Updates

A change the IRS made last year will have its first consequences next Tuesday, as the due date for partnership and trust returns on extension will be September 15 this year, a month earlier than last year.

The IRS made this change to insure that taxpayers have time to digest their K-1s from these entities before having to file their own extended returns on October 15.  Previously partnerships and trusts had the same extended due dates.  That meant some taxpayers would end up either receiving their K-1 just before they had to file, or even not end up actually getting delivery until after their date date had passed.

However, the rule applies to all entities, including those for which no one might care if the K-1 came out at the same time as an individual return was completed.  The penalty for late filing is imposed on a per month, per partner/beneficiary level at $89 apiece–so a two person partnership that filed on October 5 would initially face a penalty of $178.  While the penalty can be waived if reasonable cause is shown (and, in some cases, that relief may apply automatically) it will still mean correspondence with the IRS.

The takeaway-be sure to get your partnership and trust returns filed by midnight on Tuesday, September 15.