tag:blogger.com,1999:blog-12809841166202655032024-03-06T15:01:11.014-05:00THE TAX PROFESSIONALAdvice, information, and resources for 1040 tax professionals from veteran Robert D FlachRobert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.comBlogger145125tag:blogger.com,1999:blog-1280984116620265503.post-70881975303166744112021-07-09T04:00:00.001-04:002021-07-09T04:00:00.190-04:00HERE WE GO AGAIN<p> </p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;">Once
again, the issue of tax preparer regulation is in the news.<span style="mso-spacerun: yes;"> </span>According to ACCOUNTING TODAY “<a href="http://www.accountingtoday.com/news/congress-introduces-tax-preparer-regulation-bill " target="_blank"><b><span style="color: #2b00fe;">Congress introduces tax preparer regulation bill</span></b></a>”.</span></p>
<p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;">I
do <b>not</b> oppose requiring PTIN-holders to complete a minimum number of CPE
hours in federal income taxation to maintain their PTIN.<span style="mso-spacerun: yes;"> </span>In fact, I support this.<span style="mso-spacerun: yes;"> </span>It is vital that every sincere and competent
paid Form 1040 tax preparer take CPE in income taxation each year to keep
up-to-date on tax law changes.<span style="mso-spacerun: yes;"> </span>I have
taken on average at least 16 hours of CPE in federal income taxation each year consistently
for decades.<span style="mso-spacerun: yes;"> </span></span></p>
<p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;">I
<b>do</b> oppose requiring <b>all</b> paid tax preparers to take a government-administered
competency test, either one time or annually, to maintain their PTIN and
continue to be allowed to prepare tax returns.<span style="mso-spacerun: yes;">
</span>I would only support a one-time initial competency test if there was a grandfathering
exemption for paid tax preparers who have been consistently preparing 1040s for
a fee for at least 5 years.<span style="mso-spacerun: yes;"> </span></span></p>
<p class="MsoNormal" style="text-align: justify;"><b><span style="font-family: "Verdana",sans-serif;"><i>After
50 tax seasons of preparing 1040s without incident I have no intention of
taking a test now to prove I know what I have been doing for the past 50
seasons.</i></span></b></p>
<p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;">What
I would like to see is a new voluntary tax preparation credential, either a
part of the current IRS Enrolled Agent system or, preferably, created and
administered by an independent organization.<span style="mso-spacerun: yes;">
</span>See my editorials “<a href="http://www.accountingtoday.com/news/what-the-irs-should-do-about-the-rtrp " target="_blank"><b><span style="color: #2b00fe;">What the IRS Should Do About the RTRP</span></b></a>” and “<a href="http://www.accountingtoday.com/news/its-time-for-independent-certification-for-tax-preparers " target="_blank"><b><span style="color: #2b00fe;">It</span></b></a></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Verdana;"><a href="http://www.accountingtoday.com/news/its-time-for-independent-certification-for-tax-preparers " target="_blank"><b><span style="color: #2b00fe;">’</span></b></a></span><span style="font-family: "Verdana",sans-serif;"><a href="http://www.accountingtoday.com/news/its-time-for-independent-certification-for-tax-preparers " target="_blank"><b><span style="color: #2b00fe;">s Time for Independent Certification
for Tax Preparers</span></b></a>”.</span></p>
<p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;">So,
what do you think?</span></p>
<p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;">TAFN</span><o:p></o:p></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></p>Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-59405421863568172452021-06-25T04:00:00.002-04:002021-06-25T04:00:00.173-04:00JUST CURIOUS<p> </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiVk-9KMlqx11lHtGGzuN-l5UGu8SV2HGMf7VDifWEFmIAmEae2NgPBM-oQ451Fq6-Bl2DKIbarzJLIoquw2r-VdY6AErabRKBxObUfPp1jDbNwlhX4qYJ2bLoEcl5gXS_zjDDI-I1AQ7su/" style="margin-left: 1em; margin-right: 1em;"><img data-original-height="512" data-original-width="512" height="400" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiVk-9KMlqx11lHtGGzuN-l5UGu8SV2HGMf7VDifWEFmIAmEae2NgPBM-oQ451Fq6-Bl2DKIbarzJLIoquw2r-VdY6AErabRKBxObUfPp1jDbNwlhX4qYJ2bLoEcl5gXS_zjDDI-I1AQ7su/w400-h400/image.png" width="400" /></a></div><br /><p></p><p></p><div style="text-align: left;"><div style="text-align: justify;"><span style="font-family: Verdana, sans-serif;">As we all
know, thanks to the GOP Tax Act taxpayers can only deduct mortgage </span><span style="font-family: Verdana, sans-serif;">interest
paid on debt used to “buy, build or substantially improve” a personal if they
itemize on Schedule A. Home equity
interest is no longer deductible.</span></div><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;"> </div><o:p><div style="text-align: justify;">In addition –</div></o:p></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;"> </div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;">* The home being bought, built or improved must be used as the
security for the loan.</div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;"> </div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;">* If the homeowner defaults on the loan the home will be taken to
“satisfy” the debt.</div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;"> </div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;">* The loan must be recorded with the appropriate agency under state
law, usually at the county level.</div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;"> </div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;">We can no longer simply put the amount of mortgage interest
reported in Box 1 of a Form 1098 on Line 8 of Schedule A.</div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;"> </div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;">Thankfully, also due to the GOP Tax Act, most of our clients are no
longer able to itemize. But for those
who do the mortgage interest deduction is often the deciding factor.</div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;"> </div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;">It is clearly the responsibility of the taxpayer to keep separate
track of acquisition debt and home equity debt, going back to the original
purchase of the mortgage. The bank or
mortgage company will not do it, and it is not our responsibility. <b>But I do not know of a single taxpayer who
actually does this.</b></div><b><div style="text-align: justify;"> </div><o:p><div style="text-align: justify;">I am interested in hearing how my fellow tax preparers deal with
this issue. What do you ask of your clients
when it comes to mortgage interest? And
what documentation do you require from them to determine deductible mortgage
interest?</div></o:p></b></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;"> </div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;">I would also like to know if any of you have dealt with an IRS
audit of mortgage interest.</div> </span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;"> </div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;">You can respond via a comment to this post or via email to <b><span style="color: #0000cc;"><a href="mailto:rdftaxpro@yahoo.com"><span style="color: #0000cc;">rdftaxpro@yahoo.com</span></a></span></b> with THE TAX
PROFESSIONAL BLOG in the Subject Line.</div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;"> </div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;">FYI, I have created a guide for DEDUCTING MORTGAGE INTEREST, with
forms and specific instructions for keeping separate track of mortgage debt, to
give to clients. I am offering reprint
rights to this guide that you can personalize and give to your clients for <b>only
</b><b><span style="color: #222222;">$14.95</span></b><span style="color: #222222;"> ($11.25 for members of the National
Association of Tax Professionals – provide your membership number with your
order)</span> , sent as a word document email attachment (the signed reprint
rights agreement will be sent via postal mail).
The guide also discusses in detail who can deduct mortgage interest, refinancing
and points.</div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;"> </div><o:p><div style="text-align: justify;">If you want to see the guide before ordering reprint rights, I will
send you a copy of the public version, as a pdf email attachment, for only $2.00,
which can be deducted from the cost of the reprint edition if you decide to order.</div></o:p></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;"> </div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;">Send your check or money order for $14.95 or $11.25 or $2.00,
payable to TAXES AND ACCOUNTING, INC, and your email address to –</div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;"> </div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;">TAXES AND ACCOUNTING, INC</div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;">DEDUCTING MORTGAGE INTEREST</div> </span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;">POST OFFICE BOX A</div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;">HAWLEY PA 18428</div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;"> </div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;">I am looking forward to your responses.</div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;"> </div></span><span style="font-family: "Verdana",sans-serif; mso-bidi-font-family: Leelawadee;"><div style="text-align: justify;">TTFN</div></span></div>
<div style="text-align: justify;"><br /></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><br /></div><div style="text-align: justify;"><br /></div><p></p>Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-53018036536941121942021-06-18T04:28:00.024-04:002021-06-18T04:34:04.466-04:00TAXPRO BUZZ<p> </p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: arial; font-size: medium;">+ <span style="background-color: white; color: #2b00fe;"><a href="http://www.irstaxforum.com/index" target="_blank"><b>T</b></a></span><span style="background-color: white;"><a href="http://www.irstaxforum.com/index" target="_blank"><span style="color: #2b00fe;"><b>he 2021 IRS Nationwide Forum</b></span></a> </span>is virtual again this year.
It will be held July 20 – August 19.
<span style="background: white; color: #3b3b3b;">A printable version of the webinar
schedule is </span>available
by clicking the link in the first paragraph under the heading “Webinar Schedule
Now Available!”<span style="background: white; color: black;">.</span></span></p>
<p style="background: white; margin-top: 0in; text-align: justify; vertical-align: baseline;"><span style="font-family: arial; font-size: medium;"><span style="font-weight: normal;">+ </span><span style="color: black; font-weight: normal;">In case you haven’t heard this yet - “</span><a href="http://www.accountingtoday.com/news/irs-offers-tool-to-register-for-monthly-child-tax-credit " target="_blank"><span style="color: #2b00fe;"><b>IRS offers tool to register for monthly child tax credit</b></span></a><span style="color: black; font-weight: normal;">”.</span></span></p><p style="background: white; margin-top: 0in; text-align: justify; vertical-align: baseline;"><span style="font-family: arial; font-size: medium;"><span style="color: black; font-weight: normal;">+ Russ Fox EA
shared his thoughts on “</span><a href="http://www.taxabletalk.com/2021/06/14/the-2021-tax-season-part-1/ " target="_blank"><span style="color: #2b00fe;"><b>The 2021 Tax Season (Part 1)</b></span></a><span style="color: black; font-weight: normal;">” at TAXABLE TALK.</span><span style="color: black; font-weight: normal;"> For Russ, Part 1 is the part of the season
that ended on May 15</span><sup style="color: black; font-weight: normal;">th</sup><span style="color: black; font-weight: normal;">.</span></span></p><p style="background: white; margin-top: 0in; text-align: justify; vertical-align: baseline;"><span style="font-family: arial; font-size: medium;"><span style="color: black; font-weight: normal;">If you have not
already seen my review of the 2021 tax filing season go </span><a href="http://wanderingtaxpro.blogspot.com/2021/05/that-was-tax-season-that-was-2021.html " target="_blank"><span style="color: #2b00fe;"><b>here</b></span></a><span style="color: black; font-weight: normal;">.</span></span></p><p style="background: white; margin-top: 0in; text-align: justify; vertical-align: baseline;"><span style="font-family: arial; font-size: medium;"><span style="color: black; font-weight: normal;">+ One more
benefit of membership in the National Association of Tax Professionals (NATP) –
“</span><a href="http://blog.natptax.com/article?articleId=79xTLYv6elOBs6bj8IA6AD" target="_blank"><span style="color: #2b00fe;"><b>Free post-tax season webinars for all tax pros</b></span></a><span style="color: black; font-weight: normal;">”.</span></span></p><p style="background: white; margin-top: 0in; text-align: justify; vertical-align: baseline;"><span style="font-family: arial; font-size: medium;"><span style="color: black; font-weight: normal;">+ While written
for those who are considering becoming a professional tax preparer, this book
offers good advice and information, and food for thought, for existing tax pros
– </span><a href="http://robertdflach.blogspot.com/p/so-you-want-to-be-tax-preparer.html" target="_blank"><span style="color: #2b00fe;"><b>SO YOU WANT TO BE A TAX PREPARER</b></span></a><span style="color: black; font-weight: normal;">.</span><span style="color: black; font-weight: normal;"> </span><span style="color: black; font-weight: normal;"> </span></span></p><p style="background: white; margin-top: 0in; text-align: justify; vertical-align: baseline;"><span style="font-family: arial; font-size: medium;"><span style="color: black; font-weight: normal;">Click </span><a href="https://prontotaxschool.com/my-review-of-robert-flach-s-new-book-so-you-want-to-be-a-tax-preparer/ " target="_blank"><span style="color: #2b00fe;"><b>here</b></span></a><span style="color: black; font-weight: normal;"> for a
review of this book. </span></span></p><p style="background: white; margin-top: 0in; text-align: justify; vertical-align: baseline;"><span><span style="color: black; font-family: arial; font-size: medium; font-weight: normal;">If you have some BUZZ you want to share with fellow tax pros email me at rdftaxpro@yahoo.com with the link. Be sure top put THE TAX PROFESSIONAL BLOG in the Subject Line.</span></span></p>
<p class="MsoNormal" style="text-align: justify;"><span style="font-family: arial; font-size: medium;">TAFN<o:p></o:p></span></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: verdana;"><br /></span></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: verdana;"><br /></span></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: verdana;"><br /></span></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: verdana;"><br /></span></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: verdana;"><br /></span></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: verdana;"><br /></span></p><p class="MsoNormal" style="text-align: justify;"><span style="font-family: verdana;"><br /></span></p>Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-23751834696599677732021-06-11T05:01:00.020-04:002021-06-11T05:08:24.500-04:00TAXPRO BUZZ<p style="text-align: justify;"><span style="font-family: verdana;"> <span face="Verdana, sans-serif">The tax
filing season – my 50</span><sup>th</sup><span face="Verdana, sans-serif"> – is over, so I’m baaaaaaack!</span></span></p>
<p class="MsoNormal" style="text-align: justify;"><span style="font-family: verdana;">+ Speaking of
my milestone, I reminisce about my “50 Years of Preparing 1040s” in a series of
posts at THE WANDERING TAX PRO.<span style="mso-spacerun: yes;"> </span>Check
out -</span></p>
<p class="MsoNormal" style="text-align: justify;"><span style="font-family: verdana;">“<a href="http://wanderingtaxpro.blogspot.com/2021/05/50-years-of-preparing-1040s-my-first.html " target="_blank"><b><span style="color: #2b00fe;">My First 1040</span></b></a>”</span></p>
<p class="MsoNormal" style="text-align: justify;"><span style="font-family: verdana;">“<a href="http://wanderingtaxpro.blogspot.com/2021/05/50-years-of-preparing-1040s-how-it-all.html " target="_blank"><b><span style="color: #2b00fe;">How It All Began</span></b></a>”</span></p>
<p class="MsoNormal" style="text-align: justify;"><span style="font-family: verdana;">“<a href="http://wanderingtaxpro.blogspot.com/2021/06/50-years-of-preparing-1040s-great.html " target="_blank"><b><span style="color: #2b00fe;">The Great Unwashed</span></b></a>”</span></p>
<p style="background: white; margin-top: 0in; text-align: justify; vertical-align: baseline;"><span style="font-family: verdana;"><span face="Verdana, sans-serif" style="font-size: 11pt; font-weight: normal;">+ </span><span face="Verdana, sans-serif" style="color: black; font-size: 11pt; font-weight: normal;">My post on “The Great Unwashed” deals with
clients.<span style="mso-spacerun: yes;"> </span>Kelly Phillips Erb discusses
clients in a blast from the past“</span><span face="Verdana, sans-serif" style="color: black; font-size: 11pt; font-weight: normal;"> from her TAXGIRL blog – “</span><a href="https://www.taxgirl.com/2015/03/31/dont-be-that-client-8-clients-that-drive-tax-pros-crazy/" target="_blank"><span face="Verdana, sans-serif" style="border: 1pt none windowtext; font-size: 11pt; padding: 0in; text-decoration: none;"><span style="color: #2b00fe;"><b>Don't Be That Client: 8 Clients That Drive Tax Pros Crazy</b></span></span></a><span face="Verdana, sans-serif" style="color: black; font-size: 11pt; font-weight: normal;">”.<span style="mso-spacerun: yes;"> </span></span></span></p><p style="background: white; margin-top: 0in; text-align: justify; vertical-align: baseline;"><span style="font-family: verdana; font-size: 11pt;"><span style="color: black; font-weight: normal;">+ Getting back
to THE WANDERING TAX PRO – have you seen my annual “</span><a href="http://wanderingtaxpro.blogspot.com/2021/05/that-was-tax-season-that-was-2021.html " target="_blank"><span style="color: #2b00fe;"><b>That Was The Tax Season That Was 2021</b></span></a><span style="color: black; font-weight: normal;">” review of the tax filing season yet?</span><span style="color: black; font-weight: normal;"> Why not?</span><span style="color: black; font-weight: normal;"> </span></span></p><p style="background: white; margin-top: 0in; text-align: justify; vertical-align: baseline;"><span style="font-family: verdana; font-size: 11pt;"><span style="color: black; font-weight: normal;">+</span> <span style="color: black; font-weight: normal;">And before we
leave TWTP – I discuss the benefits of filing separate returns in “</span><a href="http://wanderingtaxpro.blogspot.com/2021/05/joint-vs-separate-that-is-question.html " target="_blank"><span style="color: #2b00fe;"><b>Joint Vs Separate – That Is The Question</b></span></a><span style="color: black; font-weight: normal;">.”</span><span style="color: black; font-weight: normal;"> </span></span></p><p style="background: white; margin-top: 0in; text-align: justify; vertical-align: baseline;"><span style="font-family: verdana; font-size: 11pt;"><span style="color: black; font-weight: normal;">+ This
legislation certainly makes sense to me.</span><span style="color: black; font-weight: normal;">
</span><a href="http://www.natptax.com/TaxKnowledgeCenter/GovernmentNews/Documents/2021-TaxDeadlineSimplificationAct-Proposed.pdf " target="_blank"><span style="color: #2b00fe;"><b>The Tax Deadline Simplification Act</b></span></a><span style="color: black; font-weight: normal;"> would amend the Internal Revenue
Code of 1986 to have estimated income tax installments paid on a truly quarterly
basis.</span></span></p><p style="background: white; margin-top: 0in; text-align: justify; vertical-align: baseline;"><span style="font-family: verdana; font-size: 11pt;"><span style="color: black; font-weight: normal;">+ The NATP BLOG
provides us with a “</span><a href="http://blog.natptax.com/article?articleId=5MMRPEpixv9rq4zQAJPNDO" target="_blank"><span style="color: #2b00fe;"><b>Summary of the American Families Plan and other recent proposals</b></span></a><span style="color: black; font-weight: normal;">”.</span></span></p>
<p class="MsoNormal" style="text-align: justify;"><span style="font-family: verdana;">+ Kay Bell,
the yellow rose of taxes, explained “<a href="http://www.dontmesswithtaxes.com/2021/05/joe-biden-first-federal-budget-covers-campaign-policy-tax-promises.html " target="_blank"><b><span style="color: #2b00fe;">Biden's first federal budget covers
campaign & tax promises</span></b></a>” at DON’T MESS WITH TAXES.</span></p>
<p class="MsoNormal" style="text-align: justify;"><span style="font-family: verdana;">TAFN<o:p></o:p></span></p><p class="MsoNormal" style="text-align: justify;"><span face=""Verdana",sans-serif"><br /></span></p><p class="MsoNormal" style="text-align: justify;"><span face=""Verdana",sans-serif"><br /></span></p><p class="MsoNormal" style="text-align: justify;"><span face=""Verdana",sans-serif"><br /></span></p><p class="MsoNormal" style="text-align: justify;"><span face=""Verdana",sans-serif"><br /></span></p><p class="MsoNormal" style="text-align: justify;"><span face=""Verdana",sans-serif"><br /></span></p><p class="MsoNormal" style="text-align: justify;"><span face=""Verdana",sans-serif"><br /></span></p><p class="MsoNormal" style="text-align: justify;"><span face=""Verdana",sans-serif"><br /></span></p><p class="MsoNormal" style="text-align: justify;"><span face=""Verdana",sans-serif"><br /></span></p>Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-42525054979471755012021-02-25T16:45:00.002-05:002021-02-25T16:45:53.609-05:00<p> </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJc-B-qk4CjioRFBcUjPEaYsEvv1B1lqbryDU1gbvmZwdtPHyBm0zgDNzu98GBz5LSBSScR_2veBRMwUaAtp1ZhIEDD-TOiUqY3Pd_FMb18HrlfXYuybqgbe5pheFslIUHixLF8ppmr7Hc/" style="margin-left: 1em; margin-right: 1em;"><img data-original-height="803" data-original-width="1200" height="268" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjJc-B-qk4CjioRFBcUjPEaYsEvv1B1lqbryDU1gbvmZwdtPHyBm0zgDNzu98GBz5LSBSScR_2veBRMwUaAtp1ZhIEDD-TOiUqY3Pd_FMb18HrlfXYuybqgbe5pheFslIUHixLF8ppmr7Hc/w400-h268/image.png" width="400" /></a></div><br /><p></p><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;">I
recently embarked on my 50<sup>th</sup> tax filing season.<span style="mso-spacerun: yes;"> </span>I have been a paid preparer of 1040s since
February of 1972.<span style="mso-spacerun: yes;"> </span></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><span style="mso-spacerun: yes;"><br /></span></span><span style="font-family: "Verdana",sans-serif;">Most
people remember their first love. I remember with fondness the first Form 1040
I prepared – which for me is really the same thing.<span style="mso-spacerun: yes;"> </span></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><span style="mso-spacerun: yes;"><br /></span></span><span style="font-family: "Verdana",sans-serif;">My
first 1040 was the 1971 model (I can actually tell you the name of the
taxpayer).<span style="mso-spacerun: yes;"> </span>This was back when a
deduction was really worth something and everyone itemized. As we used to tell
clients, "Uncle Sam will reimburse you for up to half of our
fee!"<span style="mso-spacerun: yes;"> <br /> </span></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">On
my first day on the job, never having prepared a tax return before, not even my
own, my boss took me to a desk and gave me a copy of a client’s previous year’s
