Sponsored content

Liberty Tax at 3414 Independence Avenue has been home to your locally-owned Northeast tax professionals for nearly a decade.

Owner Thomas Henggeler, who grew up near Truman Road and attended St. Stephen’s Academy with his four siblings, is set on getting his clients the highest return legally possible.

However, this year, he wants to warn taxpayers not to expect large refunds.

“I’m sure everyone in the neighborhood already knows – everyone in the country – the credits went down from what we had last year,” Henggeler said. “So everyone’s refunds are way down. Which, there’s really two variables.”

One factor was that tax credits from last year weren’t continued for this year.

“Congress passes a tax law and there’s an expiration date, and if they don’t vote to renew it, then they just go back to the default,” Henggeler said. “The other variable, it seems people’s income was either way up or way down. So, people are still struggling in this pandemic to find work, or to be able to work, and so their income’s way down and there’s no credits for them.”

Henggeler has also seen another common situation where people made more money and their withholdings were not changed appropriately.

“Their job just maybe gave them a pay raise but didn’t adjust their withholdings – and you adjust your withholdings by changing your filing status, and your exemption amounts on your W-4,” Henggeler said. “So the taxpayer who made $21,000 last year with no withholdings and three kids was in great shape. But this year they made $36,000 with no withholding and three kids and now they’re looking at a scenario where they might owe money or get very little back.”

Those who received a large refund last year should know that it was an anomaly, Henggeler said.

“They gave 50% refundable credits for childcare and then they basically doubled the Child Tax Credit for everyone,” Henggeler said. “In some cases, they tripled the Earned Income Credit for single people. That was a one-time – thank your lucky stars Congress acted in the benefit of the people – deal.”

Now, tax law looks similar to the 2020 tax year with no stimulus and no additional credits.

Henggeler recommends taxpayers call the Liberty Tax office and setting appointment to ensure they’re withholding correctly.

“We can help them fill out a W-4. Usually mid-year, July and August, that’ll give us a pretty good snapshot of what the first six, seven months of the year look like, and we can see their withholdings for those seven months and then make some recommendations on the holdings,” Henggeler said. “It’s kind of tough to see the future when you only have three months to go off of, but by July – if they’ve had the same job – it’s a pretty good idea to see where they’re going to land.”

While 2022 taxes are still on many people’s minds, Henggeler suggests taxpayers start thinking about record keeping for 2023.

The IRS has proposed that third-party payment apps like Venmo, CashApp, Zelle, Paypal and others should begin reporting all payments in excess of $600.

“All these money transfer apps that people use to buy Girl Scout cookies or send their mom 50 bucks, those were supposed to be reported this year, but at the last minute, thank goodness, the IRS decided to postpone it,” Henggeler said.

He recommends keeping records of payments on the apps, whether they’re for reimbursement, income or other purposes.

“It’s just such a commonplace thing these days… There’s going to be a rollout – which, a couple of things to be mindful of, the companies themselves should mail them to you so if you change your address, if you move, if it’s linked to an old account, if you uninstall the app, or lose your phone and get a new one and don’t reinstall it, you might not receive it in the mail,” Henggeler cautioned. “You might miss that tax document, but it’ll be reported to the IRS.”

While the pandemic and stimulus payments made tax professionals’ jobs harder, Henggeler expects this to be even more complicated if people don’t keep good records.

“My guess is in 2023, it’s going to affect 85% of taxpayers when people get those documents or use those apps,” Henggeler said. “So there’ll be a reconciliation next year that people will have to do.”

Improper filing could lead to a potential delay or audit of tax returns because of missing documents.

“So, documentation, documentation documentation,” Henggeler reminded taxpayers.

For people who haven’t filed their 2022 taxes yet, Henggeler recommends going to libertytax.com and setting an appointment.

“A lot of people have this misconception that, ‘I’ll just file it next year,’ and you run into an issue where if you miss the filing deadline, and you will owe a balance to the federal government, there’s an automatic 10% non-filing penalty they assess,” Henggeler said. “On April 19, if you owe money and you haven’t submitted a return – if you owe $1,000, they just tacked 100 bucks onto that.”

Then, penalties and interest start accruing from day one.

“That’s not the best approach,” Henggeler said. “We can file extensions. Extensions are not an extension to pay, just a six-month extension to give you more time to collect documents, but that’ll save you from the 10% non-filing penalty.”

Liberty Tax, at no additional charge, helps people set up installment agreements with the IRS.

“Depending on the balance, you can spread out your tax liability for last year into 12 months, 24 months, 36 months, whatever is reasonable for you,” Henggeler said. “The IRS will work with you on that if you communicate with them and say you want to pay them and you just need more time. If you don’t file, that’s sending them the wrong message and that’s when they assess penalties and interest.”

With a scheduled appointment, and using their encrypted app, customers can upload documents ahead of time. Often, Liberty Tax can have the return completed before the appointment so all customers have to do is sign.

“We want to thank everyone in the community for their continued and loyal support,” said Henggeler, who owns four Liberty Tax offices across the metro. “Over the years, decades, we really appreciate the business so much and say ‘thank you’ to the community.”

Tax Day is April 18. Walk-ins are always welcome, but appointments are preferred as the deadline approaches by calling (816) 920-0217 or visiting libertytax.com. Their hours are 9 a.m. to 9 p.m. Monday through Friday, and 9 a.m. to 7 p.m. on Saturdays. Liberty Tax at 3414 Independence Avenue offers Spanish, French, and Amharic and Afaan Oromo – two dialects spoken in Ethiopia.