Lacerte sent an Alert on 1/17/2023 re: CA and IRS deadline extended to May 15 for certain counties related to the storm disaster.
Today, is 1/20/2023 and Lacerte has not sent another alert stating how the program will be treating the due date of May 15 on their instruction letters and estimated tax payments.
I called the Lacerte rep today and she stated Lacerte will NOT be changing the due dates on the instruction letter or estimated tax payments nor will Lacerte be offering a checkbox for the option to change the due date. She stated the government agencies, IRS and FTB, will look at the zip code and determine if the taxpayer resides in, or the business is in, an affected county. If the taxpayer's zip code is in an affected county and the taxpayer files their return and makes their payments on May 15, then no penalties or interest will be assessed.
Hopefully, Lacerte will send an alert as soon as possible to inform everyone how their program will be handling this new due date for instruction letter purposes.
There are No product changes expected for this extended deadline (same as in prior years).
Questions such as -How do I delay a quarterly payment? -Can I delay the withdrawal of tax due when I e-file the return? -How can my client make payments to the IRS after the original due date? -How do I update my client letter with a later due date?
We're always open to feedback on help articles, be sure to answer Yes or No at the bottom of the article after "Was this helpful?". We monitor this on a weekly basis and review your comments.
We really do hope this is helpful! Thanks for your participation.
Will Lacerte be taking into consideration the revised deadline when it comes to underpayment penalties? Especially for those who chose to not pay the 4th quarter payment and will pay it with the return.
" NOT be changing the due dates on the instruction letter or estimated tax payments nor will Lacerte be offering a checkbox for the option to change the due date. "
This is very poor. Due dates are how we live and die. You can't get a new due date in your software? That is just lazy.
I urge California preparers to voice their opinions.
"Will Lacerte be taking into consideration the revised deadline when it comes to underpayment penalties? Especially for those who chose to not pay the 4th quarter payment and will pay it with the return. "
Lacerte has 83 days until the April 18th Nationwide deadline to figure this out and make adjustments to their software. But they really should resolve things by March 31, giving them 65 days.
Further, it appears the change could be applied to S-Corporations & Partnerships, which are due on March 15, so the fix for those needs to be done even earlier.
In terms of the 4th Quarter Estimates, which technically were due 8 days ago, the Underpayment Penalty has to somehow be fixed right away. Anyone who is Underpaid for the 4th Quarter, should not be penalized, if they live in one of the counties on the list.
It would be completely Irresponsible for Lacerte not to put in some sort of a fix. We pay good money for the software. At the very least, if they want to put determining the eligibility on the Preparer, put a check box so we can mark whether a Taxpayer qualifies. And add a Diagnostic for all Tax Returns with a CA address, indicating that the Taxpayer may be eligible for this relief.
An interesting side note. If the Tax Preparer is located in one of the listed counties, then ALL of their clients are eligible. This is how the official IRS Notice reads. It impacts any Tax Records which would be located in one of the counties. However, this would not be automatic, and the client would have to request relief, as the IRS is only going by the county on the Return for the automatic exception.
"if they want to put determining the eligibility on the Preparer, put a check box so we can mark whether a Taxpayer qualifies. And add a Diagnostic for all Tax Returns with a CA address, indicating that the Taxpayer may be eligible for this relief."
This is brilliant and it gets to the heart of the matter which is that Intuit/LC wants to avoid liability. There is a non-zero chance that they list a May 15 deadline for the wrong taxpayer in error, and I understand that. But @SFSTaxPrep has solved it for you Intuit!
I know that we, as preparers, can change the filing date listed in the instruction letter. I don't want to provide my clients with an instruction letter that is not correct. That makes us look like we don't know the current laws.
My bigger question is - if the client wants his/her tax payments and estimated tax payments to be withdrawn from their bank account on the due date, which date will that be? April 18 or May 15? It looks like we can change the tax due payment date by overriding it on Screen 3 but I don't see anywhere in the program to override the first estimated tax payment date.
I sincerely hope that Lacerte will come through with the changes that we need to prepare an accurate return for our clients. As far as I'm concerned, that's their only job.
The Due Date for the impacted counties, will now be May 15.
Unless Lacerte makes a change, you cannot actually override it on Screen 3, to be later than April 18. It will not allow you to enter a date later than the Due Date of the Return, and won't take any Extension into account. You can see that if you attempt to enter a date later than 4/18/23 for the payment to be made.