tax return and a briefcase full of papers that constituted the current year’s
tax “stuff”.<span style="mso-spacerun: yes;"> </span>He told me to “jump in and
swim”.<span style="mso-spacerun: yes;"> </span>I learned how to prepare income
tax returns the very best way possible – by manually preparing income tax
returns.<span style="mso-spacerun: yes;"> <br /> </span></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">Back
then -<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">*
a savvy tax preparer could "pull a rabbit out of a hat" and save a
client literally thousands of dollars in federal income tax with "Income
Averaging" or "10-Year Averaging" (and in doing so be assured a
client for life),<br /> </span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">*
credit card interest, auto loan interest and personal loan interest, as well as
our tax preparation fees, were fully deductible,<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">*
"Employee Business Expenses" were allowed as an adjustment to income,<br />
</span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">*there
was no such thing as an Adjusted Gross Income exclusion or threshold or the
"phase-out" of a deduction or credit,<br /> </span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">*
we had never heard of a PIG, PAL, ACRS, MACRS,or MAGI, at least in the context
of tax returns,<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">*
and one-half of long-term capital gain just disappeared from the tax return.<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">For
1971 the starting tax rate was 14% and the top rate was 70%. There was a
"Minimum Tax", not yet alternative, and a "Maximum Tax"
(the maximum tax on "earned income" was 50%). While we did prepare a
few maximum tax forms, I do not recall ever preparing a minimum tax form. The
Alternative Minimum Tax did not begin to affect my clients until the 2nd half
of the 1990s.<span style="mso-spacerun: yes;"> </span>And there was the
previously mentioned Income Averaging and 10-Year Averaging.<br /> </span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">On
Page 1 of the 1971 Form 1040 one would indicate name, address and Social
Security numbers of the filer(s). In the case of a return for a married couple
the names were listed as “Richard and Mary Taxpayer” on one line instead of a
separate line for the name of each spouse. The filing status was checked and
exemptions were claimed. The taxpayer and spouse could each claim an additional
exemption for being 65 or over and blind. The names, but not Social Security
numbers, of dependent children were listed, with no indication of whether they
“lived with you” or “did not live with you”. The names, but again not Social
Security numbers, of “other” dependents were listed on Page 2 of the 1040.<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">Income
was reported on Lines 12 through 18 on Page 1, with lines for wages, dividends
(no designation of “qualified”), interest (taxable only – no reporting of
tax-exempt interest), and “income other than wages, dividends and interest”,
the sub-total, total “adjustments to income” and Adjusted Gross Income. The line
for dividends included (a) for gross dividends and (b) for an exclusion amount.
If gross dividends and/or total interest exceeded $100 one would have to
complete and attach Schedule B.<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">The
net tax liability was reported on Lines 19 through 23. Federal Income Tax
withheld, Estimated Tax Payments, and “Other payments” were deducted and a
balance due or refund was indicated.<span style="mso-spacerun: yes;">
</span>Line 31 of the Form 1040, and not Schedule B, was where the taxpayer was
asked about foreign accounts.<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">Part
I of Page 2 of the 1040 was where other dependents were listed, along with
relationship, months live in taxpayer’s home, did dependent have income of $675
or more, amount taxpayer furnished toward support, and amount furnished by all
others, including the dependent.<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">Specific
items of income, adjustments to income, credits, other taxes, other payments,
and the actual Tax Computation were reported on Lines 34 through 64 in Parts II
through VII.<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">Social
Security, Railroad Retirement, and Unemployment benefits were totally exempt
from federal income tax. One could use the “3-year” rule for recovering
employee contributions to determine the taxable portion of pensions and
annuities. This was calculated on Part I of Schedule E.<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">Adjustments
to income included –<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">Sick
pay,<br /><o:p></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">Moving
expense.<br /><o:p></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">Employee
business expense, and<br /><o:p></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">Payments
as a self-employed person to a retirement plan, etc.<br /><o:p></o:p></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">The
only credits indicated on the 1040 were –<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">Retirement
income credit,<br /><o:p></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">Investment
credit, and<br /><o:p></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">Foreign
tax credit.<br /><o:p></o:p></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">The
personal exemption amount was $675. Tax could be calculated by “<i style="mso-bidi-font-style: normal;">using Tax Rate Schedule X, Y or Z, or if
applicable, the alternative tax from Schedule D, income averaging from Schedule
G, or maximum tax from Form 4726</i>”. Other taxes included a line for “Minimum
tax”, not yet alternative.<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">On
Schedule A –<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">Medical
and dental expenses were reduced by 3% of Adjusted Gross Income (this was the
only item on the Form 1040 that was reduced based on AGI).<br /><o:p></o:p></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">Taxes
included state and local gasoline tax (from gas tax tables), general sales tax
(from sales tax tables) and (not or) state and local income tax, with an
additional deduction allowed for sales tax paid on “major purchases”.<br /><o:p></o:p></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">Contributions
were deductible pretty much as they are now, except there was no strict
requirement for documentation.<br /><o:p></o:p></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">Interest
expense included not only home mortgage interest (fully deductible – not
limited to interest on “acquisition debt” and no principle restrictions) but
also interest on installment purchases, credit cards, and other “personal”
interest.<br /><o:p></o:p></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">Miscellaneous
deductions were not reduced by a % of AGI; certain employee business expense,
as mentioned earlier, were deductible as an “above-the-line” adjustment to
income.<br /><o:p></o:p></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">Schedule
D allowed for a 50% deduction for net long-term capital gain – only half of
such gains were included in AGI. So, if net long-term capital gain (or net
combined long-term and short-term gain if smaller) was $10,000, only $5,000 was
reported as income on Page 2 of Form 1040. The maximum net capital loss
deduction was $1,000.<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">The
1971 standard deduction was $1,050 for both a single person and a married
couple. The standard deduction was originally 10% of AGI up to a maximum of
$1,000. It wasn’t until 1975 that the standard deduction for married was more
than that for single.<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">There
were no computers in those days. During my first few years we did not even have
a copy machine in the office. Returns were prepared by hand on 3-page
carbonized forms purchased from Accountant's Supply House. <span style="mso-spacerun: yes;"> </span>As most of you know, I still prepare all of my
federal income tax returns manually.<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">As
I started out in the tax preparation business the matching of 1099s to 1040s
had just begun. I remember a client who came into the office during my first or
second year with a humungous print-out from the IRS listing by source all the
interest and dividends that he had failed to report on his previous year's
1040.<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">During
my early years you were not required to list the Social Security number for
dependents claimed on your return. One year a married client, let's call him
John and his wife Mary, left his "stuff" off at the office, which
included a handwritten sheet listing, among other deductions,
"dependents" John, Mary, Paul and George. The college student who
prepared the return that year (not me) listed 4 dependents - John, Mary, Paul
and George. The client received the refund requested on the return without
question.<br /> </span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">The
next year John came in and stayed while I prepared the return. I asked if he
was still claiming his four kids, John, Mary, Paul and George, and he told me
that he only had two children - Paul and George! The John and Mary he had
listed on the sheet the previous year was apparently he and his wife. It
appears that the student who had prepared the earlier return had forgotten our
first, and most important, rule of tax preparation - always review the prior
year's return when preparing the current 1040.<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">At
the IRS Tax Forum several years back, it was reported that in the first year
you were required to list a Social Security number for all of your dependents
about 5 Million dependents mysteriously disappeared from tax returns.<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">Of
course, in the "good old days" we never filed an extension. We
finished all the returns on April 15th - even if we had to stay in the office
until the wee hours of the morning, with the client present, to do so!<span style="mso-spacerun: yes;"> </span>I often made an 11:30 PM run to the Jersey
City main Post Office on April 15<sup>th<br /></sup></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">So,
you can see there have been a lot of changes to tax law, and tax preparation,
since my first 1040.<span style="mso-spacerun: yes;"> </span>And there will be
more changes going forward.<span style="mso-spacerun: yes;"> </span>It appears
the only constant in tax law is change.<span style="mso-spacerun: yes;">
</span>Today’s tax law is certainly much more complicated and convoluted than
the 1917 US Tax Code.<br /> </span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">One
thing has not changed.<span style="mso-spacerun: yes;"> </span>The basic challenge
for the tax professional is still the same today as it was in 1971– getting all
the necessary information from the client to properly prepare the return.<span style="mso-spacerun: yes;"> <br /> </span></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">In
my opinion some 1971 tax law is better than 2020 tax law and some 2020 tax law
is better than 1971 tax law.<span style="mso-spacerun: yes;"> </span>But that is
a topic for another post.<span style="mso-spacerun: yes;"> </span></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><span style="mso-spacerun: yes;"><br /></span></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><span style="mso-spacerun: yes;">TAFN</span></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><span style="mso-spacerun: yes;"><br /></span></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><span style="mso-spacerun: yes;"><br /></span></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><span style="mso-spacerun: yes;"><br /></span></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><span style="mso-spacerun: yes;"><br /></span></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><span style="mso-spacerun: yes;"><br /></span></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><span style="mso-spacerun: yes;"><br /></span></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><span style="mso-spacerun: yes;"><br /></span></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><span style="mso-spacerun: yes;"><br /></span></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><span style="mso-spacerun: yes;"><br /></span></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><span style="mso-spacerun: yes;"><br /></span></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><span style="mso-spacerun: yes;"><br /></span></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><span style="mso-spacerun: yes;"><br /></span></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><span style="mso-spacerun: yes;"><br /></span></span></div>
Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-29074151122902034232021-02-01T04:00:00.015-05:002021-02-01T04:00:04.882-05:00THE TWELVE DAYS OF TAX SEASON<div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span style="background-color: white; color: #111111; text-align: center;"><span style="font-family: verdana;">JOY TO THE WORLD,<br /></span></span><span face="Verdana, sans-serif" style="background-color: white; color: #111111; font-family: verdana; text-align: center;">TAX SEASON’S HERE!<br /></span><span face=""Verdana",sans-serif" style="color: #111111; font-family: verdana; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">I’LL SOON BE FLUSH WITH CASH.</span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span face=""Verdana",sans-serif" style="color: #111111; font-family: verdana; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br /></span><span face=""Verdana",sans-serif" style="color: #111111; font-family: verdana; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">And so, the 2021 “tax season” officially begins. <span style="mso-spacerun: yes;"> </span>This will be my 50<sup>th</sup> season.<br /></span><span style="font-family: verdana;"><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br /></span></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span style="font-family: verdana;"><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Now – what you have been waiting a year for -</span><b style="text-align: center;"><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> </span></b></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span style="font-family: verdana;"><b style="text-align: center;"><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br /><div style="text-align: center;"><b style="text-align: justify;"><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;">THE TWELVE DAYS OF TAX SEASON</span></span></b></div></span></b></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><b><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;"><br /></span></span></b><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;">On the first day of tax season my client gave to me a Closing Statement for the purchase of a home.</span></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;"><br /></span></span><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;">On the second day of tax season my client gave to me 2 Economic Impact Payment notices.</span></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;"><br /></span></span><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;">On the third day of tax season my client gave to me 3 mortgage statements (without, of course, any analysis of how much of the mortgage interest reported represents interest on acquisition debt).</span></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;"><br /></span></span><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;">On the fourth day of tax season my client gave to me 4 W-2s.</span></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;"><br /></span></span><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;">On the fifth day of tax season my client gave to me 5 Salvation Army receipts.</span></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;"><br /></span></span><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;">On the sixth day of tax season my client gave to me 6 1099-DIVs.</span></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;"><br /></span></span><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;">On the seventh day of tax season my client gave to me 7 cancelled checks.</span></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;"><br /></span></span><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;">On the eighth day of tax season my client gave to me 8 useless items.</span></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;"><br /></span></span><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;">On the ninth day of tax season my client gave to me 9 medical bills.</span></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;"><br /></span></span><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;">On the tenth day of tax season my client gave to me 10 stock sale confirms.</span></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;"><br /></span></span><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;">On the eleventh day of tax season my client gave to me 11 employee business expenses (despite being no longer deductible).</span></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;"><br /></span></span><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;">On the twelfth day of tax season my client got from me a finished tax return, 11 employee business expenses, 10 stock sale confirms, 9 medical bills, 8 useless items, 7 cancelled checks, 6 1099-DIVs, 5 Salvation Army receipts, 4 W-2s, 3 mortgage statements, 2 Economic Impact Payment notices, and a Closing Statement for the purchase of a home.</span></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;"><br /></span></span><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;">And, of course, on the thirteenth day of tax season the client gave to me a corrected Consolidated 1099 from Wells Fargo Advisors!</span></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span face=""Verdana",sans-serif" style="color: #111111; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><span style="font-family: verdana;"><br /></span></span><span style="color: #111111; font-family: verdana;">TAFN</span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span style="color: #111111; font-family: verdana;"><br /></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span style="color: #111111; font-family: verdana;"><br /></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span style="color: #111111; font-family: verdana;"><br /></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span style="color: #111111; font-family: verdana;"><br /></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span style="color: #111111; font-family: verdana;"><br /></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span style="color: #111111; font-family: verdana;"><br /></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span style="color: #111111; font-family: verdana;"><br /></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span style="color: #111111; font-family: verdana;"><br /></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span style="color: #111111; font-family: verdana;"><br /></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span style="color: #111111; font-family: verdana;"><br /></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span style="color: #111111; font-family: verdana;"><br /></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span style="color: #111111; font-family: verdana;"><br /></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span style="color: #111111; font-family: verdana;"><br /></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span style="color: #111111; font-family: verdana;"><br /></span></div><div style="background: white; line-height: normal; margin-bottom: 0in; text-align: justify;"><span style="color: #111111; font-family: verdana;"><br /></span></div>Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-10369963074197076642021-01-18T06:39:00.001-05:002021-01-18T06:39:53.887-05:00AN ORGANIZATION TIP FOR MY FELLOW TAX PROS<p><span style="background-color: white; font-family: Verdana, sans-serif; text-align: justify;">I am always seeing fancy
looking organizers on home improvement shows and in the aisles at
STAPLES. It appears that some are rather expensive.</span></p>
<p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; vertical-align: baseline;"><span style="color: black; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">I get all my business and
personal organizers absolutely free!</span></p>
<p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; vertical-align: baseline;"><span style="color: black; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">I have found that the
various containers that food and household products come in are perfect
organizers for holding different sized paper and binder clips, various sizes of
sticky pads and smaller lined paper pads, stamps, pens and pencils, erasers,
and other office and household supplies.</span></p>
<p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; vertical-align: baseline;"><span style="color: black; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">For one, there is the
plastic containers that many “tv dinners” come in (the aluminum ones are no
good). And the brown container that holds three crème-filled cupcakes in
a package. They provide multiple sections for organizing clips.</span></p>
<p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; vertical-align: baseline;"><span style="color: black; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The green, blue, and black
containers that hold the Swiffer wet pads, or the generic alternative, come in
several sizes and have many uses in the kitchen, bedroom, and office.</span></p>
<p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; vertical-align: baseline;"><span style="color: black; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The round plastic
containers that contain potato or macaroni salad from the supermarket or sandwich
shops like “Blimpie” are also good for holding small supplies.</span></p>
<p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; vertical-align: baseline;"><span style="color: black; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">I even make use of the
metal Altoids containers.</span></p>
<p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; vertical-align: baseline;"><span style="color: black; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Not only am I saving money,
but I am recycling as well!</span></p>
<p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; vertical-align: baseline;"><span style="color: black; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">BEFORE I GO</span><span style="font-family: Verdana, sans-serif;"> </span></p>
<p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; vertical-align: baseline;"><span style="color: black; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Last week’s post on the NJ-NATP
state tax seminar mentioned New Jersey’s new “BAIT” deduction and credit.</span><span style="font-family: Verdana, sans-serif;"> </span></p>
<p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; vertical-align: baseline;"><span style="font-family: Verdana, sans-serif;">I discussed my thoughts on
