax breaks for pass-through businesses; raising top level tax rates on individuals earning more than $400,000; expanding the estate tax; and raising the capital gains tax rate for individuals earning at least $1 million per year.”