{"id":1029,"date":"2015-10-19T17:54:58","date_gmt":"2015-10-19T22:54:58","guid":{"rendered":"https:\/\/taxprocenter.proconnect.intuit.com\/?p=1029"},"modified":"2016-07-30T13:05:21","modified_gmt":"2016-07-30T18:05:21","slug":"why-tax-return-due-dates-are-important","status":"publish","type":"post","link":"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/why-tax-return-due-dates-are-important\/","title":{"rendered":"Why Tax Return Due Dates are Important"},"content":{"rendered":"<p><span style=\"font-weight:400;\">This summer, Congress passed, and President Barack Obama subsequently signed, legislation that modified the due dates for several common tax returns. The due date legislation, which was a revenue provision of a highway bill (Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, <\/span><a href=\"https:\/\/www.congress.gov\/114\/plaws\/publ41\/PLAW-114publ41.pdf\" data-wa-link=\"body_congress-p141\" target=\"_blank\"><span style=\"font-weight:400;\">P.L. 114-41<\/span><\/a><span style=\"font-weight:400;\">), applies to the 2017 filing season (2016 tax returns).<\/span><\/p>\n<p><span style=\"font-weight:400;\">Congress passed the much-needed legislation at a time when many practitioners could appreciate its future impact\u2014a mere six weeks before the crunch of the Sept. 15 extension deadline. A chart of the new dates <\/span><a href=\"http:\/\/www.aicpa.org\/Advocacy\/Tax\/TaxLegislationPolicy\/DownloadableDocuments\/Due-Dates-Summary-Chart.pdf\" data-wa-link=\"body_aicpa-duedates\" target=\"_blank\"><span style=\"font-weight:400;\">can be found here<\/span><\/a><span style=\"font-weight:400;\">.<\/span><\/p>\n<p><span style=\"font-weight:400;\">Let\u2019s examine why the tax return due date change was needed and what it means for practitioners.<\/span><\/p>\n<p><b>Why the Changes Were Needed<\/b><\/p>\n<p><span style=\"font-weight:400;\">The AICPA has been advocating for changes to various tax return due dates since 2006. That\u2019s when members <\/span><a href=\"http:\/\/www.thetaxadviser.com\/issues\/2014\/apr\/dc-currents-apr2014-vm.html\" data-wa-link=\"body_taxadvisor-42016\" target=\"_blank\"><span style=\"font-weight:400;\">started<\/span><\/a><span style=\"font-weight:400;\"> voicing concerns that taxpayers and preparers were struggling with due date problems. Specifically, problems were created when flowthrough entities\u2019 Schedules K-1, Partner\u2019s [or Shareholder\u2019s] Share of Income, Deductions, Credits, etc., containing investment information provided by partnerships and S corporations, arrived late. Sometimes these Schedules K-1 arrived within days (before or after) of the extended due date of their partners\u2019\/owners\u2019 personal returns (Oct. 15), and sometimes they arrived up to a month after the extended due date of their partners\u2019\/owners\u2019 business returns (Sept. 15).<\/span><\/p>\n<p><span style=\"font-weight:400;\">Late Schedules K-1 made it difficult, if not impossible, to file a timely, accurate return. Often, practitioners were forced to use estimates to file final Forms 1040, U.S. Individual Tax Return, because partnership tax returns were due the same day (and needed to use estimates in filing final Forms 1120, U.S. Corporation Income Tax Return, due a month prior to the partnership due date). The AICPA Tax Division <\/span><a href=\"http:\/\/www.aicpa.org\/Advocacy\/Tax\/Partnerships\/DownloadableDocuments\/Due%20Date%20Letter%20and%20Bill%20-%20Final.pdf\" data-wa-link=\"body_aicpa-dueDate\" target=\"_blank\"><span style=\"font-weight:400;\">found<\/span><\/a><span style=\"font-weight:400;\"> that much of the issue related to late Schedules K-1 were a result of the increasing quantity and complexity of flowthrough entities. The interconnection of business entities and those that own them demanded a more logical flow of information between parties.<\/span><\/p>\n<p><b>Why the New Due Dates are Helpful<\/b><\/p>\n<p><span style=\"font-weight:400;\">The new law, which has the Form 1065, U.S. Return of Partnership Income, as the first tax return due, is both logical and helpful to many types of entities. That\u2019s because all other entities and individuals can be partners in a partnership and may need (and will have starting in the 2017 filing season) information from Schedules K-1 from partnership investments in order to timely and accurately complete their tax returns. Note that practitioners and partnerships that still need time to complete the preparation of the partnership tax return will still be able to extend the return until Sept. 15.