COLORADO SPRINGS, Colo — A Colorado tax professional is urging taxpayers not to rush to file their returns this season, citing lengthy amendment processing times. The same expert wanted to highlight major differences this year in taxes tied to new deductions for seniors and reporting changes that could create confusion.
“If you file your tax return, you sign it, and it's accepted by Colorado and the IRS, if you have to amend that return, you're looking at at least 20 weeks for them to process that amendment,” said Josiy McEndree, an enrolled agent with Your Tax Lady in Colorado Springs. “It is longer now than it's ever been.”
McEndree, who has been with the firm for two tax seasons and has held an accounting degree since 2021, said the most important advice this week is simple.
“Don’t file unless you're sure that you have all of your materials with you,” McEndree said.
The Internal Revenue Service has said amended returns filed on paper can take more than 20 weeks to process, and even electronically filed amended returns may require up to 20 weeks or more, depending on complexity and volume. The agency continues to work through backlogs in some areas while modernizing its systems.
New senior deduction
Among the biggest changes this year, McEndree said, is a new deduction for qualifying seniors created under what she referred to as the “One Big Beautiful bill.”
“For qualifying taxpayers who are at least 65 years of age or older, as long as your gross income is within a certain amount, you will get an extra $6,000 per qualifying taxpayer,” she said. “So certain couples in Colorado could be looking at an extra $12,000 deduction. So that's why refunds are looking bigger than they ever have before.”
The IRS publishes annual updates on standard deductions and age-based additional amounts, which can increase the total deduction available to seniors who meet income thresholds.
Tips, overtime and W-2 confusion
McEndree said changes affecting tip income and overtime pay have caused confusion for some workers, particularly when employers have not broken out those amounts clearly on Form W-2.
“If your employer didn't report those as a separate line item on your W-2, which a lot of employers aren't because it's a new change, it's important to know your pay stub,” she explained. “You can make those adjustments to your tax return by looking at that pay stub with supporting documents.”
The IRS requires taxpayers to report all taxable income, including tips, whether or not it appears separately on a W-2 . Employers are required to report tips reported by employees, but workers remain responsible for ensuring accuracy on their returns.
McEndree said she has seen cases locally where employers did not list tips or overtime separately, though she added it is “not really fair to blame the employers because it was a very late guidance change.”
Energy credits require documentation
Another common issue involves clean energy and residential energy credits. McEndree said new documentation requirements are catching some taxpayers off guard.
“If you don't have a qualifying manufacturer ID number for whatever you've installed, whether that's a heat pump or a water system or windows, if you don't have that QMID, it cannot be reported on your tax return,” she said. “It is a mandatory item.”
The IRS says certain energy-efficient home improvement credits are generally limited to 30 percent of qualified expenses and may be subject to annual caps, such as $1,200 for specific improvements.
“Not only are you limited to 30 percent, but you're capped at $1,200,” McEndree added. “You want to make sure you get those tax credits if that's what you were going in there for.”
She advised taxpayers to check receipts, invoices or contact contractors to obtain required identification numbers for qualifying equipment.
1099-K reporting changes
Small business owners and online sellers are also seeing changes related to Form 1099-K, which reports certain third-party payment transactions.
McEndree said that while some taxpayers received 1099-K forms last year for online sales through platforms such as eBay or PayPal, fewer may receive them this year because of reporting thresholds.
“The reporting requirements have changed to a threshold of $20,000 and 200 transactions,” she said. “Not very many taxpayers are going to be receiving a 1099 anymore, but that income does still need to be reported. You have to self-report it.”
The IRS has previously announced phased changes to 1099-K reporting thresholds for third-party payment platforms, emphasizing that all taxable income must be reported regardless of whether a form is received.
Scam warnings and identity protection
McEndree also warned about ongoing scams targeting taxpayers, particularly older residents.
“The IRS is never going to text you. They're not going to email you,” she said. “You'll get official IRS correspondence in the mail.”
The IRS has repeatedly warned taxpayers that it does not initiate contact by text, email or social media to request personal or financial information.
For those concerned about identity theft, McEndree recommended obtaining an Identity Protection PIN, or IP PIN, through IRS.gov. Click here for more on an IP PIN.
“It is a unique code to you and it will be mailed to you through the IRS,” she said. “Meaning nobody can, even if somebody has your Social Security number, they can't file a tax return without that IP PIN.”
The IRS confirms that an IP PIN helps prevent identity thieves from filing fraudulent returns using stolen Social Security numbers.
With several changes affecting this year’s returns, McEndree said taxpayers who have traditionally filed on their own may want to consider professional assistance.
“There is a lot more work,” she said. “If you haven't turned to a tax professional before, you might want to this year.”
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
Man hospitalized after car fully submerged at Prospect Lake Thursday afternoon
A driver, plus several first responders are in the hospital after a car drove into Prospect Lake.
____
Watch KOAA News5 on your time, anytime with our free streaming app available for your Roku, FireTV, AppleTV and Android TV. Just search KOAA News5, download and start watching.