THANK GOD IT'S OVER!

THANK GOD IT'S OVER!!!!

 

I AM OFF TO THE JERSEY SHORE TO RECOVER - AND TO WRITE MY ANNUAL "THAT WAS THE TAX SEASON THAT WAS" POST.

WHERE THE FAKAWI?

 

It has not gotten that bad yet . . .

 

Only one month to go and I have either completed, received, or heard from all but about a dozen clients (that I expect to attempt to file on time).  The "to be done" boxes are chock-a-block. 

 

Forget the corn - the pile of 1040s to do is as high as an elephant's eye!

 

I had at one point cleaned out the "red file" box (need more info), but it has grown again.  I am getting them done as the missing information arrives.

 

There are 14 returns received in February that must be done before I begin on packages received in March.  I expect to have these completed by this time next week (knock on wood).

FYI - I have been locked behind closed doors, and my phone has been unplugged, since this past Wednesday.  This will continue through Monday (SPD).  Historically the office has always been closed on SPD - a carryover from my mentor's practice - although that does not mean I am not working away on 1040s.  Monday will be devoted to Irish clients.

The answering machine will be back on Tuesday - but I will be relatively inaccessible for the rest of the "season" and the machine will truly be for messages only.  You can leave an "our we there yet" message - but it will only be responded to if we are truly there.

 

To be honest - at this point I cannot guarantee that any returns not in my hands by the end of today will be able to be completed in time for an April 15th deadline - but there is still some hope.  I want to end the "season" with the absolute least amount of GDEs possible. 

 

Back to work - I will check in with you again with an update at the end of March.

 

TTFN

 



THE FIRST WHERE THE FAKAWI OF THE TAX SEASON

One month down - one and a half to go!

As I say good-bye to February I have either done, received, or made arrangements with 55% of my client list – a bit ahead of last year. 

I have completed 84 returns, the same number as last year at this time.  So I am not behind on that front.  However that is only an average of 3 per day.  I need to double that average! 

Receipt of tax preparation income is up 39.5% from last year.  The fees have not increased, but some returns cost more this year because of additional work.  That is certainly good (although some of the 2014 is from 2012 GDEs completed in January).

And there are only 7 red-files (need more information).  I have been keeping on top of them - and completing the returns as the information arrives. 

I have 34 packages in the "to be done" box.  None  have been there for more than 10 days – I am doing good at sticking to FIFO.  I will complete these 34 sets of returns, if all info is available, before starting on any packages received in March! 

Don't be surprised if I add some additional "locked behind closed doors" days - or even a full week - before mid-March to the regular LBCD Wednesdays (don’t call me on a Wednesday – you won’t get an answer). 

All in all – so far so good.

OK - now back to work!

TTFAW

THE TWELVE DAYS OF TAX SEASON

Now it is time for what you have been waiting a year for - the annual February 1^st tradition here at THE WANDERING TAX PRO of posting “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!

 

TTFAW

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 43rd 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 15th 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 15th.

DO NOT EMAIL ME OR SUBMIT COMMENTS WITH SPECIFIC QUESTIONS ABOUT YOUR 2013 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 2013 tax returns.  THE ANSWER IS "NO". 

I will be publishing a WHERE THE FAKAWI post at least every other week 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).

My Tax Tips will be appearing regularly at the MainStreet.com Tax Center throughout the season.  Be sure to check them out.

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

BTW – be sure to stop by tomorrow for the annual posting of my TWELVE DAYS OF TAX SEASON!

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

This will be the last BUZZ until after the end of the tax filing season.   

* Over at the MainStreet.com TAX CENTER I tell you “What to Do If You Do Not Receive a W-2”, “Why You May Not Have to File A Tax Return This Year”, and “These Are the Most Important Numbers on Your Tax Return”.

* Kay Bell mentions a certain veteran tax pro some might consider eccentric in her post "Are You Ready to e-file Your Federal Return? Here's How" at DON'T MESS WITH TAXES.

Wait - it's me!

* ACCOUNTING DEGREE has a new infographic on “Obamacare and Your Taxes”.

* Joe Kristan tells us “IRS Gives Mulligan to Elect Portability for $5 Million Estate Exclusion” at the ROTH AND COMPANY TAX UPDATE BLOG.

