Welcome to the 2021 Tax Filing Season (in 2022):



Extensions Provide Several Timely Benefits

While we understand that clients often believe it is very important to file their tax return by the regular filing deadline, April 18th for individual returns for the 2021 tax year, you may not be aware that with an extension, the return is still on time if it is filed by the extended due date. Any balance due should be paid by the regular due date, and we will calculate and recommend that amount to pay as part of filing your extension.

An extension allows more time to accurately and correctly report on complex issues and for retroactive tax law changes to be incorporated into your tax return. A superseding return acts as the original filed return and allows for elections that are required to be filed with the original return if they are considered timely filed by its extended due date. Even if the return is filed by the original due date, an extension allows for the possibility of filing a superseding return and acts as a safety net for any missed elections if they are caught before the extended due date.

Finally, filing for an extension provide more time for your tax adviser to carefully review your tax return for potently overlooked deductions or credits, as well as, for you to review your tax return. Rushing to complete a tax return without adequate review time may lead to an inaccurate filing requiring the filing of an amendment.

Note that an extension does not extend the time to pay. Taxpayers must still provide the necessary data to enable the correct tax liability to be calculated and paid by the original due date. To qualify for an extension, the taxpayer must properly estimate the tax liability using the information available, enter the total tax liability, and file the extension by the return’s due date. A failure to calculate the tax may result in a rejection of the extension and additional penalties. Also, certain elections are due with by the original due date of the returns, but most can be filed separately from the filing of your return or with the extension.


Late Government Mandates and Late Form Changes Causing Delays

Both the Internal Revenue Service and California Franchise Tax Board have delayed form releases or made late changes to forms that have delayed our ability to complete tax return. This includes CA Schedule CA (540) used on all expect the simplest individual return, Form 1116, Schedule K-3 and CA Form 3804-CR.  Also many forms used for business returns have also been delayed including Forms 7203, Schedule K-3, CA Form 3804, CA Form 3893 to mention the most commonly used.

As a result, the tax year 2021 filing season has been compressed and it is likely need to file extensions of time to file for any clients who do not deliver complete or nearly complete information to us by March 7th, 2022 as we suggested in our annual tax letter.


News for Schedule K-1 Recipients

The Internal Revenue Service mandated complex, new filing requirements for the partnership and S-corporation entities who issue many of you Schedules K-1.  The new Schedule K-3 is required if any of the partnership partners or S-corporation have foreign holdings or foreign activities, or any one of their partners or shareholders file Form 1116 to claim a foreign tax credit. This complex, 19 page form may well delay your receipt of your Schedules K-1 this year. We recommend you speak to your entity representative about information they may need from you and to understand when you are likely to receive your Schedule K-1.


2021 Tax Season Challenges

If you haven’t seen reports in the news, the Internal Revenue Service (IRS) is unable to keep up with its responsibilities and this has important implications on your 2021 tax filing. The latest reports are that IRS has between 23 and 26 million unprocessed tax returns which is about one for every eight tax returns filed each year.

The implication is that any paper filed tax return or any E-filed tax return that requires manual review will be take a long time and, if you expect a refund, the refund could be significantly delayed. Two items that must be reported accurately to avoid such delays are the amount of the third Economic Impact Payment or EIP3, also known as the Stimulus payment, or advanced child tax credit payments.

For those who received advanced child tax credit payments, IRS send Letter 6419 to report the amount of such payments. If you are married, each spouse should have received a separate letter for their portion of these payments.  We need a copy of Letter 6419.

Those who received an economic impact payment should have received IRS Notice 1444-C, Your Economic Impact Payment, notifying you of the amount of the payment you should have received. The maximum payment was $1,400 per taxpayer, spouse, and dependent. The economic impact payments are treated as advance tax credits against your 2021 income taxes. As such, you will need to include a copy of Notice 1444-C when you provide us with your other tax documents.

We recommend you verify the amount reported by checking your bank deposits or by checking your IRS Get Transcript account record to verify the amount reported is correct.


Visits to Our Office

We welcome you to choose to meet with us in our office at 4725 First Street, Suite 275, Pleasaton or remotely via a Zoom web conference whichever you prefer. All of our staff have been fully vaccinated for COVID-19.

We will follow the county health officer guidance. Currently this states that unvaccinated persons will need to wear a mask while in our office. Those who can substantiate they are fully vaccinated are welcome in our office without having to wear a mask.


