Posted on July 2, 2008 by Greg Herman-Giddens

Extension Period Shortened for Forms 1065, 1041and 8804

Today the IRS issued temporary and proposed regulations that reduce the extension of time to file tax returns for certain businesses that generate Schedules K-1 and other similar statements to five months. (The current period is six months.)

This change will be effective for extension requests for tax returns due on or after January 1, 2009, and applies to entities that file the following returns and forms that have a tax year ending on or after September 30, 2008:

• Form 1065, U.S. Return of Partnership Income
• Form 1041, U.S. Income Tax Return for Estates & Trusts
• Form 8804, Annual Return for Partnership Withholding Tax (Section 1446)

The final and temporary regulations finalize the simplified procedures for obtaining an automatic extension of time to file returns, doing away with the requirements for a signature and an explanation of the need for an extension of time to file. They also complete the elimination of Form 2688, Application for Additional Extension of Time to File U.S. Individual Income Tax Return, granting individual taxpayers an automatic six-month extension with their filing of Form 4868, Application for Automatic Extension of Time to File a U.S. Individual Income Tax Return.

Thanks to Bob Keebler, CPA for this news.

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Posted on January 25, 2007 by Greg Herman-Giddens

Filing Taxes Early Can be a Mistake

An article in yesterday's Wall Street Journal discusses the problem of financial services firms providing late or amended Forms 1099.  These forms, which show the amounts of interest, dividends and capital gains attributable to each investment account, are necessary for preparation of one's income tax returns.  Both Wachovia and Morgan Stanley have obtained extensions from the IRS to file their 1099s, which will now be issued sometime in February.  In recent years, the amount of amended 1099s issued after the January 31 deadline has also increased.

The problem is that if you file too early, you may later receive a late or amended 1099, which would generally necessitate filing an amended return.

If you use a CPA or tax service you may not have much control over when your return is prepared, but if you can do so, it probably makes sense to wait until March to file your returns, especially if you are a Wachovia or Morgan Stanley client.

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