Aug 21, 2014
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The Farm CPA

RSS By: Paul Neiffer, Top Producer

Paul is now part of the fourth generation in America that is involved in farming and hopes the next generation will be involved also. Through his blog he provides analysis and insight to farmer tax questions.

Tax Filing Begins January 31, 2014

Dec 18, 2013

The IRS announced in Notice 2013-100 that the official start of the filing season for 2013 tax returns will begin on January 31. This is one day later than for 2012 tax returns. The 2012 tax season filing delay was due to the many changes brought about by the tax law signed into law on January 1, 2013. This required the IRS to completely revamp their computer system to allow for filing to begin.

Quoting the notice:

"The government closure meant the IRS had to change the original opening date from Jan. 21 to Jan. 31, 2014. The 2014 date is one day later than the 2013 filing season opening, which started on Jan. 30, 2013, following January tax law changes made by Congress on Jan. 1 under the American Taxpayer Relief Act (ATRA). The extensive set of ATRA tax changes affected many 2012 tax returns, which led to the late January opening."

Somehow the shutdown on the government for 16 days in October (a full two months before January 1) caused the IRS to delay the beginning filing date by at least one day. We are certain that politics did not a role in this extra delay (well, maybe a little).

We will keep you posted if there are any more delays. Last year's delay was much worse than a January 30 start date. Most farmers could not file until after March 1.

Speaking of March 1, most farmers always file and pay by that date. However, if your tax bill for 2012 was very low and you expect a large tax bill for 2013, it may make sense to make a January 15 estimate payment and then pay the remainder on April 15. For example:

Assume your 2012 total tax owed was $1,200. For 2013, you expect to owe $125,000. Your required farm tax estimated payment due on January 15, 2014 is only $1,200 (lesser of 100% of 2012 tax owed or 66.67% of 2013 tax liability). You now have until April 15, 2014 to pay the remaining $123,800 without owing any interest on the funds. Or you can pay the full $125,000 and file by March 1. Paying interest @ 3% on $1,200 for 90 days costs you about $9. Paying interest on $125,000 from March 1 to April 15 costs you about $462. Which would you rather do?

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