this new “scam” (my opinion) in “’<a href="http://wanderingtaxpro.blogspot.com/2021/01/bait-and-switch.html " target="_blank"><b><span style="color: #2b00fe;">Bait’ and Switch</span></b></a>” at THE WANDERING TAX PRO.</span></p>
<p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; vertical-align: baseline;"><span style="color: black; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">TAFN<o:p></o:p></span></p><p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; vertical-align: baseline;"><span style="color: black; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br /></span></p><p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; vertical-align: baseline;"><span style="color: black; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br /></span></p><p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; vertical-align: baseline;"><span style="color: black; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br /></span></p><p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; vertical-align: baseline;"><span style="color: black; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br /></span></p><p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; vertical-align: baseline;"><span style="color: black; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br /></span></p><p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; vertical-align: baseline;"><span style="color: black; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br /></span></p><p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; vertical-align: baseline;"><span style="color: black; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br /></span></p><p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; vertical-align: baseline;"><span style="color: black; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br /></span></p><p class="MsoNormal" style="background: white; line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify; vertical-align: baseline;"><span style="color: black; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br /></span></p>Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-12934973936719535332021-01-11T04:00:00.024-05:002021-01-11T04:00:02.718-05:00THE FAMOUS NEW JERSEY STATE TAX WEBINAR<p> </p><div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEghxCf0orYW9EIQEEORd5REq36XxQYy5KtUafl5fJgZ9L0puxd1VP_4D8T1Fo-iW16TtgZ2-5F5NvMVcW7Kgp4z9wEgrEPYpLr8IZ2bQpRGE5FtNix123PHo1xsfjQkZBL5J41R1qXi2Ew7/s1500/NATP-logo-words-Large-PPT.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="1050" data-original-width="1500" height="280" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEghxCf0orYW9EIQEEORd5REq36XxQYy5KtUafl5fJgZ9L0puxd1VP_4D8T1Fo-iW16TtgZ2-5F5NvMVcW7Kgp4z9wEgrEPYpLr8IZ2bQpRGE5FtNix123PHo1xsfjQkZBL5J41R1qXi2Ew7/w400-h280/NATP-logo-words-Large-PPT.png" width="400" /></a></div><div style="text-align: justify;"><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";">For the first time in many, many years I was not on the road before
sunrise heading to what used to be the Woodbridge Hilton in Iselin, New Jersey on
the second Saturday in January (this past Saturday) for the truly “Famous NJ
State Tax Seminar”.<span style="mso-spacerun: yes;"> </span>I do believe I have
only missed 2 of these seminars since they began, both times due to snow.<span style="mso-spacerun: yes;"> <br /> </span></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";"><o:p> <br /></o:p></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";">And it was the only “Famous NJ State Tax Seminar” that I have “attended”
wearing nothing but a bathrobe.<br /></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";"><o:p> <br /></o:p></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";">This was the first, and hopefully last, year that this “must-attend”
seminar for tax pros who prepare NJ state income, corporate, payroll, sales,
estate, or inheritance tax returns and/or NJ property tax relief applications was
offered “virtually”.<br /></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";"><o:p> <br /></o:p></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";">Let me begin with my usual “disclaimer”.<span style="mso-spacerun: yes;"> </span>My main interest in this seminar, or any CPE
offering, is individual income tax return issues – here the NJ-1040 and IT-201
and IT-203, and the NJ property tax relief programs.<span style="mso-spacerun: yes;"> </span>I have only a basic interest in business or
sales tax issues and none whatsoever in estate and inheritance tax issues – and
often pay little attention to discussions of these topics at any offering.<span style="mso-spacerun: yes;"> </span>However, I do feel these topics should be
covered in this seminar, as they are important for many NJ tax preparers.<br /></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";"><o:p> <br /></o:p></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";">I most definitely prefer live CPE events to online “webinars”.<span style="mso-spacerun: yes;"> </span>I like the ability for direct questions and
comments from the audience during presentations.<span style="mso-spacerun: yes;"> </span>But I had no problems “attending” this
webinar under the circumstances.<span style="mso-spacerun: yes;"> </span>It went
relatively smoothly, despite a few technical “hiccups” resulting mostly from
the presenters’ unfamiliarity to the process being used.<br /></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";"><o:p> <br /></o:p></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";">This year’s event was a bit shorter than past years – ending at
2:50 instead of 4:50. There was a shorter lunch period and there was no “peripheral”
session, such as redundant estate and inheritance tax overviewss in past
years.<span style="mso-spacerun: yes;"> </span>I have always said this seminar
should be limited specifically to New Jersey and New York state tax, and
property tax relief program, updates and changes.<br /> </span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";"><o:p> <br /></o:p></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";">One interesting new item, due to the “virtual” nature of the
presentation. <span style="mso-spacerun: yes;"> </span>There was actually a “commercial”
that ran several times during the day for the event sponsor.<span style="mso-spacerun: yes;"> </span>This was in lieu of the vendor tables and
presentations at past "in-person" offerings.<span style="mso-spacerun: yes;"> </span>The
presentations were also interrupted occasionally for audience “polls”, which, I
believe, was necessary to verify the actual participation in the event by “attendees”
for purposes of issuing CPE credit.<br /></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";"><o:p> <br /></o:p></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";">The morning involved NJ taxes and the sessions were presented by
NJ Division of Taxation’s “Taxation University”, which conducts tax seminars
and workshops for tax professionals, tax volunteers and small businesses.<span style="mso-spacerun: yes;"> </span>{As an aside, Alexis Reid, still with NJDOT
but no longer a member of TU “faculty”, was missed on the “podium” – she
continues to be a great ongoing help to me personally and other NJ-NATP members.}<span style="mso-spacerun: yes;"> </span>The afternoon was devoted to Kathryn Keane’s
annual NY State Update, although she did not touch on federal changes this year as she
has done in the past (apparently because NATP prohibits state chapters from
discussing federal issues on webinars).<span style="mso-spacerun: yes;"> <br /> </span></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";"><o:p> <br /></o:p></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";">As is the custom, the program begins, after introductory remarks
by chapter Board members, with a brief “keynote” presentation by the Director
of NJDOT – this year still “Acting” (no idea why) Director John Ficara.<span style="mso-spacerun: yes;"> </span>Saturday’s keynote was a bit more worthwhile
than past years (I have generally found this presentation a waste of time), due
to the discussion of the Division’s response to the pandemic.<span style="mso-spacerun: yes;"> </span>Unlike the IRS, NJDOT did not totally shut down
for over 3 months, and as a result the NJ returns of my clients, and their requested
refunds, were relatively promptly processed.<span style="mso-spacerun: yes;">
</span>Of course, there is obviously no comparison between the volume handled by the
IRS and that handled by NJDOT.<br /></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";"><o:p> <br /></o:p></span><span style="font-family: Verdana, sans-serif;"><span style="color: #050505;">Individual taxes were discussed first.</span><span style="color: #050505;"> </span><span style="color: #050505;">As I always say the value of update seminars
like this depends on the extent of tax law changes and developments.</span><span style="color: #050505;"> </span><span style="color: #050505;">There was not much new for any NJ tax for 2020.</span><span style="color: #050505;"> </span><span style="color: #050505;">I outlined the changes to the 2020 NJ-1040 in
my post “</span><a href="http://wanderingtaxpro.blogspot.com/2021/01/whats-new-for-2020-new-jersey-state-tax.html " target="_blank"><b><span style="color: #2b00fe;">What’s New for the 2020 New Jersey State Tax Return</span></b></a><span style="color: #050505;">” at THE WANDERING
TAX PRO.</span><span style="color: #050505;"> <br /> </span></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";"><o:p> <br /></o:p></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";">The individual tax presentation began by reminding us that <b>no</b>
COVID-related relief payment is reported as taxable income on the NJ-1040, or
NJ-1040NR.<span style="mso-spacerun: yes;"> </span>This includes the stimulus
payment, supplemental unemployment benefits (NJ has never taxed unemployment
benefits) or any “EBT” (Electronics Benefits Transfer) welfare payments.<br /></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";"><o:p> <br /></o:p></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";">One
thing worth repeating here – while the final phase-in of the increase in the Pension/Retirement
Income Exclusion is in effect for 2020, the “NJ Gross Income” threshold for
claiming this exclusion remains at $100,000, regardless of filing status.<span style="mso-spacerun: yes;"> </span>As I said in my TWTP post this means </span><span style="font-family: "Verdana",sans-serif;">“<b><i>as little of $1.00 in
additional income can cause a NJ taxpayer to pay hundreds or more in NJ state
income tax</i></b>.”<span style="mso-spacerun: yes;"> </span>Clearly the NJ
state legislature is at fault here.<br /><o:p></o:p></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">And a
reminder – while the federal government no longer penalizes a taxpayer for not
having “adequate” health insurance coverage for all members of the household, NJ
still requires coverage and charges a penalty that is assessed on the NJ-1040.<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">As in past
years, refunds requested on 2020 NJ-1040 and NJ-1040NR returns will not be
issued until March 1<sup>st</sup>, regardless of when or how the return was
filed.<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">The biggest
issue in the individual category concerned the state tax treatment of employee “telecommuting”
required by the pandemic.<span style="mso-spacerun: yes;"> </span>NJ, and NY (as
we learned in the afternoon), has <b>not made any change to its policy of
taxing employees who occasionally or temporarily “work at home</b>”.<span style="mso-spacerun: yes;"> </span>A NJ employee working for a company located
in New York will <b>not</b> be allowed to “allocate” days worked at home as
days worked outside of New York State for purposes of calculating non-resident NY
state taxable wages.<span style="mso-spacerun: yes;"> </span>Days worked at home
in New Jersey are considered days worked in New York State.<span style="mso-spacerun: yes;"> </span>As Kathryn explained in her presentation, NY
has very strict and specific rules regarding employee out-of-state home
offices.<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">The business
tax presentation that followed pointed out that telecommuting does not create a
“nexus” for business taxes.<br /></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";"><o:p> <br /></o:p></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";">There was one item in the individual presentation that was truly
new to me, and I expect to most if not all of the “attendees”.<span style="mso-spacerun: yes;"> </span>When I downloaded and skimmed through the “handout”
material for the seminar on Friday I noticed a reference to an “Income Tax
Rebate” (nothing to do with the Homestead Rebate) in a slide. <span style="mso-spacerun: yes;"> </span><b>I had never heard about this rebate before.</b><span style="mso-spacerun: yes;"> </span><b>There is nothing I saw in the 2020
Instructions for the NJ-1040 about this rebate nor anything anywhere on the
NJDOT website.<span style="mso-spacerun: yes;"> </span>And I could not even find
anything via a Google search.<br /><o:p></o:p></b></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";"><o:p> <br /></o:p></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";">During the presentations “attendees” could enter questions in a
special box that were answered either in this box or addressed by the speaker
at the end of their presentation.<span style="mso-spacerun: yes;"> </span>I
typed in a request for more detailed information on the income tax rebate, but
my request was totally ignored.<span style="mso-spacerun: yes;"> </span>Perhaps
I did not enter the question properly.<br /></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";"><o:p> <br /></o:p></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";">It appears that this rebate is not part of the actual NJ-1040
filing, although the amount is based on a taxpayer's NJ state tax
liability.<span style="mso-spacerun: yes;"> </span>And it appears that the issuance
of any rebate for 2020 depends on the fiscal year 2021 budget
that will be passed by the NJ state legislature at the end of June (much as we
have to wait each year for the budget to pass to find out if Property Tax Reimbursements
- “senior freeze” payments – are further limited).<span style="mso-spacerun: yes;"> </span>The rebates, if allowed by the budget, will
be issued separately from NJ-1040 refunds and not until after June 2021.<br /></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";"><o:p> <br /></o:p></span><span style="font-family: Verdana, sans-serif;"><span style="color: #050505;">If any of you reading this post know of any link to specific
information and details explaining this new rebate please email me at </span><b><a href="mailto:rdftaxpro@yahoo.com"><span style="color: #2b00fe;">rdftaxpro@yahoo.com</span></a></b><span style="color: #050505;"> with “NJ Income
Tax Rebate” in the subject line.</span><br /></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";"><o:p> <br /></o:p></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";">The business tax presentation reminded us that <b>ALL</b> 2020 NJ-W-3
forms and corresponding state copies of W-2s and ALL state copies of 2020 Form 1099s
<b>MUST </b>be submitted electronically. <span style="mso-spacerun: yes;"> </span>This can be done free of charge on the NJDOT
website.<br /> </span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";"><o:p> <br /></o:p></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";">The main discussion topic in this section was the new “Business
Alternative Income Tax” (BAIT) for NJ pass-through entities (i.e partnerships,
sub-S corporations and LLCs filing as partnerships or S-corps).<span style="mso-spacerun: yes;"> </span>This was first mentioned by AD Ficara and
also briefly discussed in the individual presentation, as this payment is
claimed as a withholding credit on the NJ-1040.<br /></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";"><o:p> <br /></o:p></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";">There seemed to be confusion regarding the federal tax treatment/benefit
of NJ’s BAIT.<span style="mso-spacerun: yes;"> </span>The TU speakers knew all
the details on how BAIT is elected and treated under NJ state tax law, but
could not properly address the federal implications.<span style="mso-spacerun: yes;"> <br /> </span></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";"><o:p> <br /></o:p></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";">The BAIT was clearly another attempt by NJ to “work-around” the $10,000
federal SALT deduction limit to help NJ residents legally cheat on their
federal return.<span style="mso-spacerun: yes;"> </span>Based on what we are
hearing from the IRS the BAIT scam is so far successful.<span style="mso-spacerun: yes;"> </span>Here is how the BAIT election has been
explained in an item I found online (not the NJDPT website) -<br /></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";"><o:p> <br /></o:p></span><span style="color: #050505; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Segoe UI Historic"; mso-fareast-font-family: "Times New Roman";">“<i>The significance of this election is that the business taxes
paid by an eligible entity can be deducted in determining federal income that
passes-through to the owners, resulting in less federal tax paid by the owners
on their share of the PTE income</i>.” <span style="mso-spacerun: yes;"> </span><span style="mso-spacerun: yes;"> <br /></span></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">There has
been no change to the rules for the NJ Property Tax Reimbursement (aka “Senior
Freeze”) program, other than the increase of the income threshold for 2020 to
$92,969.<span style="mso-spacerun: yes;"> </span>The deadline for filing the
2019 PTR application had been extended to February 1, 2021.<span style="mso-spacerun: yes;"> </span>Those who have not yet filed a 2019
application can still do so.<span style="mso-spacerun: yes;"> </span>The
deadline for filing the 2020 PTR application is November 1, 2021.<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">The was no
discussion of the NJ Homestead Benefit.<span style="mso-spacerun: yes;"> </span>A
slide in the Property Tax Relief presentation stated “<i>No information available
at this time</i>.”<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">Before the
lunch break there was a new presentation – a “COVID-19 Panel”.<span style="mso-spacerun: yes;"> </span>Three high-level NJDOT representatives
fielded questions on how the pandemic has affected the processing of returns,
applications, audits, and collection activity, presented to them by panel
mediator, and NJ-NATP’s old friend, Jake Foy.<span style="mso-spacerun: yes;">
</span>It truly was good to see Jake participating in this event again,
although we could not actually “see” him.<span style="mso-spacerun: yes;">
</span>While we could hear Jake’s familiar voice, some glitch in the system did
not allow him to appear on screen.<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">A panel of
this type is something that should have been made a regular feature of this
seminar years ago.<span style="mso-spacerun: yes;"> </span>I hope it continues in
future seminars going forward – with perhaps some different types of panels (such
as a panel of tax professionals).<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">After lunch
we learned there was really not much new for NY state income tax returns either.<span style="mso-spacerun: yes;"> </span>The only real item of interest was the fact
that NY State has “decoupled” from – does not accept the tax law enacted by –
the federal CARES Act, with a few exceptions.<span style="mso-spacerun: yes;">
</span>There is a new Form IT-558 to identify required adjustments on the
IT-201 or IT-203 resulting from the “decoupling”.<span style="mso-spacerun: yes;"> <br /> </span></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">New York <b>does</b>
accept the 3-year reporting of COVID-related qualified pension account withdrawals.<span style="mso-spacerun: yes;"> </span>New York <b>does not</b> allow the “above-the-line”
deduction of up to $300 for charitable contributions made by taxpayers who do
not itemize.<span style="mso-spacerun: yes;"> </span>But remember, if you do not
itemize on the federal return you may still be able to itemize on the NY state
return.<span style="mso-spacerun: yes;"> </span>New York <b>does</b> allow the
increased AGI limitation on itemized deductions for charitable contributions. <span style="mso-spacerun: yes;"> <br /></span></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">Once again
NJ-NATP did a good job with this event.<span style="mso-spacerun: yes;"> </span>New
NJ-NATP Board President Josh Mellum and Seminar Chair Ethan Hundley deserve
kudos.<span style="mso-spacerun: yes;"> </span>Being virtual apparently did not
hurt “attendance”.<span style="mso-spacerun: yes;"> </span>It was mentioned that
there were 164 participants in this year’s event vs 163 in attendance at last
year’s in-person seminar.<span style="mso-spacerun: yes;"> <br /> </span></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">Next year’s “Famous
NJ State Tax Seminar” is scheduled for January 8, 2022.<span style="mso-spacerun: yes;"> </span>Hopefully I will be on the road to Iselin NJ,
or somewhere in NJ, next January 8<sup>th</sup>.<br /></span><span style="font-family: "Verdana",sans-serif;"><o:p> <br /></o:p></span><span style="font-family: "Verdana",sans-serif;">TAFN</span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div>
<br /><p></p>Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-68849141564592486212021-01-04T05:00:00.012-05:002021-01-04T05:00:06.497-05:00I'M BACK!<div style="text-align: justify;"><span style="font-family: Verdana, sans-serif;">I’m
baaaaaaack!</span></div>
<div style="text-align: justify;"><br /><span style="font-family: "Verdana",sans-serif;">THE TAX
PROFESSIONAL – a blog of advice, information, resources, and commentary on
preparing 1040s and the tax preparation industry – is back.<br /></span><span style="font-family: "Verdana",sans-serif;"> <br /></span><b><span style="font-family: "Verdana",sans-serif;">UPCOMING
CPE<br /></span></b><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: "Verdana",sans-serif;">The NJ
chapter of NATP’s annual “<a href="http://c06675730.preview.getnetset.com/files/NJ2021-Flyer-FamousNJState.pdf" target="_blank"><b><span style="color: #2b00fe;">Famous NJ State Tax Seminar</span></b></a>” is virtual this year.<br /></span><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: "Verdana",sans-serif;">It will be
held at the usual time – Saturday January 9<sup>th</sup> from 8AM to 3PM – only online. <br /> </span><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: "Verdana",sans-serif;">I have been
attending this annual seminar – which provides updates on New Jersey and New
York state income, payroll and taxes and the NJ property tax relief programs - for
as long as it has been offered. I have
always maintained that this is a “must attend” event for anyone who prepares NJ
state tax returns for individuals and/or businesses.<br /></span><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: "Verdana",sans-serif;">All materials
for the seminar will be provided electronically via a secure link sent to
registrants up to 3 days in advance of the event. A copy of the materials will also be available
for download during the event. Registrants
will earn 6 CPE credits.<br /></span><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: "Verdana",sans-serif;">The cost is
$95 for members and $145 for non-members.
