The Internal Revenue Service announced Jan. 23 as the start of America’s 2023 tax season and, between now and mid-April, local tax preparers will be busy.
According to irs.gov, “more than 168 million individual tax returns are expected to be filed, with the vast majority coming before the April 18 deadline. People have three extra days to file this year, due to the calendar.”
Paul Ahearn, owner of The Tax Professionals at 5375 state Highway 7 in Oneonta, said 2023 marks his 35th year preparing taxes. Ahearn, an enrolled agent, said, come February, it’s all hands on deck.
“Our season really starts February 1 to April 15 and, beginning February 1, I’ll start working 12-to 14-hour days, six days a week,” he said, noting that there are four tax preparers in the office. “I do the most (hours), and the other ones … (are) probably doing an average of 60 hours a week.
“That is when we call it the ‘refund rush,’” Ahearn continued, “because it’s when most people have all their documents. The W-2s are due out the end of January, so most people have those documents by the end of January, and then it starts. After April 15, I go down to two days a week, so I feel like, the rest of the year, I’m kind of semi-retired.”
“Usually, it gets heavy about the first week of February, and we’ll be like that through April 15,” Lew Keyser, owner of Tax Resolutions at 337 Main St. in Otego, said. “Last year, we had about 125 extensions, so even after the season, I’m doing tax returns into the end of July.
“It’s just the two of us,” Keyser continued, saying that he works alongside his wife and bookkeeper, Carmen. “As of (Feb. 17), I’ve already done 112 returns, and that’s just me. She does setup work on the big ones, but, in terms of returns, I’m working from 6 in the morning until about 7 at night, for about 11 weeks. Last year, I did about 500 (returns); my first year, I did 50. My main business is helping people that have collections issues — state, federal or audits — so I do settlements, but now, the tax part of it has grown into half my business. I enjoy it; I’m a numbers geek and it’s nice, I have a 30-foot commute. I’ve always enjoyed it, and I enjoyed my time at the IRS.”
Keyser, in his 23rd season as an enrolled agent, said he previously worked as an agent for the IRS “for 18 years, right out of college.”
“In the fall of ’99, I left the IRS — I was in charge of collection for 11 counties in northeastern Pennsylvania — and left my practice and opened in Otego later in ’99,” he said. Tax Resolutions does “corporate partnerships, nonprofits, individuals, some payroll and sales tax returns and some bookkeeping,” Keyser said, noting that he covers “from Florida up to New York and quite a few other states,” with a “core area” of Otego, Unadilla, Franklin, Gilbertsville and Oneonta.
This year, Ahearn said, marks “a return to normal.”
“It’s really the first year since 2020 that it feels like a normal tax season,” he said. “People don’t have information that came to them from the government or IRS for stimulus payments or advanced child tax credits, so they don’t have to worry about all these crazy things that have been happening the last couple years.”
“The biggest shock people are getting is … that the law changes from 2020 are gone for this year and people didn’t realize,” Keyser said. “It’s a shock because refunds are smaller than in the past. Last year, because of COVID, they passed a one-year credit for children and the Earned Income Tax Credit, and that all went away.
“(Another) thing that’s changed, and people are benefiting from, is the expanded energy and solar credit,” he continued. “A lot of these are 30% for pellet stoves and woodstoves and it’s the same for solar, and they’ve never been that high in the past. and the electric car credit is up to $7,500 per vehicle, though it depends on the model.”
And, according to the IRS, top-down measures have been taken to ensure smooth filing.
“With the three previous tax seasons dramatically impacted by the pandemic, the IRS has taken additional steps for 2023 to improve service for taxpayers,” irs.gov states. “As part of the August passage of the Inflation Reduction Act, the IRS has hired more than 5,000 new telephone assistors and added more in-person staff to help support taxpayers.”
