Partnership Tax Return Deadlines Explained

Federal Partnership Tax Return (Form 1065)

What are the tax return deadlines for partnerships and limited liability companies which are treated as partnerships?

• Original Due Date: The federal income tax return for a partnership (Form 1065) is due on the 15th day of the third month following the close of the partnership’s tax year. For most partnerships that operate on a calendar year (ending December 31st), this means the original due date is March 15th.
• Extensions: Partnerships can file for an automatic extension of time to file Form 1065 by using Form 7004, Application for Automatic Extension of Time to File Business Income Tax, Information Returns, and Other Returns. This extension grants an additional six months, pushing the filing deadline to September 15th for calendar-year partnerships. It’s crucial to understand that this is an extension to file, not an extension to pay. Any taxes owed are still due on the original March 15th deadline. See Where to File Form 7004.

State Partnership Tax Returns

• Vary by State: State filing requirements vary significantly. Some states mirror the federal due dates, while others have different deadlines. It’s essential that you check the specific rules for the state(s) where the partnership operates and where the partners reside. Many states also have extension options similar to the federal one, often using a form comparable to Form 7004. Some states may require composite returns for nonresident partners. It is best to consult with a tax professional regarding specific state requirements.

Partner K-1 Delivery (Schedule K-1)

• Due to Partners: Partnerships must furnish each partner with a Schedule K-1 (Form 1065), Partner’s Share of Income, Deductions, Credits, etc., by the same date the partnership tax return is due, including extensions. So, if the original deadline is March 15th, and an extension is filed, the K-1s are due to partners by September 15th for a calendar-year partnership. Providing K-1s to partners by the deadline is critical because partners need this information to file their individual income tax returns.

Key Points about Extensions:

• Automatic: The Form 7004 extension is generally considered automatic, meaning the IRS doesn’t usually require a reason for the extension request. However, it’s essential to file the form on or before the original due date (March 15th).
• Payment Still Due: As mentioned earlier, the extension is only for filing the return. The estimated tax liability must still be paid by the original due date to avoid penalties. If you expect a balance due with the return, submit your payment with the extension request. The same rule applies to your partners even though they have not received a K-1 telling them how much income or loss to report.
• State Extensions: Don’t assume a federal extension automatically grants a state extension. You must file for a state extension separately if needed. Many partnerships have activities in multiple states and must file tax returns in more than one state. Be sure to check the extension requirements for every state in which the partnership must file.
• Penalties: Failure to file the partnership return or provide K-1s to partners by the due date (including extensions) can result in significant penalties. Penalties can also be assessed for underpayment of estimated tax.

Important Considerations:

• Professional Advice: Tax laws are complex and can change. It’s always best to consult with a qualified tax professional for personalized advice regarding your specific partnership situation. They can help ensure you meet all filing requirements and avoid potential penalties.
• Consider Your Partners: When a partnership files for an extension, each partner must also typically file for an extension of his personal tax return. A partner must also pay his taxes by the original due date. Not having a K-1 makes calculating that tax payment difficult. Some partners may have overpaid their taxes. The extension means that they must wait to file their return to get a refund. For these reasons, partners are often unhappy when a partnership files an extension.
• State-Specific Rules: This information focuses on federal guidelines. State rules are equally important and must be followed. Don’t neglect the state requirements!

Remember, this is general information, and it’s not a substitute for professional tax advice. Always consult with a CPA or tax attorney for guidance tailored to your partnership.