Some Extension Due Dates Earlier for 2009

February 9th, 2009

The extended due dates for returns of calendar year trusts and estates (1041), partnerships (1065), and certain other returns that generate form K-1s have historically been the same as for individual returns (1040).   Since these returns generally include information that is required to complete the individual returns of beneficiaries or partners, having the same extended due dates does not always give the beneficiary or the partner the ability to timely meet their filing obligation.  This can lead to a variety of penalties on the individual 1040 returns.

New IRS regulations designed to ease this problem have shortened the extended due date for 1041 and 1065 returns by one month.  Thus, beginning in 2009, the extension period for these returns has been reduced to five months (was six months), while the extension period for individual 1040 returns remains at six months.  This provides the 1040 filer with one additional month to complete and file individual 1040 returns.

The change will be effective for extension requests for returns due on or after January 1, 2009 and applies to any business entity filing any of the following forms:

• Form 1065 (U.S. Return of Partnership Income);

• Form 1041 (U.S. Income Tax Return for Estates and Trusts);

• Form 8804 (Annual Return for Partnership Withholding Tax)

The IRS is eliminating the same-day deadline for these returns and 1040 returns, which causes needless hardship and puts the individual taxpayer in an awkward position.  Thus, under the new rule, a calendar year partnership’s or trust’s extended return will be due on September 15, while the partner’s or beneficiary’s extended individual return will be due on October 15.

If you feel you are unable to have the information needed to file the income tax return of a trust, estate, or partnership return on time, please contact this office to arrange for filing of extensions for both the pass-through return and your individual return.  Please keep in mind that the extension is an extension to file but not an extension to pay.  Thus, the late payment penalty and interest will apply to any balance due on the individual return that is not paid by the original due date.  Therefore, it is important to complete the returns as quickly as possible when on extension.

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