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Congress Enacts New Tax Provisions That Provide Cost Savings to Taxpayers

8/12/2015 Articles

Congress has been promising an overhaul of the tax code for the past couple of years, with virtually no progress.  However last month, Congress managed to pass new tax legislation.  On July 31, 2015 President Obama signed into law the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015.  Even more incredible is the fact that the Act provides cost savings to taxpayers.

How, you ask?  Not through a reduction in tax brackets or an increase in deductions.  Instead, Congress was able to agree on changes in reporting requirements for various taxpayers.  Thus, for tax years beginning after December 31, 2015, nonprofit entities filing a Form 990 or 990-PF will be entitled to an automatic 6-month extension. 

Current law provides for an automatic 3-month extension, requiring nonprofits to file a second extension request for an additional 3-month extension.  The cost savings, of course, is in accountant fees.  Note that the automatic 6-month extension only applies to all calendar-year nonprofit taxpayers, and fiscal-year nonprofits that are subject to excise taxes (other than the 1% or 2% tax on investment income).  It appears that fiscal-year nonprofits are out of luck on the 6-month automatic extension, unless they happen to be a private foundation that has violated a provision of the tax code.

Other exciting changes include an accelerated deadline for partnership returns, so nonprofits can expect to receive K-1s by March 15, instead of April 15.  In addition, to give Congress credit where it’s due, it did decrease the excise tax on fuels by 10.2 cents per gallon for liquefied natural gas and 5.1 cents per gallon for propane, so there is potential for tax savings after all.

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