My 49th tax filing season –
I started as an apprentice tax preparer in February of 1972 preparing 1971 tax
returns – was the only time I am aware that the initial filing deadline was
extended, 6 months from April 15 to July 15 as a result of the COVID-19
pandemic. Taxpayers had until July 15 to
file their 2019 returns and pay any tax due, and to make the first two
quarterly 2020 estimated tax payments.
While the season officially ended July
15th, it ended July 14 for me.
I never work the last day of the initial filing season (see here to
learn why).
The big change in federal tax forms
for 2019 returns was the return to sanity.
The completely ridiculous “postcard” format of the 2018 return was
gone! The 2019 Form 1040 was most
definitely “more better” – and returned to a more logical flow of information.
There was a new Form 1040-SR for
senior filers, created for no other reason than it was required by the
Bipartisan Budget Act of 2018, which was word-for-word and line-for-line exactly
the same as the “regular” 2019 Form 1040 except it had bigger print and included
a Standard Deduction chart.
The previously 6 supplemental
schedules to the 1040 were reduced to 3.
Schedule 2 and 4 were combined in the 2019 Schedule 2, Schedule 3 and 5 were
combined in Schedule 3 for 2019, and the information previously reported on
Schedule 6 was returned to the 1040. The
2019 Schedule 1, like 2018, reported additional income and adjustments to
income, the 2019 Schedule 2 reported all additional taxes, and the 2019
Schedule 3 reported nonrefundable credits and other payments and refundable
credits.
There were no auto, computer,
equipment, or weather issues of consequence this season. And there were no real changes to tax law –
except for the last-minute retroactive extension of the infamous “extenders”,
which affected very few of my clients.
The excessive federal under-withholding
FU from last season was not evident this year.
In most cases the federal income tax withholding of my clients was fixed,
I expect by clients requesting additional withholding. At the beginning of the year the IRS issued a
totally new W-4 for 2020, doing away completely with the concept of “withholding
allowances”. I will have to wait until
next tax season to see if this new W-4 format caused any problems.
I have been working at home for more
than a dozen years now – so the pandemic “stay at home” order issued at the end
of March did not adversely affect my practice.
To be perfectly honest, I was glad that I had a reason not to go
anywhere – at least from late March through mid-April. I was also not financially impacted by the
pandemic. Money continued, and
continues, to come in, but much less was going out. My business and personal expenses were
reduced.
I did miss my annual recuperative trip
to the Jersey shore in April, and found that by June it was difficult to get
motivated to continue to deal with 1040s and I had to battle a severe case of
“manana disease
The biggest issue of this tax filing
season for taxpayers was, and continues to be, the excessive IRS delay in
issuing refunds on manually-filed federal income tax returns – which all my
federal returns are. This was a federal
issue only, as NJ refunds were issued to my clients relatively promptly. The IRS offices were closed from the end of
March until the end of June. Nobody was
opening the mail and processing manual returns, amended returns or
correspondence during this period. When
the offices re-opened there was a ton of unopened mail to deal with, including
a substantial backlog of manual returns to process. The office closures also affected the IRS
“Where’s My Refund” tool – the Service had no idea if a manual return was
received, so clients could not check on their refund status here.
There was nothing I could do, or can
do, to expediate the processing of a return or the issuance of a refund. And I had, and have, absolutely no idea when
refunds would or will be issued, or any way of finding out.
To compensate for the delays the IRS announced
that it will pay interest on refunds from April 15, 2020 to the date the check
is issued.
There was a major processing change
for my NJ returns this year. I was
initially concerned when I learned that NJ did away with its NJWebFile system,
which I had used to electronically submit many NJ state returns and request
direct deposit of refunds in the past. I
discovered that this was replaced with a new “New Jersey Online Income Tax
Filing” system, which allowed me to electronically submit all 2019 NJ-1040s
free of charge at the NJ Division of Taxation website without the need for separate
email addresses and passwords for each return.
The limitations of the old NJWebFile system no longer existed. And I could request direct deposit for all
state refunds. I used this new system
for almost every NJ return I submitted, except for some that had a balance
due. Because I used this filing method
my clients received their NJ refunds promptly.
I continued to use, and truly
appreciate, the New York state “enhanced” fill-in forms, which did the math and
calculated the tax for the IT-201 and IT-203.
There were no issues with NY returns and no delays, that I was made
aware of, for NY state refunds.
Despite the extended deadline I still
ended the season with 7 GDEs (the “E” is for “extension”). I prepared about 16 less sets of tax returns
this season. Some clients chose to move
on to a new preparer in anticipation of my retirement after next year’s tax
filing season. Some told me they were
moving on and some did not. There were a
handful of deaths, not unusual considering the age of many of my clients. (I was especially saddened by the 2020
passing of two long-time clients, originally of Jim Gill, one apparently
related to COVID-19.) And, as announced
this January, I no longer prepare the returns of the grown children of clients
who do not live at home.
So that was the 2020 tax filing
season. One more season to go before I
officially “retire” – after having completed 50 tax filing seasons!
TTFN
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