Wednesday, February 3, 2016

TAX GUIDE FOR NEW HOMEOWNERS

I have written a guide especially for new homeowners - a detailed review of all of the special tax benefits available to homeowners.
The guide discusses –

ü    itemized deductions for real estate taxes, mortgage interest, points, and mortgage insurance premiums,

ü    the home office deduction,

ü    rental income and deductions for a 2-family home,

ü    the home sale exclusion, and

ü    the dreaded Alternative Minimum Tax.

It also includes a special section on Choosing a Tax Professional, and special forms, schedules, and worksheets to use during the year and at tax time.

The cost of this special tax guide, sent to you as a pdf email attachment, is only $7.95.  A print version is also available for $9.95.

Attention tax and real estate professionals – reprint rights of this report is available for free distribution to current and potential clients.  Email rdftaxpro@yahoo.com, with HOMEOWNERS TAX GUIDE REPRINT RIGHTS in the subject line, for information.

For information on other tax guides visit my DOLLAR STORE.   

Send your check of money order for $7.95 or $9.95, payable to TAXES AND ACCOUNTING, INC, and your email or postal address, to –

TAX GUIDE FOR NEW HOMEOWNERS
TAXES AND ACCOUNTING, INC
POST OFFICE BOX A
HAWLEY PA 18428
 
TTFAW

Tuesday, February 2, 2016

AVOID TAXES LEGALLY

One more post before I leave for my tax season hiatus.

You are paying too much federal and state income tax – and it’s nobody’s fault but your own!

You don’t have to wait for the idiots in Congress to pass tax reform legislation – you can reduce your tax liability through careful year-round tax planning.

As I have been attempting to do via THE WANDERING TAX PRO, I want to continue help you to pay the absolute least amount of federal and state income tax possible with my new quarterly newsletter THE 1040 LETTER.

This newsletter will supplement and go beyond my TWTP postings by offering more detailed advice, information, and resources on tax planning and preparation strategies, techniques, deductions, and “tricks” – based on my 44 years of preparing 1040s for individuals in all walks of life.

Unlike many tax newsletters, THE 1040 LETTER is not concerned with loopholes for the “wealthy” – but, like THE WANDERING TAX PRO, is written for the average middle-class and upper-middle-class taxpayer.

And, also unlike most tax newsletters, the cost if truly reasonable – only $14.95 per year (delivered as a “pdf” email attachment).

But, more better, the cost of a one-year subscription for the first 100 premiere subscribers will be only $9.95 – a 1/3 discount!

Subscribers will also receive special 1040 ALERT emails during the year to report breaking federal tax news.  

In addition, all subscribers will receive as a free gift a copy of all of the tax guides in my DOLLAR STORE (also delivered as an email attachment), my analysis of “What’s New for 2016”, and a 25% discount on all of the rest of my current and future reports, guides, and forms compilations (click here to see what I have to offer), good for as long as you remain a subscriber!

The first issue of THE 1040 LETTER will be published on April 1st, with subsequent issues in July, October, and January.  As of this writing the April issue will include detailed discussions of –

·      IRA FEES

·      EVALUATING YOUR WITHHOLDING

·      OTHER LESSONS TO LEARN FROM YOUR 2015 FORM 1040

·      HEY, DUDE, WHERE’S MY CHECK?

·      GETTING READY FOR SUMMER – FILLING OUT FORM W-4 FOR YOUR CHILD’S SUMMER JOB

And lots of other good “stuff”.

To subscribe send your check or money order for $9.95, and your email address, to –

THE 1040 LETTER
TAXES AND ACCOUNTING, INC
POST OFFICE BOX A
HAWLEY PA 18428

I promise you will not be disappointed.

TTFAW
 
 
 

Monday, February 1, 2016

THE TWELVE DAYS OF TAX SEASON



And now what you have been waiting for –

THE TWELVE DAYS OF TAX SEASON

On the first day of tax season my client gave to me a Closing Statement for the purchase of a home.

On the second day of tax season my client gave to me 2 W-2 forms.

On the third day of tax season my client gave to me 3 mortgage statements.

On the fourth day of tax season my client gave to me 4 Salvation Army receipts.

On the fifth day of tax season my client gave to me 5 Form K-1s.

On the sixth day of tax season my client gave to me 6 1099s for dividends.

On the seventh day of tax season my client gave to me 7 cancelled checks.

On the eighth day of tax season my client gave to me 8 useless items.

On the ninth day of tax season my client gave to me 9 medical bills.

On the tenth day of tax season my client gave to me 10 stock sale confirms.

On the eleventh day of tax season my client gave to me 11 employee business expenses.

