New Federal Filing Deadlines

Taxpayers who receive Schedule K-1 information from their pass-through investments know all too well the difficulties of filing their tax returns on a timely basis. The window between when a Schedule K-1 is received until when they have to report the information to meet the filing deadline seems narrower every year. Recently, Congress passed legislation which modifies the filing due dates for the most common tax returns. The new rules will go into effect with 2016 tax returns due in 2017.

Previously, one of the most obscure due dates was for partnerships and C corporations. Partnerships had a due date of April 15, while C corporations had a due date of March 15. This is where most of the timing issues arose. A corporation may have an interest in a partnership; however, the corporation was previously required to file its return before receiving the final information from that partnership.

The partnership due date was also the same for individuals, which caused similar headaches. An individual who has an interest in a partnership and had yet to receive his or her Schedule K-1 either had to use estimates to file the final 1040 or had to request an extension.

The new legislation reverses the deadlines, with partnership returns now due March 15 and C corporation returns due April 15. The extended due dates for these two types of returns will still have the same due date of September 15.

Some of the other filing due date changes are for estates and trusts. Extended returns for estates and trusts, which were previously due September 15, will now be due September 30, providing an extra two weeks for completion. Please see Figure 1 below for a full list of all the new filing changes.

Another important filing due date change is for taxpayers who file a FinCEN 114, (Report of Foreign Bank and Financial Accounts). Currently, the FinCEN 114 is due June 30. With the new legislation, the FinCEN 114 will now be due the same day as individual returns, which is April 15. Additionally, taxpayers will have the option to extend their FinCEN returns to October 15, which previously was not permitted.

These new due dates will provide a time cushion for the proper filing of returns that receive pass-through information. With partnerships returns being due first, entities will be able to provide investors with the necessary pass-through information required to file corporate, individual, and estate and trust returns in a timely manner. Corporations and individuals may no longer need to extend or file returns with estimates, therefore potentially reducing the number of amended returns later on. Initially, contemplating the preparation and filing of partnership returns filed or extended earlier than usual may seem a bit overwhelming. However, these new filing changes will provide improved flow of information.

Click here to view the AICPA chart for complete access to all the proposed changes.