Taxpayers allowed to extend filing and defer income tax payments to July 15, 2020
NEWS UPDATE 3/20 at 9:00 a.m. CST: The U.S. is extending the deadline for filing taxes from April 15 to July 15, 2020.
On March 18 the IRS issued Notice 2020-17 offering relief for taxpayers affected by the ongoing Coronavirus pandemic.
The IRS will allow taxpayers to defer both filing and income tax payments originally due on April 15, 2020, until July 15, 2020, giving individuals and many businesses 90 extra days to pay taxes they owe.
Payment relief is for 1040 (individual/personal tax return) and 1120 (C-corporation) tax returns as well as 1041 (Trust) returns.
These are subject to certain caps. For individuals, the amount of tax which can be deferred is up to $1 million. Corporations can defer up to $10 million. These limits were selected to provide benefits to small businesses which report income through pass-through entities such as partnerships or S-corporations.
The extension is updated for both filing the return and the payment. All taxpayers now are allowed to file their return or a valid extension by July 15, 2020. 1065 (Partnership) and 1120S (S-corporation) returns typically have no federal income tax associated with them, hence no extension of time to make a payment.
Additional Guidance for CWA Tax Clients:
1120S (S-corporation) and 1065 (Partnership) tax returns have already been extended to meet the March 15 deadline. The extension deadline for these returns is September 15. The CWA Tax Department is still working toward extending all tax returns by the original due date of April 15, in order to better serve our clients.
- CWA will extend your personal tax return(s) for you by April 15, extending your return deadline until October 15, 2020.
- If you operate as an 1120, we are extending those returns until October 15, 2020.
- If you have a 1041 trust return, we are extending those returns until September 15, 2020.
Payments due for all three of these returns are extended to July 15, 2020.
In the next week your planning team will also communicate how much they estimate you will owe with your extension.
Those who owe less than $1 million can defer payment until July 15, 2020. If you need guidance on if you should pay now or later, please reach out to your planning team for personal advice.
Please be advised, if you do not pay your tax bill in full by July 15, 2020, the IRS will charge penalties and interest on any outstanding balance.
If you anticipate being in a refund situation, please upload all your tax information to our secure portal as soon as you can. If you are a CWA accounting client and your December 31, 2019, books have yet to be finalized, please upload any missing information or reach out to your CWA accountant.
If you are an owner or investor in a partnership or an S-corporation those returns must be filed first before you can file your personal tax return.
Most states have been silent as to an extension on state income taxes but we feel that this will change in the coming days. Some have already offered guidance and come out and said they will give 60-day extensions and some say they will give the same as what the Federal Government gives. We will continue to monitor this and update as we know.
We will continue to follow these developments and will provide information on these issues as they are clarified. If you have any questions, do not hesitate to contact your CWA planning team.
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