Officials from area tax services anticipate that the COVID-19 pandemic will continue to create complexities this tax season.
The filing period this year begins on Monday, Jan. 24 — 17 days earlier than last year, according to the Internal Revenue Service.
Scott Roberts, a partner with O’Connor, Brooks & Co. in Galena, Ill., said the earlier filing date can be attributed to the pandemic.
“It’s been a whole new world these last two tax seasons,” he said. “We’ve been encouraging people to get their things in early and avoid face-to-face meetings and do more stuff through the internet and email. We’ve been doing that the last couple of years.”
Dennis Buchheit, owner of Buchheit Tax Service in Dubuque, said the earlier filing date is a positive. If people take advantage of the time to file earlier, he said, their refunds can come back earlier as well.
“I think a lot of people still rely on their refunds,” he said. “They can definitely help people out. If somebody’s in that situation, it can be a positive for people.”
But Buchheit said people will have to pay attention to whether they received pandemic-related funds in 2021.
One such item is payments of child tax credits, which the IRS began sending last year to families based on the number of children in a household. The American Rescue Plan Act increased the child tax credit amount last year.
Buchheit said families had the ability to get part of the child tax credit early, though others elected not to do so.
“It’ll be a little bit of a challenge just to let people know what they’re supposed to get,” he said.
Lynda Murphy, owner of Affordable Tax Service in Dubuque, said the IRS will mail out letters with information on the amount that families received in child tax credits. She stressed that people bring those letters with them when filing their taxes.
“If they don’t know, all that’s going to do is it’s going to delay their refund,” she said.
Additionally, Roberts said, stimulus payments will again affect this year’s tax season. Eligible individuals were supposed to receive a third stimulus payment in the spring of 2021.
“If you qualified for the (stimulus) credit and didn’t get it, you can claim it on your tax return,” he said. “It’s kind of additional information that’s needed now.”
Buchheit also noted that the IRS is still behind from last year’s tax season, as there are still returns that have not been processed.
“If you’re looking to contact the IRS, it might be pretty impossible,” he said. “… They warned us that it’s really not going to be pretty if anything is transmitted manually.”
Murphy also stressed the importance of filing electronically.
“(The IRS) is so far behind on paper, and they’re short-staffed for various reasons,” she said. “I don’t encourage anyone to paper file, ever.”
Roberts also said it will be interesting to see how the earlier filing deadline affects this year’s tax season. Currently, the filing deadline is April 18. Roberts said the deadline stretched into May last year and July the year prior.
“It might be kind of a challenge,” he said. “People have kind of gotten used to it being stretched out a little bit. It could create more work in a busy time already.”
Like many other fields, Roberts said accounting firms also are suffering from employee shortages, which could add to the workload.
He also noted that rules could change during the tax season, further complicating matters.
Last year, he said, new guidelines on unemployment benefits were issued by the IRS after the filing period already started.
“Any time they’re changing stuff in the middle of everything, that kind of creates a more stressful time for the tax preparers,” he said.
Roberts stressed that those bringing their tax documents to accounting firms be patient.
“If you’re going to take your return to a tax preparer, get on the list early so they know what’s coming,” he said. “It’s best to gather the most complete records. That doesn’t always happen.”