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.

And, of course, on the thirteenth day of tax season the client gave to me a corrected Consolidated 1099 from Wells Fargo Advisors!

And so the 2016 Tax Filing Season officially begins.  Open the floodgates and bring on the 1040s!

TTFN 

Sunday, January 31, 2016

MY ANNUAL TAX SEASON HIATUS

Joy to the world - tax season’s here.
I’ll soon be flush with cash!
Let every client be organized,
and give me all I need, and give me all I need,
and give me all I need to prepare their returns!

My 45rd tax season will officially begin tomorrow - let the deluge begin!

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.

Between now and April 18th 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 18th.

DO NOT EMAIL ME OR SUBMIT COMMENTS WITH SPECIFIC QUESTIONS ABOUT YOUR 2015 TAX RETURN!  ALL SUCH ITEMS WILL BE PROMPTLY DELETED UPON DISCOVERY!

I am NOT accepting any new 1040 clients (or any other kind of tax preparation clients). So don’t email me asking if I can prepare your 2015 tax returns.  THE ANSWER IS A MOST DEFINITE "NO". 

I will be publishing a WHERE THE FAKAWI post occasionally here at TWTP to keep my clients up-to-date on my progress during the season and to report changes or additions to my tax season policies and procedures. Clients can also keep track of my tax season progress by following me at TWITTER (@rdftaxpro).
 
I realize that I am abandoning you at a time when you may need me the most – but I need to make a living!

I find it a bit amusing that the period of time when TWTP gets the most “hits” is during the tax filing season when I am not posting.

“Talk” to you when it is all over!

TTFN


 

Friday, January 29, 2016

WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’

This is the last BUZZ until late April – due to my annual tax season hiatus.  You can avoid BUZZ withdrawal by checking out Joe Kristan’s weekday daily Tax Round-Up.  

* Professor Jim Maule quotes idiot Donald Trump’s question “Who Knows the Tax Code Better Than Me?” at MAULED AGAIN.

Jim says – “I am very confident that there are people who know the tax code better than does Donald Trump”.  He is certainly correct.  A lot of people know a lot of things much better than fool Trump.  Unfortunately a disturbingly large percentage of the “great unwashed masses” don’t know very much – proven by the fact that they support the dangerous buffoon for President.

The professor’s bottom line –

So, the answer to Donald Trump’s question is, ‘Your great people, for starters. And a lot of other people, too’.”

* Jill Dodd, and Claire Hofbauer of Manatt, Phelps & Phillips, LLP talk about “New Basis Reporting Requirements for Executors and Others Who File Estate Tax Returns” at JD SUPRA BUSINESS ADVISOR (highlight is mine) –

The new requirements apply to all who are required to file an estate tax return with the IRS on or after July 31, 2015. Executors who are not required to file an estate tax return, or who do so only for the purpose of making an allocation or election respecting the generation-skipping transfer tax, are not subject to these new reporting requirements under the Act.”

The current federal Estate Tax exemption is $5,450,000 – so this is really no help for the average taxpayer - or us tax professionals who need to determine cost basis on investment sales.

The item goes on to describe the new IRS Form 8971, "Information Regarding Beneficiaries Acquiring Property from a Decedent."

* Over at DINESEN TAX TIMES Jason Dinesen’s “Glossary” series continues with a brief description of the “529 Plan”.


* A final reminder for tax pros – be sure to check out TAXPRO BUZZ, THE TAX PROFESSIONAL, my tax reform petition, and please tell your co-workers and colleagues about them.

* And a final reminder for those looking for a tax preparer – begin your search at FIND A TAX PROFESSIONAL.

* Tax Mama (I still want to know if there is a Tax Papa) Eva Rosenberg deals with the often asked question “Can My Ex Claim My Child When Filing Taxes?” at EQUIFAX.

Mama also provides advice on “What if one parent claims the child without permission?”.

THE FINAL WORD –

I couldn’t leave you for the tax season without one last Trump comment.

I don’t pray much.  But I am praying that dangerous buffoon Tronald Dump loses in Iowa and, unable to properly and maturely cope with the loss, gets angry with Republican voters (in the Dumpster’s mind, if they didn’t vote for him they must be stupid) and drops out of the race.

TTFN

Thursday, January 28, 2016

WHO MUST FILE A 2015 TAX RETURN

Do you have to file a 2015 tax return?  Let’s review.