<\/span><\/p>\n<p><span style=\"font-weight:400;\">Once partnership and S corporation returns have been filed by March 15, and owners have received their Schedules K-1, individuals, trusts, and C corporations will have the information they need from their passthrough entity investments to file accurate and timely returns. Trusts will have two more weeks after receiving extended partnership and S corporation Schedules K-1 to complete their extended tax returns and issue their extended Form 1041, U.S. Income Tax Return for Estates and Trusts, and Schedules K-1 to beneficiaries, who will have an additional two weeks to complete their extended personal returns. Taxpayers with foreign accounts will have all the information needed to complete FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), at the same time as the individual tax return (April 15, and can be extended until Oct. 15).<\/span><\/p>\n<p><span style=\"font-weight:400;\">C corporations will largely benefit from the due date changes. Calendar-year C corporations will get an extra month to April 15 and Oct. 15 to file their returns, although the corporate extensions generally change after 2025. Many C corporations previously needed to extend their returns because they were waiting on audited financial statements, which typically arrive by the end of March. These corporations may no longer need to extend the income tax return, filing by the new original due date of April 15 (or the 15th day of the fourth month following the close of the tax year for most fiscal-year corporations). Note that the due dates for estimated tax payments do not change.<\/span><\/p>\n<p><b>What it Means for Practitioners and Taxpayers<\/b><\/p>\n<p><span style=\"font-weight:400;\">Workload compression was a major consideration for the member-driven AICPA Tax Division in <\/span><a href=\"http:\/\/www.aicpa.org\/advocacy\/tax\/pages\/duedatesproposal2010.aspx\" data-wa-link=\"body_aicpa-duedatesprop\" target=\"_blank\"><span style=\"font-weight:400;\">working<\/span><\/a><span style=\"font-weight:400;\">toward a more logical flow of information between taxed entities. In developing our ultimate <\/span><a href=\"http:\/\/www.aicpa.org\/advocacy\/tax\/partnerships\/downloadabledocuments\/due%20date%20letter%20and%20bill%20-%20final.pdf\" data-wa-link=\"body_aicpa-duedateltr\" target=\"_blank\"><span style=\"font-weight:400;\">proposal<\/span><\/a><span style=\"font-weight:400;\">, we surveyed more than 30,000 AICPA members and worked closely with a task force and several technical resource panels as well as many state societies. In the end, it became clear that based on administrative constraints of the IRS, a perfect solution (for all practitioners and taxpayers) would not be possible; however, taken as a whole, the AICPA thinks that the new law is better than the prior-law due dates.<\/span><\/p>\n<p><span style=\"font-weight:400;\">As the AICPA developed the<\/span><a href=\"http:\/\/www.aicpa.org\/advocacy\/tax\/pages\/duedatesproposal2010.aspx\" data-wa-link=\"body_aicpa-duedatesprop\" target=\"_blank\"><span style=\"font-weight:400;\"> legislative proposal<\/span><\/a><span style=\"font-weight:400;\">, we realized that a due date change to achieve most of the desired outcomes would mean shorter deadlines for some entities and extended due dates for others. Some members may experience \u201cgrowing pains\u201d as they work to retrain their clients and reorder some of their internal staffing. However, the hope is that over a short period of time, CPAs and their clients will be able to adjust to the new filing dates and that extensions may help practitioners balance all the returns they need to file. Overall, the new law should produce a more logical flow of information for practitioners and clients.<\/span><\/p>\n<p><span style=\"font-weight:400;\">For the 2017 filing season and beyond, taxpayers and practitioners should start to see that they have timely and accurate information needed from flowthrough entities\u2019 Schedules K-1. Taxpayers and practitioners also should have to deal with fewer estimates, extensions, and amended returns. The tax return preparation process should go smoother and more efficiently.<\/span><\/p>\n<p><span style=\"font-weight:400;\">Practitioners preparing extended Form 1041 trust and estate income tax returns will welcome the additional two weeks to Sept. 30 (compared to the current Sept. 15 extended deadline) to complete extended Forms 1041. This delayed extension date for trusts (and the eventual Oct. 15 calendar-year corporate extension) will also help many practitioners in spreading the current Sept. 15 nightmare workload of extensions.<\/span><\/p>\n<p><span style=\"font-weight:400;\">Taxpayers with foreign bank accounts will be able to file their FinCEN Form 114 when they have the necessary information and are filing their personal income tax return, including, for the first time, being able to extend it until Oct. 15.<\/span><\/p>\n<p><span style=\"font-weight:400;\">In addition to the improved logical flow of information, practitioners who file Forms 990 will find the extension process to be simplified, eliminating the need to file two extension requests.