Go <a href="http://www.natptax.com/Chapters/Pages/NewJerseyChapterEducation.aspx " target="_blank"><b><span style="color: #2b00fe;">here</span></b></a> to register.<br /> </span><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: "Verdana",sans-serif;">I will miss
seeing my NJNATP friends and colleagues – and look forward to NJNATP, and
national NATP, returning to in-person seminars and workshops hopefully later
this year.<br /></span><span style="font-family: "Verdana",sans-serif;"> <br /></span><b><span style="font-family: "Verdana",sans-serif;">TAXPRO
BUZZ<br /></span></b><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: "Verdana",sans-serif;">+ I invite
you to read my “The Year In Taxes 2020” post at THE WANDERING TAX PRO and let
me know if I forgot anything.<br /></span><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: "Verdana",sans-serif;">+ Tax pro Joe
Kristen has returned to blogging with the “<a href="https://www.eidebailly.com/taxblog " target="_blank"><b><span style="color: #2b00fe;">EideBailley Tax News and Views Blog</span></b></a>”. Similar to my “What’s the Buzz”
at “The Wandering Tax Pro”, it is a week-day daily blog of online posts and
articles to “<i>help you stay informed with what's happening in the tax world.
Whether it's a new tax law tacked on to a spending bill, a new court case that
reminds us of venerable tax lessons, or a surprising approach by states to tax
non-residents, it's fair game</i>.” Check
it out and subscribe.<br /></span><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: "Verdana",sans-serif;">+ Did you
know that the National Association of Tax Professionals now has a blog. Go <a href="https://blog.natptax.com/ " target="_blank"><b><span style="color: #2b00fe;">here</span></b></a> to check it out.<br /></span><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: "Verdana",sans-serif;">+ And one
more tax blog you may find helpful – “<a href="https://www.currentfederaltaxdevelopments.com/blog " target="_blank"><b><span style="color: #2b00fe;">Current Federal Tax Developments</span></b></a>”.<br /></span><span style="font-family: "Verdana",sans-serif;"> <br /></span><b><span style="font-family: "Verdana",sans-serif;">MY 1040
CLIENT HANDBOOK – REPRINT RIGHTS<br /></span></b><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: "Verdana",sans-serif;">Over a dozen
years ago I sat down and compiled a “handbook” or “manual” for my 1040
clients. It provided details on the policies
and practices of my firm, identified my responsibilities and the
responsibilities of the client, listed what I would need each year to properly
prepare the client’s tax returns, and explained how long the client should save
the return and supporting records. I
sent a copy to all my existing clients at the time and gave it to each new
client going forward at the beginning of the “engagement”.<br /> </span><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: "Verdana",sans-serif;">I recently
revised and updated this handbook and offer “reprint rights” of it to you, my
fellow tax professionals, for use in your practice.<br /> </span><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: "Verdana",sans-serif;">You can use
the 28 pages of text as intended – a free client handbook for current and new
clients – or you can use various components of the text separately in free
client newsletters or as free client handouts.
None of the contents and components of the handbook may be used in any
product or publication for sale to clients or the public for a fee without
written permission from me.<br /></span><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: "Verdana",sans-serif;">The handbook
includes -<br /></span><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">ABOUT
ME<br /><o:p></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">MY
SERVICES AND RESPONSIBILITIES<br /><o:p></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">MY
FEES<br /><o:p></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">YOUR
RESPONSIBILITIES<br /><o:p></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">WHAT
I DO NOT DO<br /><o:p></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">TAX
RETURN COPIES<br /><o:p></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">WHEN
TO CONTACT ME<br /><o:p></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">MY
PRIVACY POLICY<br /><o:p></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">WHAT
I NEED TO PREPARE YOUR TAX RETURNS<br /><o:p></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">RECORDKEEPING<br /><o:p></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">DEDUCTIONS<br /><o:p></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">HOW
LONG SHOULD I KEEP COPIES OF MY TAX RETURNS<br /><o:p></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">APPENDIX
A – KEEPING TRACK OF INVESTMENT COST BASIS<br /><o:p></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">APPENDIX
B – KEEPING TRACK OF GAMBLING ACTIVITY<br /> <o:p></o:p></span><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;">·<span style="font-family: "Times New Roman"; font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;">
</span></span><!--[endif]--><span style="font-family: "Verdana",sans-serif;">APPENDIX
C – THE NEW MORTGAGE INTEREST DEDUCTION<br /><o:p></o:p></span><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: "Verdana",sans-serif;">The DEDUCTION
section contains charts of Adjustments to Income, Itemized Deductions, Rental
Expenses, Business Expenses. And THE NEW
MORTGAGE INTEREST DEDUCTION appendix includes worksheets for keeping separate
track of acquisition debt and home equity debt with a detailed example.<br /></span><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: "Verdana",sans-serif;">The text is
sent as a word doc email attachment so you can customize part – such as
composing the section that identifies you, your firm and any other preparers in
the firm and customizing the explanation of services, practices and policies to
your individual tax practice. It is
written as a one-person practice, so the “I” and “me” can be changed to “we”
and “us” as applicable. And it is
written as a NJ tax preparer, so you can add your applicable state tax
requirements under WHAT I NEED TO PREPARE YOUR TAX RETURNS.<br /> </span><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: "Verdana",sans-serif;">A signed
reprint rights license agreement will be sent via postal mail.<br /></span><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: "Verdana",sans-serif;">BTW – a thank
you to Marc Standig EA, my former editor at “NJ Taxing Times” and long-time
Board member and volunteer with the NJ chapter of NATP for his help in reviewing
and “proofing” this handbook.<br /> </span><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: "Verdana",sans-serif;">The cost of
the reprint rights license for this handbook is <b>only $49.95</b>. Members of the National Association of Tax
Professionals receive a 20% - or $10.00 – discount. Please provide your membership number when
ordering.<br /> </span><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: "Verdana",sans-serif;">Send your
check or money order for $49.95 or $39.95, payable to “Taxes and Accounting,
Inc”, and your email address and postal address to –<br /></span><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: "Verdana",sans-serif;">TAXES AND
ACCOUNTING, INC<br /></span><span style="font-family: "Verdana",sans-serif;">1040 CLIENT
HANDBOOK<br /></span><span style="font-family: "Verdana",sans-serif;">POST OFFICE
BOX A<br /></span><span style="font-family: "Verdana",sans-serif;">HAWLEY PA
18428<br /></span><span style="font-family: "Verdana",sans-serif;"> <br /></span><span style="font-family: "Verdana",sans-serif;">TAFN</span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div><div style="text-align: justify;"><span style="font-family: "Verdana",sans-serif;"><br /></span></div>
Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-67237284599377157762018-04-25T05:00:00.000-04:002018-04-25T05:00:21.560-04:00THOSE WERE THE DAYS!<br />
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhXNBZYJbonmzVvSF7ARVJJBBYSIsSgCMvRWNmjAJ_eIsXI0pxauVYcIJKbgaBg_OvvlZgPJqIuMtU7k1sEwvmcL9wZkfxPQ4zbGgYPnM7OCgOTFEeQj1SBf2GAB17xycFewNYaYan4LqYZ/s1600/Tax-Prep-Fees.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="255" data-original-width="846" height="120" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhXNBZYJbonmzVvSF7ARVJJBBYSIsSgCMvRWNmjAJ_eIsXI0pxauVYcIJKbgaBg_OvvlZgPJqIuMtU7k1sEwvmcL9wZkfxPQ4zbGgYPnM7OCgOTFEeQj1SBf2GAB17xycFewNYaYan4LqYZ/s400/Tax-Prep-Fees.png" width="400" /></a></div>
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<span style="font-family: "Verdana",sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;">
<span style="font-family: "Verdana",sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">Those
were the days, my friend.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">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%.<span style="mso-spacerun: yes;">
</span>This was obviously before the introduction of the 2% of AGI exclusion
for Miscellaneous Expenses.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">Even
after the exclusion became law, many clients could still be reimbursed by the
US government for a part of our fee.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">Unfortunately,
thanks to the GOP Tax Act, I can no longer say that.<span style="mso-spacerun: yes;"> </span>As you know, all Miscellaneous Expenses
subject to the 2% of AGI exclusion are no longer deductible.<span style="mso-spacerun: yes;"> </span>This includes the cost of preparing your tax
returns or defending yourself in an IRS or state audit.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">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.<span style="mso-spacerun: yes;">
</span>Unfortunately, these two tax benefits were put to death via the Tax
Reform Act of 1986. <span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">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.<span style="mso-spacerun: yes;"> </span>And, remembering that for <b style="mso-bidi-font-weight: normal;">one year only decades ago</b> 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.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">It
seems that while taxpayers can often forget to report income, they <b style="mso-bidi-font-weight: normal;">never</b> forget a deduction or tax saving trick!<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">Oh
well. </span></div>
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<span style="font-family: "Verdana",sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;">
<span style="font-family: Verdana, sans-serif;">BTW - did you see my "review" of the 2018 tax filing season? Click <a href="http://wanderingtaxpro.blogspot.com/2018/04/that-was-tax-season-that-was-2018.html" target="_blank"><b><span style="color: blue;">here</span></b></a>.</span></div>
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<span style="font-family: "Verdana",sans-serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">TAFN</span></div>
Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-80776393828584132312018-02-08T07:38:00.003-05:002018-02-08T08:05:07.960-05:00LET ME MAKE THIS PERFECTLY CLEAR<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgoStA46yp-wTcGubXEbjU1VgpiUW1nbZaiI-lRVLkjNDfdB1hVhX1tPcK-_k-vwrCZYtWNgbprk_7aWTSa3AHjvu0bBrhcvc5bHQXttQEKxI42jHhZ1Sk1OEtdg-mziJzDAbT8I59PuBQ_/s1600/ACCOUNTING+TODAY.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="40" data-original-width="311" height="51" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgoStA46yp-wTcGubXEbjU1VgpiUW1nbZaiI-lRVLkjNDfdB1hVhX1tPcK-_k-vwrCZYtWNgbprk_7aWTSa3AHjvu0bBrhcvc5bHQXttQEKxI42jHhZ1Sk1OEtdg-mziJzDAbT8I59PuBQ_/s400/ACCOUNTING+TODAY.png" width="400" /></a></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "arial" , sans-serif;">I’m
back again. I just want to take this
opportunity to clarify some of the points I had intended to make in my
ACCOUNTING TODAY commentary “<a href="https://www.accountingtoday.com/opinion/some-truths-about-the-tax-cuts-and-jobs-act?feed=00000158-e4d5-df94-a55c-fefffad40000" target="_blank"><b><span style="color: blue;">Some Truths About the GOP Tax Law</span></b></a>”.<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: "arial" , sans-serif;">Under
tax law prior to the passing of the Tax Cuts and Jobs Act the 2018 personal
exemption was $4,150. For a person or
couple in the 15% tax bracket this represented a reduction of tax liability of
$623. For a taxpayer in the 25% bracket this
represented a reduction of tax liability of $1,038. And so on.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "arial" , sans-serif;">For
a dependent child under age 17 the Child Tax Credit, previously $1,000, is
increased to $2,000. The additional
$1,000 credit is presumably to make up for the loss of the tax savings from the
elimination of the personal exemption deduction. A taxpayer with a “qualifying” child in the
15% bracket comes out ahead. But a
taxpayer in the 25% bracket does not.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "arial" , sans-serif;">The
GOP Tax Act does increase the AGI threshold for claiming the Child Tax Credit –
so it will be available to many more taxpayers than it was under prior
law. It is true that many married
couples in the 25% tax bracket received a reduced Child Tax Credit or no credit
at all under “old” law. In these situations,
the increased credit more than makes up for the loss of the dependency
deduction.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "arial" , sans-serif;">But
taxpayers can only claim a $500 credit for a dependent child age 17 or older,
in many cases college students. A
taxpayer in the 10% bracket would have saved $415 for such a dependent under
prior law, so that person benefits. But taxpayers in all other tax brackets end up
with <b>increased net taxable income</b>. If we look at the new tax rates – 12% of
$4,150 would be just about $500, but 22% of $4,150 is $913, and so on. So, under the GOP Tax Act dependents under
age 17 have more value than those over age 16 as well as non-child dependents
such as elderly parents.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "arial" , sans-serif;">The
elimination of the dependency deduction also adversely affects taxpayers who
had been able to itemize in the past but will no longer itemize for 2018 through
2025 due to the increased Standard Deduction amount. A married couple with no dependents who would
have been able to claim $26,000 in itemized deductions and $8,300 in personal
exemptions will be taxed on <b>$10,300 more
in net taxable income</b> if their itemized deductions are reduced to below
$24,000 by the $10,000 limit on the deduction for taxes and the elimination of
miscellaneous deductions subject to the 2% of AGI exclusion. Granted the tax rates are lower, but the
increase in net taxable income can substantially reduce or eliminate the
benefit of the lower rates. A taxpayer
in the 15% marginal bracket under “old” law could be in the 22% bracket under
the GOP Tax Act.<o:p></o:p></span><br />
<span style="font-family: "arial" , sans-serif;"><br /></span>
<span style="font-family: "arial" , sans-serif;">And if I may add an observation on the corporate tax rate change - it appears that the new 21% corporate tax rate is a flat rate (correct me if I am wrong), and replaces the previous progressive scale. So <b>smaller corporations who had previously paid 15% in federal income tax on corporate profits will get a tax increase and now pay 6% more in tax.</b> </span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "arial" , sans-serif;">The
bottom line is that the GOP Tax Act is not a “massive” tax cut for the middle
class. Whether or not a taxpayer will
benefit from the Act, or actually pay more federal income tax, depends on their
individual facts and circumstances. As I
said at the end of my AT commentary – “<i>In
reacting and responding to the changes made by the Tax Cuts and Jobs Act, one
must look carefully at what the new law actually says and not rely on the
“party” line that is being presented in the press</i>.”<o:p></o:p></span></div>
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<br /></div>
<br />
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<span style="font-family: "arial" , sans-serif;">TAFN<o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;"><br /></span></div>
Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-8449003527456127962018-02-07T08:35:00.000-05:002018-02-07T08:35:12.624-05:00THE GOP TAX ACT AND THE TAX PREPARATION INDUSTRY<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi4i7Hc6BD4haHQwct4p0j1lBS-d6QcMbESmjfiDl_O9L1J3T4JD_giiC8jEoOSVkNinySsgihrmULOFB8LWEjtVS_gcB8yxAMRvQHJARwJiZMaT_9AyKPy6BvoAJsUqmJaC-1PtAmw01H_/s1600/GOP+TAX+ACT.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="619" data-original-width="1100" height="225" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi4i7Hc6BD4haHQwct4p0j1lBS-d6QcMbESmjfiDl_O9L1J3T4JD_giiC8jEoOSVkNinySsgihrmULOFB8LWEjtVS_gcB8yxAMRvQHJARwJiZMaT_9AyKPy6BvoAJsUqmJaC-1PtAmw01H_/s400/GOP+TAX+ACT.jpg" width="400" /></a></div>
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<span style="font-family: "Arial",sans-serif;"><br /></span></div>
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<span style="font-family: "Arial",sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">The
tax filing season is off to a relatively slow start, as usual. As I receive returns in the mail I am getting
them out, with only a 1-day turnaround.