I've been using Lacerte for many years and I've never had to use that override so I was not aware of that limitation. I guess I would have found out that I can't do it eventually. Now I know in advance that I can't and I thank you for that.
I'm very disappointed in Intuit if they do not provide us with a tax program that is correct.
I hope everyone is calling Lacerte and expressing their concerns.
I agree that Lacerte needs to fix the underpayment penalty calculation for the Jan 2023 estimate not having to be paid until May 15. And also fix the penalty for late payment and late filing for returns on extension after May 15 since the due date is May , not April.
For tax return instruction letter purposes for every module, as tax preparers we have to solve the problem ourselves. My solution is to put at the beginning of the instruction letter for every module :
IF you live in or have a business in a "qualifying" County, then the 2022 tax due to the IRS and CA FTB can be paid May 15 and the first 2023 IRS and CA FTB estimated tax payment can be paid May 15. For qualifying counties, please look at
Lacerte needs to fix the changes to CA returns. CA has over 30 million residence and over 12% of the nations population, this affects every tax preparer who has clients in CA. Please make the changes.
There are No product changes expected for this extended deadline (same as in prior years).
Questions such as -How do I delay a quarterly payment? -Can I delay the withdrawal of tax due when I e-file the return? -How can my client make payments to the IRS after the original due date? -How do I update my client letter with a later due date?
We're always open to feedback on help articles, be sure to answer Yes or No at the bottom of the article after "Was this helpful?". We monitor this on a weekly basis and review your comments.
We really do hope this is helpful! Thanks for your participation.
PATHETIC & LAME! That "help" article is completely Useless, and I answered "No" at the bottom, and hope that everyone else does as well.
Lacerte won't allow ANY of the things granted by the Extension to be done. Can't pay the Tax Due after April 18th, which is specifically allowed by the Extension. Can't pay the 1st Qtr. 2023 Estimate after April 18th, which is specifically allowed by the Extension.
And the program is still going to assess Penalties for anyone who did not pay the 4th Quarter Estimate by January 17, in addition to assessing a month of Penalty & Interest for anyone who files and pays by the extended May 15 deadline.
And it sounds like we can not file extensions electronically after 4/18. As we are a California preparer, I am afraid this may make for a bad tax season. What is everyone planning to do with this final answer from Lacerte? How will you be working this tax year for your California clients?
The IRS system is NOT programmed to allow the efiling of extensions after the original filing due date (March 15, 2023 and April 18, 2023). To avoid issues with efiling extensions, we recommend you efile client's extensions by the original due date (March 15 and April 18).
We will be filing extensions for our clients on the original extension due date of March 15 and April 18.
We are not changing the client letter due dates because some of our clients are NOT in the disaster county. With over 2000 client, we are not going to customize our client letters. We are putting this paragraph in our client letters immediately after the "Dear Client":
IF you live in or have a business in a "qualifying" County, then the 2022 tax due to the IRS and CA FTB can be paid May 15 and the first 2023 IRS and CA FTB estimated tax payment can be paid May 15. For qualifying Counties, please go to IRS.GOV and search "California storm relief 2023" and for CA, please go to FTB.CA.GOV and search "California storm relief 2023".
Since the FTB and IRS computers are not programmed for this May 15 date, we are advising all of our clients to pay the extension payment by March 15 and April 18. This will avoid IRS and FTB letters that assess late payment penalties. And this will avoid numerous hours by us to call the IRS and FTB to get the penalties waived.
And we all thought 2023 tax season would be easier!
This also impacts Partnerships & S-Corporations, which are due March 15, as well as Corporations & Trusts due April 18.
I already sent out notification to my clients about the Extended deadlines, and some of them responded saying they had already heard about them.
This is going to create a Huge problem for me now, and apparently there is no way around it.
I pay over $10,000/year, between the Program & REP's, and I'm sure many of you do as well. It is ridiculous that Lacerte won't help us out, and is now screwing us over.
This IRS Extension is now utterly Useless to me as a Tax Preparer, and it might as well have not even happened.
Nothing but excuses. Lacerte could make the changes if they wanted to. When the IRS instituted changes during the Covid pandemic, they put check boxes to apply certain provisions to the Tax Returns.
