Gress Income Tax Service

Latest Tax Developments

Information is changing daily and hourly.  This was last updated as of 12:30 3/25/2020   

New federal extensions   

The Treasury Secretary announced that the April 15 filing deadline has been extended to July 15 for all taxpayers and businesses. This means taxpayers will no longer be required to file extensions for federal purposes. They also have until July 15 to pay, so long as they fall below the thresholds of $10 million due for C corporations, and $1 million due for all other taxpayers.

IRS issues written guidance on extensions (03-20-20)

  • The April 15 income tax payment deadline has been extended to July 15 for all taxpayers, not just those below the tax due thresholds previously mentioned;
  • The filing and payment extensions apply to individuals, trusts, estates, partnerships, corporations, associations, and companies;
  • The relief applies only to income tax returns and income taxes, no extension is provided for the payment or deposit of any other type of federal tax, or for the filing of any federal information return;
    • Payroll tax filings and payments are not extended by this notice; and
  • Estimates due on April 15 are extended to July 15 (there is no discussion of second quarter estimates).

New California extensions

The FTB is postponing until July 15 the filing and payment deadlines for all individuals, trusts, and business entities for:

  • 2019 tax returns;
  • 2019 tax return payments;
  • 2020 1st and 2nd quarter estimate payments;
  • 2020 LLC taxes and fees; and
  • 2020 Non-wage withholding payments.

The FTB extended their initial extension period of June 15, 2020, to be more consistent with the IRS extension relief. Like the IRS extension, the FTB extension applies to both filing and payment deadlines, but does not limit the payment extension to those below $1 million ($10 million for corporations), and applies to estimated tax and withholding payments.

IRS answers questions regarding extension relief (03-24-20)

In FAQs just posted on their website, the IRS answered many of the questions regarding the July 15 filing and payment extension announced in IRS Notice 2020-18. Note the following highlights:

  • Filing and payment extension is only available for the following returns:
    • Form 1040, 1040-SR, 1040-NR, 1040-NR-EZ, 1040-PR, 1040-SS;
    • Form 1041, 1041-N, 1041-QFT;
    • Form 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-ND, 1120-PC, 1120-POL, 1120-REIT, 1120-RIC, 1120-SF;
    • Form 8960;
    • Form 8991; and
    • Form 990-T (but only if originally due on April 15).
  • Extension relief is not available for:
    • Fiscal-year taxpayers, unless their original due date or extended due date is on April 15, 2020;
    • Second quarter estimated income tax payments due June 15, 2020;
    • Returns that were originally due on March 15, including Forms 1065, 1065-B, and 1066, and Form 1120-S for calendar year taxpayers;
    • Returns with other due dates, such as the May 15 due date for nonprofits;
    • Payroll or excise taxes;
    • Estate or gift taxes; and
    • Information returns.
  • Taxpayers needing an additional extension to October 15, 2020, can file an automatic extension request by July 15, 2020, using Form 4868 for individuals and Form 7004 for businesses (including trusts), and must pay any extension amount due at that time to avoid the imposition of interest and penalties starting July 16, 2020;
  • Taxpayers that scheduled a payment with their tax return (authorizing an electronic funds withdrawal) may cancel their payment by calling (888) 353-4537. Cancellation requests must be made no later than 11:59 p.m. ET two business days prior to the scheduled payment date. See FAQ 14 for instructions to cancel other types of scheduled payments; and    
  • You can cancel Franchise Tax Board payments (FTB, state of CA) by calling (916) 845-0353
  • Deadlines for contributions to IRAs, employer retirement plans, health savings accounts, and Archer medical savings accounts are extended to July 15, 2020.

Stimulus Payment (Rebate)

  • Tax credit rebates of up to $1,200 per individual and $500 per child that are phased out for taxpayers with AGI over $75,000 ($150,000 MJF and $112,500 HOH) .  If your income is over 99,000 single or 199,000 for mfj then you do not qualify.   They will be using 2019 income if you already filed and 2018 income if you have not.   We are waiting for more details from the IRS to how this will be applied as we are in the middle of filing season.
  • The IRS has not confirmed an actually delivery date of these payments.  The Treasury has stated that they want it to be delivered by direct deposit (based off prior tax filing), or by check if direct deposit is not available. 

Also, in response to the questions we’ve had about the amounts of the stimulus checks individuals will receive, here is a helpful link to compute the payments:

http://www.kiplinger.com/tool/taxes/T023-S001-stimulus-check-calculator-2020/index.php