So, I have some time to comment on this topic.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">My
fellow tax blogger Jason Dinesen has posted his thoughts on how the GOP Tax Act
will affect tax preparers in “<a href="http://dinesentax.com/12402/will-new-tax-law-affect-preparer-industry" target="_blank"><b><span style="color: blue;">How Will the New Tax Law Affect the Preparer Industry</span></b></a>” at DINESEN TAX TIMES.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">I
do agree for the most part with his comments on “What I Think Will Happen”. Any tax law change, good, bad or indifferent,
results in increased business. So, 2017
and 2018 will see an increase in the use of paid tax preparers. However, I agree that what follows, at least
until 2025, will be a drop in basic 1040 and Schedule A clients.<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">However,
the increased complexity of the new Section 199a deduction will most definitely
increase business from self-employed taxpayers, be they Schedule C filers,
partners, or owners of closely-held corporations. This will more than make up for the loss of itemizers. And the complexity of having 2 separate tax
rate schedules for investors who benefit from the lower qualified dividend and
capital gain rates will keep investors in “the fold” and perhaps add new ones. So, tax preparers will lose clients on the
lower-end of the fee schedule and gain clients on the higher-end. And existing business clients will be paying
higher fees for the increased complexity and calculations.<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">So,
the bottom line is that the tax preparation industry in general will benefit
from the new Act. How it will affect the
industry is that preparers will need to increase their continuing education and training
in the area of business returns – sole proprietorships, partnerships, “regular”
and sub-S corporations – and become conversant with Section 199a, and focus
their practice development efforts on these self-employed taxpayers.<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;"><br /></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">I do still think there is a market for the returns of those who cannot itemize. I have always said I would make more money, have less GD extensions, reduce the potential for error, and experience much less agita and aggravation if I did nothing but 1040A returns all day during the tax season. Preparers will need to be aware of pricing issues, and keep their fees for these simpler returns reasonable.</span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">From
a personal standpoint, the GOP Tax Act will not affect my 1040 practice one
iota. None of my clients will leave me to
prepare their own returns due to increased simplicity. I do not accept any new clients, period, and
am actually attempting to “thin the herd” as I head toward retirement after 4
more filing seasons (once I can say I have been preparing 1040s for 50 tax
seasons). I am actually somewhat pleased
that the Act will actually reduce the complexity, and potential for agita, of
the returns for many of my clients (I have truly minimal business clients). <o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">So,
what are your thoughts on the subject.
Will the GOP Tax Act help or hurt your practice?<o:p></o:p></span></div>
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<br /></div>
<br />
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<span style="font-family: "Arial",sans-serif;">TAFN<o:p></o:p></span></div>
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<span style="font-family: "Arial",sans-serif;"><br /></span></div>
Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-34617532674490515112018-02-01T05:00:00.000-05:002018-02-01T05:00:46.353-05:00THE TWELVE DAYS OF TAX SEASON<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiaKprajSAH6MZbW11ldFfdnvzk4QTNXHMiilHmdqrXEOD4eL04YC4F4WOslst8ZnBH0yxOVMZKInxSiPjwparzz5ZGH-1kJimiqfD_gq5ebLOy3ul7QxJrMtTzfJ_S0ERCui3nEEZi88ga/s1600/TAX+SEASON.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="480" data-original-width="640" height="240" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiaKprajSAH6MZbW11ldFfdnvzk4QTNXHMiilHmdqrXEOD4eL04YC4F4WOslst8ZnBH0yxOVMZKInxSiPjwparzz5ZGH-1kJimiqfD_gq5ebLOy3ul7QxJrMtTzfJ_S0ERCui3nEEZi88ga/s320/TAX+SEASON.jpg" width="320" /></a></div>
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<span style="color: #111111; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"><br /></span></div>
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<span style="color: #111111;"><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></span></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<span style="color: #111111;"><span style="font-family: Arial, Helvetica, sans-serif;">And now what you have been waiting a year for – my annual
posting of:<o:p></o:p></span></span></div>
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<br /></div>
<div class="MsoNormal" style="background: white; text-align: center;">
<span style="color: #111111;"><span style="font-family: Arial, Helvetica, sans-serif;">--------------------<o:p></o:p></span></span></div>
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<br /></div>
<div class="MsoNormal" style="background: white; text-align: center;">
<span style="font-family: Arial, Helvetica, sans-serif;"><b><span style="color: #111111;">THE TWELVE DAYS OF TAX
SEASON</span></b><span style="color: #111111;"><o:p></o:p></span></span></div>
<div class="MsoNormal" style="background: white;">
<br /></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<span style="color: #111111;"><span style="font-family: Arial, Helvetica, sans-serif;">On the first day of tax season my client gave to me a Closing
Statement for the purchase of a home.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<span style="color: #111111;"><span style="font-family: Arial, Helvetica, sans-serif;">On the second day of tax season my client gave to me 2 W-2
forms.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<span style="color: #111111;"><span style="font-family: Arial, Helvetica, sans-serif;">On the third day of tax season my client gave to me 3 mortgage
statements.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<span style="color: #111111;"><span style="font-family: Arial, Helvetica, sans-serif;">On the fourth day of tax season my client gave to me 4 Salvation
Army receipts.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<span style="color: #111111;"><span style="font-family: Arial, Helvetica, sans-serif;">On the fifth day of tax season my client gave to me 5 Form K-1s.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<span style="color: #111111;"><span style="font-family: Arial, Helvetica, sans-serif;">On the sixth day of tax season my client gave to me 6 1099s for
dividends.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<span style="color: #111111;"><span style="font-family: Arial, Helvetica, sans-serif;">On the seventh day of tax season my client gave to me 7
cancelled checks.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<span style="color: #111111;"><span style="font-family: Arial, Helvetica, sans-serif;">On the eighth day of tax season my client gave to me 8 useless
items.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<span style="color: #111111;"><span style="font-family: Arial, Helvetica, sans-serif;">On the ninth day of tax season my client gave to me 9 medical
bills.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<span style="color: #111111;"><span style="font-family: Arial, Helvetica, sans-serif;">On the tenth day of tax season my client gave to me 10 stock
sale confirms.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<span style="color: #111111;"><span style="font-family: Arial, Helvetica, sans-serif;">On the eleventh day of tax season my client gave to me 11
employee business expenses.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<span style="color: #111111;"><span style="font-family: Arial, Helvetica, sans-serif;">On the twelfth day of tax season my client got from me a
finished tax return, 11 employee business expenses, 10 stock sale confirms, 9
medical bills, 8 useless items, 7 cancelled checks, 6 1099s for dividends, 5
Form K-1s, 4 Salvation Army receipts, 3 mortgage statements, 2 W-2 forms, and a
Closing Statement for the purchase of a home.<o:p></o:p></span></span></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="background: white; text-align: justify;">
<span style="color: #111111;"><span style="font-family: Arial, Helvetica, sans-serif;">And, of course, on the thirteenth day of tax season the client
gave to me a corrected Consolidated 1099 from Wells Fargo Advisors!<o:p></o:p></span></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><span style="color: #111111;">And so the 2018 Tax Filing Season – my 47</span><sup><span style="color: #111111; font-size: 10pt;">th</span></sup><span style="color: #111111;"> - officially
begins. Open the floodgates and bring on the 1040s!<o:p></o:p></span></span></div>
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<span style="color: #111111;"><span style="font-family: Arial, Helvetica, sans-serif;">As is my custom, due to the demands of the filing season I will
be taking my annual “tax season hiatus” from posting to THE WANDERING TAX PRO and
THE TAX PROFESSIONAL. <o:p></o:p></span></span></div>
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<span style="color: #111111;"><span style="font-family: Arial, Helvetica, sans-serif;">Between now and April 17th I will barely have time to relieve
myself let alone blog! Nor will I have time to respond to comments.
If a comment requires a response I will do so after April 17th.</span></span></div>
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Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-56442480694989701902018-01-29T05:00:00.000-05:002018-01-29T05:00:10.350-05:00HORN TOOTIN'<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEixdLu47r3XsQeJo8lDRpxIrMTpXCTgFrq8SRZQ-8W5DZOL67qzWGbUtkzeflDCOiuWVm8h_laxH1PaREdNyV7Eli_mlU0xEEN70L7jGU3vJ-yYAnRQVdUHofbkcMNWJyA7Ed6JNeuutth8/s1600/SO+YOU+WANT+TO+BE+A+TAX+PREPARER+E-BOOK+COVER.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="184" data-original-width="116" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEixdLu47r3XsQeJo8lDRpxIrMTpXCTgFrq8SRZQ-8W5DZOL67qzWGbUtkzeflDCOiuWVm8h_laxH1PaREdNyV7Eli_mlU0xEEN70L7jGU3vJ-yYAnRQVdUHofbkcMNWJyA7Ed6JNeuutth8/s200/SO+YOU+WANT+TO+BE+A+TAX+PREPARER+E-BOOK+COVER.jpg" width="125" /></a></div>
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<span style="font-family: "Arial",sans-serif;">Before I begin
my annual tax filing season blog post hiatus – I do not post either here or at
THE WANDERING TAX PRO during my tax filing season of February 1 – April 17,
except for occasional tax season updates at TWTP – let me “toot my own horn” a
bit and talk about some publications I offer to fellow tax pros.<o:p></o:p></span></div>
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<span style="font-family: "Arial",sans-serif;">Click on the
below titles to read more information about the publications and ordering
information -<o:p></o:p></span></div>
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<span style="font-family: "Arial",sans-serif;"><a href="http://robertdflach.blogspot.com/p/so-you-want-to-be-tax-preparer.html" target="_blank"><b><span style="color: blue;">SO YOU WANT TO BE A TAX PREPARER</span></b></a><o:p></o:p></span></div>
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<span style="font-family: "Arial",sans-serif;"><a href="http://robertdflach.blogspot.com/p/the-joy-of-avoiding-new-jersey-taxes.html" target="_blank"><b><span style="color: blue;">THE JOY OF AVOIDING NEW JERSEY TAXES</span></b></a><o:p></o:p></span></div>
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<span style="font-family: "Arial",sans-serif;"><a href="http://robertdflach.blogspot.com/p/blog-page_21.html" target="_blank"><b><span style="color: blue;">MORTGAGE INTEREST GUIDE REPRINT RIGHTS</span></b></a><o:p></o:p></span></div>
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<span style="font-family: "Arial",sans-serif;">Please note that members of NATP receive a <b>25% discount</b> on publications ordered from me (pdf versions or print versions). Please include your membership number with your order.</span></div>
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<span style="font-family: "Arial",sans-serif;">The first two
books are available as an “e-book” to be read on Kindle from Amazon.com. Click <a href="http://amazon.com/author/robertflach" target="_blank"><b><span style="color: blue;">here</span></b></a> for my Amazon.com Author Page.<o:p></o:p></span></div>
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<span style="font-family: "Arial",sans-serif;">The NJ state
tax book includes several forms, schedules and worksheets that are not included
in the Kindle e-book version. If you
order this book from Amazon.com email proof of purchase to me at <b><span style="color: #0000cc;"><a href="mailto:rdftaxpro@yahoo.com"><span style="color: #0000cc;">rdftaxpro@yahoo.com</span></a></span></b>
with THE JOY OF AVOIDING NJ TAXES in the “subject line” and I will send you via
return email, in word format, the NJ forms, schedules and worksheets.<o:p></o:p></span></div>
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<span style="font-family: "Arial",sans-serif;">On February 1<sup>st</sup>
I will post both here and at TWTP my annual “Twelve Days of Tax Season”. That will be my last TTP until after the
April 17<sup>th</sup> filing deadline.<o:p></o:p></span></div>
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Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-82982876300636601632018-01-22T05:00:00.000-05:002018-01-22T05:00:36.864-05:00THE “EA” DESIGNATION IS NOT YOUR ONLY CHOICE <div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEihFIYuxrFAGHmwQKaKLyW44xS9v99edqIplT8DbkBCq44WRwFTH9_-QL6MNhYnuotVAemLRImYbXKBfELOQaAlmHlyNSSJQJGsv5f5MZzLInZ2f4pnxgzW8rZXP-Ny0Cq89EWLuoKGCNNN/s1600/ACAT.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="264" data-original-width="1034" height="100" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEihFIYuxrFAGHmwQKaKLyW44xS9v99edqIplT8DbkBCq44WRwFTH9_-QL6MNhYnuotVAemLRImYbXKBfELOQaAlmHlyNSSJQJGsv5f5MZzLInZ2f4pnxgzW8rZXP-Ny0Cq89EWLuoKGCNNN/s400/ACAT.png" width="400" /></a></div>
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<span style="font-family: "Arial",sans-serif;">Did
you know that EA is not the only initialed designation that tells people the
person with the initials is competent and knowledgeable and current on 1040 tax
issues? There is also -<o:p></o:p></span></div>
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<b><span style="font-family: "Arial",sans-serif;"><span style="color: windowtext; text-decoration-line: none;">Accredited
Tax Preparer® (ATP)</span></span></b><span style="color: #008ab0; font-family: "Arial",sans-serif;"> - </span><span style="font-family: Arial, sans-serif;">The ATP credential is for practitioners who have a thorough
knowledge of the existing tax code and the preparation of individual tax
returns. Their expertise covers comprehensive 1040 issues (including
supporting schedules, self-employed returns, etc.) and ethics. <o:p></o:p></span></div>
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<b><span style="font-family: "Arial",sans-serif;"><span style="color: windowtext; text-decoration-line: none;">Accredited
Tax Advisor® (ATA)</span></span></b><span style="font-family: Arial, sans-serif;"> - The ATA credential is for practitioners who can handle
sophisticated tax planning issues, including planning for owners of closely
held businesses, planning for the highly compensated, choosing qualified
retirement plans and performing estate tax planning. Their expertise covers
tax returns for individuals, business entities, fiduciaries, trusts and
estates, as well as tax planning, tax consulting and ethics. <o:p></o:p></span></div>
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<span lang="EN" style="font-family: Arial, sans-serif;">These designations are issued
and maintained by the Accreditation Council for Accountancy and Taxation®
(ACAT). ACAT “<i>was established in 1973 as a non-profit independent testing,
accrediting and monitoring organization. The Council seeks to identify
professionals in independent practice who specialize in providing financial,
accounting and taxation services to individuals and small to mid-size
businesses. Professionals receive accreditation through examination and
maintain their accreditation through commitment to a significant program of
continuing professional education and adherence to the Council's Code of
Ethics and Rules of Professional Conduct. ACAT programs are governed by a
Board of Directors that includes practitioners, educators and a public member</i>. “</span><span lang="EN" style="font-family: "Arial",sans-serif;"> </span><span lang="EN" style="font-family: Arial, sans-serif;"><o:p></o:p></span></div>
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<span lang="EN" style="font-family: Arial, sans-serif;">FYI, as part of the voluntary IRS Annual Filing Season
Program holders of the Accredited Tax Preparer (ATP)
credential issued by the Accreditation Council for Accountancy and Taxation – <o:p></o:p></span></div>
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<span style="font-family: Arial, sans-serif; text-indent: -0.25in;">(1) are
exempt from the Annual Federal Tax Refresher Course and testing requirements,</span></div>
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<span style="font-family: Arial, sans-serif; text-indent: -0.25in;">(2) automatically
qualify for the AFSP - Record of Completion (with a valid PTIN, CPE and Circular
230), and</span></div>
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<span style="font-family: Arial, sans-serif; text-indent: -0.25in;">(3) as
Record of Completion holders, will be included in the IRS public database of
tax return preparers </span></div>
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<span lang="EN" style="font-family: Arial, sans-serif;">The
Council’s website identifies the 3 Steps to Earn an ACAT Credential -<o:p></o:p></span></div>
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</span></b><span lang="EN" style="font-family: "Arial",sans-serif; mso-ansi-language: EN; mso-bidi-font-weight: bold;">1. </span><b><span style="font-family: "Arial",sans-serif;"><strong><span lang="EN" style="color: windowtext; font-weight: normal; text-decoration-line: none;">Register for an ACAT Exam:</span></strong></span></b><span lang="EN" style="font-family: "Arial",sans-serif; mso-ansi-language: EN;"> After
registering you will receive an email with details on scheduling your exam date
and time. <strong><span style="font-weight: normal;">If you are scheduling your exam late in the
testing window there may be limited testing availability.</span></strong><strong> </strong></span><span style="font-family: "Arial",sans-serif;"> <o:p></o:p></span></div>
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<span lang="EN" style="font-family: "Arial",sans-serif; mso-ansi-language: EN; mso-bidi-font-weight: bold;">2. Pass the
Exam: </span><span lang="EN" style="font-family: "Arial",sans-serif; mso-ansi-language: EN;">Get the </span><b><span style="font-family: "Arial",sans-serif;"><strong><span lang="EN" style="color: windowtext; font-weight: normal; text-decoration-line: none;">Study Materials</span></strong></span></b><span lang="EN" style="font-family: "Arial",sans-serif; mso-ansi-language: EN;"> and Locate
your </span><b><span style="font-family: "Arial",sans-serif;"><strong><span lang="EN" style="color: windowtext; font-weight: normal; text-decoration-line: none;">PSI Testing Site</span></strong></span></b><span lang="EN" style="font-family: "Arial",sans-serif; mso-ansi-language: EN;">.<o:p></o:p></span></div>
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<span lang="EN" style="font-family: "Arial",sans-serif; mso-ansi-language: EN; mso-bidi-font-weight: bold;"><br />
3. Earn Your Credential: </span><span lang="EN" style="font-family: "Arial",sans-serif; mso-ansi-language: EN;">After passing the ACAT exam you will receive information
on how to activate your credential.<o:p></o:p></span></div>
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<span style="font-family: "Arial",sans-serif;">For
more information on these designations, visit <a href="http://www.acatcredentials.org/"><b><span style="color: blue;">www.acatcredentials.org</span></b></a> or
contact ACAT at 888-289-7763 or email: <span style="color: windowtext; text-decoration-line: none;">info@acatcredentials.org</span>. <o:p></o:p></span></div>
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Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-4455065080238592332018-01-15T05:00:00.000-05:002018-01-15T05:53:18.734-05:00THE NJ-NATP "FAMOUS" STATE TAX SEMINAR<div class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt; text-align: center;">
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<span style="font-family: "arial" , sans-serif;">OOPS!
