Extended tax season?

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#21
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Another letter from the ways and means

https://waysandmeans.house.gov/sites/de ... ason_0.pdf
 

#22
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Every tax season has a different flavor to it. My personal clients have been deluging me this week, and it's not just my normal early February clients but people who usually come in late February and mid-March. I am going to struggle to maintain a 2 week turnaround.

zl28 wrote:agree with Berkshire...alot of time with PPP...and also staffing issues in this Covid environment. Though i'd like the tax deadline to be permanently changed to 5/1.


If we were to permanently change the date back, I'd say 5/15. 5/1 would be a rough day for those practitioners with payroll as part of their practice.

ManVsTax wrote:I think the cure is to stop with the retroactive tax law, not to give them more time to write retroactive tax law.


+1000
 

#23
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There should actually be a law that says Congress can't pass a retroactive tax law. I hate amending returns, and clients hate to pay for it when it is not their fault.
 

#24
JAD  
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The issue last year is that we were walking into the unknown. Although there are still uncertainties, I should hope every professional firm has taken steps in the last year to adjust to the new normal. Therefore, there is no need for an extension to the April 15th deadline.

True, for me, but I feel for those preparing tax returns at their kitchen table with children underfoot. It is not just about the clients being able to get their stuff to us. It is also about the tax preparers being able to get the work done. I feel for the people who work in traditional CPA firms, staffed for high OT during tax season, and then expected to get the same work done in the current environment.

I am receiving IRS notices on returns filed two years ago (release of liability for trustee). I have not been able to get through to the FTB Tax Practitioner's Hotline. They are having trouble operating at the same level as before. By the same token, they should understand that we also cannot get the same amount of work done in the same time frame.
 

#25
Frankly  
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If the tax pro can take two minutes any time between now and April 15, he can magically move the deadline out to October 15, gaining an extra 6 months time to work through all the myriad difficulties there may be. Doesn't take an act of Congress to make it happen...
 

#26
EZTAX  
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Frankly - I do not understand this comment. Seems like you need to calculate a rough tax liability in order to make sure that no additional interest/penalties will be owed. In California, extension is not valid unless most of the tax is paid by the deadline. We also need to worry about Obama-care issues that can be mitigated with an IRA contribution.
 

#27
AlexCPA  
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EZTAX wrote:In California, extension is not valid unless most of the tax is paid by the deadline.



Can you please provide a cite for this? My understanding is that extensions at the CA level are generally automatic. While a payment may be made by the deadline if tax is owed, non-payment does not necessarily invalidate the extension (but may result in the assessment of late payment penalties and interest).
Even more of my antics may be found on YouTube:
https://www.youtube.com/channel/UCXDitB ... sMwfO19h7A
 

#28
EZTAX  
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Alex - I am unclear on this so should not have posted it. I believe the extension is valid but I remember (not 100% sure) that a 5% per month penalty for late payment starts 4/15 (in a normal year). I will try and look this up later if no one chimes in.
 

#29
Frankly  
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California grants an automatic 6 month extension to October 15. There is no form and nothing needs to be done - it's automatic, no questions asked.

Payment is due April 15. If not paid, the late payment penalty is 5% of the unpaid tax, plus 1/2% of the unpaid tax for each month it is unpaid.
 

#30
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4868 instructions state to properly estimate your tax liability using information to you.

E&O insurance (Camico) indicates that you may not file an extension without clients authorization and that it should be accurate (given above instructions) to avoid potential problems.

How do you solve these problems in two minutes per client?
 

#31
EZTAX  
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Thanks for posting that Frankly. I always get confused but know that the penalty is high if the amount is not sent in by 4/15 as opposed to the Federal where the 5% penalty is for late filing not late payment.
 

#32
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Frankly wrote:If the tax pro can take two minutes any time between now and April 15, he can magically move the deadline out to October 15, gaining an extra 6 months time to work through all the myriad difficulties there may be. Doesn't take an act of Congress to make it happen...


I'm embarrassed to admit that I get confused about the federal extension underpayment penalty.

Please rate my understanding:

If a taxpayer fails to file an extension, and files their tax return and pays by, let's say 08/15, and there is a $1001 balance - the penalty USED TO BE $200 but now it would be $435.

If a taxpayer files a timely electronic extension with no payment, and completes their tax return prior to, let's say 8/15 again, and the tax balance is $1001 ,what is the penalty? Is it $20? Can't be.
 

#33
CathysTaxes  
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ItDeoends, in your first scenerio, wouldn't that penalty be late filing and late paying/underpayment and the second scenario is just late/underpayment?
Cathy
CathysTaxes
 

#34
Frankly  
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fatherof3 wrote:4868 instructions state to properly estimate your tax liability using information to you.

You make the best estimate you can based on limited information which may not be much more that knowing how much they paid last year and if their income is up or down this year. Just don't be frivolous about it.

E&O insurance (Camico) indicates that you may not file an extension without clients authorization ...
Those people are reactionary. If they had their way you wouldn't file any tax returns at all because there might be a risk. As for authorization, when a client hands over his papers and says "do my tax returns", there is the authorization right there to do what is necessary to get the job done.
 

#35
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Heard...I was more of the question of people we hadn't heard from yet that we did not know whether to extend since they had provided us nothing.
 

#36
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https://www.msn.com/en-us/news/politics ... r-BB1dWJv8

Per IRS Commissioner Rettig in this morning's CCH eblast, the unopened mail backlog and "trailers full of mail" are gone. No idea where they're at with unprocessed returns in the queue though.

Looking like this IRS does not want to postpone the deadline again this year, which is slightly surprising to me.
 

#37

#38
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There was an eye opening post on Mass Society of CPAs that ask how can a mom of three school aged children , who also is running her own CPA keep up. Most schools in Massachusetts are still remote and guess what most of falls on the mom.

My kids are now in high school or college, my wife just went back to work but when I was working 80 weeks it all on her.

There is no reason why they should not extend. Massachusetts is still dithering with PPP. Biden is introducing new PPP rules with a March deadline. IRS can us if if our faxes 2553 forms were expected and client want to know if they should delay submitting 2020 returns to max out Stimulus 3
 

#39
smtcpa  
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Two minutes? Lol. I usually spend 3-4 days before 4/15 extending, calculating estimates, triple-checking my lists to make sure nobody is missed.

The bigger advantage to having Congress extend the deadline is that it is a lot easier to convince clients we don't have to file by 4/15. That's my problem, this ridiculous fear among the public that if they don't file by 4/15, bad things happen.

Frankly wrote:If the tax pro can take two minutes any time between now and April 15, he can magically move the deadline out to October 15, gaining an extra 6 months time to work through all the myriad difficulties there may be. Doesn't take an act of Congress to make it happen...
 

#40
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I start on S-Corp/1065 extensions on March 7th, and personal extensions on April 7th.
Usually loose a week of productivity for each. All part of the game I guess.
 

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