Changes to the Tax Code

What Changes Affect My Filing Taxes in 2017 (Part VII)

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You did it!  You held on for the seven posts.  Today is the last one.  Where we will learn about the changes to how long extensions may be (some are shorter and some are longer than before).   Oh, and penalties- they’re going up. (Of course!)

Changes to the Tax Code

Business, Trusts, Non-Profits, and Pension Plan Extensions
There is one more change for C corporations. Their extension is no longer 6 months long- but 5 months. In other words, before when they had to file by 15 March, but could extend the due date until 15 September… Well, the C corps still have that same final extended due date, regardless that the original filing date is now 15 April.


Best Tax Blogs

Source: WalletHub

Partnerships and S entities still have a 6 month extension- which also falls (for those who use a natural year) on 15 September.  (Hmm.   Not surprising, all business entities now have the same “maximum” deadline.)

Trusts and Estates of the Deceased file are required to file Form 1041. The only extension request provided 5 months beyond the due date. Now, the due date is 5.5 months. That means the new filing due date is 15 April; requesting an extension means the maximum due date can be 30 September.

Non-Profit entities file their version of Form 990 (there are many different varieties) on 15 May- or the 15th day of the 5th month after the end of their fiscal year. Extensions used to be provided for a maximum of 3 months; they now have more time- six month extensions is the new rule.

Employee Benefit Plans (Pension Plans, 401(k), welfare plans) must file their tax returns with the IRS by the last day of the 7th month after their year end. (For natural year plans, that means 31 July). Before the changes to the extension rules, these plans could extend that deadline by 2.5 months; now the rule provides for an additional month to a maximum extension of 3.5 months.

15 Items that Have Changed the Way We File Taxes
If you’ve missed any of these sections, check the blogs since last Monday (5 December 2016)

Late Filing Penalties
The minimum penalty for filing late (more than 60 days) has been increased from $ 135 to $ 205. Except in certain cases, that penalty can be reduce to the amount of tax owed, which ever is smaller. (By 2017, the penalty will rise to $ 210.)

Which entities are affected by this change? Individuals (all forms 1040, including non-citizens). Estates and Trusts (Form 1041). Corporate Filers (all forms of the 1120 filing). And, Non-Profit entities that can file a 990-T (this version of the 990 is for non-profits that have unrelated business income of $ 1000 or more.)

There are different penalties, too. These were included in the Trade Package Legislation. (Of course!  Taxes should always be regulated when we are discussing overseas sales and trade.) The act included penalties for the late filing of 1099 forms, W-2s, and 1095 (Health Care Reporting). You will note that some of  the deadlines to distribute to recipients (and file with the IRS) have been moved up- so pay attention and file them on time. Because the penalties can be $ 1060 for each delinquent 1099 form- if the IRS believes you have intentionally filed late to the government AND to the payee!

Now, if you file the 1099 only 30 days late, the penalty is $ 50 (again- for each – the payee and the government). If you get your act together by 1 August, the penalty is $ 100 (again, for each). And, if you miss that date, the penalty is $ 250 each- unless the IRS feels it was intentional (and you know that number is $ 530).

 

Well, this is finally done.  You know the big changes for the year. Now, you should be ready to file your taxes comes the 1rst of the year. However, you can’t expect really fast refunds (as one would have expected in prior years). Because the IRS is going to be checking to make sure the taxpayer is legit- they don’t want all those identity theft and tax fraud situations to obtain.

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2 thoughts on “What Changes Affect My Filing Taxes in 2017 (Part VII)”

    1. The problem with our tax system is that we all want a tax concession. And, one’s concession is another’s loophole. And, so it goes and grows.
      The real issue is that our governments (all of them) use the tax code to achieve results that would be better obtained by separate legislative vehicles. So, that the tax computations and collections can be simple and unencumbered with all those “goodies”.
      Thanks for the visit and the comment, Martha!

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