The Internal Revenue Service and the California Franchise Tax Board have issued guidance allowing an extension of time to pay income taxes and file returns.
CALIFORNIA: The California Franchise Tax Board has announced that the filing and payment deadlines of March 15th for entities and April 15th for individuals have been extended until June 15, 2020. That extension includes tax returns for 2019 and estimated tax payments for 2020. The FTB will not impose interest on tax payments otherwise due on April 15th that are made on June 15th as to taxes for 2019 and 2020. The FTB continues to require and collect installment payments for prior years.
The IRS will be granting automatic payment and filing extensions both for 2019 income, gift and FATCA taxes and 2020 estimated taxes through July 15, 2020. The IRS has suspended installment payments for prior years’ taxes until July 15, 2020
“If you owe a payment to the IRS, you can defer up to $1 million as an individual and the reason why we’re doing $1 million is that it covers lots of pass-throughs and small businesses, and $10 million to corporations, interest-free and penalty-free for 90 days. All you have to do is file your taxes, you’ll automatically not get charged interest and penalties. Now, of course, any American has the right to extend their taxes, we’re not taking away that right.” To extend the time to file your individual income tax return, file an extension request with the IRS on Form 4868 by April 15th. That will get you an extension of time to file your 2019 federal income tax return through October 15, 2020 (but payment would be due by July 15th for individuals and June 15th for entities).
REFUNDS: If you expect an income tax refund, it makes sense to file timely.
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The legal professionals at Stubbs Alderton & Markiles, LLP will continue to monitor changes to legislation and publish updates as information becomes available. Please contact one of our attorneys at SA&M if you would like to discuss how these changes might affect your business.