The IRS has announced that it will begin accepting 2025 Income Tax returns on January 26, 2026. It might be a bit of a rough ride. I don’t have the impression that the IRS is functioning well at all. On the surface, it’s okay, but once you scratch that surface, you’re likely to find yourself dropped on Mars by one of Elon’s taxpayer-paid-for toys.

CT has announced the same starting date. Other states may/may not begin then, but those of you in other states typically file later in the season anyway. If you want to file earlier, shoot me a text or email, and I’ll let you know, but once we’re into that last week of January, it’s rare for any state not to be accepting returns. Your portals are always available year-round, so please feel free to upload data as soon as you receive it. If you have any questions, please call or email. The old office number is so buried in spam calls that it’s unusable. Call or text my personal cell. That’s the number starting with the area code, then “4,” and ending in “6”.

One new thing to keep in mind is that the IRS wants everything done electronically. It wants to be paid and pay you electronically, so we will be incorporating banking info into the returns this year, unless your balance is zero. I’ve only had that happen once in my years of doing taxes.

Okay . . . I’ll do what I can to keep it from getting too taxing.

Neither the IRS nor the tax software company will be processing 2025 returns before mid-January, but that’s only TWO WEEKS away, and they will go by in the blink of an eye. IRS guidelines say reporting documents should be out by the end of January. Once all the documents are in, we can start prep and filing.

COVID is over. The IRS has been tRumpified, utterly destroyed, what’s left has been beaten down, and is performing poorly. I haven’t had to call, but colleagues report it’s impossible to find anyone who can answer their questions, and waits are very long. Perhaps the new management, with no IRS experience, will fix that, but I certainly wouldn’t hold my breath. It’s the same guy who recently led the SSA, and we know how well that’s working. It’s likely to be a very rough season. Add to that new systems that haven’t been run through a season and will undoubtedly be loaded with impediments to progress. Hopefully, the season will run smoothly, but be prepared for the worst and pleasantly surprised by the best.

The 2025 filing season for 2024 returns is well underway. CT had a hitch getting it’s business tax returns done and into software companies so all CT business returns with 3/15 deadlines are on extension. CT has finished their forms so now it’s up to software companies to get them coded and into production. Hopefully that won’t take too long.

Other than that, the season is running very smoothly in spite of the hacker “Big Balls” and his little unqualified friends ripping the functionality of the government apart with absolutely no plans or forethought. Since no consideration has been given to the risks of handing government information to a known hacker, be extra extra vigilant. They will never acknowledge it was them who sold our info to North Korea, Russia, or Iranian hackers – if they do – so assume they will and act accordingly.

We’re participating in a program offered by Drake – TIO’s tax software provider – that provides a small amount of identity theft and audit protection. Review it in your Client Copy so if anything should happen you can enlist their help.

Filing is Underway

The 2023 filing season for 2022 returns is underway. The portals are set up. You can upload your information as you get it. You are in control of your passwords and, therefore, the security of your information. I highly recommend complex passwords.

You can still fax or mail as well. I have a new fax number this year. I haven’t canceled the old one yet, but I will after April 15th. I want to make sure everyone has the new one. The old 6777 phone number still works, but the masses of spam pouring into it make it almost unusable. You all have my personal number. You can text or call. It’s starting to get a bit more spam, but very little for the most part.

I will not send you information via email that is not password protected, and I’d strongly recommend you not send me unprotected information either. Integrity seems to be in the toilet today. The hassles of password-protecting everything are part of the high cost of low integrity.

Let me know when everything is there, and I’ll finish your return. If you have any questions or problems, let me know.

We can start filing now, and returns are coming in. The IRS is extremely shaky already. If a return can slide through the automated system, and any payment or refund handled electronically, it should be fine. The least little thing to derail it may derail it for months.

We have to reconcile the third COVID Stimulus Payment on the 2021 return. If we don’t get it right, the return is derailed. So. . . please check your records, your bank accounts, etc. to see how much you received in that third COVID payment and when you received it. It was most likely March or April, perhaps later. The amount should have been $1400 per person included as either Taxpayer or Dependent on the return.

I’ve been using Gmail since it was released, and I know I’m responsible for getting many of you hooked on it too. I discovered today that it’s putting your messages – that I’ve created filters for – in Spam. I don’t have the time right now to edit all the filters to add “Never send to spam.” If one creates a filter, one would think that it already says, “Never send to spam.” It wasn’t a problem until lately, but now it’s cropping up more often.

