Looking Ahead - Forthcoming Changes to Tax Return Due Dates

by Steven Sodini 16. December 2015 15:33

As of July 31, 2015, the U.S. Congress passed legislation that will impact the filing deadlines of certain income tax returns that will be filed in 2017. Under the name of the Surface Transportation Act of 2015 (a.k.a. the Stopgap Highway Bill), Congress intends to generate revenue that will partially finance highway and transportation spending by modifying tax compliance regulations rather than raising taxes on the taxpayers. It is predicted that this legislation will create about $314 million in revenue over the next decade.

The Stopgap bill has modified tax return due dates mainly for partnerships and S corporations. For calendar tax years beginning after December 31st, 2015, these entities’ initial return due dates will be moved from April 15th to March 15th. For non-calendar tax years, the due dates for partnerships and S corporations will be 2 ½ months after their year-end. In addition, calendar year C corporation tax returns will be moved from March 15th to April 15th. Non-calendar year C corporation returns will be due 3 ½ months after their year-end. However, there is one exception for C corporations with year-ends of June 30th. Their returns must still be filed by September 15th until after 2025.

The Foreign Bank Account Report (FBAR) filing deadline will also be changed under this bill moving it from June 30th to April 15th. These new filing deadlines will be effective for tax years starting after December 31st, 2015, thus returns filed in 2017 are where these deadlines will apply to taxpayers.

Automatic extensions will be available for C corporations with tax years other than calendar year, however, the IRS will effectively modify extension filing rules for all applicable entities including partnerships, S corporations, and trusts.

This bill will have a positive impact on taxpayers’ returns. With earlier deadlines for certain entities, taxpayers will be able to receive their Schedule K-1’s sooner and ultimately file their individual and corporate tax returns by their initial due dates, thus reducing the amount of extended and/or amended tax returns. For tax preparers, this will also create ease in managing their clients’ initial due dates and extensions.

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