Is it just me, or does the shortest month of the year, always feel like the longest? Maybe it is the shorter days or the bitter cold, or some combination, but I really notice a huge difference when I get to flip the calendar to March!
As you probably already know a partnership return, also called a 1065 return is due on or before March 15th for the prior year return (assuming calendar year).
But, did you know you can file an automatic 6-month partnership return extension using form 7004?
Some people ask me, why would I bother to file an extension for a business if no tax is due? The answer to that question for me is simple; it comes down to penalties. If you do not timely file your partnership return for any given year, you will be looking at a significant penalty. The penalty for late filing your partnership return is $205 for each month (or part of a month) late times the number of partners in the partnership with a maximum penalty period of 12 months. So, if you are a two owner partnership and file your return four months late the penalty for being late is $1,640! Quite a lot of money if you could avoid it, by simply filing an extension.
The IRS has more information about filing the partnership return extension form 7004 on their website www.IRS.gov. Also, if you believe you owe State taxes or local taxes (of any flavor) you can also do so online.
If you have been unfortunate enough to receive a love letter from the IRS demanding a payment for late filing a partnership return, we can, under many circumstances ask for the penalty to be reduced or removed.
We help many other partnerships with filing partnership return extensions and general tax compliance and advice. If you do not feel comfortable taking care of this filing, reach out to us at [email protected].
Anthony Momany, Managing Member, Capstone CPA Group PLLC