When a partnership dissolves, terminates, or ceases operations, a final tax return must be filed by the 15th day of the third month following the date its tax year ended. While the instructions for the 2023 Form 1065 U.S Income Tax Return for a Partnership state the form can be used when filing a short year return which begins and ends in 2023, TaxAct® does not support this scenario. Because the TaxAct calculations are based on 2023 tax law, entering 2023 beginning and end dates will not cause the program to calculate based on 2023 tax laws.
Per IRS Instructions for Form 1065 U.S. Return of Partnership Income, on page 4:
The 2023 Form 1065 is an information return for calendar year 2023 and fiscal years that begin in 2021 and end in 2023. For a fiscal year or a short tax year, fill in the tax year space at the top of Form 1065 and each Schedule K-1.
The 2022 Form 1065 may also be used if:
However, the partnership must show its 2023 tax year on the 2022 Form 1065 and incorporate any tax law changes that are effective for tax years beginning after 2022.
Therefore, if the due date of the final tax return falls before the new year's tax forms are released by the IRS, you will need to use the current year's tax forms.
As a possible work-around, you could manually enter any amounts which are affected by 2023 law changes and paper file the return. You will need to verify that the proper amounts are being reported on the Form 1065 return based on the tax code for 2022 and override those entries that would be changed due to tax law changes (TaxAct will calculate based on the 2022 tax code).
An Alert will be generated which states:
Error or Omission: Invalid Tax Year
An invalid tax year has been entered. The tax year must begin in 2022 and the ending date must be after the beginning date.
This Alert will prevent the e-filing of the return.
Note that any link in the information above is updated each year automatically and will take you to the most recent version of the webpage or document at the time it is accessed.