Firm News

March 30, 2021

Manager Chris Cicalese Interviewed on NJ 101.5

Alloy Silverstein manager, Chris Cicalese, CPA, MSTFP, was interviewed on New Jersey 101.5 about the new law regarding unemployment taxes. Following the American Rescue Act of 2021, the first $10,200 ($20,400 for married or joint filers) of jobless benefits will not be taxed. In the article, “If possible, hold off on filing tax returns if you collected unemployment in 2020” Chris discusses what to do if you already filed your taxes and reported the unemployment income you received in 2020 as taxable.

Christopher Cicalese, manager at Alloy Silverstein Accountants in Cherry Hill said do nothing. The Internal Revenue Service doesn’t want anyone filing an amended tax return at this time. Most likely what will happen is that the IRS will try to figure out an easier way for there to be a mass refund or a mass recalculation where they can use the computer power of the IRS to automatically adjust everyone’s tax returns.

The problem is that everyone’s tax software, no matter who the tax preparer is, does not have the latest coding. If someone were to manually go in and amend the return, Cicalese said there is the potential to mess up a different calculation.

“It starts to get really confusing when you’re looking at the tax law that was passed and looking at the prior tax law that is still in place,” said Cicalese.

Cicalese said if someone has not filed taxes yet and potentially was in any situation where he or she had something that’s going to change, hold off on filing if possible. By the end of the year, everyone should be made whole. But it’s going to take time and it’s up to the IRS to be able to process all this information within a reasonable time frame.

Because the tax software does not have the coding in it to not tax the unemployment compensation, the IRS needs to update the forms as quickly as possible to reflect the new law passed in The American Rescue Plan. That information will then be given to software companies, which, in turn, will need to write new tax codes to update the software. From there, the codes go to the tax preparers.

So, Cicalese said basically everyone who filed returns with unemployment compensation or have unemployment benefits and have yet to file, are in a holding pattern right now.

“I could expect the IRS is going to have to come out with something in the next couple of weeks because the deadline is already around the corner and possibly they might even extend the return filing date,” said Cicalese.

This interview took place on March 16, 2021. As of March 17, the IRS announced that individual tax return filing has been extended until May 17, 2021. For the most up-to-date information, visit our COVID-19 Resource Center.

To read the full article, click here. Follow New Jersey 101.5 on Twitter @nj1015.

https://nj1015.com/if-possible-hold-off-on-filing-tax-returns-if-you-collected-unemployment-in-2020/

The article was also featured on 92.7 wobm, https://wobm.com/if-possible-hold-off-on-filing-tax-returns-if-you-collected-unemployment-in-2020/

 

JB Financial Associates is now Alloy Silverstein.
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