On the site, Acting IRS Commissioner Doug O’Donnell states: “‘This filing season is the first to benefit the IRS and our nation’s tax system from multi-year funding in the Inflation Reduction Act. With these new additional resources, taxpayers and tax professionals will see improvements in many areas of the agency this year. We’ve trained thousands of new employees to answer phones and help people. While much work remains after several difficult years, we expect people to experience improvements this tax season. That’s just the start, as we work to add new long-term transformation efforts that will make things even smoother in future years. We are very excited to begin to deliver what taxpayers want and our employees know we could do with this funding.’”
Being prepared, sources said, is perennially important.
“The IRS urges people to have all the information they need before they file a tax return,” irs.gov states. “Filing a complete and accurate tax return can avoid extensive processing and refund delays as well as avoid the possibility of needing to file an amended tax return.”
“Procrastination is never a good thing,” Ahearn said. “One of my favorite lines is, ‘procrastination on your part does not constitute an emergency on my part.’ You can’t show up in April and expect (to have your taxes done). Nobody’s busier than I am in April. and we become, as the deadline gets closer, more selective, because we want to make sure we can service our ongoing clients instead of somebody who walks through the door.
“All in all, it probably takes us a little bit over an hour to prepare a person’s tax return,” he continued. “But we do close to 1,200 tax returns in 10 weeks, and not everybody is prepared and ready, so we will get people that bring a document every couple weeks and we have to go back and work on their return, then put it away. and the more complicated returns tend to start coming in the middle of March; that is when people who have investment accounts get their 1099 dividends from the broker houses.”
The Tax Professionals services “corporate returns, nonprofits, trust tax returns and individual tax returns,” Ahearn said, covering “international clients” and domestic clients “in probably 40 different states.”
“Filing earlier is better,” Keyser echoed. “I’ve had some clients tell me they’ve gotten refunds as quickly as three days, but most are averaging seven to 10. But the longer it goes, the slower it goes, because the IRS has more to process.”
And experts said, electronic filing is key.
“Avoid paper filing at all costs,” Keyser said. “For some (last year), it took seven months to process paper returns, so only do paper if you absolutely have to. It’s mostly elderly (clients that do), but that’s why I tell them, ‘Come on in and I’ll help you do it electronically.’ The IRS puts paper returns aside until they have time to process.”
“We have a secured portal, where a client from another state can upload documents and we prepare the tax return and then we upload it back through the secure portal, per IRS regulations, so your data isn’t out there in the metaverse and your data can’t be hacked,” Ahearn said. “The internet has helped the transfer of information.”
Irs.gov, too, advises “speed(ing) refunds by filing electronically.”
“There are important steps people can take to help ensure their tax return and refund are processed without delays,” the site states. “The most important is to file electronically with direct deposit. This is still the fastest and easiest way to file and receive a refund. To avoid delays in processing, people should avoid filing paper returns wherever possible. To speed refunds, the IRS urges people to file electronically with direct deposit information as soon as they have everything needed to file an accurate return. Individuals can use a bank account, prepaid debit card or mobile app to use direct deposit and will need to provide routing and account numbers with their return.”
Candor when filing, Ahearn said, is also important.
“I’ve had people that wanted to deduct their dogs as guard dogs, and I’ve had people that want to deduct a motorboat that they’ve entertained clients on, and the IRS code says specifically that you can’t deduct that,” he said. “I’m always asked about dogs and cats as dependents on tax returns, and my response is, ‘If you can get it a Social Security number, you can deduct it,’ but so far, nobody’s been successful.”
Outside of peak season, Ahearn said, tax considerations remain.
“We like to help people plan their tax and financial life,” he said. “It’s more than just filing a tax return. An example being, (say) you have teens getting ready for college; that’s going to affect your tax returns in the coming years. When (a child) turns 17, that tax credit goes from $2,000 to $500, and when they go to college, they’re eligible for $2,500 worth of tax credits there, so, with younger couples, as their children age and change, there can be huge swings on the tax return. We like to help you avoid those tax surprises.”
For more information or to make an appointment, call Tax Resolutions at 607-988-6658 or The Tax Professionals at 607-432-7099. Also, visit thetaxpros.biz.