This past summer President Obama signed into law, a bill that included changes to due dates for certain tax returns. These changes had been proposed by AICPA members who wanted a more logical chronology so that information taxpayers needed to file 1040s or 1120s would be available on time.
Why the changes were needed:
The AICPA has been advocating for changes to various tax return due dates for several years. Members started voicing concerns that taxpayers and preparers were struggling with due date problems. Specifically, problems were created when Schedules K-1 arrived late. At times the Schedules K-1 were arriving within days (before or after) of the extended due date of their partners’/owners’ personal returns (Oct. 15), and sometimes they arrived up to a month after the extended due date of their partners’/owners’ business returns (Sept. 15).
The AICPA Tax Division found that much of the issue related to late Schedules K-1 were a result of the increasing quantity and complexity of flowthrough entities. The interconnection of business entities and those that own them demanded a more logical flow of information between parties.
What the new changes are:
Partnerships & LLCs filing Form 1065: The new date is March 15th or the 15th day of the third month after year end (formerly April 15th or the 15th day of the fourth month after year end).
S Corporation & LLCs filing Form 1120S: No change, your due date remains March 15th or the 15th day of the third month after year end.
C Corporations, HOAs filing Form 1120: The new date is April 15th or the 15th day of the fourth month (formerly March 15th or the 15th day of the third month after year end).
Individuals and Businesses with more than $10,000 in a foreign bank account filing FBAR (Report 114): The new due date is April 15th (formerly June 30th) however there is now a six-month extension available until October 15th. For those unfamiliar with the Foreign Bank and Financial Accounts Report (FBAR), this form is required for any individual or business with a financial interest in, or signature authority over, at least one financial account (personal or commercial) located outside the United States for which the aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year reported.
Form W-2 and Form 1099-MISC reporting box 7 – Nonemployee Compensation: The new due date for paper and electronically transmitted forms sent to the IRS/SSA is January 31st. If filing Form 1099-MISC reporting any other box, the IRS/SSA filing due date is unchanged and is by February 28th if you file on paper and March 31st if you are filing electronically. The due date for furnishing payee statements remains January 31st.
Click here to view AICPA due date chart.
Why the new due dates are helpful:
The new law is both logical and helpful to many types of entities. That’s because all other entities and individuals can be partners in a partnership and may need information from Schedules K-1 from partnership investments in order to timely and accurately complete their tax returns.
Once partnership and S corporation returns have been filed by March 15, and owners have received their Schedules K-1, individuals, trusts, and C corporations will have the information they need from their passthrough entity investments to file accurate and timely returns.
If you are a business tax return client of Machen McChesney, please pay close attention to your year-end letter which will be mailed in December. We will give you more information specific to your situation at that time.
If you have any questions on the above article or need any taxation services, contact Lisa Albritton, EA at (334) 887-7022 or by leaving us a message below.
