January 31, 2017
It is now the end of January, the time of year when many people's thoughts turn to the sometimes overwhelming prospect of getting 2016's tax returns completed. Here's five things you need to know about the 2017 tax filing season:
1) New Due Dates
There are new due dates for tax returns in 2017. The IRS made a number of changes to rationalize the due dates, which may provide you with more, or less time to get things completed, depending on your situation. Most notably, please note the following:
Form W-2 and 1099 have a deadline for delivery to recipients, and for efiling with the government of January 31st (previously 3/31 for W-2's, and 2/28 for 1099's).
Individual tax returns (Form 1040) are still due April 18th, with an extension available until October 16th.
Trust tax returns (Form 1041) are still due April 18th, but the extended due date is now October 2nd.
Partnership tax returns (Form 1065) are now due March 15th (previously April 15th). The extended deadline is still September 15th.
S Corporation returns (Form 1120S) are still due March 15th, with an extended deadline of September 15th.
C Corporation tax returns (Form 1120) are now due April 18th (previously March 15th).
Foreign bank account reporting (FinCEN 114) is now due April 18th (previously June 30th), with an extension of time to file available
You will note that since April 15th falls on a weekend, the due date has been extended to April 18th, since April 17th is "Emancipation Day" - a holiday in DC.
2) Consider an Extension
One of the worst mistakes you can make is rushing at the last minute to get your tax return completed. You are far more likely to miss deductions and important details, than if you carefully and methodically work to get your taxes completed. If things get tight at the deadline, carefully consider requesting an automatic extension of time to file your taxes.
Please note - an extension does not extend the time to pay your tax obligations. You will still need to pay what you owe at the normal tax deadline. The extension only extends your time to file the tax return.
3) Organize & Communicate
The key to a smooth tax filing season is organizing your tax documents as they come in, and proactively communicating with your tax advisor. Don't tell your tax advisor on April 15th that you sold a large real estate holding the prior year - he should have known about that when it happened in 2016. If you don't understand something, ask questions with your advisor. If you heard of a tax rule in the news and you think it might apply - ask! If you had a major life event or business deal occur during the year, let your advisor know as it happens.
4) Understand What Happens if You are Late
Sometimes paying or filing your taxes late may not have earth-shattering repercussions. Usually, however, paying or filing your taxes late will bring significant costs. For example, you may be assessed with late filing and payment penalties, or you could miss out on tax elections that must be filed in time to take advantage of.
5) Don't Just Focus on the Tax Return
Getting your tax return completed is not just getting numbers in the right boxes. When your tax return is being prepared, it is time for a holistic view of your financial situation, including tax, financial, and estate planning. Most money-saving tax moves can't be done after the year closes. You need to work proactively with your advisor to make sure your 2017 is set up for the best possible tax outcome.
Here's to a smooth and successful tax filing season for you!
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