<\/span><\/p>\n<p><b>Moving Forward<\/b><\/p>\n<p><span style=\"font-weight:400;\">The tax return due dates legislation was a major success for the profession and will benefit many taxpayers and practitioners for years to come. Many states are likely to follow the federal changes and may need to enact legislation to change their due dates to conform to the new federal dates. The AICPA Tax Division will continue to listen to, and work with, members to advocate for additional ways to simplify and make the tax system better for taxpayers and practitioners.<\/span><\/p>\n<p><span style=\"font-weight:400;\">For example, we continue to advocate (as we did in <\/span><a href=\"http:\/\/www.aicpa.org\/Advocacy\/Tax\/TaxLegislationPolicy\/DownloadableDocuments\/AICPA%27S%20TESTIMONY%20ON%20SENATE%20FINANCE%20COMMITTEE%20HEARING%20ON%20APRIL%2016,%202013.pdf\" data-wa-link=\"body_aicpa-commiteehearing\" target=\"_blank\"><span style=\"font-weight:400;\">April 2013<\/span><\/a><span style=\"font-weight:400;\">, <\/span><a href=\"http:\/\/www.aicpa.org\/Advocacy\/Tax\/DownloadableDocuments\/AICPA-Comments-on-Discussion-Draft-on-Tax-Administration.pdf\" data-wa-link=\"body_aicpa-taxadmin\" target=\"_blank\"><span style=\"font-weight:400;\">Jan. 2014<\/span><\/a><span style=\"font-weight:400;\">, <\/span><a href=\"http:\/\/www.aicpa.org\/Advocacy\/Tax\/DownloadableDocuments\/Tax-Refund-Theft-Prevention-Comment-Letter-Final.pdf\" data-wa-link=\"body_aicpa-theftprev\" target=\"_blank\"><span style=\"font-weight:400;\">Dec. 2014<\/span><\/a><span style=\"font-weight:400;\">, and <\/span><a href=\"http:\/\/www.aicpa.org\/Advocacy\/Tax\/DownloadableDocuments\/2015-09-15-Prevent-ID-Theft-and-Tax-Refund-Fraud-Comment-Letter-FINAL.pdf\" target=\"_blank\"><span style=\"font-weight:400;\">Sept.2015<\/span><\/a><span style=\"font-weight:400;\">) for additional proposed changes related to the increasing problem of late and amended Forms 1099 by brokerage firms, often requiring the filing of an amended return. To help members who may have questions about the newly enacted due date changes, the AICPA Tax Division has developed resources, including a <\/span><a href=\"http:\/\/www.aicpa.org\/Advocacy\/Tax\/TaxLegislationPolicy\/DownloadableDocuments\/Due-Dates-Summary-Chart.pdf\" data-wa-link=\"body_aicpa-summaryChart\" target=\"_blank\"><span style=\"font-weight:400;\">chart<\/span><\/a><span style=\"font-weight:400;\"> of the due dates and a <\/span><a href=\"http:\/\/www.aicpa.org\/InterestAreas\/Tax\/CPEAndEvents\/DownloadableDocuments\/2015-09-16%20Washington%20Tax%20Brief%20Presentation%20Slides.pdf\" data-wa-link=\"body_aicpa-slides\" target=\"_blank\"><span style=\"font-weight:400;\">PowerPoint presentation<\/span><\/a><span style=\"font-weight:400;\"> and archive of the recent free special Washington Tax Brief <\/span><a href=\"http:\/\/www.aicpa.org\/News\/AICPATV\/Pages\/home.aspx?bctid=4499611579001\" target=\"_blank\"><span style=\"font-weight:400;\">webcast<\/span><\/a><span style=\"font-weight:400;\"> held on Sept. 16 to further assist and communicate the changes for tax filing season 2017.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>This summer, Congress passed, and President Barack Obama subsequently signed, legislation that modified the due dates for several common tax returns. The due date legislation, which was a revenue provision of a highway bill (Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, P.L. 114-41), applies to the 2017 filing season (2016 tax<\/p>\n","protected":false},"author":107638106,"featured_media":1036,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rkv_browse_by_id":0,"rkv_cta_id":0,"rkv_optimize_for_pagespeed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"useModifiedDate":false,"customPublishDate":"","_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_wpas_customize_per_network":false},"categories":[509474089],"tags":[],"intuit_collection":[],"intuit_series":[],"coauthors":[509474120],"class_list":["post-1029","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tax-law-and-news"],"header_image":"","yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.3 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Why Tax Return Due Dates are Important - Tax Pro Center | Intuit<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/accountants.intuit.com\/taxprocenter\/tax-law-and-news\/why-tax-return-due-dates-are-important\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why Tax Return Due Dates are Important - Tax Pro Center | Intuit\" \/>\n<meta property=\"og:description\" content=\"This summer, Congress passed, and President Barack Obama subsequently signed, legislation that modified the due dates for several common tax returns. 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