287 High Street, Suite 319, Holyoke, Massachusetts 01040, United States
updates
Holyoke Tax Service Welcomes New & Returning Clients For 2023! We look forward to another great year of serving all your tax-related needs, including your individual and business returns, rental real estate and multi-state returns, payroll, and much more.
Wishing everyone a great summer! Although our office hours are now limited, we are always here for you you; please call or text if there is anything we may help you with, and we will get back to you promptly.
¡Feliz Día del Impuesto a Todos!
Happy Tax Day to All!
Contrary to popular belief, however, today is in no way the last day to file a tax return. Yes, ordinarily today would be the last day to claim a refund, not for the most recent year, but the year for which returns were originally due three years prior, in this case 2019. But that was 2020, which of course was no ordinary year. As you may recall, Tax Day was postponed (not extended, which is different) by several months; since it was merely a postponement, the IRS was not obligated to recognize those extra months this year, nonetheless, it has agreed to do so, meaning that you still have until July 17 to get any unclaimed 2019 refund.
Another common myth is that you will somehow be penalized for filing after the “deadline” when there is a refund coming, but that is the same as saying there is a penalty when you have an account with a credit balance; they already have your money, so what reason do they have to “punish” you? On the other hand, when there is money due there are of course interest and late charges, which in the case of taxes are based on a percentage of the amount owed. Lastly, the April “deadline” does not mean you can wait until that date to pay all of your tax; it is a “pay-as-you-go” system, meaning that if you have not already paid at least 90% of your tax (with a few other exceptions) over the course of the previous year you will still be charged interest, even though you are all paid up by the “deadline.”
Chapter 62F Refunds
The news media has created some confusion by conflating these refunds with the COVID-19 Essential Employee Premium Pay Program.
The Chapter 62F refunds, which were issued late last fall in the same manner used on the original return (either direct deposit or check), were a refund of 14% of a taxpayer's original 2021 tax liability (provided there was one), due to the Commonwealth having collected excess revenue for the year, according to that law. These refunds are clearly not taxable, unless, rather than taking the standard deduction on the federal return as most do, a taxpayer itemized (Schedule A) and took a deduction for that same tax.
What the IRS has actually cautioned people to perhaps delay filing on, however, is the latter program. While there is certainly ambiguity, at Holyoke Tax Service we believe that it is entirely reasonable to take the position that these payments were qualified disaster relief under Section 131 of the Internal Revenue Code, and hence not taxable.
The Only Constant in Taxes is Change
At Holyoke Tax Service we are always upfront with our customers. In keeping with that philosophy, we regret that some of you are going to be disappointed this year because the beneficial provisions of 2021, most notably the fully-refundable and increased Child Tax Credit, the expanded Earned Income Credit for people without qualifying children, and Recovery Rebate Credit (a/k/a "fourth stimulus") were all only one-time, and we have reverted to the prior rules for 2022 (although, of course, if you haven't yet filed, or need to amend, 2021, we can still do that). Nonetheless, please be assured that, no matter how much the rules change, we will always obtain the best possible results for you.
COVID-19 Essential Employee Premium Pay Program - Round 3
Some of us may have been a little surprised to receive a $250 check from the Commonwealth of Massachusetts this month for a program we did not believe we qualified for. This is because, while like the first two rounds of $500 checks for Massachusetts residents during 2021 who earned at least $13,500 of income from employment (determined separately for each spouse in the case of a joint return), and had total household income below 300% of the federal poverty level, in the third and final round the requirement that an individual had not received any unemployment compensation was dropped.
The government press release helpfully notes that, while these payments are specifically excluded from Massachusetts tax, and that since they are below the $600 filing threshold 1099-G's will not be issued, they "may" be federally taxable. Obviously these payments are, in reality, not at all compensation for services performed, as there is no correlation to hours worked, nor even that they were "essential" (could have been all remote). However, it remains an open question whether they may be construed as qualified disaster relief payments, perhaps in this case to promote the general welfare by mitigating the negative impact of the pandemic on low-to-moderate income families. Stay tuned.
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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 five grandchildren.
Our Services
- Preparation of all 1040 series tax 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.