As you know, the tax system is made up of all types of deadlines. This year, deadlines that we have long been accustomed to are changing. These changing deadlines apply to Forms W-2 and 1099-MISC as well as to income tax forms such as the Form 1065 for entities taxed as partnerships and the Form 1120 for C corporations. This post will describe the new deadlines for each of these items.
Forms W-2 and 1099-MISC
When a business pays a worker who is not an employee $600 or more in a year, the business must file an information return using Form 1099-MISC (miscellaneous income) to report the payments. Likewise, an employer must report wages paid to employees on Form W-2. In prior years, these forms had to be provided to the worker by January 31 of the following year and copies were required to be filed with the IRS (Form 1099-MISC) and the Social Security Administration (Form W-2) by the last day of February, or by March 31 if filing electronically.
Starting with 2016 forms (due in 2017), the due dates for IRS and Social Security Administration have been accelerated to January 31 of the following year (no longer the last day of February, or March 31 for electronic filers). So, 2016 Forms W-2 and 1099-MISC will need to be filed with the government by January 31, 2017–the same date that the forms have to be provided to workers.
Failing to file these returns timely can result in significant penalties–beginning at $50 per 1099-MISC or W-2 filed late.
Form 1065 (U.S. Return of Partnership Income)
Under prior law, partnership tax returns were due three and a half months after the end of the year (i.e., April 15). Since the partnership tax return was due on the same day as personal income tax returns, many owners of partnerships (or LLCs taxed as partnerships) did not receive their Form K-1 from the partnership in time to file their personal returns by the April 15 personal income tax deadline.
Beginning with 2016 partnership tax returns, the deadline has been moved up to two and a half months after the end of the partnership tax year (i.e., March 15). Six month extensions to September 15 are available.
It is important to either timely file the partnership tax return or to request an extension. If the return is filed late, the penalty is $195 per owner per month! So if a five member LLC unaware of the new deadline files a partnership tax return on April 15, the return is one month late and the penalty is $975.
Form 1120 (U.S. Corporation Income tax Return)
The deadline for C CORPORATION tax returns has been two and a half months after the end of the corporate year (generally March 15). Beginning with 2016 C corporation tax returns, the deadline has been moved back to three and a half months after the end of the corporate tax year (generally April 15). Since C corporations are not flow-through tax entities, the owner’s personal tax return is not dependent on the filing of the C corporation tax return. Delaying the C corporation deadline and accelerating the partnership tax return deadline therefore makes some sense.
Form 1120S (U.S. Return of S Corporation Income)
No changes here–the deadline is still March 15.
FinCen Form 114 (FBAR)
In prior years, foreign bank accounts had to be reported to the IRS by June 30, and no extensions were allowed. Beginning this year, the due date for FinCen 114 will be April 15 of the following year, but a six month extension will now be allowed. The extension will last to October 15.
Under the Internal Revenue Code, if a due date falls on a holiday or weekend, the return is due on the next business day. Unfortunately, the FinCen 114 form is required under the Bank Secrecy Act of 1970 and not under the Internal Revenue Code–so if the April 15 deadline for FinCen 114 falls on a holiday or weekend, the due date will not be delayed to the next business day (even though the Form 1040 will be delayed to the next working day).
So this tax season, April 15 is on a Saturday and Monday, April 17 is Emancipation Day, so the Form 1040 due date will be April 18. Since the FinCen 114 is outside of the Internal Revenue Code, its due date remains April 15.
Buzzkill Disclaimer: This post contains general tax information that may or may not apply in your specific tax situation. Please consult a tax professional before relying on any information contained in this post.