New tax filing deadlines require attention from CPAs
August 04, 2015

In late July, the country saw several bills pass through the House and the Senate, then on to President Obama's desk for approval. Officially signed into law on July 31, both the short- and long-term highway-funding bills will change the way partnership and C corporations file their taxes, reported Accounting Today. Accounting professionals dealing with C corporations or partnerships must stay informed of these new details and start dates to ensure clients pay federal and state taxes on time.

Who is affected and how?
Both C corporations and partnerships have to adjust to altered government stipulations. C corporations are businesses the Internal Revenue Service treats as separate entities from their owners. A C corporation's income is taxed at the corporate level and then again when the business owner collects it. The new bill allows C corporations to file tax returns on the 15th day of the fourth month of their fiscal year. Previously, C corporations had only until the 15th of the third month of their fiscal year.

In addition, until 2026, calendar-year C corporations are granted a five-month period to file Form 1065 for an extension, and those companies ending their fiscal year on June 30 will have a seven-month extension period. All other C corporations will have a limit of six months to file extensions from here on out.

Partnerships, or any company owned by two or more parties, are also affected. Calendar-year partnership companies also receive an additional month to file tax returns. Partnerships ending their fiscal year on a date other than Dec. 31 have until the 15th of the third month of the new fiscal year to file. Partnerships also have up to six months to file an extension.

These new regulations will go into effect after Dec. 31. The only exception applies to C corporations with fiscal years ending June 30, according to the Journal of Accountancy. The highway-funding bills will apply to these businesses after Dec. 31, 2025.

Where do CPAs come in?
This new bill approval is good news for certified public accountant groups, as these accounting professionals lobbied for a more fluid process when it came to organizing and paying taxes for clients. Often, the information required for returns isn't available in time for reporting, which could result in late or inaccurate tax filings.

"The new structure will provide more accurate information to taxpayers in a more logical flow and reduce the number of extended and amended individual and corporate tax returns that are filed each year," American Institute of CPAs President and CEO Barry Melancon stated.

What happens next?
CPAs working with C corporations will need to communicate clearly with C corporation and partnership clients to ensure taxes are filed appropriately. Utilizing accounting resources like cloud-based financial software can help CPAs make transitions easier on both themselves and their companies. Streamlining tax filings and setting reminders for new or changing deadlines can improve performance and help businesses maintain strong fiscal health. 

Nexus: G-WEBCD1