The IRS and California Franchise Tax Board recently announced that the income tax filing deadline for individual 2020 tax returns and payments has been extended from April 15, 2021 to May 17, 2021.
While this extension provides an additional month to pay any remaining tax liabilities for 2020, BPW will continue to uphold the original April 15, 2021 tax filing deadline. Since the extension only partially addresses certain tax obligations, it is in the best interest of our clients to file all necessary tax returns by the April 15 deadline to ensure optimal tax planning opportunities, or you may elect to extend your 2020 returns until October 15, 2021.
At this point, the extension does not apply to the following tax filings, payments, and contributions and are still due by April 15, 2021:
- 1st quarter estimated tax payments
- Trust income tax payments and return filings on Form 1041
- Corporate income tax payments and return filings on various Forms 1120
- Individual retirement account (IRA) contributions
Most quarterly tax payments are based on safe harbor calculations using prior year tax liability; therefore, the benefit of postponement is nullified, as the tax return work must be completed regardless of the extended deadline. For this reason, we are staying on track with the original April 15 deadline.
We understand that for many people filing a tax return this year may be more complicated than in years past due to the host of changes that occurred in 2020. If you plan to extend your return, please let us know, and we will complete it in a timely manner between April and October as similar to prior years.
As we continue to operate in a fluid tax environment, we will keep you apprised of ongoing federal and state changes when they become available.
If you have any questions, please call your advisor at (805) 963-7811 to move forward with the best possible strategy for your tax situation. We look forward to connecting with you soon!