The First Major Deadline of the Tax Season is Looming!
Many people think of the IRS filing deadline as April 15th. Simple right? In fact, there are deadlines all year long, something different every month. IRS Publication 509 has the outlines, if you want a quick search to look something up. If you are in certain industries, you likely know you have different deadlines; like farmers and fisherman who have not paid their estimated tax by January 15th must file by March 2nd (yes, just two weeks away) . The deadlines for pass-through business entities is March 16th. If you think about it, that deadline makes sense, as an S Corporation or a Partnership return is prepared so that a K-1 from the entity can be issued to the owners, with enough time for them to use that document to prepare their own 1040 by the April 15th deadline. If you have a C Corporation (which is not a pass through tax structure), your deadline is April 15th, as there is no K-1 and the tax is due from the entity and not the owners as individuals.
So…
If you are an S Corporation or a Partnership, you now have four weeks to file!
What if you are not ready?
The IRS allows the filing deadline for these returns to be extended. By requesting an extension, you are allowed an additional six months, until September 15th, to file, but that is the final deadline. The result, however, of putting your business entity on extension is that you cannot prepare or file your personal tax return before the business return is complete, since you need the K-1 from the business return to file the personal. So, for most people, if the business return is going on extension then they might as well put the personal 1040 on extension as well. If you put a business return on extension, you don’t calculate a tax amount due by the March 15th deadline, as the K-1 carries the liability to the personal return. But caution!!: If you extend your personal return, you get more time to send in paperwork, but NOT more time to pay the tax due. ALL TAXES are still due by April 15th, and a filing extension does not change that deadline. The IRS it seems doesn’t care so much about all the paper we create in our complex lives getting to them on the first deadline, but they sure care about the money arriving on time!