If up seems down to you this tax season, you might be a small business owner. A new law which kicks in for the tax year 2016 has flipped due dates for some corporate and partnership tax returns due in 2017.
One important change that affects small businesses: the due dates for C corporations and partnerships have flipped. Fortunately, the due dates for S corporations remain the same (S corporations file more than 70% of corporate returns) so that tax preparation season isn’t terribly lopsided for most tax preparers.
The law also changed due dates for taxpayers with foreign assets – those pesky FBARs – and tweaked dates for extensions.
Here’s a quick look at what’s different in 2017:
- With respect to partnership and S corporation tax returns, the new due date is March 15 for calendar year partnerships and the 15th day of the third month after the close of the fiscal year for fiscal year partnerships. Note that this is a month earlier than the previous due date of April 15. With respect to C corporation returns, the new due date is the 15th day of the fourth month following the close of the corporation’s year (that would be April 15 for a calendar year-end corporation). Note that this is a month later than the previous due date of March 15 for calendar year-end corporations. In both cases (partnership returns and corporate returns), the new law allows for a six-month extension with exceptions for certain corporations through 2026. All of these changes apply to returns for tax years beginning after December 31, 2015, with one exception: C corporations with fiscal years ending on June 30 have ten extra years (yes, ten) to make the change.
- The new law also changes the due date for foreign trust reporting. The due date of Form 3520–A, Annual Information Return of a Foreign Trust with a United States Owner, has been changed to the 15th day of the third month after the close of the trust’s tax year (remember that trusts can have flexible tax years). The due date of Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts, for calendar year filers has been changed to April 15.
- Here’s a big one: The new law changes the due date for the FinCEN Report 114 relating to Report of Foreign Bank and Financial Accounts (replacing the old “FBAR return”) to April 15 (April 18 for 2017). Remember that the due date used to be June 30 so this is significantly earlier. Fortunately, there’s now an extension available (see below).
- The new law modifies the time allowable for extension of time to file for several returns. For form 1065: 6-month period ending on September 15 for calendar year taxpayers. For form 1041: 5½-month period ending on September 30 for calendar year taxpayers. For form 5500: automatic 3½-month period ending on November 15 for calendar year plans. For form 990 (series): automatic 6-month period ending on November 15 for calendar year filers. For forms 4720, 5227, 6069, 8870: automatic 6-month period beginning on the due date for filing the return. For forms 3520–A and 3520: 6-month period. And for the first time ever, the FinCEN Report 114 has a 6-month period ending on October 15 (with extension rules similar to those at Treas. Reg. section 1.6081–5).
- With respect to extensions for FinCEN 114 (FBARs), the IRS has confirmed that “[t]o implement the statute with minimal burden to the public and Fin CEN, Fin CEN will grant filers failing to meet the FBAR annual due date of April 15 an automatic extension to October 15 each year. Accordingly, specific requests for this extension are not required.“ In other words, if you’re looking for an extension form on the site, there’s no need: you don’t need one. However, if you need to extend your income tax return at the same time, you will need a separate form for the income tax return extension.
- The new due dates apply to taxable years beginning after December 31, 2015. That means that they’ll apply to the tax year 2016 (the returns you’ll file in 2017) for most taxpayers.
To keep those dates straight, here’s a handy-dandy due date chart:
* Remember that dates for fiscal year taxpayers will vary depending on the year-end.
With respect to extensions, you can request an automatic six-month extension for forms 990, 1040, 1065, 1120 and 1120S. You can request a 5½-month extension for form 1041. And new for 2017, request a six-month extension for FBARs. Some exceptions apply, so always check the instructions for the applicable form. You also can check this prior post for more information.
