Human beings are creatures of habit. We clearly see that in the tax side of our practice - our returning customers almost always file the same week they did the previous year. For some people that may be in February; for others, March, April or even later in the year.
Beginning with the 2017 calendar year (the 2016 income tax filing season), the IRS has a rude awakening with some changes to tax filing deadlines.
The three major changes for 2017 relate to the partnership (1065) tax filing deadline and to the foreign information reporting requirement, often referred to as FBAR.
The changes are as follows:
- The partnership tax filing deadline will change from April 15 to March 15.An extension of a partnership tax return will still result in an extension until Sept. 15.The penalty for late filing of a non-extended partnership tax return will still be $195 per partner for each month it is late.
- The FBAR filing requirement, necessary to report foreign bank and investment accounts for individuals with over $10,000 in accounts overseas, is pulled in from June 30 to April 15. There will be a new extension available for the FBAR filing requirement that will extend the return due date until Oct. 15. There can be stiff penalties - $10,000 and up - for not filing a FBAR return or filing it late under certain conditions.
- W-2s must be filed with the Social Security Administration (SSA) by Jan. 31. In the past, electronic filing of W-2s could be submitted as late as the end of March. There is an option to apply for a one-month extension on the Jan. 31 filing requirement but it is not an automatic extension.
If you are involved in a partnership or have FBAR or W-2 filing requirements, start planning now for these changes in your preparation for the tax filing process. You typically can't decide today that you want to go in tomorrow to see your CPA and drop off information to file your taxes. It's normally a process to gather the necessary information to complete your return.
Although these changes were advocated by the American Institutes of CPAs, they are going to put additional strain on CPA firms, as additional time-intensive returns will be due on March 15. The positive side to this change is that there will be a time differential between the partnership filing deadline and individual filing deadline, allowing for more individual returns to be filed on time.
My goal with this article was to help you avoid surprises with changes to the tax filing deadline this coming spring.
Adam Shay, CPA (N.C. License Number 35961), MBA, is managing partner of Adam Shay CPA, PLLC. He focuses on minimizing taxes and improving the financial results of entrepreneurs, and is actively involved in supporting the Wilmington entrepreneurial and startup community. For more information, visit http://www.wilmingtontaxesandaccounting.com/ or email him at [email protected]. He can also be reached by phone at (910) 256-3456.