HAPPY NEW YEAR!

Our best wishes for good health, happiness, and prosperity in 2024.

This year’s tax prep season is completely unpredictable.  The best advice is to move forward as quickly as possible to gather your materials and start the reporting process. As of today, (Jan.8) there are ongoing discussions in the tax writing committees of both the House and the Senate.

It is possible that adjustments will be made for credits and deductions that will be incorporated into the spending bills due on Jan 19. If so, they will be effective for the 2023 year, just ended, and part of the tax returns.  These include child tax credits, possible increased deduction for property tax, and more.  BUT, absolutely no one knows the outcome. To avoid a partial government shutdown, four spending bills need to be passed by Jan. 19.  February 2 is a deadline to pass an additional eight spending bills. If the Feb. 2 deadline is not met, it is expected that the IRS will suspend most operations.

The current IRS plan is to open Jan. 29. If the retroactive tax provisions are passed by Jan. 19, the IRS will then need to revise the tax return formats and software coding. After that, all software providers will need to revise and get approval from the IRS before they can release final updates to start the filing season. I cannot tell you when the gates will actually open at IRS, but I promise a crazy, chaotic season.

Things we do know:

www.SomersetTaxServices.com is the place to look for my posting of updated information as I receive it. The website has a new portal for file sharing, updates on our scope of services, pricing, and more.  Please note that the Financial Calculators tab will take you to a “1040 Calculator section.” This section allows you to project and estimate your tax liability and has a wealth of information on filing status, tax rates, standard deductions, and definitions for most categories of income. Please use this resource, and the links to IRS and NJ, (LINKS tab) for information on current requirements for tax year 2023.

Options for sending your tax prep materials:

Access to the portal is through my website. The secure encrypted service is provided by Encyro. Click on the LINKS tab and open the hot link to upload your documents and send directly to me. They will not reside on a folder in the file-sharing service. Once they are transmitted, you will not be able to access them. Please keep a dedicated folder on your computer with copies of everything that you transmit.

Completed returns will be delivered through Encyro to your email address. Please note there is a limited window of opportunity to access the material unless you have an Encyro account. YOU DO NOT NEED to establish an Encyro account, but you may choose to do so.

The secure drop-box will be on the front patio at my home from Jan. 15-April 30. Feel free to pull in the driveway during daylight hours, Monday through Saturday. Sunday afternoon between 2-5 is also available, except for Easter Sunday. Please notify me after you drop-off. Please do not visit during ice/snow events, or after dark. My home is considered a remote work location, and not designated as an office open to the public.

Mailing materials through US Priority Mail works well. Please mail to my home:49 Ninth St., Somerset, NJ 08873-1516. The conference room at the Easton Ave location, Suite 2-8B, has a mail slot in the door and is a secure location to drop-off. Building access is controlled by the management. It is open during regular business hours Monday through Friday. It may be open at other times; but there is no guarantee.

If you need us to pick up your package, please send an email and we will discuss best times. If you would like to schedule an in-person appointment, the best times are Wed., 11-4 and Sat. 11-2. Please send an email or leave a message at 732-246-3332.

Completion time: Tax return materials are processed as first in, first out. If there are twelve people in front of you, the work on your file will commence after those twelve are completed. Final date to provide the materials is March 23. Signed Forms 8879 to authorize filing must be received by April 12. If you require an extension, payment to me must be made by April 12. Providing information in pieces does not speed the process, it actually requires more time to review multiple submissions of data.

Filing the return and scheduling payments are two separate steps. If you file in February, you can still schedule payments to IRS as late as April 15.

Finally, I need to address changes in the pricing structure. Fees have been increased to recognize current costs and margin requirements. The total cost will depend on which forms are needed and the time required for preparation. There is a minimum fee of $275 for a Form 1040 without schedules.

The demands of the rapidly changing technology are requiring an investment of more time and money. Rather than simplify the process, the changes increase the complexity. If preparation cost is a strain on your budget, you might try the tax volunteers at the public library.

I’ve been practicing as a CPA for 42 years. I’ve seen a lot of changes. We can’t go backwards; but the path forward is murky. Please keep a paper copy of your records. You cannot depend on IRS, State of NJ, or any other tax authority to have an accurate record of your filings. Neither can you expect the tax preparer to have those files.  I’m purging several years of paper records. Most online systems are changing to incorporate more artificial intelligence (AI). Systems changes and increased costs of system maintenance may mean that your favorite program or provider may be suddenly unavailable. I do not retain copies of your returns more than three years. I do not retain your back-up materials. Please make certain that you have your records in a safe, accessible place.

There are many important tax issues that I can’t address in this short letter. Please check the website for season updates.

 Please provide me with your best email address and mobile phone number for quicker communication.

May a benevolent force be with us all as we move forward together.

Shirley Y Pietrucha, CPA, MBA