Generally, you do not have to file a 2015 Form 1040, or 1040A, unless your “gross income” is at least -

Single = 10,300

Single, Age 65 or Older = 11,850 

Head of Household (with one dependent) = 17,250

Married Couple = 20,600

Family of 4 = 28,600

Married Couple, Both 65 or Older = 23,100

“Gross income” means “all income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States or from the sale of your main home (even if you can exclude part or all of it). Do not include any social security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time in 2014 or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly).” 

Gross income includes gains, but not losses, reported on Form 8949 or Schedule D.  If you are a sole proprietor filing a Schedule C, gross income is the amount reported on Line 7 of Part 1 – gross receipts less returns and allowances and cost of goods sold plus “other income”.  And if you are a landlord gross income includes the gross rents reported on Schedule E.

So you see that the filing requirements are not based on actual "net" taxable income.  For any type of business income or capital gains the income before deducting any expenses or deducting the cost basis of investments sold is counted.  You must file a return to identify the expenses and cost basis.

You must file a tax return for a dependent if any of the following applies –

·   unearned income is more than $1,050,
·   earned income is more than $6,300, or
·   gross income is more than the greater of $1,050 or the sum of $350 and the individual's earned income (total not more than $6,300).

Regardless of your gross income, you generally must file an income tax return if –

• you had net self-employment income of $400 or more,
• you owe household employment taxes,
• you owe additional taxes on premature retirement plan distributions,
·   you failed to take a required minimum distribution from a retirement plan,
• you must repay the 2008 Homebuyer Credit,
• you owe Social Security and Medicare taxes on unreported tip income, or
• you received an advance payment on the Premium Tax Credit.

And, whether or not you are required to do so, you should file a tax return to get a refund of tax withheld or to take advantage of a refundable tax credit like the Earned Income Credit or the Additional Child Tax Credit.

Another reason to file a tax return, even if you are not legally required to do so, is to start the clock running on the normally 3-year statute of limitations for IRS audit or review of a return. 

The numbers for individual state income tax returns differ.  You may not have to file a federal return, but you must, or should, file a state return.  For example, the State of Pennsylvania is a gross income tax with no personal exemptions or standard, or itemized, deductions.  You must file a PA-40 and pay the 3.07% flat state income tax if “you received total PA gross taxable income in excess of $33”.  

So if you do have to file, or want to file, a 2015 tax return get thee to a tax professional. 

Would you like to know “What’s New In Taxes for 2015”?  Click here.  

TTFN

Wednesday, January 27, 2016

WHAT IS GOFUNDME?

I had never heard of gofundme.com before.  I learned of it recently when a client emailed to ask if a donation made via this site would be deductible.

Gofundme advertises itself as “The World's #1 Personal Fundraising Site” with over $1 Billion raised.  Wikepedia tells us –

GoFundMe is a crowdfunding platform that allows people to raise money for events ranging from life events such as celebrations and graduations to challenging circumstances like accidents and illnesses.”

My client wanted to make a contribution to help with a friend’s medical expenses.  He was told one way to do so was via the gofundme “John Doe’s Cancer Fund” (this is obviously not the real name of the fund).

The initial answer I gave my client was –

You cannot deduct money given or donated to a specific individual as a charitable contribution, regardless of how needy the person or how charitable your intent.  It is a gift and not a charitable contribution.  There would have to be a special fund-raising activity sponsored by an existing organized church or charity and you would then contribute to that particular church or charity.  

The usual example is you cannot deduct the value of a coat you give directly to a specific homeless person - you must give the coat to the Salvation Army or similar organization that gives clothing to the homeless.”

I looked at the webpage for “John Doe’s Cancer Fund” and could find no indication that this was a legitimate charitable organization.

A Google search led me to “Is my donation tax-deductible?” at the site’s Help Center, where I was told –

Donations made to a GoFundMe Personal campaign are generally considered to be personal gifts and are not guaranteed to be tax-deductible. You can always check with a tax professional to be sure. Only donations made to a GoFundMe Certified Charity campaign are guaranteed to be tax-deductible.

Not sure if you donated to a Certified Charity campaign? You should've received a tax-deductible receipt from our charity partner FirstGiving. You can also visit the campaign you donated to and look for the 'Certified Charity' badge. Here's how it looks:

 
If you don't see the 'Certified Charity' badge on the campaign you donated to, then it's likely a Personal campaign. You'll need to consult with a tax professional in your area to see if your donation is eligible to claim as a tax deduction.”

There was no such “badge” anywhere on the “John Doe’s Cancer Fund” page, so I told my client that any contributions he made would not be tax deductible.

I told the client that I was unfamiliar with gofundme, and to be safe if he wanted to give money to his friend to help with medical expenses he should just write a check to “John Doe”.  This way he knew all the money would go directly to “John”.

TTFN