2021 Tax Package

We welcome you to our annual right of passage in filing your 2021 tax return.  We delivered an improved version of our “tax package” including customized tax organizers either in print form by mail or as electronic (pdf) document via your client portal based on your prior request or history of usage. We included a few new documents to ask about processing your tax return on color-coded pages we call our rainbow pages to streamline our work together.  We call the entire package our “Taxes Completed in Ten Easy Steps.”





Below are details from the 2020 Tax Filing Season:


Updated May 7th, 2021

We have been getting questions about delays in your receiving your refunds from IRS. We have come to understand that IRS has faced some technical and logistical challenges. Refunds are taking much longer than usual.  For more information, see the article in today’s Wall Street Journal entitled “Are you getting money back form IRS this year?  Be prepared to wait.”


Updated April 8th, 2021

We have encountered enough of our clients and prospect who have been surprised to learn that tax preparers and advisers have been facing challenges this tax seasons are are surprised that their tax returns have not been completed in the time expected. They have been surprised to learn that IRS extended the regular filing deadline until May 17th, 2021.

As a result, we wanted to share some of the challenges we have faced this year along with our fellow tax preparer colleagues. I found the an article you can access here from CNN Business that does a better job of providing an explanation that I can.

Since the deadline to make your estimated tax payments remains April 15th, 2021 we are hard at work getting this information to those we know need it, then we will focus on getting your tax return completed for you.

Thank you for your patience.


Updated Wednesday, March 17th, 2021

Today the Internal Revenue Service announced they have extending the 2020 tax filing deadline for individual taxpayers until May 17, 2021. See here for the full announcement from IRS.

Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Penalties, interest and additions to tax will begin to accrue on any remaining unpaid balances as of May 17, 2021. Individual taxpayers will automatically avoid interest and penalties on the taxes paid by May 17.

This relief does not apply to estimated tax payments that are due on April 15, 2021. These payments are still due on April 15.


Updated Sunday, February 28th, 2021

We are offering to work with you this year in a variety of ways to try to accommodate our preferences including working completely remotely while offering limited duration meeting in our office. First, we want to thank all of those you listened to us and have started early working with us on their 2020 tax returns.

Please deliver substantially complete information to prepare your 2020 tax returns by March 15, 2021 otherwise we are likely to file an extension of time to file and work on completing your tax return this summer.  To better understand why, please read on.

Some notes about common issues we are facing.

  1. Stimulus Rebates: We need to know about both of the “Economic Impact Payments” (aka stimulus payments) you received, both the first one you may have received in the spring / summer of 2020 and the second one you may have received in January 2021. Both payments must be reported on your 2020 tax return. Check with IRS at https://www.irs.gov/coronavirus/get-my-payment about your payments.
  2. Unemployment Compensation: Did you receive any unemployment compensation in 2020? We are recommending delaying filing any tax returns with unemployment compensation. Unemployment compensation is taxable for federal tax purposes (not for California). Yes, EDD may have withheld taxes, but almost certainly not enough. The Congress has proposed legislation to treat up to $10,200 of unemployment compensation received in 2020 as not taxable. The legislation is proposed, but not enacted.
  3. Payroll Protection Loans: Many business owners received a PPP loan. If it has been forgiven or is likely to be forgiven, expenses used to qualify for forgiveness are currently taxable for California tax purposes, but not for federal tax purposes (seems like the same as saying the loan forgiveness is taxable, doesn’t it since it amounts to the same result). There is proposed legislation what would make up to $150,000 of such expenses deductible. Again, this is proposed legislation which has not been enacted, so we recommend anyone who took a PPP to wait to file until this legislation is either passed or not.

There are other issues, but we are sharing that the tax laws related to many 2020 tax returns is uncertain and likely to change which will mean expect to have an unusually challenging end to the tax season.


Updated Thursday, June 18th, 2020

We are happy to report that we will begin schedule short duration meetings again in our office starting on Tues., June 23rd.

Appointments will be limited to 15 minutes and only one family unit at a time with time in between appointments to provide for adequate social distancing in addition to taking other protective measures. This will not allow for the time for tax preparation while you wait, but it will allow for in-office visits to review your documents, review your tax return, sign papers and other activities of relatively short duration.

Please do not come to our office if you are sick or have symptoms associated with COVID-19.  Please pay close attention to the signs and instructions both in our building and in our office. You will be subject to a health check and we will require that you wear a face covering during your entire visit.

Give us a call and make an appointment. We will be happy to see you.


