As most of our readers know, the IRS has extended the March 1 farmer filing deadline to April 15, 2013 for those farmers who MISS the March 1 deadline.  One of the major forms that farmers were waiting for was Form 4565 – Depreciation which was released yesterday.

However, there are still several forms that will most likely not get released until after March 1 that are important to farmers.  These include:

• Form 4136 – Credit for Federal Tax Paid on Fuels,
• Form 8582 – Passive Activity Loss Limitations, and
• Form 8903 – Domestic Production Activities Deduction.

Most likely the most important form is the last one since almost all farmers will have some type of Domestic Production Activity Deduction calculation to perform.  Therefore, there should be no issue with waiting until after March 1 to file and pay your income tax since these forms are most likely not available until at best, near the original March 1 deadline.

Paul Neiffer, CPA

Even though the IRS granted relief for farmers to file their tax return by April 15 of this year, there is a “gotcha” in the details.

If you file your return on or before March 1, 2013, you must also payyour tax on or before March 1.  If you file on March 1 and then pay your tax on April 15, you most likely will be subject to the penalty.

Therefore, to file and pay your tax without the penalty, make sure to file between March 2 and April 15, 2013.  Otherwise, you may owe a penalty you were not counting on.

Paul Neiffer CPA

Senator Charles Grassley of Iowa released a letter yesterday to both Timothy Geithner, Secretary of the Treasury and Steven Miller, Acting Commissioner of the IRS urging prompt attention by the IRS to extend the March 1, 2013 filing deadline.  As many farmers know, they can file and pay by March 1 without having to make any estimated tax payments on January 15.

Due to the passage of the new tax law, the ability of the IRS to accept most farmers tax returns by March 1 is very uncertain.  Senator Grassley’s letter indicates that the IRS has granted an extension in the past, most recently last year when the MF Global mess occurred.  In that case, the IRS did not actually extend the filing date, but granted waivers of the penalty for any estimated tax penalty caused by MF Global untimely mailing of form 1099.

This year, the possible delay is not caused by simply one organization going bankrupt, but rather by the complete lack of appropriate timing by Congress in passing the new law.  This has caused the IRS to delay acceptance of any tax returns until January 30 and most farmers until late February at the earliest.

We hope that Senator Grassley’s letter will have the weight needed to get the IRS to issue a notice timely that will allow farmers to (1) know when their returns are due and (2) give them enough time to properly prepare the return based upon the final release of the IRS forms.

We will keep you posted.

Paul Neiffer