Reminder: IRS Changes Filing Due Dates, including Information Returns
September 27, 2016
As the year comes to an end, start planning for the new income, payroll and information return due dates now.
After many years of complaints by both taxpayers and tax preparers, Congress passed legislation which established new filing dates (and extended due dates) for income and payroll tax returns, as well as certain information returns (W-2s, 1099s, etc). The intent was to allow more time, both for taxpayers to prepare their returns and for the IRS to process tax filings that may impact one another. By making these changes, the IRS hopes to alleviate some of the tax fraud which has been rampant in recent years.
As the year comes to an end, we strongly suggest that you use the last quarter of the year to update your employee and vendor tax information. With the short window in January to complete information returns, taxpayers will be hard-pressed to meet these new deadlines without advanced planning. Technology companies in particular often have a higher level of Form 1099 reporting than most companies, due to the use of outside developers, increased attorney fees for legal services around funding and intellectual property and payments to independent contractors for services such as accounting, bookkeeping and marketing. (Note: any fees paid for legal services, regardless of entity structure, must receive a Form 1099).
Vendor information can be updated by using Form W-9, and employee information can be updated by using Form W-4.
In addition to the new due dates, the penalties for late filing of information returns have been increased to:
- Up to 30 days late – $50 per return
- Over 30 days, but before Aug. 1 – $100 per return
- After Aug. 1 – $250 per return
- Intentional disregard – $500 per return
These penalties apply to both the return that must be filed with the IRS and the copy that must be sent to the taxpayer.
Beginning with tax returns after Dec. 31, 2015, the new due dates are as follows:
Forms 1099: The new date for filling 2016 Forms 1099-MISC for both the recipient and the government will be Jan. 31, 2017. This is a major change, as taxpayers generally had until March 31 to file the copy with the government. This form reports payments to independent contractors, payments for legal services and other miscellaneous income. All other Forms 1099 are due on Feb. 28, if filed by paper, or March 31, if filled electronically.
Form W-2: 2016 Forms W-2 and W-3 with IRS or SSA will be due on Jan. 31, 2017. Extensions are no longer automatically filed, but companies may request a 30-day extension by submitting Form 8809.
FinCEN 114 (Foreign Bank Account Report): The new due date will be April 15, with an extension of six months, or Oct. 15.
Form 1065 (Partnerships): The new due date for filing partnership tax returns will be March 15, 2017, with an automatic six-month extension until Sept. 15, 2017. Taxpayers should be aware that if a short period tax return arises in 2016 (technical termination, buyout, etc.), the new due date would be the fifteenth day of the third month after the change.
Form 1120 (C-corporations): For C-corporations, the new due date for calendar year tax returns will be April 15, and there will be a maximum extension of five months, or Sept. 15. For fiscal year-ends other than Dec. 31 and June 30, the new due date will be the fifteenth day of the fourth month, with a six-month extension to the fifteenth day of the tenth month. Returns for fiscal corporations with a June 30 year-end will be due on the fifteenth day of the third month, or Sept. 15, with a seven-month extension, or April 15.
Note: Form 1120S (S-corporations) will continue to have a due date of March 15 with an automatic six-month extension until Sept. 15 for calendar year corporations.
Form 1041 Extension: The original due date will continue to be April 15; however, a taxpayer can extend up to five and a half months, or Sept. 30, rather than Sept. 15 prior to this change.
Questions about filing due dates and how they may impact your 2016 taxes? Need help filing your 1099s? Contact Charles Webb, partner, at [email protected]
Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or under any state or local tax law or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Please do not hesitate to contact us if you have any questions regarding the matter.
About the Author
Partner At Aprio Charles is a partner in Aprio’s Technology & Biosciences and International Services groups. He has more than 25 years of experience providing tax planning, tax compliance and strategic analysis to his clients. Charles is adept at serving the needs of startups and other emerging companies. He has been an entrepreneur himself and understands firsthand the needs and challenges growing companies face.