Tuesday, April 27, 2010


Turn-round time was a few days during the first two weeks of the tax season. Returns received from February 14th on were generally completed within two weeks, expanding to three weeks as the month ended. But those received in March had an average 4-week turnaround time. I did, at least at first, attempt to maintain a FIFO – first-in, first-out – system of preparing returns, but things got hectic in March and I did not keep good track of when returns were received. I need to work on developing a better system for next year. I did manage to again stay “on top” of “red files” (needed more information), completing the returns as the missing information was received.

I strictly enforced my “read my lips – no new clients” policy.

Because of the season-end problems I had to extend more returns than usual. This included a number of returns received in early March that under normal circumstances would have been completed on time. Once again all returns received in February were completed.

However, as planned, while April 15 and 16 were totally 1040 free (I do not work on April 15th) I did begin on the GD extensions on April 17th and worked through the 24th, getting, I am pleased to say, a good number completed and in the mail. As of this writing I have 34 GDEs in the box, 6 of which are for clients who have either not sent me anything at all yet or who are waiting for additional info from a 3rd party.

I began my post-season recuperative visit to the Jersey shore on Sunday, and will be away through Thursday.

As for the great “Garden State” of New Jersey . . .

I am required by state law to submit all my full-year resident NJ-1040s “electronically”, unless the client chooses to “opt-out” by signing a form. As I do not used flawed tax preparation software, and am not a federal ERO (electronic return originator) my only option is to submit my returns via the free online NJWebFile system offered by at the NJ Division of Taxation.

NJ state tax law changed slightly for 2009. Taxpayers with NJ Gross Income between $150,000 and $250,000 had to limit their property tax deduction to $5,000 – half the usual maximum. Those with incomes over $250,000 got no deduction, although they could claim a $50.00 property tax credit.

In the past, while there were various situations where I could not use NJWebFIle, there was never any income limitation to cause me to file manually. At the beginning of February while entering the information for a married couple with NJ income in excess of $150K I received an error message that said I could not continue to use NJWebFile for the client because their gross income was over $150,000.

The State of New Jersey was too lazy, or more properly too cheap, to pay someone to revise the NJWebFile software to reflect the change in the state law. I thought that NJ wanted everyone to file electronically to cut costs. What idiots!

Another new item on the New Jersey state front for 2009 was adding a payroll deduction for “Family Leave Insurance” contributions, similar to the SUI and SDI withholding. As with the SUI and SDI there is a per worker maximum contribution.

For many years now NJ workers who pay more than the maximum SUI or SDI due to multiple employers can receive a refund of the excess contributions as part of their NJ-1040 via Form 2450. The maximum NJ Family Leave Insurance contribution for 2009 was $26.01. However the Form 2450 was not revised to include excess FLI contributions. Employees who have paid too much into the FLI fund because they had more than one employer during the year must file a special form separately with the Department of Labor to get a refund of the overpayment.

Because the amount of potential excess FLI contribution is relatively small I expect that 99% of those who overpay will not take the time to get and submit the necessary separate form. It is hardly worth the effort to get a $3.00 to $10.00 check from Trenton. It certainly does not make sense to pay me, or any tax pro, to prepare this form – the fee would eat up all of the potential refund. But if the refund request were a part of the Form 2450 just about everyone who overpaid would get their money back.

I do seriously believe that the DFBs in Trenton did this purposely – so they could keep the excess contributions in the state Treasury to use for continued political pork. A $3.00 - $6.00 refund may not seem much to the individual worker, but multiply this by the tens if not hundreds of thousands of workers who have overpaid and it adds up.

And, oh yes, this tax season the NJ Division of Taxation decided not to make copies of the NJ-1040 package, with instructions, forms and a payment voucher, available at local Post Offices or the IRS office. Oh course this was the year that I was forced to file more manual returns than usual. I have to purchase blank NYS forms from Albany, and will probably soon also have to purchase blank NJ forms from Trenton.