The IRS is specifically allowing Extensions to be filed by MILLIONS of Californians, on or before May 15, yet Lacerte won't adjust their software to account for this fact? This, in itself is a joke, and combined with all the other issues including Penalties which will continue to be reflected, and the requirement to have payments made by April 18th, when the IRS & CA have both stated they can be made until May 15, is going to now create blowback from my clients, who I have told they had until May 15 to pay any Balance(s) Due.
Thanks for your insights @lisaFTC I'm sure your comment will be helpful to others.
@CMcCullough@SFSTaxPrep I'm reviewing these comments, thanks for taking the time to share your concerns as I'm sure others have the same questions as you. I'll let you know if I get anymore feedback.
I find it difficult to believe, that with all the technology and programming that goes into the Lacerte software, it is not possible to have a fix or work around present, so that the Preparer can indicate those Taxpayers who qualify for the relief, and have it provided. We're not talking about a few Taxpayers, we're talking about Every Taxpayer in GIANT counties like Los Angeles, Orange, San Francisco, Marin, San Diego, Riverside, Sacramento, etc.
If the IRS took it upon themselves to grant this Automatic 1 Month Filing Extension, to so many, they should have planned on making adjustments to their E-Filing system, to be able to process Extensions filed between April 19th & May 15th, as provided by their own Notice. It is utterly irresponsible to put out a news release saying that these Millions of Taxpayers can file an Extension until May 15, and then when those Taxpayers rely on that advice, they'll be met with a system that won't allow such a LEGAL & TIMELY Filing.
I'm just a lowly CPA, but here is how I would have resolved the problem, if I were a technician at Lacerte:
1. Resolve the Underpayment Penalty issue associated with missing the January 17th Estimate.
2. Resolve the March 15 Due Date & Extension issue associated with S-Corporations & Partnerships.
3. Resolve the Tax Returns Electronic Payment issue associated with S-Corps & Partnerships.
4. Resolve the Tax Returns Electronic Payment issue associated with Individuals, to allow payments to be withdrawn up until May 15.
5. Resolve the 1st Quarter 2023 Estimates issue, to allow payments to be withdrawn up until May 15.
6. Resolve the Extension issue associated with Individuals, Corporations & Trusts to allow Extensions E-Filing until May 15.
7. Resolve the Penalty & Interest issue associated with S-Corps, Partnerships, Individuals, Corporations & Trusts, to assess No Late Penalties/Interest for Returns filed by May 15.
Yes, a lot of work to undertake, but we're talking about Millions of Taxpayers in the most populous state in America. 40 Million People, making up 12% of America's population, and a large majority of them fall under these provisions.
"....who I have told they had until May 15 to pay any Balance(s) Due."
AND so has every single news source in the State of CA. It's not like the clients are in the dark about it.
So, our choice is to spend a lot of time overriding (I haven't tried to yet, but I'm sure it's a PITA/time consuming process), or to blame it on the software. Which tends to lead to doubt about our competency, or the accuracy of the software in the eyes of our clients.
NOT a professional *look*, and I'm pretty sure the cost of Lacerte is in the "professional" cost category. One reason I could never switch to Drake is the presentations are third rate (in my eyes anyway).
One other thing. I have plenty of clients who like to wait until the last minute before filing their Taxes, and the last second before making payments due on their Taxes. Now that they are aware that they have until May 15 to file an Extension, or to make a Payment, you can rest assured that many of them are going to want to take full advantage of that, and not let the IRS have their money 1 day before they are required to.
They are not going to appreciate me telling them that they have to pay the $5,000 they owe, by April 18, simply because my software or the IRS system, is not advanced enough to allow payment until the actual May 15 due date. And since the whole idea of using Lacerte software, is to make things easier on me, I shouldn't have to make a note of several Returns that I need to manually make payments for via the IRS/CA websites on May 15th, because the software won't allow it.
I'd be stunned but this is the company that did paid $141 million in fines.
And so a smaller amount, maybe 50K?, for programming and developer time and costs to change to May 15 isn't viewed as an investment by Intuit. It's disappointing but not unexpected.
