Current Items:
- IRS Revised Tax Due Dates Again
- The Lord Giveth
- Just Do It… Yourself?
- Where’s the Dough
1). The Treasury Department and Internal Revenue Service announced again that the federal income tax filing due date for 2020 is automatically extended from April 15, 2021, to May 17, 2021. That was good news as I, like many taxpayers, just wasn’t in the mood to be hassled at the moment. Boy, you’d think the IRS would give the tax preparers a longer lag time like last year to July 2021. But no way. That would be consistent and heaven forbid we had any consistency in our jumble of tax laws. Oh, not to mention that the estimated tax due dates unlike last year were not extended. Just more silliness. The IRS is just now processing 2019 tax returns. I got a nice notice of a miscalculation on my own 2019 return of $57.46 that took a year for them to discover. What is all the rush about? The agency is up to its old tricks showing it can handle matters. If congress gives IRS any more work to do I may have to saddle up again and go back to by old IRS office in NYC just to give them a hand. Fat chance of that happening. So too the pension RMD baloney. Take it or not? Last year you got to pay it back and not be taxed. So far this year no waiver and it’s take it or else. So if you think you may have a tax return that is due and you’re wondering about whether the due date has been extended go to the IRS website to figure it out. There are so many exceptions made for people who may have been Covid infected or ravaged by floods and other natural disasters that it would be impossible to list them here. Just know this, whatever you do file will probably not get looked at for about a year or more.
2) Taxpayers and clients alike often complain about the fact that their unemployment and Social Security payments are taxable. The Lord giveth they say..and IRS taketh it away. There does seem to be some inconsistency here. Payments that are designed to keep people afloat when they are unemployed or surviving when they are no longer working would seem to have their very purpose diminished by extracting a tax on those very payments. Over the years these payments have found their way to be taxable as a way for politicians to avoid the ugliness of raising tax rates. Instead, slipping in a calculation for Social Security payments often goes without notice by the not as yet retired tax paying public. The sneak tax has always been the hallmark of the scoundrels who write the tax laws. But alas the IRS too can giveth back some too! Last year over 23 million US workers nationwide filed for unemployment. That included for the first time self-employed workers. On March 11, 2021 legislation was passed which allows taxpayers who earned less than $150,000 dollars in modified adjusted gross income to exclude unemployment compensation up to $20,400 if married filing jointly and $10,200 for all other eligible taxpayers. The legislation excludes only 2020 unemployment benefits from taxes. Of course this raises a problem for IRS for taxpayers who may have filed their tax returns claiming taxable unemployment before the March date. So IRS has stated that it will be reviewing and issuing either refunds or credits to these taxpayers. IRS says these taxpayers should get those refunds during the summer. You may already know that in order to pull a rabbit out of your hat requires the complete cooperation of the rabbit. It will be a miracle if IRS is able to pull this particular administrative rabbit out of its beat up Fedora by this summer.
3) I’m sure private tax preparers are not happy that so many ways now exist for individuals to file their own tax returns without any professional assistance. Adding insult to injury is the IRS website that now reveals to the public things that only we tax professionals once knew. Dumping so many individual tax deductions and forcing people to claim the standard deduction has made in many cases the simple tax return a reality. The AARP magazine for March 2021 carried an article called “You’re the Tax Man” with the subtitle that read “Preparing your own return may be easier than you think. It’s cheaper, too.” College students who may be thinking of a career in tax accounting may want to give that life plan second thoughts. In the not too distant future IRS will accumulate all the necessary information on every individual so that your only task will be to push a button that says “it looks good to me.” I still have on my desk the old Staples red button that loudly announces when pushed “That was easy.” Some of the available programs online are free and providers like TurboTax are easy to use. The AARP article says credit karma.com/tax lets you prepare and file state and federal returns for free in return for targeted ads and offers. The IRS free file program is available for taxpayers with less than $72,000 in total income. For me with an LLM in taxation doing my own return has always been somewhat fun, but now I am realizing that it has been made to my utter disappointment a lot simpler. Where’s the fun in that?
4) These bulletins which I have written over the last decades are for the most part always about the dough. So it is fitting that I end this one with a sad but hopeful observation. Italians in Italy since Covid have been lamenting the possibility of: La Morte del Bacio”. That means the death of kissing. And forget hugging as well with social distancing being somewhat enforced. But according to an article in Smithsonian magazine the real threat has been to: “La Morte della Pizza.” The Death of Pizza. Now if you have ever been to Naples, Italy you know that the city claims the invention and current production of the most perfect pizza in the world. That pizza is cooked in a 900° oven for no more than 90 seconds. This is a far cry from anything you may be swallowing if you bought it in a pizzeria in America*. And that dish is to be consumed within minutes of it being done. But with Covid these Naples pizzerias have had to resort to their dismay to pizza take-away and delivery! Obviously that prevents the customer from getting the full impact of an exquisitely cooked piping hot conglomeration. How sad and such an incredible consequence of this damn virus.
*Okay, go ahead and email me with your favorite pizza joints in New Jersey. I can use the tips in the next bull…. it’s always about the dough.