IRS announces additional tax Extensions

The Internal Revenue Service has been scrambling to make things easier for taxpayers in light of the COVID-19 pandemic, and now it’s issued another notice related to this tax season that moves deadlines later.

1) First-quarter estimates:
This is good news for all the sole proprietors out there! The IRS has made clear that relief now applies to estimated tax payments due June 15, 2020. Previously, the relief only applied to the April 15, 2020, estimated payments - which had the absurd result of having second quarterlies (due June 15, 2020) due before first quarterlies (moved to July 15, 2020). Now, it’s clear that any individual or corporation that has a quarterly estimated tax payment due on or before July 15, 2020, can wait until July 15 to make that payment without penalty.  

2) Extensions now available past the July 15th deadline

If you need even more time to file your 2019 tax return - beyond the July 15 deadline - you can request an extension (here’s how). Extensions filed using form 4868 will allow taxpayers to file on or before October 15, 2020, without penalty. That’s six months after the “normal” April 15 due date and not six months after the already-extended date. Remember that an extension to file is not an extension to pay. You should estimate your tax liability and pay any taxes owed by the July 15, 2020 (not April 15, 2020), deadline to avoid additional interest and penalties.

3) 1031 exchanges & opportunity zones
On April 9th, 2020 the IRS issued guidance to grant deadline relief for both 1031 like-kind exchanges and opportunity zone investments that are already underway.  Both of these programs are designed to promote economic growth in communities.

• 1031 Like-kind exchanges.  If an investor has taken the first step of a like-kind exchange by selling the old property, and either the 45-day or the 180-day deadline falls between April 1 and July 15, the deadline has been extended to July 15. 

• Opportunity Zones.  If an investor who sold a capital asset planned to roll over the gain into an Opportunity Fund and the 180-day deadline to do so falls between April 1 and July 15, 2020, he or she can make the investment as late as July 15.  
  

4) Trusts, estates, corporations & expats now included
Additionally, Notice 2020-23 confirms that all individuals, trusts, estates, corporations and other non-corporate tax filers, including Americans living abroad, get extra time until July 15 to file and pay federal income taxes.