New law changes some tax return due dates
Posted On: 8-13-2015 | Posted By: Tory Brondel, CPA
A number of tax return due dates were changed by provisions of a federal law extending highway funding. While that might seem like an odd bill for tax changes, it became law of the land on July 31, 2015, when President Obama signed the “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015” (the Act).
The Act includes many important tax provisions that will affect almost all businesses for the foreseeable future. It modifies the due dates for several common tax returns, requires that additional information be reported on mortgage information statements, and requires consistent basis reporting between estates and beneficiaries.
Due Date Revisions
The Act provides new due dates for partnership and C corporation returns, as well as FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), and several other IRS information returns. The new deadlines generally won’t be effective until the 2016 tax returns are filed in 2017.
The new due date for a partnership return is the 15th day of the third month following the close of the year (March 15 for calendar-year end partnerships). These returns are currently due on the 15th day of the fourth month (April 15 for calendar-year end partnerships), thus accelerating the filing deadline by one month. Because the partnership return date is currently the same as for individuals, taxpayers holding partnership interests have had to file for an extension to file their returns because Schedule K-1’s don’t arrive until the last minute.
The new due date for a C corporation is the 15th day of the fourth month following the close of the corporation’s year (April 15 for calendar-year end C corporations). These returns are currently due on the 15th day of the third month (March 15 for calendar-year end C corporations), thus deferring the filing deadline by one month.
The new due date for FinCen Report 114 will be April 15 with a maximum extension for a six-month period ending on October 15. These reports are currently due on June 30 and no extension of time to file is available. Additionally, any penalty for failure to timely request, or file, an extension may be waived by the Treasury Secretary for any taxpayer required to file Form 114 for the first time.
Please note that the due dates for S Corporation and Individual returns did not change under the Act.
Extension of Time to File Revisions
C Corporations (Form 1120) will be allowed a five-month extension period (ending on September 15 for calendar year taxpayers) until year 2026, when the extension period would revert back to six months. Currently corporations are allowed a six-month extension period.
Partnerships (Form 1065) will be allowed a six-month extension period (ending on September 15 for calendar year taxpayers). Currently partnerships are allowed a five-month extension period.
Trusts (Form 1041) will be allowed a 5 ½-month extension period (ending on September 30 for calendar year taxpayers). Currently trusts are allowed a five-month extension period.
Employee Benefit Plans (Form 5500) will be allowed a 3 ½-month extension period (ending on November 15 for calendar year taxpayers). Currently benefit plans are allowed a 2 ½-month extension period.
Exempt Organizations (Form 990) will be allowed a six-month extension period (ending on November 15 for calendar year taxpayers. Currently trusts are allowed a three-month extension period.
Other Tax Provisions Included in the Act
Mortgage Interest Statements. The Act provides that the interest recipient (lender) must now include:
- the outstanding mortgage principal amount as of the beginning of the calendar year;
- the mortgage origination date; and
- the address of the property which secures the mortgage (or other description, if property does not have an address).
Basis Consistency Reporting. The Act directs a new basis consistency standard in which the basis of property received via death must equal the value of that property for estate tax purposes. Although the same valuation standard (Fair Market Value upon decedent’s date of death) currently applies to both provisions, the current law does not explicitly require the basis to be the same in both instances.
The revised tax return due dates described above will not affect taxpayers for some time, so we will provide more guidance in future months. In the meantime, you can contact your WK advisor at (573) 442-6171 or (573) 635-6196 if you have any questions.