Tax Preparation and planning services

Opening Day is almost here! The IRS has just announced it will begin processing electronically filed returns on Monday, January 24. Generally speaking, you do not need to wait for previous years' returns to be processed before filing for 2021; at last report the IRS was working on returns received in April of last year. Of course if you receive all of your tax tax documents (if any) prior to the twenty-fourth you do not need to wait until then, we can prepare your returns and submit them once e-filing opens; note, however, refunds for returns including the Earned Income Credit or Additional Child Tax Credit will not issued until mid-February. 

 Especially important this year will be reporting accurate amounts for Advance Child Tax Credit and Consolidated Appropriations Act of 2021 Economic Impact ("third stimulus") payments received during 2021; incorrect amounts will cause considerable delay. 

Some other important dates are: January 18, fourth quarter 2021 estimated tax payments due; April 19, filing and payment deadline for Maine and Massachusetts; April 18, filing and payment deadline everywhere else; October 17, filing (not payment) deadline with prior extension request.

Despite the Commissioner's best efforts, simply, as the National Taxpayer Advocate writes, “There is no way to sugarcoat the year 2021 in tax administration: From the perspective of tens of millions of taxpayers, tax administration did not work for them.” We at Holyoke Tax Service couldn't agree more with that statement, and deeply regret that some of our clients have been waiting over half a year for refunds, while others have received nerve-racking computer-generated notices demanding that they pay up in twenty days “or else,” when there is only a one in nine chance of getting through to customer service representative by phone to respond, and written replies will go unopened for, on average, ten times that long.

While the IRS certainly had many commendable accomplishments last year – processing 269 million “routine” returns, issuing 478 million Economic Impact “stimulus” payments, worth over $812 billion, and more than 36 million Advance Child Tax Credit payments, worth over $93 billion, and even recovering billions of dollars through its Criminal Investigation Service – it fell far short when it came to anything requiring manual processing (as is to be expected, considering that over the past decade its workforce has decreased by 17%, while its workload has increased by 19%). As of the end of last year there remained unprocessed about 6,000,000 original individual returns, 2,300,000 amended returns, and 5 million pieces of correspondence; some of these submissions date as far back as last April.

The Taxpayer Advocate also expresses concern about the current year. She emphasizes, as do we, the critical importance of providing accurate amounts for the “stimulus” – for the Recovery Rebate Credit, which was the leading cause of delays last year – and AdvCTC payments; if they are incorrect that will necessitate the dreaded manual processing.

At Holyoke Tax Service we strive to do everything we can to help you avoid these unfortunate delays, and stand by you in situations where they do become unavoidable. Please consider us for all your income tax-related needs.