This year’s tax season has been unlike any other.
Due to a number of pandemic relief measures and a year of particularly turbulent employment, many individuals may find their 2020 tax returns more difficult to navigate than usual.
Even with the deadline for both state and federal taxes extended from April 15 to May 17, North Shore-based accountant Leigh Berry of Neal A. Price & Co., LLP said she worries many Massachusetts residents still won’t receive the stimulus money they’re entitled to.
“Stimulus checks to individual taxpayers are not taxable at the federal or the state level. However, they are required to be reported because, if someone were entitled to those payments and didn’t receive them for whatever reason, they would get it then as a refund on this tax return,” Berry said. “Reporting accurately on your tax return is essential so you do get that money back as a refund.”
However, Berry said that, for many people, reporting accurately isn’t as easy as it may seem.
“It’s astonishing that people don’t know what they received. Not even a year later, we’re asking people to tell us what they got, and they literally have no idea what they received in a check or a credit card, or, in many cases, direct deposit,” Berry said.
She estimated that roughly 40 percent of her clients are unable to recall the exact amount of stimulus payments they’ve received.
“Sometimes it’s a case of the spouse handling the finances, as opposed to whoever we deal with (at the firm),” she said. “In the last few years, I think there’s sort of been a shift where people don’t sit down and reconcile their bank accounts. They just look at their online banking and assume that’s how much money they have in their account without really paying attention to the details of that.”
Because stimulus checks were also distributed in 2021, Berry worries that the same issues will arise during next year’s tax season.
“I’m hopeful that people will start keeping track and remember for next year,” she said. “But sometimes you still have clients who call every single year and still ask ‘What am I supposed to give you?’”
For those looking to be smarter about their finances, Berry emphasized that simply being diligent when keeping track of income — and any stimulus received — can do wonders when it comes time to file taxes.
“If you can point to March for when you received the stimulus direct deposit, or if you got a check and deposited it during this week … it’s helpful for us to roughly know when these things happen,” she said. “As long as you have things gathered in one place rather than having paperwork all over the place, it really, really does help tax professionals to have documentation as opposed to guesswork.”
