A Difficult Season

My love affair with my clients and "all things tax" started over thirty-five years ago, but this 2021 tax filing season is by far the most challenging tax season in a long career. Tax laws have changed mid-season and the IRS and software companies are scrambling to catch up. Many of the returns that we've already filed are impacted by law changes and others are in a holding pattern waiting for form redesign and software changes. Returns that we've already calculated are changing before our eyes as both the IRS and software companies struggle to implement changes into a complex system of forms and calculations. We ask for your patience while these changes take place and please know that we are following and learning about these changes as quickly as they happen. Currently, the IRS has asked that we not amend returns since they plan to adjust returns already filed on their end. Massachusetts also has pending changes and has asked the same. We are hopeful that they can make corrections eliminating the need for amended returns.

For those of you that don't know, just weeks ago it was decided to exclude $10,200 per person of unemployment income on federal returns. Additionally, taxpayers that obtain health insurance through the Marketplace and receive a Premium Tax Credit will not be required to pay back the excess advance of this credit. Massachusetts has legislature pending that will potentially also exempt all or a portion of unemployment income. Additionally, the filing deadline for the filing and payments of personal returns has been extended until May 17th.

At this time, we would like to ask for your cooperation so that we can wrap up this difficult tax season. If you have received returns and signature forms from us, please return these forms as soon as possible so that we can file the returns. Tax payments are not due until May 17th, but it's important to us that the returns get filed as soon as possible so that corrections on our end can be made before the filing deadline.

If you have a balance due on your MA return and collected unemployment, please hold on making your MA tax payments at this time. As of March 15, we are no longer filing MA returns with unemployment awaiting guidance. As soon as we receive this guidance, we will mail updated payment vouchers and file outstanding MA returns. If you already made MA tax payments and collected unemployment, be patient. We have been told that the MA Department of Revenue plans on correcting these returns already filed on their own.

Most importantly, we ask that you get your tax information to us as soon as possible if you haven't yet already done so. Even though the deadline has been extended, we are still working towards having all returns eligible for filing filed by the original April 15th deadline. Certain payment deadlines have not been extended and payments received after the April 15th deadline will be considered late. Additionally, we will need the additional time to correct returns impacted by the recent tax law changes. Your cooperation in working with us towards reaching these deadlines this year is especially important and greatly appreciated.

If you need tax extensions filed this year, please reach out as soon as possible. We will start working on completing tax extensions April 5th.

As always, your continued patronage and trust in allowing us to complete your tax returns is greatly valued.

On the home front, we have a new grandson born just weeks ago and baby lambs born last week. The grass is greening, and trees are budding. These signs of life and spring are a welcome reminder that life is indeed wonderful and that there are great things yet to come!

My best to you and yours!

Sherri Mahoney