While I am on “hiatus” you can get some BUZZ from Joe’s daily “Tax Roundup”.

* The FISCAL TIMES lists “The 10 Worst States for Taxes in 2014”.  It is no surprise that New Jersey is number two (NJ is often referred to as “Number Two”) – the second worst state behind New York.

“New Jersey’s per capita property tax is the most onerous in the country.”

The picture “identifying” NJ has absolutely nothing to do with NJ – it is the brain dead sluts and skanks of THE JERSEY SHORE, who are from NY.

* The TAX RESOLUTION BLOG explains the “Nuts and Bolts of an Offer in Compromise”.

* A client just emailed me to say that he could not afford health coverage in 2013 and to ask how much would he be penalized.  My answer was “nothing” – the penalty does not apply to 2013.  It begins this year – 2014.

Tax Guy Bill Bischoff discusses the Obamacare penalty in “Owe the IRS Money? Good News - The Obamacare penalty only applies to those who get a tax refund” at MARKET WATCH.  

* Here is a legislative proposal reported by ACCOUNTING TODAY that is along the lines of something I had thought about a while back – “Congressman Introduces Bill to End Tax Write-off for Lavish Executive Bonuses”.

My proposal would have also included the requirement that any such excessive bonus must come from current earnings and profits – so CEOs of companies with current losses could not give themselves eventually deductible ridiculous and unjustified salary payments.

* Barbara Weltman’s thoughts on the “State of the Union Address and Small Businesses” at BARBARA’S BLOG are similar to mine.  Like -

“My problem with a corporate tax rate reduction is the need to simultaneously reduce tax rates on small businesses in which owners of pass-through entities pay tax on their share of business profits on their personal returns. It makes no sense to me to lower the top corporate rate from 35% to say 25% or so while retaining the top individual income tax rate paid by some small business owners of 39.6%.”

And -

“The proposals on automatic retirement savings for the middle-class sound fine. By making savings easy it likely will help this group increase retirement savings (something I thought was intentioned by the retirement savers credit). Paying for this by taking away retirement savings tax breaks for wealthy individuals doesn’t make sense to me.”

And –

“Overall, the old expressions—the devil is in the details—makes all the difference on whether or not the proposals are worthy of support. We’ll all just have to see!”

Some of the details of the “myRA” account are provided in a White House issued “Fact Sheet”.

ü  It would be a ROTH account – no deduction going in but no tax coming out. 

ü  “Initial investments could be as low as $25 and contributions that are as low as $5 could be made through easy-to-use payroll deductions.  Savers have the option of keeping the same account when they change jobs and can roll the balance into a private-sector retirement account at any time.

ü  “Savers will earn interest at the same variable interest rate as the federal employees’ Thrift Savings Plan (TSP) Government Securities Investment Fund.”  This rate is nothing to write home about.

 

ü  “This saving opportunity would be available to the millions of low- and middle-income households earning up to $191,000 a year.  These accounts will be offered through an initial pilot program to employees of employers who choose to participate by the end of 2014.  The accounts are little to no cost and easy for employers to use, since employers will neither administer the accounts nor contribute to them.

Any retirement savings is better than no retirement savings.  It would be good as a starting point, with the account balance being transferred to a “regular” ROTH account and invested in a mutual fund once it reaches perhaps $2,000.

* “Hate Doing your Taxes? Blame Congress, Not the IRS”!  Right on, Allison Linn of CNBC.

The item quotes the spot on assessment of Michael Graetz, a professor of tax law at Columbia Law School and a proponent of major tax reform -

"We have come to use the tax system as if it is a cure for every social and economic problem the country faces.”

But -

“That's not necessarily what the federal tax system was intended for when it was introduced about 100 years ago.”

* Let’s end with what bloggers love most – another list.  This one, from Shana Norris at MODEST MONEY, is “10 Things A Parent Should Know About 529 Plans”.

TTFN

TAXES AND THE STATE OF THE UNION ADDRESS

I did not watch the State of the Union address last night.  Instead I watched the wonderful film GAMBIT with Michael Caine and Shirley MacLaine on TCM.  This morning I “wandered” the web for blogs and articles on the address.

As you might expect, I was interested in BO’s statements on 1040 issues.

