Extensions

[TAXMAN]

What will be your cut date and about how many over last year. I am thinking 4-1 and about 20% more than last year.

[Catherine]

My cutoff date for promising to have returns done to file by 4/15 is March 20th -- and only holds true for those clients from whom I have EVERY piece of information! No dropping off half of it just to "get in the queue" and expect to be done when the other half is still missing on 4/5.

Anyone now may go on extension -- and they all know it. Lots depends on the clients. Every year, I get 4/10 emails asking "when will they be done?!?!?!" to which the answer is "not until you get me items a, b, c, and d, which I first requested on March 5th -- at this point, you are going on extension."

[rfassett]

My cutoff was this past Friday and I have enough in house to keep me busy busy through April 11th. On the 12th and 13 th we will do extensions and maybe take the 14th off and do a half day on the 15th.

[JohnH]

I suggest a slightly different strategy. File extensions immediately as the returns come in the door after your cutoff date (mine began 2 weeks ago). That keeps the pressure off, and it allows you to better prioritize as the deadline approaches. Personally, I think this allows me to get more returns finished between now and Apr 15 because there's no pressure.

For me Apr 15 has become just another day on the calendar. I usually come in late, spend a few hours reviewing extensions and calling a few people to be sure they paid their balance due, and go home early. Ron, your approach achieves the same result, but what happens if somebody gets sick or other unavoidable delays happen around the 12-14th? I learned this the hard way years ago when a business partner had a heart attack during the final week. The next year, I became proactive with extensions and have done that ever since.

There are a couple of other advantages as well. Sometimes you have a client who gets really unnerved about extensions. You flush that out early in the process and then can make a good decision about whether he's worth making an exception or do you want to take the chance that he will go elsewhere. You're not dealing with his obsessiveness under deadline pressure. The other benefit is with those who's work comes in after the deadline, you tell them they're going on extension, but they still call, text, or email to ask "How's it coming?" My answer is always "I filed your extension, will get back to you after Apr 15." End of discussion. For me, this works quite well.

[Lion EA]

I started talking extensions, on a case by case basis, 1 March. I'd hoped to actually file them by now, but maybe next weekend. It's going to be a higher number for me, waiting on forms, more with K-1s not out yet, corrected statements from brokers, clients not having everything when they first drop off, and new issues with old clients (a foreclosure here, an estate there, here a problem, there a problem, everywhere a problem, problem) have me barely treading water. And 2011 returns brought in this year and 2011 letters. And more states than usual. I've been blaming Congress, but my clients created a lot of issues too. And, everyone's fussing about not being first in my queue. This one can't go on extension or she'll lose her installment agreement, this one can't because she needs her FAFSA, this one can't with the baby due in May, etc. "I know my return won't be ready until next week, but can you tell me how much I owe?" I let the telephone go to voice mail, but I'm starting to wait until I'm good and ready to answer emails now too.

[Randall]

I'm getting ready to prioritize those I have info. I'll make a list of those to get done. I've been hedging with clients the past week. Saying 'I'll try but can't promise'. Anyone who comes in now or calls, I'll definitely tell them extension. I'll have more extensions than in the past.

[JohnH]

Lion: there's no problem filing am extension for someone who is on an installment agreement. Even if the extension anticipates that they will owe additional taxes, it still won't invalidate the I/A.

[joanmcq]

I put March 20 in my client letter as the cutoff date, but I started warning people at the beginning of March that I was behind but hoped to get everyone done that I got in by the 20th. Many of my returns I have to at least work up to make sure they don't owe or determine a balance to pay with the extension, and often a first quarter estimate too. I'm trying to get people done who have been waiting three weeks. The first two weeks of April I devote to extensions. And I hope to have an April 15 like John's. I've had a few, but often I'm running my own figures to get my extension done!

[Guest Taxed]

Cutoff for Extension is 4/1 for business returns. For personal returns I am a bit more flexible. If Sch D or 1099-B issues involved then they go on extension on 4/1. If it is a missing W2 or interest statement etc, I will use whatever the taxpayer can provide that looks reasonable.

Right now it is first come first serve for all new cases with all info included. If missing a critical document/info then choices are go on extension, or get the document and stand at the back of the line.

Starting 4/10 we do checks of all pending cases and if info. is still missing, extensions are required and taxpayer is given the choice, agree to extension and pay an estimated amount if they were balance due the previous year or take the case to another tax preparer.

It is amazing how fast people get the info. once they get that call that their case is about to go on extension. All of a sudden missing W2 and 1099s show up like magic!

[RitaB]

I think my cut off day is today for this client after getting this e-mail. She does this every year:

Hi, I was wondering if I get you my paperwork by Monday of next week will you still be able to do my taxes this year?

Thanks,

Slacker Client

I told her, sure, I should be able to do it this year. Maybe May or June of this year, we'll see.

I will, of course, reserve the right to be more accomodating to clients with good reasons for being late, like my little lady in the nursing home since September, whose neighbor brought in her forms yesterday. Hey, it's my office, right?

[clay]

Those are some pretty early extensions I am seeing in this thread.

