Smith Dickson, An Accountancy Corporation
February 2017
NEW FILING DEADLINES FOR 2016 TAX RETURNS
Smith Dickson would like our clients to know of some changes in tax return deadlines.  In particular, partnerships (including LLCs) now have an earlier tax deadline.
 
Some background: The AICPA has long advocated for more sensible due dates for tax returns to provide relief from problems caused by the existing filing deadlines.  The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, although primarily aimed at infrastructure funding, included provisions for new tax filing deadlines, particularly for business returns.

The Act changes deadlines for some business entities, starting with 2016 federal tax returns filed in 2017.

Federal Tax Return Due Dates For Calendar-Year Businesses

Entity Type
Return
Prior Due Date
New Due Date
New Extension Period
Partnerships
Form 1065
April 15
March 15
6 months
C corporations
Form 1120
March 15
April 15 (April 18 in 2017)
5 months
S corporations
Form 1120S
March 15
March 15
6 months

For a summary of all return types and due dates, see this AICPA table.  Some special notes per return types:
  • Partnerships: Under the new law, for fiscal year partnerships, returns will be due on the 15th day of the 3rd month after the year-end. A six-month extension is allowed from that date.
  • S Corporations: No change
  • C Corporations: Starting with 2016 tax returns, all other C corps besides Dec. 31 and June 30 year-ends (including those with other fiscal year-ends) will be due on the 15th of the 4th month after the year-end. A six-month extension is allowed from that date.  Special rule for C Corporations with fiscal years ending on June 30 - the new due date rules will go into effect for returns with taxable years beginning after Dec. 31, 2025.
  • Trusts and Estates (Form 1041):  Extension due date changed from Sept. 15 to Sept. 30.
  • Individuals (Form 1040): No change
  • FBAR:  Report of Foreign Bank & Financial Accounts filings will be due on April 15 (April 18 in 2017).  A 6 month extension is allowed.
  • Exempt Organizations (Forms 990): New extension will be a single, automatic 6-month extension, eliminating the need to process the current first 90-day extension.
  • Employee Benefit Plans (Form 5500): No change
  • Foreign Trusts with a U.S. Owner (Form 3520-A): No change
Many states have started to enact legislation (or issue regulations or guidance from the state departments of revenue) to change their due dates to conform to the new federal dates.  California has already made some changes (see this summary).
 
Should you file an extension?
The IRS allows an automatic extension to file your returns every year, as long as extension forms are completed and submitted.  However, even if you obtain an extension to file, you must still pay your income tax in full by the deadline. 

Some taxpayers worry that an extension could increase their chance of an audit.  While the IRS does not disclose how returns are selected for audit, there does not appear to be an association between filing an extension and increased audit risk.  The most important factor in avoiding audit risk is filing a complete and accurate return that doesn't need to be amended at a later date.
 
Business owners can benefit from an extension in many ways.  Often you may  need additional time to compile your internal bookwork or receive Schedule K-1s from partnerships.  You may need time to evaluate elections to make on your tax return such as whether to carryback or carryforward current year losses.   A significant factor can be decisions involving retirement plan contributions, since these calculations can take time to prepare (and some retirement plans can be funded or even established up to the extended due date of the tax return).
 
Individuals may need extensions for many reasons, including: more time to assemble your tax documentation, unexpected life events (illness, death, etc.), and reversal of ROTH IRA conversions.
 
As always, Smith Dickson is here to help you through all of these considerations.  Contact us with your questions.

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