New Law Changes Business Tax Filing Deadlines

August, 2015

By Steven G. Horn, CPA and Tax Partner

“Highway Bill” changes filing dates for partnerships, C Corporations and foreign bank account reports (FinCEN 114); also affects Estate returns and mortgage statements.

On Friday, July 31st, President Obama signed the “Highway Bill” (H.R. 3236) into law. While the purpose of the law is to provide an extension of Federal aid from the Highway Trust Fund for highways and transportation and flexibility to the Department of Veterans Affairs for health care services, the new law also includes provisions that will affect businesses. http://wblcpa.com/new-law-changes-business-tax-filing-deadlines/The Highway Bill affects tax return due dates, provides for more consistent basis reporting between an Estate and its beneficiaries, and affects the level of detail being provided on mortgage information statements.

 Changes to Tax Form Filing Deadlines

The most significant change included in the new law impacts tax return filing due dates for partnerships, C Corporations and foreign bank account reporting (FinCEN 114).  The table below describes the changes that affect tax return due dates.

Tax Form Filing Date Changes

Type of form Previous filing deadline New filing deadline Takes effect
Partnership tax returns 3-1/2 Months After Year-End (April 15 for calendar taxpayers) 2-1/2 Months After Year-End (March 15 for calendar taxpayers) Tax year beginning AFTER 12/31/15
C Corporation tax returns* 2-1/2 Months After Year-End (March 15 for calendar taxpayers) 3-1/2 Months After Year-End (April 15 for calendar taxpayers) Tax year beginning AFTER 12/31/15
S Corporation tax returns 2-1/2 Months After Year-End (March 15 for calendar taxpayers) No change No change

*Exception:  For C Corporations with a June 30 year-end, the change noted above will not take effect until AFTER 12/31/25.  Until then, such corporations will have a September 15 filing deadline.

 Changes to Length of Extensions

The law also modifies the maximum extensions allowed for returns with taxable years beginning after December 31, 2015. The following are the revised extended due dates for calendar year taxpayers:

Tax Form Extension Date Changes

Type of form Previous length of extension New length of extension New due date for calendar years
Partnership Form 1065 5 months 6 months September 15
Trust Form 1041 5 months 5.5 months September 30
Exempt Benefit Plan Form 5500 2.5 months 3.5 months November 15
Exempt organizations Form 990 (series) Up to two separate 3-month extensions 6 months November 15
Exempt organizations Form 4720 3 months 6 months November 15
C Corporation tax return* 6 months from March 15 5 months from April 15 September 15
Trust Form 5227 Up to two separate 3-month extensions 6 months October 15

* Beginning after tax year 12/31/25 this will become a 6 month extension due October 15.

Change Affecting Taxpayers with Foreign Bank Accounts

Taxpayers with bank accounts outside the United States must file a FinCEN Report 114 with the Report of Foreign Bank and Financial Accounts (FBAR).  The FinCEN Report 114 will now be due April 15th and for the first time, a maximum 6 month extension, due October 15th, is allowed.

Foreign Bank Account Filing Date Change

Type of form Previous due date New due date Extension
FinCEN Report 114 June 30 April 15 6 month extension (10/15)

Other items of interest included in the “Highway Bill”

The Highway Bill also includes a section that is intended to address previous inconsistencies with the way that basis of assets is reported when a taxpayer acquires property from an Estate. The new law now requires the executor of an estate to furnish a statement that identifies the value of the asset at the time of the decedent’s death to the IRS as well as to each person acquiring any of the decedent’s assets.  This statement is to be filed 30 days after the estate return is required to be filed or 30 days after the date the return was filed, whichever is earlier. There may now be penalties assessed for inconsistent basis reporting for estate tax returns filed after the date of the enactment of the Act (July 31, 2015).

Mortgage statements will now include the amount of outstanding principal as of the beginning of the calendar year, the date of the origination of the mortgage and the address (or other description if a property without an address) of the property which secures the mortgage.  This new information reporting will be effective for those statements required to be furnished after December 31, 2016.

To discuss these changes with a WBL tax professional, please contact us at 770-512-0500 or visit our web site at www.wblcpa.com.

 

* * * * *

Leave a Reply

Your email address will not be published. Required fields are marked *