I do not have that problem, but I find this year I had a constant 2 week backlog.

Generally I catch up in early March and then the creepage comes back in in early April.

But this year I have had to work MANY more hours to keep the backlog to two weeks.

Is it all the info IRS wants us to gather, the 8863 is always a nightmare in obtaining actual payments, and the 8849 details are just another delicious tidbit they added. My workload has remained constant over the years (by design, I get rid of those not worth keeping).

So is anyone else experiencing the same as me...or am I just getting older and slower!

[Margaret CPA in OH]

Pretty much the same as you. It is indeed a struggle getting education info and HSA increasingly. "Basis? What's that? Oh, you mean I have to get the name of the organization that I gave all that furniture and clothes to last year? Of course it was worth $800 but I don't know the value. Can't you put it down? Estimated payments - oh, whatever you told me to pay, I paid it."

Grrr...

[Lion EA]

Clay and Margaret: ditto!

John: I agree with you, but new client (referral from a long-time client who's a source of many referrals) is adamant that her IA will be nullified if they don't pay by 15 April, and she didn't agree with my suggestion to pay with the extension. I'm starting their return now; if everything's in their envelope, I'll complete it today. Maybe they misbehaved in the past. They're both sales people with wildly fluctuating income, so maybe 2010 wasn't the first time they didn't make ES and had to go on an IA and got a stern warning from the IRS. If I complete their returns (a couple of states and all the usual stuff like child care, Goodwill donations, investments, and a really lot of 2106 expenses for both of them), then in future years I will NOT be this accommodating; I'm doing it for my long-time clients who are nice.

[RitaB]

Those are some pretty early extensions I am seeing in this thread.

I do not have that problem, but I find this year I had a constant 2 week backlog.

Generally I catch up in early March and then the creepage comes back in in early April.

But this year I have had to work MANY more hours to keep the backlog to two weeks.

Is it all the info IRS wants us to gather, the 8863 is always a nightmare in obtaining actual payments, and the 8849 details are just another delicious tidbit they added. My workload has remained constant over the years (by design, I get rid of those not worth keeping).

So is anyone else experiencing the same as me...or am I just getting older and slower!

Yeah, I got behind at the outset, always do, but of course, this year has been worse. But, I am catching up, and I will admit, I try to get everybody finished up that gets here by the first week of April. I am slammed in February, so it really does not help me for even more people to come in February, so I don't fuss at people who bring everything at one time at the end of March. Rather see them now than a month ago. But, no mercy for the people who can't bring me everything, but think they are in line cause they brought me something. Or the ones bringing me stuff the day before they go on vacay, etc. I am here year round, and am happy to do all the extensions I can; I will pretty much keep the same pace February through April 13, then act like a normal person with a 40 hour a week job. You know, spend two hours a day on Facebook.

[Marie]

How do you handle the amounts due on clients you can't get finished? I'm way behind and keep hoping everyone is finished by April 15, but those late comers who are always late think I'm saving them a place and will get thier return finished anyway. Lots of late hours

[ILLMAS]

The only extensions I'll be doing are for my hair I will probably wait to April 2 to do my clients.

[rfassett]

What makes it easier for us to tell folks that their return will be extended is that we pre-schedule everyone in late December. This does wonders for spreading out the workflow. And our last scheduled drop off was last Friday. So other than the 107 returns we had in house Friday evening, there is no pressure. I feel comfortable that the 107 will be done by April 7th.

[Guest Taxed]

How do you handle the amounts due on clients you can't get finished? I'm way behind and keep hoping everyone is finished by April 15, but those late comers who are always late think I'm saving them a place and will get thier return finished anyway. Lots of late hours

Does your software let you do a projection based on last years's figures? I add to that the additional income that i can determine based on their very prelim info plus 10% and estimate the balance due. 99% of the time they get a refund at completion but if they have to pay it is a few hundred dollars.

It is amazing how people are willing to wait it out and they pay with extension to avoid the late payment and interest???

[Jack from Ohio]

What makes it easier for us to tell folks that their return will be extended is that we pre-schedule everyone in late December. This does wonders for spreading out the workflow. And our last scheduled drop off was last Friday. So other than the 107 returns we had in house Friday evening, there is no pressure. I feel comfortable that the 107 will be done by April 7th.

How did you handle the appointments you had in late January this year? Pre-scheduling that far in advance is fraught with pitfalls and dangers...

[rfassett]

How did you handle the appointments you had in late January this year? Pre-scheduling that far in advance is fraught with pitfalls and dangers...

The appointment is one-sided. That is the client's appointed time to drop off their info, no commit is made on our end as to when the return will be worked on. But that said, our first scheduled drop offs begin the first week in February. Been doing it this way for 15 years and the system has weathered all storms. It works.

[joanmcq]

I'll start some or put them in the queue when I get most of the docs. That way, I'm mostly done while waiting for that final k1 or brokers statement. Or if I need to extend, the projection is done too. I get the bulk of my returns in late February & early march. Mid February I was so caught up I actually went out with friends two evenings in one weekend! Then my kitty got sick, and I didn't do squat for a whole week. That messed me up mightily.