In our recent article: Current & Updated Deadlines for IRS Forms, we informed U.S. taxpayers about the new deadline for certain U.S. tax forms, which will apply to the 2016 tax year (due in 2017).
Why You Should Start Planning Now
The changes affect many U.S. tax forms for which the deadline has been pushed forward, providing limited time to work on the tax return. For example: The new deadline for IRS Form 1065, U.S. Return of Partnership Income for a partnership with a December 31 year end, is now the 15th of March. The deadline for an S-Corporation with a calendar year filing IRS Tax Form 1120S will remain the same; March 15. The new deadline for a corporation is the 15th day of the 4th month. For a corporation with a calendar year they will now file on April 15 rather than March 15.
Form W-2 and 1099
In addition, the deadline for Form W-2 and Form 1099 reporting non-employee compensation has been moved ahead to 31st of January. In the past, these forms were required to be given to the taxpayer by January 31, but were not sent to the IRS until February 28 or March 31. This change was made so that the forms are sent simultaneously to the employee and the Social Security Administration (SSA). This will allow the IRS to verify the information included on the employees Form 1040 return and issue refunds sooner.For some tax returns, this change in deadline could be a benefit while for some returns this could be a disadvantage.
For example, in the case of Form W-2, the later deadline provided significant time to rectify any errors on the Form W-2 before submitting the final copy to the IRS. Now that the employer needs to send out the W-2 forms to the SSA sooner, this is no longer possible. Additionally, this will require employers to file a correct and compliant W-2 form. Employees will no longer have to amend their tax returns should the employer decide to change the W-2.
Form 1065 U.S. Return Of Partnership Income
In the case of Form 1065, U.S. Return of Partnership Income, this early deadline could prove to be good. This is because income from the partnership is required to be reported on the individual income tax returns of the partners. The deadline for both the partner (Form 1040) and the partnership (Form 1065) until last year was 15th of April. Now that the deadline for Form 1065 has been moved ahead by a month, partnership business owners can concentrate on filing Form 1065, Partnership return by 15th of March, and the information they need to file the individual returns will be available in advance by the April 15 deadline.
If a corporation is a member of a partnership, the old deadlines saw the corporation tax return due before the partnership return forcing the corporation to file an extension. The new deadline changes fix this dilemma by making the deadline for the partnership, one month earlier than the corporation. This will allow the corporation to have the information available to file the corporate return.
With these changes in deadlines for U.S. tax forms, A.G. Tax LLP recommends that U.S. taxpayers start preparing for their taxes earlier than usual to avoid the peak season rush, and ensure proper tax planning. The change in deadlines is likely to create chaos this tax filing season as this is the first year that the new deadlines would be applicable.
Some taxpayers may experience a delay in receiving their returns. Taxpayers should, therefore, reach out to their tax practitioners to plan their taxes and start working on their tax returns and other tax-related forms as early as possible to avoid any tax filing issues and file a complete and accurate return by the updated deadline.
AG TAX LLP CAN HELP
If you have any tax-related queries, need assistance with tax planning or filing your tax returns please contact us. Our team comprises of highly experienced tax professionals with extensive knowledge of US and Canadian tax laws as well as cross-border compliance.
Furthermore, as a full service accounting firm, AG Tax assures complete assistance with even your most complex tax needs.
We can assist with:
- Canadian Personal and corporate tax returns
- Cross Border Taxation and Business Planning
- US Personal and Corporate Taxation
- Disclosure of Foreign Assets and other information filings
- Retirement planning
- Estate Planning, Inheritance tax advice
To obtain a quote or to arrange for a tax consultation to discuss your queries, please contact us at:
- 604-538-8735 (Greater Vancouver Area, BC)
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Disclaimer: The information in this publication is accurate as of the time of its publication. AG Tax assumes no responsibility for changes to tax legislation subsequent to the publication of this document. The information provided is for general information purposes only and should not be acted upon without seeking professional advice. If you would like to engage our services, please contact our staff and obtain authorization to send our firm confidential information. A client relationship is not created by the transmission of information. A client relationship is only formed with our firm when a scope and engagement letter signed by the firm and the potential client detailing the terms of engagement is present.