By Laura Saunders
The Internal Revenue Service has extended tax deadlines in Los Angeles County, Calif., following the recent destructive wildfires. This pushes back the filing deadline for around 10 million people from the traditional April 15 date to Oct. 15.
The extension is for all taxpayers in the county, including individuals and businesses. As a result, many non-victims as well as victims will likely benefit from these delays.
In addition, the relief measure also delays the deadlines for quarterly estimated tax payments for the fourth quarter of 2025 (due Jan. 15) and the first three quarters of 2025. The due date for these payments is now Oct. 15 as well.
That, plus nearly three dozen other disaster declarations from last year, means that millions of victims and non-victims across the country will get relief from the IRS.
As a result of the extension for L.A. residents, interest due on estimated-tax underpayments for the fourth quarter of 2024 and the first three quarters of 2025 won't be assessed. Currently the rate, which resets quarterly, is 7%.
So if a Los Angeles resident unaffected by the fires has a windfall capital gain during this period but doesn't pay quarterly estimated taxes on it by the regular deadlines, interest won't accrue as it normally would.
This benefit could cause some confusion, however. A number of retail and professional software programs don't adjust for delayed deadlines from disasters and will likely assess penalties that aren't owed.
If that happens, the IRS's computers typically catch the discrepancy and issue a refund-but the taxpayer may be mystified by it. A surprise refund can cause almost as much anxiety as a surprise tax bill.
The bottom line: Taxpayers living in disaster areas should check whether they qualify for extended tax deadlines on the IRS website, even if they weren't victims.
This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).
(END) Dow Jones Newswires
January 13, 2025 10:00 ET (15:00 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.