If you’re using Gmail, you may also want to double-check your filters.

Gmail has performed so well for us for so long. In all likelihood, they changed something intended to make email serve better, and this is an unwanted side effect. In any case, if I don’t answer within 24 hours, please text me. Thanks!

The IRS has announced that it will start accepting returns on Jan. 24th. I see nothing on the CT DOR website and they haven’t emailed me an update. None of the tax software is ready to go yet. Hopefully, everything else will also be in place when the IRS is ready on the 24th.

What the IRS isn’t ready for is to actually handle the returns that are filed. As long as your return can slide through the automated process, everything will be fine – plan to pay electronically and to receive refunds electronically. Anything paper – anything at all that pulls a return out of the automated process – is going to be a problem. We’ve been warned of that.

Lest you think I jest, the IRS still hasn’t resolved problems from the 2019 filing season – returns filed during COVID Season #1. In addition, it’s nearly impossible to get a phone call through. Wait times are routinely in excess of 45 minutes – then you think they are answering but the line goes dead.

There’s at least one company that has made a business out of running a dialing service that just endlessly robo-dials the IRS then sitting on hold. The moment the line is answered, they pass that line to someone who is paying them upwards of $100 a month for the service. The IRS has been told to add people to provide the necessary customer service. I’m not sure where we are with that because Omicron moved in so now half the labor force is home with COVID.

Other tax preparers who work with the IRS repeatedly post that the IRS has hundreds of thousands of pieces of unopened mail.

This was from another tax preparer regarding their experience with the IRS. “I am going to kill myself, and then after that, send the IRS a nasty letter. After being on hold for 105 minutes (yes an hour and 45 minutes, I finally got through to a person in the Business and Specialty Tax section. After hearing my concern, he went to ‘research the issue (I will be back in 5 to seven minutes)”. Within 2 minutes I was disconnected. Please somebody, just, shoot me.”

Technically, a preparer’s job ends with acceptance of the return. After that, it is completely out of our hands. In fact, we’ll often need paperwork to even talk to the IRS on behalf of a client. That said, clients look to us and we want to help our clients. None of that matters when there are no people at the IRS to take the call.

Personally, I’ve been hung up on probably a dozen times or more after waits over half an hour. The line clicks, you think someone is picking up, then you’re disconnected. We deserve better. Taxpayers deserve better. A key need right now is to get more IRS employees and to get the backlog cleaned up. I still have a couple of people with 2019 returns that haven’t yet been processed and there doesn’t seem to be a thing that can be done about it.

Please give the IRS a bit of extra time this year. If your return is very straightforward, it will slide through the mechanized system, and you probably won’t see much of a difference from previous years. If there’s anything on it that might require a bit of additional review or a different process, having Unemployment income, for example, it will definitely take longer than usual. The IRS is shorthanded given the enormous increase in work due to COVID. For example, right now, they are reviewing all the returns with Unemployment income. That’s slowing down the processing of other returns that might need to go through additional processing steps.

Some of you have reported that your mortgage companies cannot get transcripts, and there’s at least one 2019 refund still outstanding. The IRS is answering only a fraction of phone calls with minimum hold times of 45 minutes or more. After long holds, many are getting dial tones in their ears. The IRS also has a mail backlog.

The IRS has been shorthanded for a long time. Their technology also needs to be updated. Scrimping on the IRS budget means that the IRS can’t engage in more expensive projects – like auditing the wealthy. It places an undue and unfair burden on working-class taxpayers. Small businesses are notorious for cheating a bit on their taxes. The problem is that it’s easy to catch. When the IRS audits smalls and micros, it always finds more than the audit costs. This is not a secret. It’s been openly testified to in front of Congress.

Enforcement, in general, has been very low for the past couple of decades, but it is going to pick up. Proceed accordingly.

CT will follow the Federal exclusion of up to $10,200 in Unemployment income.

“Is Connecticut income tax liability impacted by the exemption from income of the first $10,200 of unemployment compensation in the American Rescue Plan Act? (added 3/16/2021)

The starting point in determining an individual’s Connecticut income tax liability is the individual’s federal adjusted gross income. There are no Connecticut statutory modifications that require this new federal exemption amount to be added back on Connecticut’s return. Therefore, the excluded amount is not subject to Connecticut income tax.”

https://portal.ct.gov/DRS/Individuals/Income-Tax-Filing-Alerts/2021-CT-Income-Tax-Filing-Season-FAQ