Tax season officially begins on January 19, 2016. That will be the first date that IRS will accept returns for the 2015 tax year. That means that there will be just over 3 months to get those returns and extensions filed.
But for many people, tax season won’t begin until February 2 or later. According to the law, W-2s and most 1099s, etc., do not have to go out in the mail until January 31, or in this year’s case, because January 31 was on a Sunday, there is an automatic extension granted to February 1. So that 1099 you might receive on February 2 was still sent to you on a timely basis if it was postmarked by February 1.
Remember a few years ago when you received 6 different 1099s from the same brokerage firm, and they kept revising the allocation of dividends between long term capital gains, nontaxable, etc., because they also received late information? So the rules were changed to try and minimize that by giving brokerage (and mutual fund) companies until February 15 to send out the forms. February 15 falls on Presidents’ Day, a Federal holiday, so they have an automatic extension until Tuesday, February 16.
Do you have an ownership interest in an S Corporation or through your investments, in a Publicly Traded Partnership? The Corporate returns are due on March 15 (not a holiday or weekend!) and if the return does not go on extension, you should receive your K-1 (the report of income you need to pick up on your personal return) somewhere shortly thereafter. Again, provided the corporate return does not go on extension.
But what about the partnerships? For 2015 returns, they are not due until Friday, April 15, 2016. Oh wait, that is Emancipation Day in Washington, DC so the returns are then due on Monday, April 18, 2016. Except for the state returns due in Massachusetts, Maine or Wisconsin which celebrate Patriots Day. Those state returns (not the Federal returns) are due on Tuesday, April 19, 2016.
But back to the partnerships … if those returns are due the same date as the 1040s, how do you file your return on time? Especially if you don’t get the forms on time.
The answer is “you shouldn’t.” You should not stress, find a CPA that can help you estimate the amount of taxes that will be due on April 15 (or 18), and then just file for an extension waiting until you get all the forms you need to properly file your return.
As long as you pay at least 90% of the total tax shown on your return, there are no penalties and you should not have a “late” filed return. There may be interest charged but at very low rates, equal to or perhaps even lower than the interest you are getting in your bank.
IRS does not look negatively at returns placed on extension. They do not receive special scrutiny, particularly when e-filed. An amended return because you filed early and then have to change the return because of late info has to be processed manually. That does mean more scrutiny.
So, yes, dates matter when it comes to tax returns. But a good CPA will help you understand them and comply with all filing requirement.
© 2016, Mark N Gulko, All rights reserved