When it comes to your US crypto tax filing, the rules vary from state-to-state.
We’ve compiled a helpful guide for all US taxpayers filing 2020 US Crypto state tax returns in 2021.
US Taxpayers have both a state tax filing deadline and a federal tax filing deadline.
These state tax returns are due on the same date as the federal tax returns.
Each year April 15th is the official tax deadline to file your federal income tax return, but that date can vary depending on whether it falls on a legal holiday or a weekend day. This year it falls on a Thursday.
Deadlines for annual returns are typically in the spring, with crypto tax extensions available until the fall.
What are the Federal Tax Filing Deadlines For 2021?
Individual income tax returns are due on April 15th which is on a Thursday this year and will not be impacted by the weekend or holidays.
Related Reading: Crypto Owners Terrified Of the New 1040 Tax Question
LLC and Partnership returns (IRS Form 1065) are due March 15th, 2021. The extended deadline is September 15th, 2021.
Tax Tip: You should file an extension early, so you don’t forget the deadline. The penalty for being late on filing a partnership return or a multi-member LLC return is 195 dollars per person, per month. So it can get steep fast!
Another important thing to note is that a single owner or a single-member LLC does not file a separate tax return.
Instead, they file on Schedule C of IRS Form 1040, which is due April 15th.
Another area of confusion for many is that Form 1120-S for S-Corporations is due in March, and Form 1120 for C-Corporations is due in April.
C-corporation income tax returns (IRS Form 1120) are due April 15th, 2021, for C-corporations that operate on a calendar year. The extended deadline is October 15th, 2021.
S-corporation returns (IRS Form 1120-S) are due March 15th, 2021, for corporations operating on a calendar year. The extended deadline is September 15th, 2021.
Foreign partnership returns are due on the same date as other partnership returns on March 15th, 2021
What are the US State Tax Filing Deadlines For 2021?
The state crypto tax returns are due on the same date as the federal tax returns.
Some states accept that if you file at the federal level, then the state will also accept it. Similarly, if you file an extension at the federal level, the state also accepts it.
Other states, however, require you to file a separate extension, and it’s quite a hassle.
We will provide a list of them for your convenience, but your accountant or tax software should do that for you.
You can file an extension with most tax software; it will let you file an extension and do the electronic filing of the notice to the IRS and your state if appropriate.
Source for the Complete State Tax Extensions List below is: https://www.thebalance.com/state-tax-extensions-3192928
Important US Tax Season Dates To Remember
- Friday, February 12th. IRS begins 2021 tax season. Individual tax returns start being accepted, and processing begins.
- Thursday, April 15th. Due date for filing 2020 tax returns or requesting extension of time to file.
- Thursday, April 15th. Due date for paying 2020 tax owed to avoid owing interest and penalties.
- Friday, October 15th. Due date to file for those requesting an extension on their 2020 tax returns.
How Can I Get More Time With US State Tax Filing Extensions?
A US state and federal tax filing extension gives you an extra six months to prepare your crypto tax return. However, it is not an extension for paying your taxes; that date doesn’t change.
We’ve learned from clients that many people are afraid that filing an extension will increase their chances of getting audited.
This is not something you should be concerned about. It is completely unfounded.
Filing for a tax extension will not increase your risk of an IRS audit.
Related Reading: 3 Reasons Why Crypto Traders Should Have Crypto Tax Audit Defense
As tax returns get more and more complex each year. An increasing number of taxpayers need to file extensions to do it correctly.
Approximately half of US tax returns are extended each year.
Crypto Tax Tip: Since U.S. state Crypto tax returns are particularly complex, you should take your time to do them correctly and file an extension each year.
At Donnelly Tax Law, almost all of our clients get extended through October 15th, except the early birds and no tax return is ever too complicated.
We will never turn a client away for a complex return.
We’ve got your back!