Update for 2020 tax Season
We would like to take a moment and speak openly and honestly about tax season.
First, we want to tell you all how much we love you and appreciate the continued support. It brings all our hard work into perspective and lets us realize how much of an impact we have on our community. However, this tax season has been a struggle. In all honesty, it seems to be a carryover from last year. This year has brought so many changes to how we do returns as well as the returns themselves.
When the pandemic started, we were considered essential and were open for business as usual. We worked all year, trying to navigate the complexity of PPP Loans, payroll issues and tax returns. Keep in mind, we were doing this while the Federal and State agencies were shut down. Our hands were tied on all things related to these locations - - questions were left unanswered and everything ground to a halt.
We were inundated with businesses that needed help navigating through the myriad of information on grants and loans that became available. It took a lot of time to learn all of this and took away from our normal workflow. We try to help everyone with every situation, and it has proven difficult. This is one of the reasons why we haven’t been as available for calls and emails as we normally are. We want to address all your questions, however there are times that it must be delayed until a moment where we can take a breath and send out that email response.
This year, the IRS started our filing season two weeks late, and has not extended the season. Now with the newly signed stimulus, changes have been made to the 2020 tax season with only 5 weeks left. The biggest change affects people who have received unemployment benefits. The new law states that the first $10,200 is now tax free (prior to this change, all unemployment was considered taxable income). Many of these returns, covered under this scenario, have already been filed.
The IRS has given no guidance, and tax software companies don’t know how to adjust their software. We are awaiting direction, and until then, we feel the best course of action is to not file any returns that include Unemployment Benefits.
One of the other struggles we are having, is processing the returns for businesses that have received Covid related assistance. Currently, the Federal gov’t is saying some of this income is non-taxable, yet the states are considering it all taxable. Each return is affected differently and must be looked over carefully.
We would like to offer apologies to everyone, for the delays in processing the returns we have in-house. Currently, we have a deadline coming up for business returns. Deni and Dani are working hard to get as many done as possible. Unfortunately, this means DJ is the only one working on the personal returns during this time frame. We realize that this isn’t our client’s issue, it is ours.
We are still working the returns in the order they are received and doing our best to get them done quickly and accurately. We are anticipating a need for amended returns based on the new guidelines. Of course, we must await guidance. If amendments are indeed needed, these will be handled after the April 15th tax deadline. This will help ensure our clients that need a first filing get taken care of before the returns that need correction.
We want to assure everyone that we WILL get to you and your account. We are all working 12-hour days, 6 days a week. We’ve joked about camping in the waiting area.
If we were asked to describe our situation, it would best be summed up as this:
We are in a large, open, sinking boat and bailing for all we are worth. Unfortunately, our bucket has been replaced with a spaghetti strainer, and someone just threw us an angry warthog and 6 cats to keep dry. Did I mention the rainstorm? Yeah, there is a rainstorm…..
Our professionals are here to serve you and offer advise on your tax and small business financial needs.