Few changes in tax laws this year

By Staff, 02/3/21 2:18 PM

PRESCOTT – It’s pretty much everyone’s least favorite time of year – tax time.

This year, though, there aren’t a lot of changes over last year. Carl Dalrymple, owner of Dalrymple-Crain Accounting, said the major change is with stimulus money, which has to be accounted for on tax returns. Those who received stimulus checks in 2020 have to declare them on their taxes, though they won’t be paying tax on these funds. Those who didn’t receive a stimulus check will get a like amount in their refund.

Dalrymple said there’s also an above the line donation for charity of $300 for couples and $150 for individuals, but proof of donation should be provided.

One of the problems this year, he said, is the difference in business grants. Some are tax deductible while others aren’t, and neither the state nor federal government has a way to distinguish which is which. “It’s a mess,” he said.

Another problem is the Internal Revenue Service (IRS) shut down on March 15, 2020, and opened with a third of its workforce working a third of the month in rotation. Dalrymple pointed out the confusion caused by talking about a business in Hope that filed for a tax identification number. After not hearing back for more than a month, he contacted the IRS and was told if it had been more than 20 days since the application was filed, another would be required. A second application was sent in with the end result being the business wound up with two tax numbers.

Those looking forward to getting a refund this year don’t need to be in a hurry either. He said no one can file electronically until Feb. 12, 2021, and there’s a chance this date could change as well as the IRS doesn’t have its system ready. Additionally, there are about 15 forms still in development, but these changes came at the end of 2020.

Otherwise, the tax laws are basically the same as last year.

However, Dalrymple said, there’s a bill in the legislature that would align which grants are deductible and which aren’t with the federal government. “I hope this passes,” he said, “it’ll help.”