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 1st (yes, next week).
The deadline for pass-through business entities is March 15th. 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 and file their own 1040 by the April filing deadline (April 18th this year, or the 19th for those lucky enough to live in Maine or Massachusetts) . If you have a C Corporation (which is not a pass through tax structure), your deadline is also April 18th (or 19th), 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 less than three 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. And of course 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 need to 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 the April deadline, and a filing extension does not change that deadline.
The IRS it seems doesn’t care so much about all the paperwork we create in our complex lives getting to them by the first deadline, but they sure care about the money arriving on time!