Monday, April 25, 2016


And another one bites the dust – another tax filing season that is.  It was my 45th!  Only 5 more to go.

The message on my answering machine on the last day of tax filing season (this year April 18th) begins –

Tax season’s over!  My face it has a big smile.”

My face really had a big smile on April 18th.  I was apparently especially efficient this season - I ended it with slightly less than half the number of GD extensions than last year – only 24.  Perhaps the least amount of GDEs since I began keeping track of season-end GDEs! 

11 were because the client’s package was received after my deadline for timely filing of March 19th.  5 were “red-filed” – needed more information.  And 4 were requested by clients who did not send me any 2015 tax info yet.  

Only 4 were due to my workload, and were for “expediency” sake.  Each of these sets of returns were received before March 19th and were opened and the federal and NJ returns were worked up to determine, or estimate, a liability.  The expediency issue was to postpone the time consuming process of writing up, compiling, copying, and collating the actual returns – each one was a project. 

One of these was extended because the client had more than 30 dreaded GDMF limited partnership K-1s (limited partnership K-1s are worse than the dreaded AMT and GD extensions combined).  Another one would require the preparation of a Massachusetts state return for the sale of rental property by non-residents.  I have never prepared a Massachusetts state return, and am only doing so in this case because of the relationship of the client.  I was certainly not going to stop everything and learn how to prepare a Mass state return during the last week of the tax season. 

So, to pat myself on the back, all returns that were in my hands by the deadline of March 19th that I announced to clients in my annual January mailing were dealt with. 

The season-end GDE results are testimony to the fact that my 2016 filing season ran smoothly.  There were no weather, equipment, computer, or other issues.  The idiots in Congress passed the PATH Act in mid-December, which, in a rare show of intelligence, made permanent many of the more appropriate “extenders”.  So there was no delays in the beginning of tax return processing or the availability of IRS forms.  I do not know if electronic filers experienced any delays – but such delays would not affect me.  I was able to begin my tax season as always on February 1st. 

IRS consumer service and return processing reached historic lows last season – due to the continual reduction of the IRS budget by the idiots in Congress and continued IRS mismanagement.  I heard from more clients about seriously delayed refunds and processing FUs last year than in all the years before combined – including one client who was told by the IRS that his refund could not be processed because he was dead (he had to have the Social Security Administration certify that he was still alive – and finally got his refund 8 months after filing the return).  But there were no similar FUs or delays, that I was made aware of, this season.  I only heard from two clients whose NJ refunds appeared to be a bit late.  I expect this is because the states, and the IRS, was taking a bit longer to process returns in attempts to avoid identity theft.

As the basis reporting requirements become “older”, more and more investment transactions are becoming “covered”, which increases filing efficiency.  And there is now more uniformity in 1099-B reporting by brokerage and mutual fund houses.  While there were still corrected Year-End Tax Reporting Statements issued by brokerages, there seemed to be less corrections (not more than one per account), and they were issued earlier in the season than past years.

This was the first year that Obamacare Forms 1095-B and 1095-C were required.  In most cases, as I have been telling clients when they ask about these forms, they are just additional wasted government paperwork.  Generally I do not need these to determine if clients are covered by “appropriate” insurance.  And I do not need actual “proof”, other than a client’s representation, that all applicable family members are covered. 

The IRS delayed the filing deadline for these forms until mid-March.  Some were sent out early, but most arrived late - often after I had already prepared a client’s return.  I got tons of emails in late March with attachments of 1095-Bs and Cs, which wasted some valuable time.  The few 1095-As I needed were all issued in early February, so no delays there.

This season none of my clients had to pay the Obamacare “shared responsibility” penalty, the very few without insurance were exempt due to “affordability”, and only a handful of returns involved the advance premium credit reconciliation. 

I did discover an issue involving the “second lowest cost silver plan” numbers that are included in the calculation of the allowable credit.  In one case the numbers provided for 2015 were substantially different, higher (and therefore resulting in a lower allowable credit amount), than the numbers given for 2014 for the same family situation.  When I went to the Marketplace website tool to search for the SLCSP numbers for 2015 using the family’s information I came up with different, lower, numbers.  I used the lower online amount in the reconciliation, with an attached statement of explanation, which resulted in a smaller credit payback.   

On the state side – I was extremely pleased with New York’s new “enhanced” online Form IT-201 and IT-203 “fill-in” (but manually filed) forms.  The “enhancement” automatically did the math and actually calculated the tax – saving valuable time.  I used the new enhanced process for all of the 20+ New York returns I prepared – and continued to add to my invoice a $5.00 “New York State Tax Preparer Extortion Fee Surcharge” for all clients with NY state returns.

I continued to use NJWebFile to electronically submit NJ-1040s directly to Trenton, free of charge and without a “middleman” (I wish the IRS would initiate a similar program), whenever possible (unless specifically forbidden by the client’s request).  However there are still too many situations where this option is not available.  When I had to manually prepare the return for the client to mail I used the online “Fill-In” Form 1040, which did some math but did not automatically calculate the tax.   I did not encounter any issues with NJ returns – yet.

I do think the delayed filing deadline – April 18 instead of April 15 this year – and the additional day provided by being a leap year did help somewhat in reducing season-ending GDEs.  As usual the tax season ended for me not on April 18th but on April 17th (see my 4/18/16 post). 

So there it is – another tax season come and gone.  Let’s hope the next 5 seasons go just as smoothly as this one – and I continue to reduce the number of season-end GDEs.

As I usually ask my fellow tax pros at the end of this post each year – did I miss anything?


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