The only other legislation with tax components passed in 2021 was the Infrastructure Investment and Jobs Act, signed into law on November 15th. However, the few tax aspects of this Act really do not affect many 1040 filers.
The House passed the Democratic Build Back Better legislation at the end of November, but the Senate will not deal with the bill until 2022. The legislation mostly affects 2022 tax returns – but the House version did include an increase in the SALT itemized deduction limit from $10,000 to $80,000 (no increase in the current Senate version) – so we will have to wait until a final Act is signed into law, assuming a Senate version actually passes, before we can complete 2021 Schedule A’s.
No issues for me with state returns. I continued to use, and appreciate, the new “New Jersey Online Income Tax Filing” system to electronically submit directly to the NJDOT free of charge almost all of the NJ-1040s for my clients. And I continued to use, and appreciate, the “enhanced” fill-in forms available at the New York State Department of Taxation and Finance website.
In 2021 the New Jersey legislature finally addressed the issue of the income threshold for claiming the Retirement Income Exclusion, although not in the way I had hoped and expected. Beginning with 2021 returns a partial exclusion is now allowed for NJ taxpayers with gross incomes between $100,001 and $150,000. New Jersey also expanded and enhanced the state’s Earned Income Credit and Child and Dependent Care Credit for 2021.
Reviewing my tenure as a tax professional I believe the thrill is gone.
Dealing with the IRS is becoming impossible. While it has always been somewhat frustrating, it appears the IRS has now become incompetent – thanks mostly to the excessive COVID-19 shut down.
The tax season never ends. GDEs continue. Just when I think the season is finally over there appear new IRS or state correspondence and notices, mostly incorrect, to deal with. And with Congress constantly fucking with the Tax Code, often at year-end, and continuing to erroneously use the Code to distribute government benefits, there are more and more complications, and agita, for clients, and preparers, and more and more questions from clients.
Getting all the correct information from clients during the season has gotten more difficult and generates more agita and wasted time – often a result of Congressional Code-fucking.
My favorite times as a preparer, when preparing taxes was truly fun, were the first 29 working with Jim Gill in a storefront office first on Sip Avenue and a dozen years later moving to Newark Avenue between the Court House and Dickinson High School (my alma mater).
It is truly time to retire.
Before I go – the usual question I ask my fellow tax pros. Did I miss anything?