For a variety of tax filings, there are several new dues dates in 2017. Of particular importance to the farmer is the new 1099 and W2 reporting requirements, and the associated penalties for not filing the forms.
Here is a listing the major changes:
- Form 1099s and W2s are now due by January 31. Previously, the forms were required to be sent to employees and payees by January 31 and could be electronically filed by March 31 with the IRS and Social Security Administration. The new law has eliminated the March 31 option. These forms are now due by January 31 for all filings.
- The penalty for not filing 1099s can be steep. It can easily by $500 per form not filed and in some cases can exceed this amount. Any aggregated payments for services exceeding $600 annually needs a 1099 if paid to an unincorporated entity.
- Form 1065 (partnership returns) are now due March 15 (for calendar year-ends). They used to be due April 15. Congress believes that many extensions for individuals and corporations relate to waiting for partnerships k1s. Therefore, they moved the due date up to March 15.
- Form 1120 (corporation returns) has been moved to April 15 from March 15 due to the acceleration of the due date for partnership returns. Of particular note is that any June 30 corporate year-end will file by September 15 instead of October 15 for ten years.
- FinCEN Form 114 (foreign accounts reporting) has been changed to correspond with the individual due date of April 15 with an automatic extension until October 15. Under the old law, it was due on June 30 with no extension available.
- Form 1041 (trust and estate tax returns) can now be extended for five and half months up from the old five month period.
- Form 990 (non-profit returns) can now automatically be extended for six months, instead of the old automatic period of three months with another filing for an additional three-month extension required. The elimination of the second step saves time for preparers and the IRS.
- Dependent’s Tax Identification Number (SS #) now must be issued by the return due date. In order to claim a dependent and any associated credits requires a tax identification number (in most cases a social security number). The Social Security Number must now be obtained before the due date of the return.
- Form 1098-T (Tuition Statement). In order to claim any education credit, a taxpayer must now obtain a Form 1098-T. Previously, you could claim the credit without the form.
- Form 1098 (Mortgage Interest Statement) will now report (1) the beginning principal balance, (2) the mortgage origination date, and (3) the address of the property that secures the mortgage. This is designed to allow the IRS to more fully determine the proper amount of mortgage interest deduction. This is a welcome relief to this office as we can now match up 1098(s) with the underlying property.
Many of these changes are welcomed by preparers. We will keep you posted with any other changes.