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Over the past year, many California businesses have faced various new challenges arising from the pandemic. Supply chain issues have forced extended production lead times, resulting in significant delays in order fulfillment. Workplace safety issues focused on protecting against the spread of COVID, including mask requirements and vaccine mandates, have complicated matters. Despite this, the ever-present threat from wildfires is a constant concern. This year alone, there have been over 49,000 wildfires responsible for burning 6.5M acres of land, including the Dixie wildfire, one of the largest in state history. The damage can be immense, resulting in industrial, commercial, and retail property destruction. For those impacted by these events, the IRS recently announced an extension to January 3, 2022, to file various individual and business tax returns and make related payments. To help clients, prospects, and others, JLK Rosenberger has provided a summary of the key details below.
The extension automatically applies to businesses located in any part of California that has been designated by the Federal Emergency Management Agency (FEMA) for either individual or public assistance. It includes Lassen, Nevada, Placer, Plumas, Tehama, and Trinity Counties. In addition, the IRS will also work with taxpayers that may live outside these areas but whose records are necessary to complete the required filings are located within a disaster zone.
The announcement provides individual and business taxpayers the extended timeframe to meet tax filing and payments deadlines which started on July 14, 2021, to meet these requirements before January 3, 2022. As a result, this extends the following:
- 2020 Individual Extensions – For taxpayers that had a valid extension of a 2020 return scheduled to expire on October 15, 2021, now have until the new January deadline to submit the filing. Since extensions apply only to the filing and do not require payments, there is no extension for payments due.
- Business Tax Filings – The extension also applies to quarterly estimated income tax payments originally due on September 15, and quarterly payroll and excise tax returns. In addition, businesses with a 2020 extension also have additional time to make the required filings.
The relief provisions will automatically be applied to any taxpayers with an IRS address located within the disaster zones. Those who have essential records located within the disaster zone, but do not live there, will not receive an automatic extension. For these taxpayers, it will be necessary to contact the IRS to receive an extension.
The extended IRS relief is welcome news for taxpayers attempting to recover from the devastating effects of California’s infamous wildfires. It is important to plan to ensure the necessary information is available to meet the extended filing/payment deadline. If you have questions about the information outlined above or need assistance with tax planning or compliance, JLK Rosenberger can help. For additional information, call us at 949-860-9902 or click here to contact us. We look forward to speaking with you soon.