Intuit to pay $141 mln to settle TurboTax deception claims
FTC Sues Intuit for Its Deceptive TurboTax “free” Filing Campaign
As far as the letter, what you do is go into screen 5.1 and enter your own override on due date of return and state due date. Still trying to figure out if I can update letter to say that IRA contributions are also not due until May 15, but honestly these agencies are doing such a bad job at their regular work I plan to file by the normal due date, if possible.
That does not solve the problem of having the amount withdrawn from the client's account for a balance due return. If it isn't due until May 15 and the client doesn't want to pay until May 15, we shouldn't have to hold a return to e-file it on May 15 to have the withdrawal date be correct.
I believe the IRS Online Payment site will allow you to schedule a payment for a specific future date. But again, it shouldn't fall to the preparer to have that extra step, when Lacerte could put in a patch to allow it.
The S corp program is now allowing me to use the May 15 date (manually entered) for the 1st quarter 2023 ES and the balance due (it would not allow me to enter dates after the deadlines before).
Would you trust this or have concerns about it working properly?
The IRS will allow future payments using their Direct Pay system to be scheduled but you can only schedule 2 payments at a time. Once you've scheduled 2 payments you have to wait 24 hours before you can schedule 2 more. It took me 3 days to schedule the payments for my client that had a balance due and 4 estimated tax payments.
At least California allows you to schedule multiple payments in one time.
Since many of my clients fall into that category, I'm going to have to spend lots more manual time because Lacerte doesn't want to provide us with a tax program that works properly for this year's tax laws.
I feel completely abandoned by this company to which I have been a faithful customer for more than 30 years!
During Peak Covid, they only extended the deadline to July and then May. In 2022, they wouldn't even give an extension, even though things were obviously still not back to normal.
I guess since it's only 3 states, they figure they can allow it to be extended, but October is kind of ridiculous.
I'm not going to look a gift horse in the mouth, as the phrase goes, but I assure you that none of my clients were really impacted by these storms enough, if at all, to warrant extending all the deadlines for filing and payments until October.
I think we all know this has nothing to do with storm victims, this has to do with a back log at the IRS and they are giving themselves an extension. Maybe it will be October or maybe after fire season it will get moved to January, it's the wild west, literally.
What's going to be updated? And they just changed it to October 16. I'm already having to explain to my clients why I'm unable to have their payments come out later than April 18, when they're not required to pay until October 16. I'm going to end up with more work going to the IRS & CA websites to put in manual payments if they insist on taking advantage of the allowance, which is certainly their right.
I am disappointed that Lacerte is not going to make this possible, or is the IRS not accommodating them somehow?
Lacerte needs* to know that preparers must spend MORE time due to its software. This is an excerpt from a letter I send to clients:
But the May 15 payment date can't be done electronically (due to an Intuit software limitation) for the 2022 tax due and the 2023 Quarter 1 estimated tax payments. There are three options:
1. Pay them electronically on April 15 (which I will set up);
OR
2. Mail those 3 payments with a check by May 15 (which you will pay and mail);
OR
3. Make those payments on the tax agency websites (which you will set up and pay.)
Let me know what you choose.
*Actually, they don't "need" to know; they closed the voting and that says they don't care.
They could allow it if they wanted to. I'd really like to know their reasoning. Unless the IRS systems somehow would prevent it, which I find hard to believe, since you can Schedule a payment through the website for any date you wish, then there has to be a reason that Lacerte won't allow that option.
California has the most Taxpayers of any state in the country. So it's not like they're making the extra effort for some small county in Kansas.
Seems like they don't give enough of a S&*T to explain. All they will respond with is a simple, "NO, we're not going to, too bad. Deal with it."
I too called into Lacerte to ask these very same questions regarding the due dates on the letters, the calculations of underpayment of estimated tax penalties, etc. and got the same response. The agent did send me a link to the "Work Around" in Lacerte which is very onerous. He also mentioned that the states would be sending clients back refunds of any over calculated penalties assuming they are in the effected area, did Lacerte consider that as preparers we are then going to have to field all the questions from clients when they get a notice stating WE prepared their returns wrong and why did we over charge them for penalties? The only work around is to manually calculate those penalties and override the system, this doesn't seem right. Surely with CA being the most populous state they would do something to make it more efficient for preparers in this state. I suggest that the program's be updated to automatically make these changes based on ZIPCODE. I believe they did that for the Texas snowstorms a year or two ago. If they can do it for that why cant they do it here?
