287 High Street, Suite 319, Holyoke, Massachusetts 01040, United States
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We are honored to be a sponsor again in 2026:
- Holyoke Tax Service, Student Sponsor
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- Holyoke Tax Service – 2- $200 Gift Certificates for Tax Prep
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updates
You May Still Get Your 'Stimulus' After All
Ordinarily, a tax refund or credit must be claimed within three years of the original due date (including extensions) for the tax return for the respective year (or within two years of when the tax was paid, if later), otherwise, the refund or credit is permanently lost. For example, someone who did not receive the 2020 Economic Impact Payments, commonly called stimulus payments, would have had to file a 2020 tax return by no later than May 17, 2024 (assuming no extension), three years after the original filing deadline.
However, there are now several cases working their way through the court system, most notably Kwong v. United States, which argue that during the COVID-19 national disaster period and 60 days after – January 20, 2020 to July 10, 2023 – those usual time limits were suspended according to the law in effect at that time. If this argument is successful, that would mean that people have until this July 10 to file returns (or amend already-filed returns) and still receive refunds for tax years 2019 through 2022. They would also be able to file for and receive refunds of interest and penalties paid that were charged for late payment and filing during the suspension period (this may be done up to two years after payment was made, if that is later than this July 10). Abatement of interest and penalties assessed for the same time frame, but not yet paid, may be requested as well, although the same strict time limitation doesn't apply.
Rather than making a formal claim for refund, we recommend making what is known as a protective claim, which must be as detailed as possible and identify the specific issue the claim is contingent on – in this case the outcome of the Kwong litigation. The reason for this is that the IRS must approve or deny a formal claim within six months (long before the case will be resolved), and if denied the claimant has two years to appeal in federal court (by which time the Kwong case probably still won't be settled), after which time the IRS is permanently barred from issuing any refund, even if the claim later turns out to be valid; a protective claim, on the other hand, is generally put on hold by the IRS until the contingent issue has been resolved.
Of course the courts may ultimately rule against the arguments being made in the Kwong and similar cases entirely, or only allow certain exceptions to the general rule while rejecting others, however, what is almost certain is that most people who may potentially have refunds for 2019-2022 must act by this July 10 to protect them; at Holyoke Tax Service we are here to help you with the necessary filings to do that.
When is an IRA not an IRA (but actually is)?
When it's a “Trump” account, the rules of which are (not to offend anyone or get too political) about as coherent as the man who named it after himself. The tables in the following section attempt to make some sense of them, although of course they are somewhat of an oversimplification, and we are always glad to assist you with the finer points.
We look at this only from the perspective of the account holder (“Beneficiary”), not the trustee, except to say that the requirements to be a trustee are the same as for any other type of IRA, and that investments are limited to funds that track a “qualified index,” such as the Standard & Poor's 500 stock market index.
These accounts do not become available until July 4, 2026, however they may be elected when filing the 2025 tax return. While we cannot give investment advice, in our opinion these are probably not the best choice, other than of course to get the “free money” from the U.S. Treasury or the Dells.
Waiters, Waitresses, Bartenders Who Make Good Tips: Don't get Married to Each Other
At least not for the next four years... That is because you can deduct up to $25,000 on each of your single returns, but on a joint return – which must be filed to receive the deduction if you are married – you can only deduct up to $25,000 between the both of you.
On the other hand, this would be a great time to marry someone who works a lot of overtime. That is because on a single return only up to $12,500 of overtime pay – which, to be clear, is just the ½ in time and a half – can be deducted, but up to $25,000 can be deducted on a joint return, so you and your spouse could potentially have up to $50,000 of deductions, in addition to your standard deduction (although if you make too much money those deductions become subject to income limitations and are phased out).
Of course there are many finer points to all this, especially when it comes to self-employed people in customarily tipped occupations, but at Holyoke Tax Service we are here to help you navigate them. We are also planning future installments discussing the recently enacted new tax law.
Do Sole-Proprietors Get Paid?
The short answer is no, at least not in the sense of getting a weekly paycheck, as one does from a job. The reason for this is that, while a sole-proprietorship can certainly hire employees, the business and the owner herself are indivisible, one-in-the-same, and cannot be split into employer and employee. This is true even if there is an LLC, but, as is often the case, the owner chooses to disregard it for tax purposes. In order pay herself a salary the business owner must establish a separate entity, such as a corporation, to do so (notwithstanding she is still the only one controlling the other entity).
Of course the real answer is that a sole-proprietor's pay is as much, or as a little, as the business's net income, regardless of whether she uses it for personal purposes, which some call a “draw,” or leaves it in the business bank account. No matter what some eager payroll services may tell you, that money is already yours, no intermediary necessary. While some prefer the security of a regular paycheck, it can never beat the upside of when your business is profitable, and you are rewarded for your own hard work. And from a tax perspective, for a small-business owner it is almost always preferable to be self-employed rather an employee, most notably due to the 20% Qualified Business Income Deduction, which only applies to self-employment earnings, not wages.
Since we mentioned Limited Liability Companies, will take the opportunity to remind everyone that while they limit the business's liability, you are still personally liable for your own actions, so, particularly when you're providing personal services, and it is only you, the LLC will not save you.
There are of course many more nuances to all of this, and at Holyoke Tax Service, we are always happy to help you with any of them.
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About Us
Our Office
- 287 High Street, Suite 319, Holyoke, Massachusetts 01040
- Conveniently located near Holyoke City Hall and the Holyoke Transportation Center
- Please call, text, or message us for an appointment (please see our policy above)
David Yos
- Over fifteen years of tax preparation experience.
- Holyoke resident since 1999.
- Married to Jacqueline Yos, with two daughters and six grandchildren.
Our Services
- Preparation of all 1040 series tax forms
- Form 990 - Tax-Exempt Organizations
- Form 1120(-S) - Corporations
- Form 1041 - Estates & Trusts
- Form 1065 - Partnerships
- 94_ series returns
- 1099 & W-2 Forms
- Authorized IRS e-filer
- Small business returns
- Rental property returns
- Multi-state returns
- Your proactive adviser: W-4's, estimates, etc.
- Please ask about other services we may provide.