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March 26, 2020

Updates On Federal and California Tax Related Deadlines Due To The Corona Virus

Please read important disclosures and index definitions HERE

Given the impact of the Coronavirus on the personal and economic affairs of individuals, the IRS and California’s taxing agencies have taken action to ease the financial burden of its taxpayers by extending many of the following important tax deadlines.

Federal and California Tax Related Deadlines Due To The Corona Virus

Federal Income Tax Due Date For Filing Returns and Payment of Taxes Owed

The U.S. government has postponed the April 15 tax filing and payment deadline for 2019 taxes owed for 90 days or until July 15, 2020, for all taxpayers regardless of the amount owed. This deferral includes both income tax and self-employment tax and no special form needs to be filed to qualify for the deferral. In addition, interest and penalties on the tax deficiencies will be waived.

If a taxpayer has already filed their 2019 return and scheduled an automatic withdrawal of their tax payment, taxpayers can take action to change the payment date.

If a Form 4868 (Application for Automatic Extension Of Time To File) is submitted by the new due date, taxpayers can receive an automatic extension to file until October 15, 2020 but any taxes owed would still be due by July 15, 2020. If a taxpayer is expecting a refund, it could be wise to file as soon as possible.

Estimated Tax Payments

The due date for estimated tax payments for the first quarter of 2020 which would have been due on April 15, 2020 has also been extended until July 15, 2020. As of this date, it is not clear whether the second estimated tax payment due during the deferral period-the one due on June 15, 2020 is also eligible for deferral but this could change and we will watch for further announcements.

Trusts and Estates

The extended due date for filing and payment also applies to trusts and estates.

IRA, Health Savings Account (HSA), and Solo 401(k) Contributions

Given the extended 2019 tax filing date to July 15 the deadline for making a 2019 contribution to an individual retirement account, Roth IRA, and HSA is automatically extended to July 15, 2020. For solo 401(k) plans, both the employee deferral and profit sharing contribution can be made up until the personal tax-filing deadline. For 2019, these contributions can also be deferred until July 15, 2020.

California Tax Returns and Payments

For California taxpayers, the Franchise Tax Board has announced that it is also postponing until July 15, 2020 the filing and payment deadlines for all individuals and business entities for:

  • 2019 tax returns
  • 2019 tax return payments
  • 2020 1st and 2nd quarter estimate payments
  • 2020 LLC taxes and fees

Taxpayers do not need to claim any special treatment or file any forms to qualify for relief.

For additional information on tax extensions for filing and payment of taxes, contact your B|O|S Wealth Manager and/or tax advisor.

Sources:

https://www.irs.gov/newsroom/tax-day-now-july-15-treasury-irs-extend-filing-deadline-and-federal-tax-payments-regardless-of-amount-owed

https://www.ftb.ca.gov/about-ftb/newsroom/covid-19/extensions-to-file-pay.html

https://www.wsj.com/articles/new-details-from-the-irs-on-july-15-tax-deadline-11585087948

Filed under: Tax Planning

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