The IRS also shares guidance on tax relief under the CARES Act
for those with net operating losses.
The IRS says all taxpayers — including both
individuals and businesses — now have more time to file and pay their tax
returns.
Recently, the Internal Revenue Service
announced that taxpayers “generally had” until July 15, 2020, to file and pay federal
income taxes originally due on April 15 — with no late-filing penalty,
late-payment penalty or interest due.
Today, individuals, corporations and other
entities (such as trusts and estates) have been given until July 15 to make
their 2019 payments, as well as their estimated quarterly tax payments for both
the first and second quarters of 2020, without
penalty.
“Today’s notice expands this relief to
additional returns, tax payments and other actions,” the IRS said Thursday. “As
a result, the extensions generally now apply to all taxpayers that have a
filing or payment deadline falling on or after April 1, 2020, and before July
15, 2020.
“Individuals, trusts, estates, corporations
and other non-corporate tax filers qualify for the extra time,” the agency
explained. “This means that anyone, including Americans who live and work
abroad, can now wait until July 15 to file their 2019 federal income tax return
and pay any tax due.”
Individuals needing extra time can request an
extension to Oct. 15, 2020, though they must pay any taxes owed by July 15 to
avoid interest and penalties.
CARES Act Updates
Also Thursday, the IRS issued guidance about
tax relief tied to the $2.2 trillion stimulus package, also known as the
Coronavirus Aid, Relief and Economic Security, or CARES act.
For taxpayers with net operating losses that are carried back, the IRS is:
·
waiving the carryback
period in the case of a NOL arising in a tax year starting after Dec. 31, 2017,
and before Jan. 1, 2021;
·
disregarding some
amounts of foreign income subject to transition tax that normally would have
been included as income during the five-year carryback period; and
·
waiving or reducing a
carryback period, or revoking an election to waive a carryback period, for a
taxable year that started before Jan. 1, 2018, and ended after Dec. 31, 2017.
The IRS also extended the time to file Form 1045 or Form 1139 — with respect
to the carryback of a NOL that arose in any taxable year that began during
calendar year 2018 and that ended on or before June 30, 2019 — for six months.
Individuals, trusts and estates should
file Form 1045, while corporations should
complete Form 1139 .
On Wednesday, the IRS issued Revenue Procedure 2020-23, allowing eligible
partnerships to file amended partnership returns using Form 1065 (U.S. Return
of Partnership Income), checking the “Amended Return” box and issuing amended
Schedules K-1, Partner’s Share of Income, Deductions, Credits, to each of its partners.
(Partnerships filing such amended returns must
write “FILED PURSUANT TO REV PROC 2020-23” at the top of their latest returns.)
Janet Levaux, MA/MBA, is Editor in Chief of Investment
Advisor magazine; she has covered the financial markets since 1991 and advisors
since 2005. After living in Latin America and Europe as part of her studies at
Yale and Johns Hopkins SAIS, Janet worked in Japan and then California, where
she raised two children and earned a business degree before returning to her
hometown of San Antonio, Texas.
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