Tax Day 2020 has come and gone. However, California offers taxpayers an automatic tax-filing extension, which grants additional time to file a state tax return. Read on to learn more about due dates to file California taxes, due dates to pay California taxes, extended tax deadlines in California, and other need-to-know information from the Franchise Tax Board. If you need state or federal tax filing services in Roseville, Sacramento, or the surrounding region, ask the experienced tax accountants at Cook CPA Group how we can assist.
Can I File a Late CA Tax Return in 2021?
The Internal Revenue Service (IRS) processes federal income tax returns. A state agency called the Franchise Tax Board (FTB) processes state income tax returns in California. In its own words, the role of the FTB, which operates under the California Government Operations Agency, is to “provide the services and information to help taxpayers file accurate and timely tax returns and pay the proper amount owed.”
The FTB is a comprehensive source of information for California taxpayers. As the FTB notes, the due date to file a tax return and pay estimated California taxes is April 15, 2021. (Additionally, some taxpayers may have made a payment without filing a return by using Form FTB 3519, Payment for Automatic Extension for Individuals.)
Fortunately, missing the April deadline does not mean that all hope is lost, for two reasons:
- California grants taxpayers an automatic six-month filing extension. You do not need to file any forms to claim this extension, unlike the federal filing extension, which taxpayers apply for using Form 4868 (Application for Automatic Extension of Time to File U.S. Individual Income Tax Return).
- Additionally, the FTB makes an exception for taxpayers who were traveling or residing outside the U.S., extending their tax due date to October 2021.
Does Filing for a Tax Extension Give You More Time to Pay?
While obtaining a tax extension can give you some much-needed breathing room to gather and evaluate your financial records, there’s a critical caveat for taxpayers to keep in mind: as the FTB cautions, “[T]he extension to file your tax return is not an extension to pay your tax. You must pay your tax in full no later than the April 15 deadline, regardless of when you file your return, or a late payment penalty may be imposed.”
This language could not be more precise: the filing extension is not a payment extension. A time extension will not prevent penalties from being imposed, nor will it stop costly interest from accruing. If you wish to avoid being charged interest and being ordered to pay expensive civil penalties, you must make a payment by the regular deadline (which is the purpose of Form FTB 3519, as noted above).
If you missed the payment deadline, you can be charged a failure-to-pay penalty per month of delinquency, generally capped at 0.5% of the unpaid amount. The failure-to-file penalty, or late filing penalty, is even more costly: typically up to 5% of the unpaid amount, imposed per month, if the taxpayer does not file the return in question. Note that this also includes partial months.
If the FTB believes you committed tax fraud – in other words, that you intentionally failed to file a return to avoid paying income tax – you may be audited and even criminally investigated. If you are convicted, you could be facing months or possibly years in prison, plus other penalties.
It’s important to take corrective action as soon as possible if you are out of compliance with state (or federal) tax filing requirements. However, before you file, be sure to choose the appropriate version of the California tax return. An experienced Roseville tax preparation professional from Cook CPA Group can help you make the right decision. Different versions of the personal income tax return for California taxpayers include:
- Form 540 (California Resident Income Tax Return)
- Form 540 2EZ (California Resident Income Tax Return)
- Form 540NR (California Nonresident or Part-Year Resident Income Tax Return)
COVID-19 and Your Tax Returns in 2021
During 2020, the IRS granted a 90-day extension to file your taxes due to coronavirus (COVID-19). This benefit extended your filing date, allowing California residents – and residents around the country – a much-needed time to evaluate their finances and work a strategy to file their taxes. As of today, there are no mentions about a second extension to file your taxes. It is critical to adhere to April 15, 2021, due date. This way, you ensure you avoid running into problems with the IRS. Our Roseville tax accountants can help you with your tax returns in 2021.
CA Tax and Accounting Firm Serving Sacramento and Roseville
Cook CPA Group is a California tax and accounting firm serving businesses and individual taxpayers throughout the Sacramento and Roseville regions. Featuring skilled tax accountants and consultants, our accomplished team of financial professionals brings more than 20 years of combined experience to the clients we serve. If you or your business owes taxes to the state of California, has unfiled returns to catch up on, needs help resolving a tax controversy, or simply has questions about effective tax planning or FTB procedures, Cook CPA Group can provide detailed, step-by-step guidance for all your California and federal tax needs. To arrange a free consultation about our tax services in California, contact Cook CPA Group online, or call us today at (916) 269-9282.