They did it again! The NJ chapter of the
National Association of Tax Professionals held another truly “famous” State Tax
Seminar at the APA Hotel in Iselin (formerly the Woodbridge Hilton).<o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">In the
25+ year history of this annual event, always at this hotel (a good central and
easily accessible location and I hope it will continued to be held here), I
have missed only 2, due to snow. As I
have always said, this seminar is a “must attend” for any tax professional who
prepares NJ state individual or corporate income, payroll, inheritance, and/or
sales tax returns.<o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">As an
aside, after registering in the morning I came across Tony Ferrara, a colleague
from my days in Jersey City, who operated a tax practice across the street and
up the block from my Newark Avenue office.
He had continued the practice began by his father, just as I had
continued the practice started by my mentor James P Gill, and his ongoing
practice is probably older than my ongoing practice. I often see Tony at this seminar. He told me he had recently attended a Gear-Up
tax update seminar where the instructor mentioned me by name, citing my
reputation for preparing all my 1040s by hand.
I am curious to discover the name of this instructor, which Tony promised
to send to me. <o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">Obviously,
as I said last year, the value to the tax pro of this seminar usually depends
on the degree of changes to the tax law that affect current and ongoing
filings. While there was not much new
with NJ taxes and property tax benefit programs for 2017, there was obviously a
huuuge change to federal income taxes going forward at the end of 2017. While the theme of this seminar is “state”
taxes, and I have always believed it should be limited to state tax changes and
issues, it has often included some federal updates.<o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">The event
always includes a buffet breakfast, in the seminar area, a buffet lunch,
previously in another room in the hotel, and an afternoon dessert break. The meal offerings have always been very good
– with the full buffet breakfast among the best of those offered at tax seminars
I have attended over the decades. <o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">This
year the lunch, limited to salads and sandwiches, was also held in the seminar
area. I thought this change was “more
better” than moving to a separate room, as it saved time and allowed for more of
it to be devoted to the true “meat” of the day - the tax presentations. I would, however, preferred if the lunch buffet
had included hot items, as it always had in the past. There was no afternoon dessert break this
year, with minimal dessert choices offered as part of the lunch buffet. I would prefer the separate dessert break – and
I missed the “diabetic-friendly” sugar-free cookies that had been available in
the past.<o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">As
always, following greetings from new chapter President Mary Rose Martino and
seminar chairperson Tony Manziano, the presentations got underway with the “keynote”
speaker, always the current Director of the Division of Taxation or a
representative. This year we heard from
Acting Director John Ficara. <o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">I have
always felt that over the years, with very few exceptions, these presentations
have been of no real substantive value to the tax pros in the audience. I do accept that this practice is probably a good
and necessary one, and, thankfully, very little time in the schedule is allotted
to the Director’s presentation. Mr.
Ficara, was a good and obviously knowledgeable speaker and talked in general about
what is going on with the Division to modernize and improve services But there was really nothing of consequence
to “take away”. There was no time for
audience questions or comments, and he did not address real systemic issues
with the Division, such as its continued unethical practice of remaining “silent”
on taxpayer overpayments or unidentified payments.<o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">Perhaps
for the future seminars registrants could be asked to submit to the chapter in
advance written systemic questions and concerns for the seminar chair to present
to the Director instead of the nice but mostly useless keynote address. <o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">What
followed for most of the rest of the day was the real reason we all came – the presentation
from “Jake and Company”, aka the Division’s “Taxation University”. Jacob Foy was charged with discussing “tax
updates”, and began by telling us that, once again, NJ refunds will <b>NOT</b> begin to be issued until <b>March 1<sup>st</sup></b>. <o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">He
went on to clarify that homeowners who chose to prepay some of their 2018
property tax payments in December 2017 due to the changes for 2018 in the GOP
Tax Act will <b>not</b> lose any of their
tax deduction on the NJ-1040 or with regard to the property tax relief
programs. For NJ-1040 purposes, the
state only cares that what is considered the calendar year’s tax assessment –
taxes due on February 1, May 1, August 1, and November 1 - are paid in full. They do not care in what year these assessments
are paid. You can only deduct up to
$10,000 (coincidentally the same limitation used in the GOP Tax Act) in <b>2017</b>
property taxes on the <b>2017</b> NJ-1040, and
you can only deduct </span><span style="font-family: "arial" , sans-serif;">taxes due in <b>2018</b> </span><span style="font-family: "arial" , sans-serif;">on the </span><b style="font-family: arial, sans-serif;">2018</b><span style="font-family: "arial" , sans-serif;"> NJ-1040 , <b>regardless of when you actually gave the money to your municipality</b>. So, prepaying 2018 taxes in 2017 does </span><b style="font-family: arial, sans-serif;">not</b><span style="font-family: "arial" , sans-serif;"> increase your 2017 NJ-1040
deduction, and it does </span><b style="font-family: arial, sans-serif;">not</b><span style="font-family: "arial" , sans-serif;"> reduce
your 2018 NJ-1040 deduction.</span></div>
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<span style="font-family: "arial" , sans-serif;">Jake
also spent time on the increased Retirement Income Exclusion and the new tax
credit for honorably discharged veterans that affect the NJ-1040. He said the Division will be flexible in
considering documentation of a taxpayer’s veteran status, and will accept
copies of the DD214, DD256, and a driver’s license with veteran status – which is
a license which has the word “VETERAN” on it.<o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">I was
pleased that Jake announced the state’s corporate business income tax return
(CBT) e-file “mandate” has once again been suspended, as NJDOT is not yet able
to allow corporations to submit their CBT-100 and CBT-100S returns directly to
the state online, as it does with 1040s via the NJWebFile system.<o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">He
also discussed the new totally redone format of the <a href="http://www.state.nj.us/treasury/taxation" target="_blank"><b><span style="color: blue;">NJDOT website</span></b></a>. Unlike the recent IRS website redo, the NJDOT
changes are very much an improvement, and, in my opinion, “more better” than
the old website. Jake asked us to
provide our comments on the new format via the “Give Us Your Opinion) <a href="https://www.surveymonkey.com/r/7NSKGVJ" target="_blank"><b><span style="color: blue;">feedback option</span></b></a> on the website.
<o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">Next
up was the tag team of Abra Watson, from TU, and Robert Skala, a NJDOT auditor,
who gave a good and informative presentation on the calculation of the NJ-1040
credit for taxes paid to other jurisdictions.
Nothing new here, but a helpful, and apparently enlightening to many, review
of the rules.<o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">A discussion
of the Property Tax Relief programs – the NJ Homestead Benefit and the Property
Tax Reimbursement Program – by frequent TU presenter, and friend of NJ-NATP,
Alexis Reid was scheduled next.
Unfortunately, Alexis took ill and had to leave, so Abra was asked to
fill in at the last minute. She did a
great job with the subject. Again,
nothing new here – just a review of ongoing rules, especially for homeowners
who should have been in the PTR program for several years but are just joining
now, and those who were in the program but, although still qualifying, for some
reason did not submit applications for a couple of years and want to get back
in. If a qualified homeowner has never
filed a PTR application, but should have been doing so, he or she should file a
separate PTR-1 application form or each of the past missing years. No checks will be issued for missed years,
but a correct base year will be established.<o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">After
lunch we returned to NJ state taxes with a presentation on the NJ Inheritance
Tax, now the only “death” tax assessed by NJ since the state estate tax was
repealed effective January 1, 2017, by Michael Rosen, Chief Auditor for the
Inheritance Tax Branch of NJDOT. While
Michael is a witty and knowledgeable speaker, although not a particularly “vibrant”
one, I personally have absolutely no interest in the Inheritance Tax return – I
do not prepare them and I no longer live in NJ – so I pretty much “zoned-out”
during his discussion, as if it were an “ethics” presentation. <o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">As
another aside, one voice that was definitely missed at this year’s seminar was
that of John Kelly, a former NJDOT employee and frequent speaker at this event in
the past, who had become a member of the audience a few years ago after retiring
from his state position. In the past
couple of years he provided helpful insight and historical perspective on the
NJ issues being presented from his seat in the audience.<o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">Alexis
was supposed to talk about NJ Sales Tax next, but as she had left this presentation
was cancelled to provide more time for Kathryn Keane of New York, another
NJ-NATP favorite speaker, to give a brief presentation of NY State Tax Updates –
there were basically none – and, of perhaps more interest to the audience, a
federal tax update. I also have no
interest in NJ Sales Tax issues, so this was ok with me.<o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">What
we really wanted to hear from KK was a review of the Tax Cuts and Jobs
Act. Unfortunately, she began with, for
many in the room a redundant (we had already heard this “stuff” at the NATP Annual
Conference, the NATP Tax Forum, and/or the NATP year-end 1040 Update) talk of some
other federal developments. This took time
away from what, as I previously said, we really wanted to hear.<o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">To be
fair, an hour and a half at the end of the day is certainly not sufficient time
to discuss in detail, and provide any true guidance or insight on, the new GOP
Tax Act. KK did a yeoman’s job – but she
was not even half-way through her presentation by the scheduled 4:40 PM end of
the seminar. She stayed on and
continued, but due to travel requirements, many audience members, myself
included, had to leave at this point so we missed much.<o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">If NJ-NATP
is going to devote time to the GOP Tax Act, and it should if national NATP is
not going to offer a specific seminar throughout the US relatively soon after
the end of the tax filing season, it should offer a separate half-day, or more
appropriately full-day, seminar, perhaps led by KK or John Sheeley, in May – maybe
it’s regular May offering expanded to a full day. Or maybe it can join with NY-NATP and PA-NATP
for a joint full-day seminar on the topic.<o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">For
future January state tax seminars, I would like to see presentations on SUI,
SDI, and FLI taxes from the NJ Division of Revenue and Enterprise Services or
the Department of Labor. These taxes
have been ignored in past years. Just a
thought.<o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">That said,
I certainly once again give my “kudos” to NJ-NATP and Jake and Company for
another excellent “famous” state tax seminar.
It certainly did what it attempted to do – and, as usual, did it well.<o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;">TAFN<o:p></o:p></span></div>
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Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com3tag:blogger.com,1999:blog-1280984116620265503.post-59543145548688326482018-01-08T15:02:00.002-05:002018-01-08T15:02:25.031-05:00THIS JUST IN<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh_RFkI80pzuwsW0jAFD24lTE9T7fWFIu6QYYLFCBO2ogU9lbcNsiyn6Dcp9ckLCrCS3Fbtkc8F2n6gw0bEM2nfTVNFEEFPXSadbhfH9ZDaYw2qKQABhyphenhyphenOlTc1ylGXYAeApeo1zFl7WcKyL/s1600/IRS+TAX+FORUMS.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="105" data-original-width="333" height="125" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh_RFkI80pzuwsW0jAFD24lTE9T7fWFIu6QYYLFCBO2ogU9lbcNsiyn6Dcp9ckLCrCS3Fbtkc8F2n6gw0bEM2nfTVNFEEFPXSadbhfH9ZDaYw2qKQABhyphenhyphenOlTc1ylGXYAeApeo1zFl7WcKyL/s400/IRS+TAX+FORUMS.png" width="400" /></a></div>
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<span style="font-family: "Verdana",sans-serif;">The
IRS has announced the schedule for the <a href="https://www.irstaxforum.com/index" target="_blank"><b><span style="color: blue;">2018 Nationwide Tax Forums</span></b></a> –<o:p></o:p></span></div>
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<b><span style="color: #333333; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">City<o:p></o:p></span></b></div>
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<b><span style="color: #333333; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Hotel<o:p></o:p></span></b></div>
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<b><span style="color: #333333; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Dates<o:p></o:p></span></b></div>
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<span style="color: #333333; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">ATLANTA<o:p></o:p></span></div>
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<span style="color: #333333; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Atlanta Marriott Marquis<o:p></o:p></span></div>
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<span style="color: #333333; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">July 10-12, 2018<o:p></o:p></span></div>
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<span style="color: #333333; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">NATIONAL HARBOR (DC)<o:p></o:p></span></div>
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<span style="color: #333333; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Gaylord National Harbor<o:p></o:p></span></div>
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<span style="color: #333333; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">July 17-19, 2018<o:p></o:p></span></div>
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<span style="color: #333333; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">SAN DIEGO<o:p></o:p></span></div>
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<span style="color: #333333; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Town and Country Resort<o:p></o:p></span></div>
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<span style="color: #333333; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">August 7-9, 2018<o:p></o:p></span></div>
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<span style="color: #333333; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">CHICAGO<o:p></o:p></span></div>
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<span style="color: #333333; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Hyatt Regency Chicago<o:p></o:p></span></div>
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<span style="color: #333333; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">August 21-23, 2018<o:p></o:p></span></div>
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<span style="color: #333333; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">ORLANDO<o:p></o:p></span></div>
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<span style="color: #333333; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Hyatt Regency Orlando<o:p></o:p></span></div>
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<span style="color: #333333; font-family: "Verdana",sans-serif; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">September 11-13, 2018<o:p></o:p></span></div>
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<span style="font-family: "Verdana",sans-serif;">Registration
will open in March 2018!<o:p></o:p></span></div>
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<span style="font-family: "Verdana",sans-serif;">The
Forums provide an excellent opportunity for earning CPE. Sessions are taught by tax professionals belonging
to NATP, NSTP, NAEA, and other tax pro membership organizations as well as by IRS
employees. <o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: "Verdana",sans-serif;">A
keynote presentation by a high-ranking IRS official is also included, as well
as the opportunity to review individual cases with IRS personnel. And you can visit with representatives of
various membership organizations, software providers, and other tax-related vendors.
