The corporate tax deadline has recently passed and the individual, partnership and fiduciary filing deadlines are fast approaching on April 15th. Tax deadlines can definitely create stress and uneasiness for taxpayers and tax preparers alike. There are many remedies for dealing with tax deadline stress. The first is early preparation which is painfully obvious but if you are reading this and have not adequately prepared at this point, that strategy isn’t very valuable to you now. Another method of dealing with the stress is seeking professional assistance with the preparation of your tax returns. I can’t count the times I have met with a new client for the first time and heard the client speak of apprehension and fear for the tax deadline and the tax preparation process only to see them leave my office taking calm, deeper breaths and having peace of mind about meeting the filing deadline and moving forward with more enjoyable aspects of life.
I have a few clients who are not clear on the details of the tax deadline. For C-corporation and individual income tax returns, the respective March and April deadlines are shaped by two separate deadlines. The first is the filing of the income tax return by these initial deadlines. If information is missing or other reasons make filing the return by the initial deadline impossible, an extension can be requested which allows more time to gather the necessary documents to file a complete and accurate return. Filing extensions are automatically granted if the request is made by the initial filing deadline. If a corporate or individual return is not successfully extended by the initial deadline and tax is later determined to be owed for the prior year, late filing penalties will be assessed.
The second deadline to consider is the tax payment deadline. Again, for C-corporations (March deadline) and individuals (April deadline), any remaining tax liability for the prior year must be paid by the initial filing deadline. Receiving an extension of time to file the return does not extend the time to pay any remaining tax due – the amount due is still due on the initial deadline. This forces the taxpayer to estimate what they might still owe for the prior year and make a payment by the initial deadline to avoid potential late payment penalties. In summary, the taxpayer must consider both late filing and late payment penalties as the deadline approaches and the return can’t be filed timely.
In recent years, the IRS has also employed stiff penalties for late filing of partnership and S-corporation returns. While there are generally no late payment penalties associated with these returns, the late filing penalty has become quite substantial so it is vital to request an extension for any partnership or S-corporation returns by the initial deadline.
The initial filing deadline for calendar year corporate returns (C-corp and S-corp) is generally March 15th (unless the 15th falls on a holiday or weekend in which case the deadline is the next business day after the 15th) and an extension grants another six months until September 15th. The initial filing deadline for individual, partnership and fiduciary returns is generally April 15th (once again, unless the 15th falls on a holiday or weekend). An individual return extension grants an additional six months to file until October 15th. A partnership extension grants an additional five months to file until September 15th. A fiduciary return extension grants an additional three months to file until July 15th but a second extension can also be granted for an additional three months to file until October 15th.
If you have not yet filed your 2014 income tax returns, we can help. Contact us to discuss your filing needs. Tax season doesn’t have to be stressful – you can adequately deal with it without worrying yourself sick!