THOSE WERE THE DAYS!

Those were the days, my friend.

For about the first third of my tenure as a professional tax preparer we would tell our clients that if they itemized Uncle Sam would reimburse them for a substantial percentage of our fee – up to 50%.  This was obviously before the introduction of the 2% of AGI exclusion for Miscellaneous Expenses. 

Even after the exclusion became law, many clients could still be reimbursed by the US government for a part of our fee.

Unfortunately, thanks to the GOP Tax Act, I can no longer say that.  As you know, all Miscellaneous Expenses subject to the 2% of AGI exclusion are no longer deductible.  This includes the cost of preparing your tax returns or defending yourself in an IRS or state audit.

And back in “the day” we could also “pull a rabbit out of a hat” and save clients literally thousands of dollars in federal income taxes by using Income Averaging or 10-Year Averaging.  Unfortunately, these two tax benefits were put to death via the Tax Reform Act of 1986.  

Yet it seems that each year at least one long-time client asks me about income averaging when faced with a big jump in income and a corresponding big tax bill.  And, remembering that for one year only decades ago the IRS permitted itemizers to deduct their sewer bill as a tax, each year two or three clients continue to give me their sewer bills along with their tax stuff. 

It seems that while taxpayers can often forget to report income, they never forget a deduction or tax saving trick!

Oh well.  

BTW - did you see my "review" of the 2018 tax filing season?  Click here.

TAFN