Another tax filing season down – 4 more to go till I can say I have prepared 1040s for 50 tax seasons.
Another successful year – I ended the season with only 22 GDEs (the “E” is for “extension” – you can guess what the “GD” is). This is lower than the 24 from last tax season, which at the time was the least amount of GDEs since I took over my mentor’s practice in 1999.
13 were because the client’s package, or all the needed information, was received well after my deadline for timely filing of March 18th - many received in April (actually one package arrived in my PO box on April 19th). Only 2 were “red-filed” – I needed more information to complete the return. And 7 were requested by clients who did not send me any 2016 tax info yet. I expect that there is one more from a client who had not contacted me at all yet – they usually submit their own GDE application and send me their “stuff” in the summer.
Not a single GDE was due to my workload! Every single return received in my hands by March 18th was completed and returned to the client, as were several received after that date.
So once again my filing season ran smoothly. There were no car, equipment, computer, or other issues. The weather did impact the season on one occasion – for the first time since I moved to NE Pennsylvania the snowfall was much more here than in NJ. A 30+ inch blizzard in mid-March literally buried my car and I could go nowhere for almost 2 weeks. I have always said that I welcomed a huge snow storm in March so I could catch-up without interruption – and I got my wish this season.
I had no issues with late-issued corrected Consolidated 1099 Tax Statements from brokerage houses this year. The returns of several clients who usually had to wait until late March to send me their “stuff” were done earlier than usual. And more cost basis information was provided, to both taxpayers and the IRS, for long-term transactions.
The IRS did much better processing returns this year. I have not heard of any excessive refund delays or other processing FUs so far. NJ announced in January that no refund, regardless of how submitted, would be issued until March 1st, due to additional identity verification - and I advised February filers with refunds of this fact.
Despite an advertised slight delay in the date the IRS would begin processing returns (Monday, Jan. 23, 2017) the season officially began for me, as it always has, on February 1st. I can could on the fingers of one hand the number of returns I have prepared before February 1st in the past 45 years.
Thanks to the PATH Act (nothing to do with the subway from NJ to NYC) the IRS was required to hold tax refunds until Feb. 15 for taxpayers who claimed the Earned Income Tax Credit or the Additional Child Tax Credit. This did not affect my clients – as I have a truly minimal number of clients who claim these government welfare benefits.
While I continue to oppose the excessive additional “due-diligence” requirements for tax professionals preparing tax returns of clients requesting an Earned Income Credit, and beginning with this season the American Opportunity Credit and the Child Tax Credit, and the existence of IRS Form 8867, I was happy that the form was reduced to 2 pages this season and wasted less of my time to prepare.
I did absolutely nothing new, different, or additional this season regarding EITC, AOTC, and CTC claims than I have done in past years. The Form 8867 was only a minor time-wasting inconvenience this season. My biggest issue with this form was having to remember to include it for taxpayers claiming the Child Tax Credit.
Most of my clients have been with me for decades, often before the birth of their applicable dependents, so I am well aware of their situation. And I have always asked clients for college Bursar’s or other financial statements in addition to the Form 1098-T to verify the correct amount of qualified tuition, fees and expenses when claiming tuition tax benefits. While Congress, doing something right for a change, did require colleges to properly complete the Form 1098-T beginning with tax year 2016 returns, the IRS gave in to whining from the schools and continued to allow the 2016 Form 1098-T to be as useful as tits on a bull.
As most of you know I no longer accept ANY new clients. If I did I would refuse to accept clients who would be requesting an Earned Income Credit.
The Obamacare “shared responsibility penalty” was not an issue for me this season. Nor was the advance premium tax credit reconciliation. There was only one client who would have been subject to this penalty – but the IRS announced that it would not delay processing of returns that were “silent” on full-year health insurance coverage (did not check the box to verify full-year coverage and did not include Form 8965), so I completed the return without checking the box and without completing Form 8965. The IRS may ask for this form later in the year – and I will deal with the issue it that occurs. I continue to believe it is wrong to require a taxpayer to pay someone to assess an IRS penalty.
Forms 1095-A, B, and C arrived earlier this season, though the late receipt of Form 1095-B or C would not hold up my preparation of a return. Information on W-2s and Social Security statements and client representations are enough for me to indicate full-year health insurance coverage.
On the state side – I continued to be 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 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 also continued to use NJWebFile to electronically submit NJ-1040s directly to Trenton free of charge 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 wish NJ would initiate a system similar to the NYS “enhanced” process). I did not encounter any issues with NJ returns – yet. But it is still early.
The delayed filing deadline – April 18 instead of April 15 again this year – really did not add much work time to my season. I stopped working on 1040s April 14, and actually completed most of the GDE forms that afternoon. As you may know, I never work on 1040s (or 1040As) on the actual filing deadline day (click here to see a post from fellow tax-blogger Peter Reilly explaining why).
As is my custom I took time off after the 18th to recover at the Jersey shore. As you read this I am back at my desk working on GDEs at a more leisurely pace.
So another tax filing season is added to the history books. Let’s hope the next 4 seasons continue to be similarly smooth-running and problem-free.
I end with my usual question for fellow tax pros – did I miss anything?
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