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IRS delays Tax Day until mid-May: Here's how the headlines could affect your money

Americans now have until May 17 to file and pay federal taxes.

The Internal Revenue Services offices in Washington, D.C.
Adam Jeffery | CNBC

Markets surged to new highs Wednesday. Unemployment claim figures are worse than expected. Plus, there's a new May tax deadline. Here's how the headlines could affect your money.

Markets make a comeback

Stocks climbed higher Wednesday as investors cheered news that the Federal Reserve expects to keep interest rates near zero for the next two years. The central bank also upgraded its economic outlook.

The Dow gained 0.6% and closed above the 33,000 mark for the first time. The S&P jumped 0.3% and closed at a record high, while the Nasdaq gained 0.4%. 

The major indexes were mixed Thursday morning.

Jobless claims worse than expected

More Americans than expected filed first-time unemployment claims during the week ending March 13, according to Labor Department figures. Jobless claims totaled 770,000 for the period. That's an increase from the prior week and worse than economists expected. 

IRS pushes Tax Day to mid-May

The IRS announced Wednesday it will delay the federal tax filing deadline until mid-May. You now have until May 17 to file and pay federal taxes. But if you pay estimated quarterly taxes for your side hustle or small business, those Q1 payments are still due April 15. 

Also note that states set their own deadlines. It's unclear yet whether they'll offer filers more time, too.

In general, the sooner you file, the sooner you can get a refund or address any problems you run into early on, says Timothy Gagnon, an associate professor of accounting at Northeastern University: "Just because the deadline was extended, doesn't mean people should take more time on their taxes," he says.

A notable exception: If you collected unemployment benefits last year, experts say it's best to wait a bit longer to file your return. The recent Covid-19 relief package retroactively changed the tax rules to waive the federal tax on $10,200 in benefits for 2020, and the IRS and tax software providers are working to accommodate that provision. 

Should married couples file taxes jointly or separately

Video by Stephen Parkhurst

Words you've heard: HSA

A health savings account is a tax-advantaged account that can be paired with high-deductible health plans. There's a triple tax benefit: Your contributions are pre-tax, the money grows tax-free, and it can be withdrawn tax-free for qualified medical expenses. 

The new mid-May tax deadline could also apply to making HSA and IRA contributions for 2020, experts say, but the IRS has yet to offer official guidance on that topic.

Although the daily news can have an impact on your wallet, remember to take a long-term outlook when it comes to decisions on spending, saving, and investing.

This story was updated to clarify tax filing recommendations for individuals who collected unemployment benefits in 2020.

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