SHELDON—Winters are always busy for accountants, but 2021 is especially taxing.
After a year full of uncertainty, the extra paperwork has piled up and many firms can’t even meet in person to sort it all out.
Stacie Dykstra, business development director at Cain Ellsworth & Co. in Sheldon, said that lack of human connection with clients made last year difficult and that challenge remains this year.
“It’s important that we have grace for everybody because everybody has been impacted by COVID in some way,” Dykstra said. “It’s important that we realize that it’s made everyone’s jobs more difficult and more stressful.”
The accountant said that it’s crucial for clients to get their forms in order early each tax season, but this year makes the checklist longer. The federal government enacted a range of programs to combat the economic chasm the pandemic ripped open. Dykstra highlighted some key areas for this year, including:
- Direct stimulus checks — either from 2020 and January, both of which are counted to last year’s income and require documentation for filing
- Unemployment benefits — taxable, unlike direct stimulus, and may result in taxes owed if none were withheld
- Self-employed individuals may be eligible for an additional credit based on average daily earnings up to $5,000
On top of the extra layer of red tape, Sheldon and area residents lost a tool that could have helped: the Volunteer Income Tax Assistance program previously offered by Northwest Iowa Community College in Sheldon. VITA is sponsored by the IRS and offers free aid in filing simple tax returns for lower-income earners.
Sheila Drenkow, an accounting instructor at NCC who helped lead the program in previous years, said it would be impossible to give quality service to a worthwhile number of people because of COVID-19 procedures. She said the decision had to be made last fall when positive cases were at an all-time high in Iowa.
“When we were making the decision, it was November and we just didn’t know what colleges were going to do,” Drenkow said. “Some were going entirely digital and we just didn’t know.”
The instructor said about 300 taxpayers had appointments last year, right before the pandemic took hold in the United States. This year, she said, NCC would only be able to accommodate less than a 100, if that.
“With social distancing and masks, it was impossible to hold it,” Drenkow said.
There isn’t a government-backed assistance initiative nearby, but Dykstra said her office is doing its best to meet the needs of clients who are understandably stumped by the complications this year brings.
“We’ve been trying to be resources for our clients since everyone has so many questions,” she said. “Everyone is trying to get up to speed on legislation at the same time.”
Last spring, Congress pushed back the filing deadline to July 15 to give taxpayers more time to compile their records. This year, the deadline is back to its regular April 15 date and the IRS also had a delayed opening to filing season, and only started to accept income-tax forms on Friday.
According to a Jan. 15 news release by the IRS, the move allows more time for federal systems to prepare for all the added complexities of 2021.
“If filing season were opened without the correct programming in place, then there could be a delay in issuing refunds to taxpayers,” the statement said. “These changes ensure that eligible people will receive any remaining stimulus money.”
Dykstra emphasized the confusion felt by the industry and taxpayers regardless of what the timeline looks like.
“No one knows what’s happening,” she said. “No one knows what’s going on.”
Despite the hurdles, she said she is encouraged to see her clients and co-workers doing their best to push through. From using unfamiliar digital platforms such as Zoom and GoToMeeting to simply displaying more patience, Dykstra said everyone is trying to make the best of an unideal situation.
“It’s been an interesting year, but the other thing is how willing people are to adapt,” she said. “Some people may have been scared to use technology, but they’ve learned to adapt.”
The IRS announced on March 17 that the income tax filing deadline for 2021 has been extended to May 17.