“What Happens If I Miss the Extension Deadline for My Partnership Tax Return?”
Are you the tax partner for your business, the one responsible for making sure that your Form 1065 partnership tax return gets filed on time?
Wondering what happens if your business filed an extension, but you don’t get your returns done by the extended deadline?
Filing late is kind-of a big deal, especially if your business doesn’t have extra cash to burn. Here’s what happens if you miss the deadline, and how to avoid it.
Extension Deadline for Partnership Tax Returns is 9/15
The due date for filing Form 1065 is the 15th day of the third month following the date your tax year ended. For most partnerships, that’s March 15.
Filing an extension moves your filing deadline to September 15.
Must Have Filed Extension by 3/15
If you did not file your extension (Form 7004) by March 15, the IRS won’t give you one and your return will be considered late.
Late Filing Penalty is $220 per month, per partner (or member of LLC), for up to 12 months
If your Form 1065 is filed after the September 15 extension deadline, you may face a late filing penalty from the IRS.
That penalty is $220 for each month or part of a month that the return is late multiplied by the total number of partners in the partnership, up to a maximum of 12 months. For example, if you have two partners and you file your return six months late, your penalty will be $220 x 6 x = $2,640.
Failure to Furnish Information Timely is $290 per K-1 (and K-3), up to $580 if you blow it off on purpose
Your responsibility doesn’t end when you file your partnership tax return, you also have to give each partner a copy of Schedule K-1 (and K-3), so they can accurately report and pay their personal taxes on their share of the income from the business.
The same due dates apply and if you fail to furnish Schedule K-1 (and K-3) timely to each partner, the IRS may hit you with an additional $290 penalty for each K-1 that’s late. The penalty doubles to $580 you intentionally disregard the requirement.
“How Can I Avoid the Penalties?”:
Here are some tips on how to avoid missing the deadline:
- Check with your CPA (or tax preparer) for their internal cutoff date (the date for receiving your information in order to prepare your return on time).
- Provide all requested information prior to that date.
- Trial Balance (in spreadsheet form)
- Balance Sheet Comparison Report
- Profit and Loss Comparison Report
- List of fixed asset purchases and dispositions
- Copies of payroll tax returns for the year
- Completed Tax Organizer & Questionnaire
- Other workpapers, etc.
- Answer any questions your CPA has as soon as possible
- Review and sign returns quickly. Use electronic signatures and e-file your return to speed things up.
Now you know what happens if you miss the extension deadline for filing your partnership tax return, and how to make sure that it doesn’t happen to you!