Tax Strategies gbfadmin Tax Strategies gbfadmin

Changes to 2016 Tax Filing Deadlines

In 2015, a bill was passed that changed tax filing deadlines for certain IRS forms that will impact a lot of filers. Not only is it important to know the changes so you can prepare and file your return timely but to understand why the changes were made.

In 2015, a bill was passed that changed tax filing deadlines for certain IRS forms that will impact a lot of filers.  Not only is it important to know the changes so you can prepare and file your return timely but to understand why the changes were made.

Summary of Changes

IRS Form Business Type Previous Deadline New Deadline

1065 Partnership April 15 March 15

1120C Corporation March 15 April 15

NOTE:  The dates in the chart above are for companies with years ending 12/31.  If a company has a different fiscal year, Partnerships will now file by the 15th day of the third month following year end and C Corporations will now file by the 15th day of the fourth month following year end.

Why the Changes?

The most practical reason for the change to filing deadlines is that individuals with partnership interests will now have a better opportunity to file their individual returns (Form 1040) without extending.  Form K-1 provides information related to the activity of a Partnership at the level of each individual partner.  For example, if I own 50% of a Partnership, my K-1 would show 50% of the income (or loss) generated, certain deductions, and any other activity needed for me to file my Form 1040.  The issue with the previous Partnership return deadline of April 15th is that it coincided with the individual deadline.  This resulted in partners of the company not receiving their K-1’s with sufficient time to file their personal return by April 15th.   With Partnerships now having a deadline of March 15th, this will give individuals a month to receive their K-1 and file their personal return without having to extend.

The deadline for Form 1120, which is filed by C Corporations, was also changed with this bill.  Where the Form 1065 deadline was cut back by a month, the Form 1120 was extended a month.  C Corporations, for tax purposes, are treated similar to individuals whereas they pay taxes directly when they file their return.  Partnerships are not taxed directly, rather the income or loss is passed through to each individual partner who recognizes the tax ramifications on their personal return.  For this reason, the deadline for Form 1120 being extended a month has little impact, if any, on individuals.  The change gives C Corporations more time to file without having to extend the return.

S Corporations are another common business type.  The deadlines for S Corporation returns (Form 1120S) were not changed with this bill.  S Corporations are similar to Partnerships in that K-1’s are distributed to owners and the income or loss generated is passed through to the individuals return.  That being said, Form 1120S already has a due date of March 15th, the same as the new Partnership deadline.

Extension Deadlines

IRS Form Business Type Deadline

1040 Individual October 15

1065 Partnership September 15

1120 C Corporation September 15

1120S S Corporation September 15

Extension deadlines were not immediately changed with the passing of the bill.  Although Partnerships previously had the same filing deadline as individuals, the deadline with the filing of an extension was a month before.  This was necessary because if a Partnership did not have to file an extended return until October 15th, individuals with partnership interests wouldn’t have a choice but to file delinquent.

The one change to the extension chart above set to take place in 2026 is the C Corporation extension being changed to October 15th.

Summary

Overall, the changes appear to have improved the filing calendar.  This may be a big adjustment for Partnerships that are used to the April 15th deadline as they will have one less month to get organized and file.  For this reason, you may see an increase in 2016 Partnership extensions.

About Rob……...

Hi, I’m Rob Mangold. I’m the Chief Operating Officer at Greenbush Financial Group and a contributor to the Money Smart Board blog. We created the blog to provide strategies that will help our readers personally , professionally, and financially. Our blog is meant to be a resource. If there are questions that you need answered, pleas feel free to join in on the discussion or contact me directly.

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A New Year: Should I Make Changes To My Retirement Account?

A simple and easy answer to this question would be…..Maybe? Not only would that answer make this article extremely short, it wouldn’t explain some important items that participants should take into consideration when making decisions about their retirement plan.Every time the calendar adds a year we get a sense of reset. A lot of the same tasks on the

A simple and easy answer to this question would be…..Maybe?  Not only would that answer make this article extremely short, it wouldn’t explain some important items that participants should take into consideration when making decisions about their retirement plan.Every time the calendar adds a year we get a sense of reset.  A lot of the same tasks on the to do list get added each January and hopefully this article helps you focus on matters to consider regarding your retirement plan.

Should I Consult With The Advisor On My Plan?

At our firm we make an effort to meet with participants at least annually.  Saving in company retirement plans is about longevity so many times the individual meetings are brief and no allocation changes are made.  Even if this is the result, an overview of your account, at least annually, is a good way to keep retirement savings fresh in your mind and add a sense of comfort that you’re investing appropriately based on your time horizon and risk tolerance.

These individual meetings are also a good time to discuss other financial questions you may have.  Your retirement plan is only a piece of your financial plan and we encourage participants to use the resources available to them.  Often times these meetings start off as a simple account overview but turn into lengthy conversations about various financial decisions the participant has been weighing.

How Much Should I Be Contributing This Year?

This answer is not the same for everyone because, among other things, people have different retirement goals, financial situations, and time horizon.  That being said, if the  company has a match component in their plan, the first milestone would be to contribute enough to receive the most the company is willing to give you.  For example, if the company will match 100% of your contributions up to 3% of pay, any amount you contribute less than 3% will leave you missing out on retirement savings the company is willing to provide you.

Again, the amount that should be saved is dependent on the individual but saving anywhere from 10% to 15% of your compensation is a good benchmark.  In the previous example, if the company will match 3%, that means you would have to contribute 7% to achieve the lower end of that benchmark.  This may seem like a difficult task so starting at an amount you are comfortable with and working your way to your ultimate goal is important.

Should You Be Making Allocation Changes?

The initial allocation you choose for your retirement account is important.  Selecting the   appropriate portfolio from the start based on your risk tolerance and time until retirement can satisfy your investment needs for a number of years.  The chart below shows that over longer periods of time historical annual returns tend to be less volatile.

When you have over 10 years until retirement, reviewing the account at least annually is   important as there are a number of reasons you would want to change your allocation.  Lifestyle changes, different retirement goals, or specific investment performance to name a few. Participants tend to lose out on investment return when they try to time the market and are forced to sell low and buy high.  This chart shows that even though there may be volatility in the short term, as long as you have time and an appropriate allocation from the start, you should see returns that will help you achieve your retirement goals. 

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