amended corp tax return with increased PS deduction

[himt4]

Let's say a Corporation with a calendar year Fiscal year and Plan year does not go on extension and files their 2006 tax return by 3/15/07. If they prepare an amended 2006 tax return filing prior to 9/15/07, can they increase the profit sharing deduction that they had taken on the original filing as long as they contribute this increased amount by 9/15/07. Is this allowable/deductible/possible/plausible....?

[Guest mjb]

no. you can only increase contribution if you had filed extension by 3/15. Cannot amend tax return to increase contribution. See REv Rul 76-28.

[himt4]

Thank you.

So that seems to be a reason that corps should always file an extension.

A lot of clients seem to always want to file by 3/15. Is there a reason for this other than

perhaps their CPA's charge for preparing the extension.

I guess I am curious as to why some want to file by 3/15 each year.

[jpod]

Reasons:

1. Fear (probably misguided) of increased risk of being selected for examination.

2. Desire not to extend the period of limitations for assessing tax deficiencies.

3. If it is an S corporation, in order to get K-1s to shareholders before April 15.

[himt4]

OK.

But even if you file by 3/15, is there any reason why you can't (or shouldn't) also file

for an extension as the mere existence of an extension form seems to keep open some

options for you?

[Guest mjb]

there is an IRA ruling that allows a corporation that files both an extension and the tax return on the due date for the return to defer making the contribution until the last day of the extension.