In addressing tax reform BO said -

“Both Democrats and Republicans have argued that our tax code is riddled with wasteful, complicated loopholes that punish businesses investing here and reward companies that keep profits abroad.  Let’s flip that equation.  Let’s work together to close those loopholes, end those incentives to ship jobs overseas, and lower tax rates for businesses that create jobs right here at home.”

This is about business tax reform.  The only reference to 1040 tax issues in the address was a call to expand the Earned Income Tax Credit –

“So let’s work together to strengthen the credit. . .”

He referenced Senator Mark Rubio’s concerns with the EITC.  Rubio wants to take the EITC out of the Tax Code and replace it with perhaps a direct wage subsidy.  The President clearly wants to keep the credit as part of the 1040 – where it clearly does not belong.

Rubio had pointed up two of the biggest problems with the EITC –

“One weakness of the EITC compared to the minimum wage, however, is the fact that low-wage workers only see the refundable tax credit once a year in a lump sum, rather than a small increase in their paycheck over a full year.”

And –

“Currently the Earned Income Tax Credit has one of the highest payment error rates of all federal programs that cost between $11.6 and $13.6 billion in 2012. Whether these payment errors are due to intentional fraud and abuse or the program’s staggering complexity is up for debate (it is likely a mixture of the two).”

Apparently the President is not concerned with these serious issues.

It is clear that President Obama does not want serious, substantive tax reform.  He wants to continue to complicate the already mucking fess that is the US Tax Code by expanding refundable credits – which are magnets for tax fraud.  Do not look for any real tax reform in 2014, or probably anytime soon.

The other item of interest in the address was his call for a “myRA” payroll withholding starter retirement account for employees without access to a 401(k) plan. 

It appears the “myRA” would be a kind of US Savings Bond.  Many employees already have the option of purchasing US Savings Bonds via payroll deduction. 

There were no specific details on the “myRA”.  BO spoke of a bond that “guarantees a decent return” – but what is a “decent return”.  Current savings bonds certainly do pay more interest than basic savings accounts – but do not provide what I would call a “decent return”.  Would employers, with or without 401(k) plans, be required to offer this savings opportunity to all employees?  Would employee contributions be tax deductible?  Would there be a ROTH-like option?

I have read that this account would possibly have a maximum lifetime contribution limitation.  When the maximum is reached the account could be rolled-over into an IRA account.

I support anything that encourages and assists Americans to save for retirement, but would obviously need to see more details before giving the “myIRA” a thumbs up.

TTFN

WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’ - TUESDAY EDITION

Only 1 more BUZZ after this before I begin my annual tax season “hiatus”.

* Over at the MainStreet.com TAX CENTER identify the information returns you may be getting soon in “The Forms Are in the Mail: Quick Tax Tip”. 

And before you begin to gather your 2013 “stuff” to give your tax preparer you should check out “What to Give Your Tax Professional”.

 

* I obviously understand and can support the financial argument behind avoiding large refunds, but over the years I have come to agree with Mark Steber, who, writing in THE BLOG at the Huffington Post, proclaims “BIG Tax Refunds Really Are Good”.

Mark lists 8 reasons.  My support of the concept is found in #3, #4, and #7.

* Kay Bell reminds us "Tax Season is Tax Scam, Tax Identity Theft Season” at DON’T MESS WITH TAXES.

This fact from Kay needs to be constantly repeated -

“Remember, the IRS does not initiate contact with taxpayers by email to request personal or financial information. Official tax agency communications generally are in old-fashioned written form.”

* Beverly DeVeny and Jared Trexler cover the “Differences between 401(k), Roth 401(k) and Roth IRA” and provide a comparison chart.

* William Perez joins the bandwagon by offering suggestions and resources for “Finding the Right Tax Professional” at ABOUT.COM.

He has a good list of resources for your search – except, of course, for state CPA societies.  

Of course the best resources are your friends, family, and colleagues.

* What the TAX POLICY BLOG says is true – “High-Income Taxpayers Could Face a Top Marginal Tax Rate over 50 percent this Tax Season”!

This is not good!

* “IRS Warns of Pervasive Telephone Scam”.  This sounds similar to a scam that recently targeted one of my clients.

* Manassa Nadig explains “Moving On In Life? How That Can Be Tax Deductible!!” at THE BUZZ ABOUT TAXES.

TTFN