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2020 Tax Filing Q&A

April 5, 2021 | COVID-19

April 5, 2021

When will my return be complete? Can I count on a specific date?
Our office prepares each tax return with the same care and attention. There are several steps in the preparation process that starts with intake and organization even before your tax preparer begins to enter and calculate your return. Preparation time may vary, depending on the complexity and the availability of all applicable data and software updates. Sometimes there is an added delay if we are awaiting additional information or if, like this year, tax laws change. Once we have compiled the full return, it is reviewed by a senior tax manager or your Financial Advisor. Notes and adjustments may follow before the final return is signed and ready for output. Digital and paper processing steps follow, depending on preference. All the above factors, in addition to unknowns as we have seen during the pandemic, make the time from drop off to final return delivery range from a couple of weeks to a couple of months.

Why does it seem to be taking longer than usual this year for my return to be completed?
2020 and 2021 have been full of change. Our team has been successful in adapting to rapid change and proactively creating new or enhanced processes to maintain our client-first focus. That said, we are somewhat at the mercy of some factors like the delayed start of the tax filing season (two weeks), and relief bills changing tax law and the required software and planning updates (ongoing). We appreciate your patience as we work in the best interest of all our tax clients, during these unusual times when enhanced safety and security are paramount.

When do I need to get my information to you to file in time for the new May 17 deadline?
April 15 is our estimate based on current turnaround times.For return information received after that date, our team will be assessing the best course of action, including the option of filing for an extension to file by October 15.

How do you determine when filing an extension is appropriate?
There are several reasons and benefits to filing for an extension. Most often the recommendation comes due to late arrival of information. Sometimes that is because they are not available or there are corrections – Schedule K-1s and Form 1099s are frequent culprits. Tax filing season is a finite amount of time and tax preparers get busy. So, taxpayers who are out of town for a period during tax season or clients who simply got their information together too close to that deadline can often take advantage of an extension to relieve the stress that often accompanies trying to pull everything together by tax time. Finally, and especially notable this year, an extension will allow you to take advantage of retroactive changes to the tax law that might be made after the filing deadline, without the added time and expense of filing an amendment.

Does an extension mean there is something wrong with my return or flag me for auditing?
No and no. Filing an extension is very simply allowing more time to complete an accurate return. In fact, sometimes, filing an extension can help avoid penalties or errors because of the extra time to evaluate everything. As for the myth that extensions somehow flag taxpayers as an audit risk, some tax professionals theorize that filing an extension will decrease your odds of being audited, since IRS auditors must meet quotas and try to do so early in the year. While the IRS does not disclose its process for selecting returns for audit, the earlier a return is filed, the longer it is in the system and thus subject to a review.

Who should I contact about the status of my tax return? How often should I expect updates?
Our Tax Department has a full-time staff not only preparing but also administrating the return process. Reaching out to tax@valleynationalgroup.com or calling our office and asking for the Tax Department is one of the fastest ways to get an accurate update on your return status. If you have questions about tax planning or other personal tax strategies, your Financial Advisor is probably the right point of contact. He or she can include your tax preparer in the conversation as needed. You can expect to receive confirmation from us when we receive paper documents delivered by mail. Otherwise, you may not hear from our team until your return is complete – unless there are questions or data requires confirmation.

What has changed at VNFA regarding my tax return preparation? What is the Tax Department?
We have invested in updated technology and additional staff to create a more streamlined Tax Department here at VNFA. In prior years, we managed tax preparation using an “all hands on deck” approach from our team.We found that this was creating a potential gap in ongoing client service, so we decided to revamp the process slightly to create more capacity for our advisory service teams to focus on wealth management and planning priorities for our clients. Most of the change is internal and should not affect your experience. In fact, it is our intention to enhance your experience with the added value of having a dedicated team of tax professionals working alongside your advisory service teams.

Why am I hearing from a new tax preparer this year? Isn’t my advisor preparing my return?
You Financial Advisor works with a CPA on our team to prepare and review your tax return. Your advisor communicates any tax planning information or other personal planning strategies that may influence the preparation process. The assigned CPA goes through all the data and prepares the return before your Financial Advisor thoroughly reviews the return and provides their signature when they are satisfied that it is ready for your review and authorization.

Why do my paper documents come back in a different order than I submitted them to you?
Tax preparers only need certain data from these forms to enter into your return, so we make an effort to clear the clutter so that they can focus on those important pieces of information. Tax returns are prepared digitally in our office. So, when we receive paper documents, we go through a scanning process to create digital formats of the important information you send. In order to create a clean scan, we remove any superfluous items (like instructions or envelopes). This is also the reason we prefer you send us your documents removed from envelopes and free of staples. After the initial clean up, we scan the documents and place them into a folder until the return is processed and prepared for delivery.