Updated Wednesday, April 15th, 2020

It is the normal tax day, but not this year.  All filings and payments are now due on July 15th, 2020.  There are a few state filing exceptions, but California conforms to the revised due date. It applies to filings and payments.  No penalties or interest will accrue due to filing or paying if by July 15th.  This does not forgive penalties or interest that would fave applied you had filed an paid by the regular due date such as failure to pay proper estimated tax.


Economic Impact Payments (aka Stimulus Payments)

The IRS had begun making these payments starting with those who used direct deposit of their refund from the last year filed (2018 or 2019). You can check the status of your “stimulus” payment and, if you did use direct deposit on your most recently filed tax return, provide IRS with your bank routing and account number to receive your payment be direct deposit at https://www.irs.gov/coronavirus/get-my-payment. You can find information about who qualifies for this payment and how much at Coronavirus Legislation Summary for Individual Taxpayers.


Updated Friday, April, 10th, 2020

Yesterday the IRS announced they expanded the deadline for additional returns, tax payments and other actions. As a result, the extensions generally now apply to all taxpayers that have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020. Individuals, trusts, estates, corporations and other non-corporate tax filers qualify for the extra time. This means that anyone, including Americans who live and work abroad, can now wait until July 15 to file their 2019 federal income tax return and pay any tax due.


Extension of time to file beyond July 15:

Individual taxpayers who need additional time to file beyond the July 15 deadline can request an extension to Oct. 15, 2020, by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses who need additional time must file Form 7004. An extension to file is not an extension to pay any taxes owed. Taxpayers requesting additional time to file should estimate their tax liability and pay any taxes owed by the July 15, 2020, deadline to avoid additional interest and penalties.


Estimated Tax Payments

Besides the April 15 estimated tax payment previously extended, today’s notice also extends relief to estimated tax payments due June 15, 2020. This means that any individual or corporation that has a quarterly estimated tax payment due on or after April 1, 2020, and before July 15, 2020, can wait until July 15 to make that payment, without penalty.


2016 unclaimed refunds – deadline extended to July 15

For 2016 tax returns, the normal April 15 deadline to claim a refund has also been extended to July 15, 2020. The law provides a three-year window of opportunity to claim a refund.  If taxpayers do not file a return within three years, the money becomes property of the U.S. Treasury. The law requires taxpayers to properly address, mail and ensure the tax return is postmarked by the July 15, 2020, date


IRS live telephone Unavailable 

IRS live telephone assistance is currently unavailable due to COVID-19.


Updated Monday, April, 6th, 2020

The Families First Coronavirus Response Act and the Coronavirus, Aid, Relief, and Economic Security (CARES) Act affects most individuals and businesses. We have created a summary of the key provisions as they affect individuals and businesses.  Please review these two page summaries by downloading the document using the links below.

Coronavirus Legislation Summary for Individual Taxpayers

Coronavirus Legislation Summary for Business Taxpayers


Updated Monday, March, 23rd, 2020

We are prepared to maintain our services but acknowledge there will be temporary adjustments needed. We continue to work to balance serving you and taking care of ourselves. Effective immediately, we will not be able to have any office visits until further notice. We do not know how long this policy will remain in effect but are prepared to serve you remotely. We expect to have one person in our office to collect and process documents which come to our office physically or electronically, as well as to facilitate work between our staff and clients. You will be able to find updates regarding our status on our website at https://adaptax.com/coronavirus.

The IRS has extended both the time to pay and file until July 15, 2020. See their announcement here. The extension to pay includes any balance due on your tax return and the estimated tax payments normally due on 4/15. The change in filing and payment deadlines takes much of the immediate pressure off for now.

We are working to: complete your tax return or financial plan, represent you or manage your investments. With these measures in place, our work will take a bit longer to complete. I hope you understand.

If you have documents to deliver to us: (1) use our secure portal at https://adaptax.com/portal, (2) mail to 4725 1st St., Ste. 264, Pleasanton, CA 94566, (3) use our secure lock box located in the 2nd floor hallway in our office building between the First Street entrance and the elevator, or (4) FAX to 925-397-3061.

If you have an urgent need to get your tax return completed, please let us know. Otherwise, we work on projects in the order delivered to us. Under the current circumstances, we will try to prioritize tax returns with refunds.

Once we have our tax return completed, we will want to know if you wish to review your tax return with us via a meeting by phone or web conference. In the meantime, we will also want to know how to deliver your tax return. Our default choice will be to deliver documents via our secure portal.  We can also offer to mail them to you, and in some cases, use E-signatures using DocuSign or equivalent or wait for an in-office review.