<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: "Verdana",sans-serif;">One
advantage of this over the NATP Forums is that you get the IRS perspective on
many important tax issues and developments.<o:p></o:p></span></div>
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<br />
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<span style="font-family: "Verdana",sans-serif;">TAFN<o:p></o:p></span></div>
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Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-49351205214523750652018-01-08T05:00:00.000-05:002018-01-08T05:00:43.096-05:00A LITTLE THIS-A, A LITTLE THAT-A<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">+ For those of
you who are members of NATP, I recently got the word from Cindy Hockenberry -<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">“<i>The research team is ready and able to
answer any question regarding the new tax law. Questions will be billed as
research questions</i>.”<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">+ I submitted
my questions about the deduction for interest under the GOP Tax Act and
learned, despite what I had thought, that the itemized deduction for investment
interest is <b>NOT</b> gone. It has survived the Act. The NATP Research Department told me - <o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">“<i>Investment interest will continue to be
reported on Form 4952 and carried to Schedule A, line 14, part of the interest
you paid section</i>.”<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">+ The GOP Tax
Act totally did away with the itemized deduction for home equity interest. <b>There
is no “grandfathering” of existing home equity debt</b>. This makes it truly vital for all homeowners
with both new and existing mortgages to keep separate track of acquisition and
home equity debt <b>going back to day one
of the purchase of the property</b>. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">After having some
items confirmed by the NATP Research Department I am just about ready to “go to
press” with my revised “Mortgage Interest Guide” and a special report on
deducting mortgage interest under the GOP Tax Act for my clients. Both of these include my worksheets for
keeping separate track of acquisition and home equity debt and a detailed
example. <o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">Reprint rights
to both of these items will be available for fellow tax professionals to give
to clients for <b>ONLY $24.95</b>. Members of NATP receive a 25% discount – so
the cost is <b>only $18.70</b>. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">I will email
you a pdf copy of these reports for your review if you email me t <b><span style="color: #0000cc;"><a href="mailto:rdftaxpro@yahoo.com"><span style="color: #0000cc;">rdftaxpro@yahoo.com</span></a></span></b>
with SAMPLE MORTGAGE REPORTS in the “subject line”. <o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">The reports
will be delivered as a “word doc” email attachment. The signed reprint rights agreement will be
sent via postal mail. Send your check or
money order, payable to TAXES AND ACCOUNTING, INC, and your email AND postal
address (and membership number if a NATP member) to –<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">TAXES AND
ACCOUNTING, INC<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">MORTGAGE
INTEREST GUIDES REPRINT RIGHTS<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">POST OFFICE BOX
A<o:p></o:p></span></div>
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<span style="font-family: "Arial",sans-serif;">HAWLEY PA 18428 <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">+ The new IRC
Section 199a Qualified Business Income Deduction is truly a convoluted mucking
fess that adds much unnecessary complexity to the Tax Code. Tony Nitti of FORBES.COM has tried to explain
this new deduction<span style="color: blue;"><b> <a href="https://www.forbes.com/sites/anthonynitti/2017/12/26/tax-geek-tuesday-making-sense-of-the-new-20-qualified-business-income-deduction/#34c456b444fd" target="_blank">here</a></b> </span>and <a href="https://www.forbes.com/sites/anthonynitti/2018/01/04/the-new-qualified-business-income-deduction-varies-based-on-your-business-type-or-does-it/#c16461e20763" target="_blank"><b>here</b></a>.<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">I have already
received an email from a client asking if he should change from being an employee
to an independent contractor to take advantage of this new loophole. While this is a valid question, although one certainly
cannot simply go from being an employee to being an independent contractor by
just saying “make it so” and changing the method of payment, and one that needs
to be answered now, I have neither the time, nor the desire, to properly “digest”
this new deduction now, considering that I need to get ready for the upcoming
tax filing season.<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">A request for
my fellow tax professionals – I expect the IRS will no doubt create a detailed worksheet
to make sense of the convoluted mess and properly calculate this deduction when
it gets around to writing the instructions for the 2018 tax returns – much later
this year. But we need such a worksheet
now. <b>Does anyone have, or has anyone seen or heard of, a Section 199a
Deduction Worksheet that is available to download NOW, either free or at a
minor charge?</b> If so, please email me
at <b><span style="color: #0000cc;"><a href="mailto:rdftaxpro@yahoo.com"><span style="color: #0000cc;">rdftaxpro@yahoo.com</span></a></span></b>
with SECTION 199a WORKSHEET in the “subject line” with the information. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">I will share the
link or links to acquire such a worksheet in a subsequent post here.<o:p></o:p></span></div>
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<span style="font-family: "Arial",sans-serif;">TAFN<o:p></o:p></span></div>
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Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-69950699355702238672018-01-02T05:00:00.000-05:002018-01-02T05:00:30.828-05:00A NEW INCOME OPPORTUNITY FOR 2018<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguvaVAgYc2GsomjK5XO8XoRFpsaL1x7o_kcf7kySom1D3GgerfDB4linUnYYoZsuHn64zofcGHf-TYQNkgR-DWUiGmlO74immHTQDj616ndMbWT8_DY0uMWPLcmpDwUUOAfoR62SwLltT7/s1600/INCOME.png" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="720" data-original-width="545" height="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEguvaVAgYc2GsomjK5XO8XoRFpsaL1x7o_kcf7kySom1D3GgerfDB4linUnYYoZsuHn64zofcGHf-TYQNkgR-DWUiGmlO74immHTQDj616ndMbWT8_DY0uMWPLcmpDwUUOAfoR62SwLltT7/s320/INCOME.png" width="242" /></a></div>
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<span style="font-family: "Arial",sans-serif;"><br /></span></div>
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<span style="font-family: "Arial",sans-serif;">HAPPY
NEW YEAR! May 2018 be less taxing.<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">While
the new limitations on the mortgage interest deduction in the GOP Tax Act simplifies
the Tax Code, it greatly complicates recordkeeping for taxpayers and <b>potentially for tax professionals</b>. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">As
we know, under the Act interest on home equity debt, regardless of the amount
of the debt principal, is <b>no longer
deductible</b>. Period. There is grandfathering of existing
acquisition debt interest rules – but there is <b>NO grandfathering of existing home equity debt</b>. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">I
do believe in the original House version of the bill all existing mortgage debt
was “grandfathered” – including home equity debt. While I can understand, and agree with, the
philosophy of limiting deductible mortgage interest to acquisition debt, for
practicality sake I wish that existing home equity debt had been included in
the grandfathering.<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">Going
forward, it will not be a big problem for new home purchases made after
December 15, 2017. Taxpayers need to
keep track of only acquisition debt on these mortgages – and perhaps new
regulations for reporting information on Form 1098 may take care of this to a
degree. But <b>taxpayers with existing mortgage debt incurred before December 16, 2017
will definitely need to separately track acquisition and home equity debt</b> <b>going back to day one!</b> <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">Taxpayers
have always been required to keep separate track of acquisition and home equity
debt, but, if my clients are any indication, I expect that few actually did - due
to the allowance of a deduction for interest on up to $100,000 of home equity
debt. And how many of us have actually been
doing this for our clients on an ongoing basis? <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">I
also expect that with the new law, <b>clients
will expect us as their tax preparer to keep track of their debt at least going
forward</b>. And many will also want us
to create separate schedules of acquisition and home equity debt for their
existing mortgage loans so the proper amount of interest can be claimed. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
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<b><span style="font-family: "Arial",sans-serif;">This is an opportunity for
us to generate post tax-season income this year</span></b><span style="font-family: "Arial",sans-serif;"> – when preparing an applicable client’s
2017 return we can explain the new mortgage rules and offer to generate
separate historical debt schedules after the filing season, and a brief period
of recuperation, for, of course, <b>an
additional hourly fee. <o:p></o:p></b></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">I
hope, and expect, that the existing rules and regulations for who can deduct
mortgage interest - when it comes to situations like multiple owners making
unequal individual payments and “equity ownership” - will remain in effect
under the new Act, as well as the current rules and regulations for determining
what is home equity debt. <o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">Currently
any additional closing costs of a refinanced mortgage that are added to the
principal of the new loan is considered home equity debt. For example - clients purchased a home in
2011. They have had only one mortgage,
from the original purchase, and no home equity debt. They refinanced the original mortgage in 2015
to get a better rate. The principal
balance on the original mortgage was $197,374.
The principal balance of the refinanced mortgage was $200,000. They did not take any money “out”, and paid a
little over $1,000 at the closing. The
difference is the closing costs for title insurance, inspections, fees, etc.
etc. These clients have acquisition debt
of $197,374 and home equity debt of $2,626.
<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">And,
also currently,</span> <span style="font-family: "Arial",sans-serif;">if you have
refinanced mortgage debt that combined both previous acquisition debt and home
equity debt., the home equity debt is considered to be paid down first. A client refinanced a mortgage to combine the
purchase mortgage balance of $197,374 and the balance in a home equity line of
credit of $90,000. During a year he paid
down $6,000 of the refinanced loan principal.
The $281,374 remaining principal is considered to be $197,374 of
acquisition debt and $84,000 of home equity debt. <o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">Finally,
I hope, and expect, that taxpayers will still be able to elect to treat home
equity debt secured by a personal residence as <b>not</b> being secured by the residence – so the interest on the debt is
treated as deductible business interest on Schedule C or a deductible rental
expense on Schedule E instead of home equity interest. Unfortunately, investment interest is, at
least I think (can anyone verify?), no longer deductible on Schedule A.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">I
will be rewriting my Mortgage Interest Guide, which includes worksheets for
keeping track of mortgage debt and a detailed example of how to use them, to
reflect the new rules for 2018 and beyond, and will be offering reprint rights
of this guide to fellow tax pros. I will
also be creating a special report to give to my clients with existing mortgages,
which will also include the worksheets and example, that will explain the new
rules and remind them of their responsibility to keep separate track of acquisition
and home equity debt. Reprint rights to
this report will also be available. I
will let you know here when they are available. <o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">So,
we should prepare for <b>additional work</b>,
and <b>a new opportunity for increased
income</b>, for clients with mortgage debt.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">Any
thoughts or comments?<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: "Arial",sans-serif;">TAFN<o:p></o:p></span></div>
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Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-22832587135291218472017-12-25T05:00:00.000-05:002017-12-25T05:00:29.956-05:00MERRY CHRISTMAS!<div class="separator" style="clear: both; text-align: center;">
<br /><iframe width="320" height="266" class="YOUTUBE-iframe-video" data-thumbnail-src="https://i.ytimg.com/vi/SFGC_YgeQ5w/0.jpg" src="https://www.youtube.com/embed/SFGC_YgeQ5w?feature=player_embedded" frameborder="0" allowfullscreen></iframe></div>
<br />
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<div style="text-align: center;">
<span style="font-family: "trebuchet ms" , sans-serif; font-size: large;"><em>While I think the tax filing season is the most wonderful time of the year - this is a close second!</em></span></div>
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</div>
<div style="text-align: center;">
<strong><span style="font-size: x-large;"><span style="color: red;">WISHING</span> <span style="color: #274e13;">YOU</span> <span style="color: red;">A</span> <span style="color: #274e13;">MERRY</span> <span style="color: red;">CHRISTMAS</span><span style="color: #274e13;">!</span></span></strong></div>
<div style="text-align: center;">
</div>
<div style="text-align: center;">
<em><span style="font-family: "trebuchet ms" , sans-serif; font-size: large;">From The Wandering Tax Pro and Turbo</span></em><br />
<em><span style="font-family: "trebuchet ms" , sans-serif; font-size: large;"><br /></span></em>
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Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-79391707367395832142017-12-20T06:41:00.000-05:002017-12-20T06:41:05.141-05:00PLENTY OF QUESTIONS<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhFs3Y_P_yLGgIIomlaNg__mFeTmJpuk-0KLMCR7HixgGsLxCkCjlzBmcEQpDUBraFnKR3cACoygtLNaSXO4LyuPMu9-QeG0eosReMxWD4Kr7uYHE9Xxo0vNXCo1IHfInSEh5U_O3HYQF5c/s1600/TRIVIA.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="300" data-original-width="228" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhFs3Y_P_yLGgIIomlaNg__mFeTmJpuk-0KLMCR7HixgGsLxCkCjlzBmcEQpDUBraFnKR3cACoygtLNaSXO4LyuPMu9-QeG0eosReMxWD4Kr7uYHE9Xxo0vNXCo1IHfInSEh5U_O3HYQF5c/s1600/TRIVIA.jpg" /></a></div>
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<span style="font-family: "Verdana",sans-serif;">Implementation
of The Tax Cuts and Jobs Act changes to tax law certainly raises a multitude of
questions for tax professionals.<o:p></o:p></span></div>
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<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">(1) As
I previously discussed in “<a href="http://wanderingtaxpro.blogspot.com/2017/12/a-nightmare-on-tax-street.html" target="_blank"><b><span style="color: blue;">A Nightmare on Tax Street</span></b></a>”, will the Form 1098 form
to report mortgage interest be revised and will additional recordkeeping
requirements be placed on bank and mortgage companies? <o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">Will
existing IRS regulations on acquisition debt and home equity debt – treatment of
closing costs of refinancing included in principle, application of payments of
principle on consolidated mortgages, etc. - remain, or will new ones be
written?<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">(2) What
about the revised dreaded Alternative Minimum Tax (AMT)? The exemptions and exemption phase-out ranges
have been changed, but I have read of no change to the “preferences”, other
than because miscellaneous expenses subject to the 2% of AGI threshold are no
longer deductible on Schedule A this will no longer be a preference. <o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: "Verdana",sans-serif;">In
the “old” AMT personal exemptions were a tax preference, and not deductible in
calculating Alternative Minimum Taxable Income.
And the Child Tax Credit is allowed as a credit against AMT. We will no longer have a personal exemption
deduction – this deduction is replaced by an increased Child Tax Credit and a
new “non-child” dependent credit. Will
the enhanced and new credit be allowed in full as a credit against AMT?<o:p></o:p></span></div>
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<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">(3)
How will the new Schedule A report the specific components of real estate taxes
and state and local income or sales taxes that make up the $10,000 maximum if
this maximum is applied? This
information will be important in determining if any portion of state tax
refunds are includable in taxable income in the subsequent year. <o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: "Verdana",sans-serif;">I
would think the first line in the tax section of Schedule A would be to
identify real estate taxes paid, up to the $10, 000 maximum. A second line would report either state and
local income taxes or state and local sales taxes allowed (with a box check
like on the current Schedule A), up to the combined maximum, if the property
taxes paid are less than $10,000. <o:p></o:p></span></div>
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<div class="MsoNormal" style="line-height: normal; margin-bottom: .0001pt; margin-bottom: 0in; text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">(4) We
know that the 20% deduction of “pass-through” business income will not be
deducted directly on Schedules C or E or as an “adjustment to income” to reduce
AGI, but will be deducted from AGI to determine net taxable income. But will this deduction also be applied in
determining “net earnings from self-employment” subject to the self-employment
tax.<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: "Verdana",sans-serif;">And
the list goes on.<o:p></o:p></span></div>
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<span style="font-family: "Verdana",sans-serif;">With
a law written and passed in such a hurry there will be lots of issues that will
need to be addressed, many in additional “Technical Corrections” legislation.<o:p></o:p></span></div>
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<span style="font-family: "Verdana",sans-serif;">TAFN<o:p></o:p></span></div>
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Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-18869960631042060072017-12-18T05:00:00.000-05:002017-12-18T05:00:25.833-05:00WHAT IS CONSIDERED PREPAID INCOME TAXES?<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhQLjr_cAP7jwcG5TDcSAPV8QmKqjTRpQiB7tqVVkQwW9tz7Ze9QhrEnUPv-Ym9qWMi-Rq1xqVnWZsmNgGBhltbQU7gKnTZ6skQ4SkV7jsuEaUJLzpF1T0a5X-G4doQcVm0_ZYGuCNbnS4F/s1600/QUESTION.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="255" data-original-width="197" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhQLjr_cAP7jwcG5TDcSAPV8QmKqjTRpQiB7tqVVkQwW9tz7Ze9QhrEnUPv-Ym9qWMi-Rq1xqVnWZsmNgGBhltbQU7gKnTZ6skQ4SkV7jsuEaUJLzpF1T0a5X-G4doQcVm0_ZYGuCNbnS4F/s1600/QUESTION.jpg" /></a></div>
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<span style="font-family: "Verdana",sans-serif;">I
am sure you have been, and will be, getting emails and phone calls from 1040
clients asking if they can prepay their 2018 taxes to claim a 2017 deduction,
considering the potential $10,000 limitation on the deduction for 2018.<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">The
conference bill specifically states that "<i>an individual may not claim an itemized deduction in 2017 on a
pre-payment of <b>income tax</b> for a
future taxable year in order to avoid the dollar limitation applicable for
taxable years beginning after 2017</i>."<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">So,
it appears you <b>can </b>deduct prepaid <b>real estate taxes</b>, but not prepaid
income tax. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">What
exactly is prepaid state income tax? <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">The
actual amount of state income tax liability is based on the information on the
final 2017 tax return – and will not be known until 2018. The amount of state income tax withheld is
based on the state withholding tax tables and a person’s W-2 wage income. <o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">And
for the most part quarterly state estimated tax payments are based on either the
prior year’s liability or the current year’s anticipated income. The 4<sup>th</sup> quarter 2017 payment is
not due until mid-January of 2018; is making this payment in December of 2017
considered to be a “prepayment”, even though the tax payment is being made for
2017 income? <o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">Obviously,
if your normal 4<sup>th</sup> quarter payment would be $2,000 but you send a payment
of $10,000 in December you are making a prepayment of 2018 taxes. But what about the normal $2,000 payment. And if you do not make quarterly estimated
state tax payments, having your anticipated state tax liability covered in full
by withholding, but you make a 4<sup>th</sup> quarter 2017 estimated tax
payment of $5,000 in December, this $5,000 is clearly a prepayment.<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">What
about a person who can control his state tax withholding in real time, like a sub-S
business owner who pays himself a year-end bonus in December? He or she can have an excessive amount of
state income tax withheld from the bonus paycheck, which would, to me, clearly
be a prepayment. But what if that person
anticipates excessive year-end dividends and capital gain distributions? This could also apply to the person making
only a 4<sup>th</sup> quarter state payment.
