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If You're A Late Filer, This Maine Tax Professional Says You're Far From Alone

IRS Refund Delay
Eric Gay
AP file
In this April 23, 2020 file photo, President Donald J.Trump's name is printed on a stimulus check issued by the IRS to help combat the adverse economic effects of the COVID-19 outbreak in San Antonio.

So you haven't done your taxes. Maybe you're feeling like you're behind everyone else as the extended filing deadline of May 17 gets bigger in the rearview mirror.

For a little perspective, All Things Considered host Jennifer Mitchell spoke with Mike Santo, senior tax manager with accounting firm wipfli in Augusta.

This interview has been edited for clarity.

Mitchell: So the tax deadline was extended, are you pretty much done with filings now? Are you you kind of in the weeds with late filers?

Santo: Still very much in the weeds trying to get through all these returns. It's been tough changes that were made this year that impacted this tax season. So a lot of things are changing, and they change pretty quick. And just because you've got a form in front of you doesn't mean that form isn't already outdated.

What kind of changes are we talking about? Obviously, the pandemic had big impacts to folks and their income. Are we talking about changes that came about as a result of the pandemic?

So unemployment is a big one. A lot of people that maybe have never been on unemployment before were on unemployment this past year, unfortunately. A lot of people didn't necessarily understand that that is taxable income. And that holds true even for the special unemployment benefits that the state of Maine were giving to people that normally wouldn't qualify for unemployment. Just before the 4/15 deadline, Congress ended up passing a law that allowed for $10,200 per person of unemployment to be exempt from income. But unfortunately, again, that came pretty late into the season. So a lot of people may have already filed their taxes with that income on there.

So does that mean then if you're not a procrastinator, and you filed kind of early, that you might be missing out on $10,000? And if that's the case, is it just a matter of filing an amended return, then, that people need to do?

Yeah. So this is a little bit of a rabbit hole right now. As you start to dive into it a bit more, what seems like a fairly simple fix becomes a bit more complicated. The IRS has put out guidance that they're going to review those returns. I don't know when they're going to be reviewing those, supposedly any day now. But they said they'll review those and anybody that qualifies for that exemption amount, they would fix their return up and issue that refund. The problem with this is that a lot of other items on a tax return get impacted by someone's adjusted gross income. There might be new deductions that they weren't able to claim before because their AGI was too high that now they're eligible for. There might be a few other changes that come about from it that, if their income was lower, they would have been able to take more advantage of. They have said don't file amended returns, they'll fix it on their own, but you may not actually get back fully what you deserve to get back. And in that case, yeah, you probably want to file an amended return. As we dive into that rabbit hole a little bit deeper, states, they don't really know how to handle this, because when your tax return gets changed, you're supposed to file an amended state return as well. But unless the IRS actually sends you a notice that shows you what they changed, you're not going to know that.

OK, so this could be a process that folks just need to keep an eye on and fix maybe months down the road.

So yeah, you've got three years to file an amended return to get that refund. So there's no immediate rush. But again, we're in a pandemic, people need money.

Another new thing during the pandemic were the stimulus checks. What do people need to know about those?

So those stimulus checks were advance tax credits. You've got to know how much you received, especially if you didn't receive the full amount. Because if you're eligible for the full amount, come filing this tax return, you can get that amount that you never received before. The stimulus checks are not taxable either. And if you got too much money, let's say that for some reason, you know, your income went up in 2020, compared to 2019 and 2018 and you got too much of a credit, you do not have to pay any of that back either.

OK, so another thing that was different this year is a lot of folks worked from home, bought special equipment, set up home offices, upgraded computers, upgraded internet, got headsets and zoomed in. Can people claim any of those extra expenses that they may have incurred by working from home?

So the first thing is that probably most people, especially if you're just an employee of a company, are not going to be able to claim anything. This was part of the tax reform under the Trump tax cuts. They did away with employees being able to take unreimbursed job expenses. So unfortunately, if you're an employee and you've been working from home, those extra heating oil costs that maybe you wouldn't have had and extra printing costs and things like that. Unfortunately, you're out of luck.

When we were talking earlier, you'd mentioned all these changes, that the last couple of years it's been change after change, and extensions, and that basically the days of filing by April 15 are kind of a thing of the past at the moment, that people need to get comfortable with filing extensions.

Extensions are not bad. There's no need to fear them. The longer you wait to file your tax returns, it's actually better. That used to not be the case. But the last few years it just constant.

Well, that's good to know. I don't feel so bad because I haven't actually done my taxes yet.

I haven't either.

You haven't done your own taxes yet?

No. I'm waiting as long as I can. Because I want to make sure that when I file, we know what we need to file.