Our nation is in a trying situation right now as we fight the spread of Covid-19. This virus is having a huge impact on how Americans live their lives day to day. In response to this rapidly changing “new normal” that Americans are facing, the IRS is providing some relief to taxpayers.
Taxpayers must file their personal and business income tax returns by April 15. However, the IRS will waive penalties and interest on tax payments for 90 days.
Here at ExpressExtension we are dedicated to monitoring the current climate and providing information that could impact your business.
The Personal Income Tax Deadline
Income taxes for individuals with up to $1 million or in tax liability will not be charged any penalties for 90 days following the April 15th deadline.
This means anyone filing their personal tax returns that owes less than $1 million to the IRS can defer their income tax payment for 90 days following April 15. While the deadline for tax payment is being extended, your income tax return will still need to be filed by April 15th.
This is especially important information for sole proprietors that report their business information on their personal income tax return.
The IRS and the federal government encourages any individuals that expect a refund to file their tax return by April 15.
The Corporate Income Tax Deadline
Income taxes for corporations owing $10 million or less in tax liability will not be charged any penalties for late payment for 90 days after the April 15, 2020 deadline.
This means that corporations with less than $10 million are able to defer their income tax payment for 90 days after April 15, 2020. Again, this additional time only applies to your income tax payment. Income tax returns must still be filed to the IRS by April 15, 2020.
When Should I File An Extension?
These additional 90 days apply only to the tax payment itself, not the income tax return. Filers will need to apply for a traditional extension if they need additional time to complete these returns.
If you file for a 6 month extension, your tax payment will be due to the IRS on July 15, 2020 and your income tax return must be filed with the IRS by October 15, 2020.
What Extension Should I File?
There is a different tax extension for corporate filers and for personal filers. However, they both allow you an additional 6 months to file your return and neither requires any explanation from the IRS.