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Many businesses routinely file an extension to file their tax returns. Historically these extensions allow an extra six months before a tax return is due. The Internal Revenue Service is changing this rule for some businesses. Your extension will only be valid for FIVE months after the ruling becomes effective. This simply means that the date you have been accustomed to using, October 15th, will now be September 15th. The tax returns affected are the Form 1065 (Partnerships), Form 1041 (Estates and Trusts) and Form 8804 (Annual Return for Partnership Withholding Tax).

Currently, these business returns are due the same day as the individual returns. Therefore, IRS feels that it is a burden for individual taxpayers who rely on information from these returns to prepare and file their personal tax returns in a timely manner. You will notice that Corporate Forms 1120 and 1120-S are not included in this law change. That is because they are already due a month earlier than the Partnership returns. March 15th is the normal due date for calendar year corporations and the extension would therefore be due on September 15th.

If your business uses a normal calendar year (your year ends on December 31st), the new ruling affects you for your tax return due after January 1, 2009 (your 20008 tax return). If your business uses a fiscal year (anything other than December 31st), your effective date for the new ruling is effective for you if your tax year ends after September 30th 2008.

If you have any questions, please call Agency Consulting Group’s Tax Hotline at 856-779-2430.