Five Lessons From What Felt Like The Longest Tax Season Ever

Tax Day was Monday for most individual taxpayers—remember that some taxpayers filed for, or were eligible for, automatic extensions. It marked the end of a difficult season for taxpayers and tax professionals alike. Here’s some of what we learned.

1. The one thing we can count on is change.

It’s not just you: Even the IRS has labeled the past year as “an unpredictable year with many changes and challenges.” As a result, the tax filing season, which usually kicks off in January, didn’t open until mid-February. At the time, IRS Commissioner Charles Rettig signaled that it would be a fairly typical tax season, with the tax filing deadline remaining April 15, 2021.

That changed in March when the tax filing deadline was officially postponed to May 17, 2021. It felt almost like 2020—with one exception: The postponement to file and pay taxes did not apply to estimated tax payments. Those were still due on April 15, 2021.

The constantly changing tax landscape was confusing and served as a good reminder about the importance of staying up to date.

2. Taxes can be complicated.

A late push for another stimulus package in December created another layer of confusion for taxpayers. With questions swirling about stimulus checks and unemployment benefits, it’s no surprise that taxpayers increasingly turned to tax professionals for answers. E-filed tax returns—which accounted for 94% of all tax returns received so far this filing season—reflected a 10.6% bump in professionally prepared returns. In contrast, self-prepared returns were down 5.6%.

If you didn’t hire a tax professional in 2021—but wish you had—you can ease a lot of your stress by looking for someone now. Ask for referrals and find someone that you feel like you can trust. Most importantly, follow through well in advance so that you don’t get caught by surprise next year—Tax Day 2022 is just 331 days away.

3. Mistakes happen.

2021 may well be the year of the amended tax return. With stimulus checks and Covid-19 relief-related tax credits hinging on filing status and income, taxpayers learned that filing early isn’t always the best option. Taxpayers who filed a valid tax return but realized that they made a mistake may need to file an amended tax return—and not a second tax return.

And those taxpayers who missed the Tax Day deadline—it happens—shouldn’t panic. It can be tempting to resolve to fix it all later but don’t put it off: Fix it now. The IRS can abate penalties, including for reasonable cause. If you file late—and you think you have reasonable cause—you can request an abatement using Form 843, Claim for Refund and Request for Abatement. And if this is your first mistake, the IRS may also provide administrative relief under its First Time Penalty Abatement policy.

4. Patience is a virtue.

I am well aware of the irony of my saying this. My favorite button on my stovetop is the “power up” button because it makes water boil faster. I fast-forward through commercials to get to the good stuff. And if there’s peach cobbler on the menu, I will order it early and eat it first. I hate to wait.

But even I am aware that I can’t make the IRS move any faster. And this year, that was a significant frustration point for many taxpayers. The IRS has been slow to release guidance on stimulus-related tax matters. Many taxpayers are still waiting on their Economic Impact Payments, known as EIPS, or stimulus checks . And according to the National Taxpayer Advocate, the IRS is holding more than 30 million returns for manual processing, including 15.8 million 2019 and 2020 paper returns, which means delayed refunds.

Calling the IRS won’t speed anything along. As of earlier this month, the IRS reported that only 7% of taxpayer calls to the 1040 lines reached a real person. At the lowest point, that number dropped to 2%—or one in 50—of the roughly 70 million taxpayer calls to the IRS. The worst part? Even if you get through, the IRS is not likely to be able to explain processing and refund delays.

The only thing that taxpayers—and tax professionals—can do at this point is to wait. That’s true even if it feels entirely unsatisfactory.

5. We’re all in this together.

On Tuesday, May 18, many tax professionals woke up with a direct message on Twitter. Isai B. Cortez, a tax lawyer from California, had posted a screenshot of a gift card from Starbucks with the message, “Coffee on me today.”

I reached out to Isai to ask if he had a comment about his act of kindness. He wrote:

Our #taxtwitter community has been through a rough season. Helping our clients, dealing with ever changing rules to our country’s tax system and just the stress of doing this during a world crisis. It was the least I could do to say job well done to a community that has in turn been supportive to me.

Like your birthday, Tax Day comes around just once a year—and carries just as much baggage. But now that it’s over, you can take a deep breath and promise not to talk or think about tax for a bit. Or, at least until next week.