Clark County tax pros deal with season of change

Congratulations on making it to Tax Day — or at least, what would have been Tax Day.

Due to the novel coronavirus pandemic, the dreaded April 15 deadline has been pushed back to July 15 for most taxpayers, upending the usual seasonal work pattern for local tax preparation agencies.

In a typical year, enrolled agents and CPAs would have spent the past month working at a breakneck pace to get through all the tax filings from clients who procrastinated right up to the deadline. But this time around, a big part of their focus has shifted instead to assisting clients with stimulus checks, small-business loans and other federal financial support programs.

“Rather than doing tax returns, we’ve probably spent 50 percent of our time answering taxpayers’ questions,” said Susan Lauderdale, owner of Northwest Accounting and Tax Service in Vancouver.

The new round of questions comes during a season when accountants were already fielding inquiries about changes to tax filing prompted by the 2017 Tax Cuts and Jobs Act. Joan McNeil, owner of Vancouver-based Allied Accounting and Tax Service, said people aren’t yet used to the changes from the act — even changes that took effect in 2018, such as elimination of personal exemptions.

“We were already caught up with that when the world just went upside down,” she said.

The stay-at-home order has also changed the way accounting firms conduct business with clients. Email, regular mail, fax and online drop-box options were already in place, but the restrictions on in-person meetings have suddenly made the digital tools the only option.

That’s been an adjustment for Vancouver-based O’Leary’s Tax Service, according to owner Terry O. Bakker, because the firm tended to have a very relationship-based approach that focused on in-person meetings with clients.

“It’s been odd not to have our clients come in and see us,” she said.

The online tools can sometimes slow down the filing process, McNeil said, because the digital documents have to be emailed back and forth several times between the agency and the client, and it can take longer to request individual pieces of data or information from clients.

In other ways, the digital system has made the process faster, and Lauderdale said she thinks some clients might continue to embrace the convenience of features like digital drop boxes even after the stay-at-home order is lifted.

“I think it’s going to change the way we do taxes. I really do,” she said. “We’re going to streamline the process.”

The filing deadline delay appeared to take the urgency off for a lot of taxpayers, who now seem content to wait until closer to July to file. Despite in many cases being stuck at home, a lot of people are deadline-driven, Bakker said.

“It’s just moving the normal April craziness to the beginning of July,” she said.

McNeil said she’s still seen a few people rush to file their taxes in recent days, but not because they don’t know about the deadline delay — instead, she said, they mistakenly think the IRS needs their 2019 taxes on file in order to send them a stimulus check.

“Rest assured, if you filed in 2018, you’re fine,” she said.

For the moment, McNeil said, the best thing individuals and businesses can do is reach out to tax professionals with questions, especially given how frequently the situation keeps changing with regard to the virus and the economic relief efforts.

Lauderdale said she’s already begun to think in terms of how the outbreak will impact tax season next year, when the country will have to deal with the tax implications of a period of mass unemployment and shuttered businesses.

Clark County commuters in particular may find themselves in a different situation next year, she said, because wages are taxed based on one’s physical location when they do their work.

A large subset of Clark County residents commute to Portland for work, but some of those residents will have spent several months of the year working from home in Washington, where there’s no income tax.

“Tax returns are going to look very different next year,” she said. “We’ve got to figure out a way to start dealing with that before next January, February time frame.”

Source: https://www.columbian.com