These amounts are often not known until January when the December brokerage
statements arrive. As with anything, specific
facts and circumstances would, or should, apply. <o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">Of
course, if a person substantially overpays his or her state income tax for 2017
by whatever method he or she is only temporarily postponing paying federal
income tax. The resulting refund of
excessive withholding or estimated payments would be included in taxable income
on the 2018 return – although this money would be taxed at a slightly lower tax
rate, and the taxpayer would get the potential benefit of the money earned on
the deferred taxes if properly invested.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Verdana",sans-serif;">Any
thoughts on the question?<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: "Verdana",sans-serif;">TAFN </span></div>
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Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-10820537795907422002017-12-11T05:00:00.000-05:002017-12-11T05:00:04.301-05:00BACK ON THE SOAPBOX<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhYkIN3etb1Z1B3yn26YazIpYzxJvvoenU5bJbo8RXo0axHQ_ZbnDJUd-kFHpDub303K_K6RJAR9QrY8UYRTGDjjNrOvNOwk67Rhv8nsdjNfrR-Mg1tp_h0G8F6R5Hyhme47bZzeIXKKBW4/s1600/SOAP+BOX.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="289" data-original-width="405" height="285" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhYkIN3etb1Z1B3yn26YazIpYzxJvvoenU5bJbo8RXo0axHQ_ZbnDJUd-kFHpDub303K_K6RJAR9QrY8UYRTGDjjNrOvNOwk67Rhv8nsdjNfrR-Mg1tp_h0G8F6R5Hyhme47bZzeIXKKBW4/s400/SOAP+BOX.gif" width="400" /></a></div>
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<span style="font-family: "Arial",sans-serif;">It seems to me
that the underlying reason for the existence of any labor or trade union, or
professional membership organization like the AICPA, is to get as many benefits
as possible, financial and otherwise, for, and lobby to protect, its membership
– regardless of whether or not the benefits and lobbying are appropriate, or
whether or not providing the benefits, or what they lobby for, does harm or
damage, financial or otherwise, to any other party or parties. Their existence is purely selfish in nature–
as I guess it should be.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">For example,
the actions and lobbying of the AICPA is solely for the purpose of lining the
pockets of, and reducing competition for, their CPA members. They don’t care if what they lobby for is
morally or ethically “correct” or “appropriate”, or if what they want comes at
the expense of, or does harm to, non-CPA groups and individuals. They are not interested in proper tax
administration, or what is in the best interests of individual and
taxpayers. They only care what is in the
best interests of CPAs, and act accordingly.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">Case in point –
the AICPA opposes anything that gives additional credibility to Enrolled Agents
or to “unenrolled” tax preparers. If
they oppose tax preparer regulation it is because they do not want taxpayers to
think non-CPA preparers who receive IRS “approval” or credentials are as good
as, or closer to reality better than, CPA tax preparers. They think they “own” the tax preparation profession
and want to keep it that way. When they
do support any regulation of preparers they expect to be exempt from its
requirements.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">While Enrolled
Agents do have the National Association of Enrolled Agents to promote and
protect members, and lobby on the behalf of members, more ethically and
appropriately than the AICPA, “unenrolled” preparers do not have an equivalent
of AICPA or NAEA. <o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">There is NATP
and NSTP – but these organizations are geared more for providing quality
education and resources for members. While
they do speak to legislation and IRS issues occasionally on a basic level, and
do promote their members, they do NOT act affirmatively to <b>protect</b> members via aggressive lobbying against legislation and
government rules and regulations that adversely affect members.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">Unenrolled tax
preparers, or more to point non-CPA members of the tax preparation industry,
truly need a loud and aggressive voice in Washington<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "Arial",sans-serif;">But I see a
lobbying organization for tax preparers representing the interests of ALL
preparers - EAs, the “unenrolled” and CPAs, actually all PTIN-holders - and
dealing with the concerns that are common to all preparers. Unlike the AICPA, this organization would not
attempt to portray that one class of preparer – the unenrolled and/or the
Enrolled Agent – is “more better” than another – the CPA. The competence and appropriateness of a tax
preparer should be determined and judged on the combination of the specific
qualities and qualifications – knowledge, training, experience, remaining
current, pricing and practices - of the individual preparer. <o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: "Arial",sans-serif;">Its purpose
would NOT be to promote tax preparers, or one class of tax preparer, in the
eyes of the public, but to protect ALL tax return preparers from the imposition
of excessive and inappropriate rules and regulations by Congress and the IRS. <o:p></o:p></span></div>
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<span style="font-family: "Arial",sans-serif;">Your thoughts?<o:p></o:p></span></div>
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<span style="font-family: "Arial",sans-serif;">TAFN<o:p></o:p></span></div>
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Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-14479287010468188212017-12-04T05:00:00.000-05:002017-12-04T06:32:37.942-05:00IS A PUZZLEMENT<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjY60v7HvrssQqHVYLf2rLxguktc9pGotQrazNkfew1wrUwecUXcOjdkDnyDK0kbvfGwLJugRC3aQhKdeHfsuSX6HeycQoXgIsPhblQvGgForYoXuBlX1GVqYfzXw_iSLQKtw6fSdDteJiq/s1600/QUESTION+MARK.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="252" data-original-width="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjY60v7HvrssQqHVYLf2rLxguktc9pGotQrazNkfew1wrUwecUXcOjdkDnyDK0kbvfGwLJugRC3aQhKdeHfsuSX6HeycQoXgIsPhblQvGgForYoXuBlX1GVqYfzXw_iSLQKtw6fSdDteJiq/s1600/QUESTION+MARK.jpg" /></a></div>
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<span style="font-family: "arial" , sans-serif;">As you all know
by now, in the wee hours of Saturday morning the Senate approved its version of
the “Tax Cuts and Jobs Act” by a vote of 51 to 49.<b> </b>The Republicans were
actually able to finally pass a bill in both the House and the Senate, despite
the handicap of having arrogant idiot Donald T Rump in the White House!<o:p></o:p></span></div>
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<span style="font-family: "arial" , sans-serif;"><br /></span></div>
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<span style="font-family: "arial" , sans-serif;">FYI - see my post on "<a href="http://wanderingtaxpro.blogspot.com/2017/12/making-one-bill-out-of-two.html" target="_blank"><b><span style="color: blue;">Making One Bill Out of Two</span></b></a>" at TWTP.</span></div>
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<span style="font-family: "arial" , sans-serif;">This bill is
not as good as the Republicans claim it is, and not as disastrous as the
Democrats insist it is. There is both
good and bad in both the House and Senate versions of the bill. <o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "arial" , sans-serif;">What is bad
with ANY legislation at ANY time is rushing it through without proper
intelligent review, research and discussion merely so the idiot in the White
House, and the Republican Party, can claim a legislative victory (Trump really
doesn’t give a rodent’s hind quarters what is actually in the bill – he just
wants Congress to pass ANY bill so he looks good). The “Affordable Care Act”, aka Obamacare, was
similarly rushed through, with nobody actually reading in full the actual bill,
to get an early victory for Obama – and, while like the tax reform bill it was
based on a good concept, the actual legislation that passed was a mucking fess.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "arial" , sans-serif;">It is obvious
that, despite what Trump tweeted in self-congratulation, the tax cuts for working families and the
middle class in the bill is certainly <b>not</b>
MASSIVE. And let’s be perfectly clear - <b>self-absorbed Trump truly gets a MASSIVE
tax cut in this bill.<o:p></o:p></b></span></div>
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<br /></div>
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<span style="font-family: "arial" , sans-serif;">I look forward
to seeing the final legislation that the conference committee will come up with.<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: "arial" , sans-serif;">One thing that
has always confused me in both versions is the need to reduce the maximum tax
rate on “pass-through” business income, which includes income reported by a
sole proprietor on Schedule C.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "arial" , sans-serif;">Am I not seeing
something?<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "arial" , sans-serif;">Under current
law corporations pay a maximum of 35% on corporate income, and when this income
is passed to shareholders as dividends they pay a maximum of 20% in income tax
and 3.8% in NIIT on the dividends. So, the income of a “C” corporation CAN be
taxed at a maximum federal rate of 58.8%.<o:p></o:p></span></div>
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<br /></div>
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<span style="font-family: "arial" , sans-serif;">Pass-through
business income is currently taxed at the business owners’ individual tax rate.
It is not subject to NIIT. So, under current law the maximum federal tax on,
for example, “S” corporation income is 39.6%. When you consider the phase-out
of items affected by AGI the actual effective maximum rate may be a bit higher
– but nowhere near 58.8% The purpose of pass-through treatment is to avoid the
double-taxation of corporate income.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "arial" , sans-serif;">Partnership and
sole proprietor income is also subject to the self-employment tax, but the W-2
salaries of corporate owners is subject to FICA tax. So this is not included in
the above comparison.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "arial" , sans-serif;">So why does
there need to be a reduction to the federal tax rate of pass-through business
income?<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "arial" , sans-serif;">All
pass-through entities are not equal.
Owners of sub-S corporations must be paid a W-2 salary, taxed as a W-2 salary;
the amount that is passed through on the K-1 is in full the equivalent of
corporate dividends. The “pass-through”
income of sole proprietors and general partners is a combination of
wage-equivalents and dividend-equivalents, but is currently taxed in full at
ordinary income rates and subject in full to the self-employment tax. And the deductions for health insurance and
pension contributions for the self-employed sole proprietor and general partner
do <b>not</b> reduce net earnings subject
to the self-employment tax; they are treated as adjustments to income on the
Form 1040. These items are not subject
to FICA tax for a corporate owner-employee.
It is the in the application of the self-employment tax that inequities
exist. <o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "arial" , sans-serif;">If nothing
else, the pass-through rate changes add additional and unnecessary complexity
to the mucking fess that is the Internal Revenue Code, and more unnecessary
work and agita for us at tax time.<o:p></o:p></span></div>
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<div class="MsoNormal" style="text-align: justify;">
<span style="font-family: "arial" , sans-serif;">I would very
much like to hear from fellow tax professionals on this issue. You can send a comment to this blog or email
me at </span><a href="mailto:rdftaxpro@yahoo.com"><b><span style="color: #0000cc; font-family: "arial" , sans-serif;">rdftaxpro@yahoo.com</span></b></a><span style="font-family: "arial" , sans-serif;">.</span></div>
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<span style="font-family: "arial" , sans-serif;"><br /></span></div>
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<span style="font-family: "arial" , sans-serif;">TAFN</span></div>
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Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0tag:blogger.com,1999:blog-1280984116620265503.post-45286753716348382372017-11-27T05:00:00.000-05:002017-11-29T10:35:41.717-05:00THE THIRD ANNUAL REVIEW OF REQUIRED CPE FOR NEW YORK STATE TAX PREPARER REGISTRATION RENEWAL<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiY6Q1kdsN4VZxWAaVw5VXEcRwPEtAatfCKWQUBNSODwPPzKkNqf_xtcLRr99oXi3cH8HpEWztCajdoyWypPac0zQexxUq2-rFUoXSXzeeG2TIq74oaryEu-49mB0LvnwMX3AQYqX0ZrCr7/s1600/NYS+DEPARTMENT+OF+TAXATION.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" data-original-height="162" data-original-width="311" height="208" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiY6Q1kdsN4VZxWAaVw5VXEcRwPEtAatfCKWQUBNSODwPPzKkNqf_xtcLRr99oXi3cH8HpEWztCajdoyWypPac0zQexxUq2-rFUoXSXzeeG2TIq74oaryEu-49mB0LvnwMX3AQYqX0ZrCr7/s400/NYS+DEPARTMENT+OF+TAXATION.jpg" width="400" /></a></div>
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<span style="background: white; color: #1d2129; font-family: "arial" , sans-serif;">So, a week ago I finished sitting through the, thankfully,
free 4 CPE hours (4 50-minute hours) of
webinars that are required as part of my annual registration as a preparer of
NY state income tax returns.<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="background: white; font-family: "arial" , sans-serif;"><span style="color: #1d2129;">FYI - Click </span><a href="http://wanderingtaxpro.blogspot.com/2016/10/required-state-cpe-for-new-york-tax.html" target="_blank"><b><span style="color: blue;">here</span></b></a><span style="color: #1d2129;"> to read my “review” of last year’s required NYS
CPE and </span><a href="http://wanderingtaxpro.blogspot.com/2015/09/required-new-york-state-continuing.html" target="_blank"><b><span style="color: blue;">here</span></b></a><span style="color: #1d2129;"> to read the “review” of the 2015 CPE. In both reviews I stated that the 3 1/3 hours
I spent were </span><b style="color: #1d2129;">a total waste of my time</b><span style="color: #1d2129;">.<o:p></o:p></span></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="background: white; color: #1d2129; font-family: "arial" , sans-serif;">I first “enrolled” in “New York State Updates and Department
Messages” – which were in the past
updates of the <b>previous year’s</b> tax
filing rules and <b>NOT</b> the upcoming
current one (i.e. the information reported last year at this time was for 2015
returns, the returns prepared during the tax filing season that ended in April
of 2016, and not for 2016 returns). Like
last year, instead of an actual “webinar” it was a PowerPoint-like series of
slides. At the end of a series of slides
I was asked multiple choice questions.
If I answered correctly a check mark appeared. If I entered a wrong answer I was told so in
a box, which also provided the correct answer.
I could then select the correct answer and could proceed to a new
section. As I said in the past, I really
do like this method. <o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="background: white; color: #1d2129; font-family: "arial" , sans-serif;">This year I needed to complete three (3) required courses and
one (1) course chosen from among 4 optional topics. The required topics were –<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="background: white; color: #1d2129; font-family: "arial" , sans-serif;">1. New York State Updates and Department Messages– 45 minutes<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="background: white; color: #1d2129; font-family: "arial" , sans-serif;">2. Tax Preparer ID Numbers and Permissions – 40 minutes<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="background: white; color: #1d2129; font-family: "arial" , sans-serif;">3. Standards of Conduct and Penalties – 75 minutes (of course
the longest was redundant ethics)<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="background: white; color: #1d2129; font-family: "arial" , sans-serif;">For my optional topic I choose NY State Subtraction
Modifications scheduled for 40 minutes.<o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="background: white; color: #1d2129; font-family: "arial" , sans-serif;">Like the past two years, the entire process was <b>a total waste of my time.</b> While it appeared the update session may have
been about 2017 returns, there was minimal information provided that actually
applied to the NYS tax returns I prepare (only IT-201 and IT-203). There was relevant information on various tax
credits, but only one applied to my clients.
It appears that there is nothing new relating to the actual returns I
prepare for my clients. The other 2
required sessions were truly redundant – the same information from last year. The optional topic was truly basic. <b>I
learned absolutely nothing new by sitting through these sessions.<o:p></o:p></b></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="background: white; color: #1d2129; font-family: "arial" , sans-serif;">Some good news. While
I will not tell you the exact amount of my time that was wasted, I will say
that it was much less than the “advertised” 200 minutes. So, thank God for small favors. I did “satisfactorily” complete all the
required CPE, and was able to print certificates for each class. <o:p></o:p></span></div>
<div class="MsoNormal" style="text-align: justify;">
<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="background: white; color: #1d2129; font-family: "arial" , sans-serif;">Every January as part of the NJ chapter of NATP’s “Famous
State Tax Seminar” there is a session on New York State tax updates led by NY
preparer Kathryn Keane. It is an
excellent presentation, and actually covers what is new for the upcoming tax
filing season for NYS tax returns, and allows for questions from participants. But, of course, this presentation does not
satisfy the state requirement<b>. <o:p></o:p></b></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<b><span style="background: white; color: #1d2129; font-family: "arial" , sans-serif;">I would
much rather pay a fee and attend a live half-day seminar offered by the NY or
NJ chapter of NATP, or John Sheeley’s organization, than waste my time with the
free NYS offering</span></b><span style="background: white; color: #1d2129; font-family: "arial" , sans-serif;">.<o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="text-align: justify;">
<span style="background: white; color: #1d2129; font-family: "arial" , sans-serif;">After finishing the CPE, I attempted to pay my annual $100 extortion
fee. I tried multiple times over the
past week without luck. Each time I was
told “Our records indicate that you have not completed your mandatory tax
preparer education requirements”, despite the fact that I had in hand printed
certificates for, and email confirmations that I had completed, each of the 4
required classes. As of this writing I
have still not been able to give NY my $100.
I will call the number provided on Monday morning (the day this post
first appears). What a total pain in the
arse!<o:p></o:p></span></div>
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<span style="background: white; color: #1d2129; font-family: "arial" , sans-serif;">As I wind down my practice toward retirement (after
completing 50 tax filing seasons), I truly look forward to the point where I
prepare less than 10 NYS income tax returns (I currently do at least 20), so I
do not have to deal with this nonsense every year – neither the CPE time-waste
nor the $100 fee.<o:p></o:p></span></div>
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<span style="background: white; color: #1d2129; font-family: "arial" , sans-serif;">FYI – I add a special line item charge on the invoice sent to
each client for whom I prepare a NY state income tax return for $5.00, which I
identify as “NYS Tax Preparer Extortion Fee Surcharge”.<o:p></o:p></span></div>
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<span style="background: white; color: #1d2129; font-family: "arial" , sans-serif;">So, do any of you have any comments on the NYS registration
process and its CPE and fee requirements?<o:p></o:p></span><br />
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<b><span style="color: red; font-family: "Arial",sans-serif;"><span style="font-size: large;">UPDATE 11/29/2017:<o:p></o:p></span></span></b></div>
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<span style="font-family: "Arial",sans-serif;"><span style="font-size: large;">I
found out why NYS would not accept my $100 extortion fee payment. They were apparently correct when they told
me in an error message “<i>Our records
indicate that you have not completed your mandatory tax preparer education
requirements</i>”. <o:p></o:p></span></span></div>
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<span style="font-family: "Arial",sans-serif;"><span style="font-size: large;">The
state lied – the CPE requirement is NOT 4 CPE hours (4 50-minute hours of 200
minutes). <b>I had to take 230 minutes</b>. It appears that one must take <b>1 class each from 2 separate optional groupings</b>. So, I chose a class titled “Tax Computation
Credits and Other Taxes” advertised as 30 minutes. <o:p></o:p></span></span></div>
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<span style="font-family: "Arial",sans-serif;"><span style="font-size: large;">I
now have a printed “Certificate of Completion” for “successful completion of
2018 Registration Education Requirements”!</span></span></div>
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<span style="font-family: Arial, sans-serif; font-size: large;">I
will wait for my completion of the final class to be processed and try to give
the state my extortion money later today.</span><span style="font-family: Arial, sans-serif; font-size: large;">
</span><span style="font-family: Arial, sans-serif; font-size: large;">Hopefully they will finally take it and this nonsense will be over for
another year.</span></div>
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<span style="background: white; color: #1d2129; font-family: "arial" , sans-serif;">TAFN<o:p></o:p></span></div>
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<b><span style="font-family: "arial" , sans-serif;">I
have been preparing 1040s since 1972. Over the years I have developed a
collection of forms, schedules and worksheets that have proven very helpful in
my practice. <o:p></o:p></span></b></div>
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<b><span style="font-family: "arial" , sans-serif;">Some
of my forms are given to clients to help them provide me with the information I
need to properly prepare their returns. Some are used as “memos” to the
client’s copy and my office file copy to back-up items reported on the returns.
Others are used as attachments to the returns.<o:p></o:p></span></b></div>
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<b><span style="font-family: "arial" , sans-serif;">I
offer this compilation to you for</span></b><b><i><span style="color: red; font-family: "arial" , sans-serif; font-size: 12.0pt;"> only $7.95!</span></i></b><b><span style="font-family: "arial" , sans-serif;"><o:p></o:p></span></b></div>
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<b><span style="font-family: "arial" , sans-serif;">Click
below for more information-<o:p></o:p></span></b></div>
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<a href="http://robertdflach.blogspot.com/p/blog-page.html"><b><span style="color: #0000cc; font-family: "arial" , sans-serif;">http://robertdflach.blogspot.com/p/blog-page.html</span></b></a><b><span style="color: #0000cc; font-family: "arial" , sans-serif;"> <o:p></o:p></span></b></div>
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Robert D Flachhttp://www.blogger.com/profile/06034127763662917220noreply@blogger.com0