I have not finished all the GD extensions. While I did finish one set of multiple-year returns – my long-time friend and fraternity brother is finally “current” - I still have another set to do for a couple from Florida. It is a real project with hurricane damage, like-kind exchanges and self-employment income to report – and I will be setting aside a couple of days during the first week of January to bring them up to date. Once the Florida couple has been “put to bed” I have a small pile of returns to review for amendment and some updating to do to be ready for the deluge that begins pretty much on February 1st.
The week between Christmas and New Years is always a busy one for me, as I work to close out the one set of calendar year companies I still do and determine how much to pay the doctor for the year (I give her one paycheck on the last day of the year), and close out payroll for the doctor’s companies and my very few other remaining business clients (close personal friends and a long-time client who began with Jim Gill the same year I did) – leading up to typing the balance of the W-2s on New Year’s Eve. I am pleased to report that I am on schedule here.
I am way ahead of schedule on my annual January 10th mailing to 1040 clients – everything has been written and printed and the envelopes have all been addressed. My “out-of-state” envelopes have all been stuffed and sealed, ready to be mailed. I am just waiting for the NJ Division of Taxation to issue the 2006 Form 1040-O “Opt Out” form so I can have it printed on the back of my medical expense worksheets before I can stuff the envelopes of my NJ clients.
I want to make sure I book a few theatre evenings in NYC for January via TDF before I have to forgo all cultural activity for 2½ months, which I will do as soon as all the W-2s are done.
Looking back at 2006, I did end the tax season with fewer GD extensions than the year before – but it once again took the rest of the year to put them all behind me (and, as mentioned above, all are not yet behind me). I have instituted some policies for 2007, which are outlined in my January client mailing, to make sure this does not happen again and I can have at least six “1040-free” months.
As I review the year in tax policy, while some progress was made in the pension area, the cafones in Congress really outdid themselves by dragging their arses on extending popular tax breaks until literally the last minute, which is sure to cause some agita during the upcoming filing season. At least they had the rare good sense to extend the breaks for 2 years so we do not have to go through the same nonsense again next year.
Looking ahead to 2007, I truly hope that the new heads of the Senate and House tax-writing committees are sincere in their intention to fix the dreaded Alternative Minimum Tax (AMT) problem – hopefully by repealing it altogether. The Reagan passive activity rules of the Tax Reform Act of 1986 successfully addressed the problem that the AMT was originally intended to solve, and it is no longer a valid tax. As James Maule pointed out in his tax blog “Mauled Again” (see my December 28th posting), the continued “existence of the AMT is proof positive of the flaws of the ‘regular’ tax. Fix the regular tax and there's no need to fix the fix”.
I will continue to post through the end of January, at which time I will take my normal tax season hiatus until the end of April. During the tax season I barely have time to relieve myself let alone blog! Your comments, questions and suggestions on THE WANDERING TAX PRO are always welcome, either by clicking on “comments” at end of a posting or by sending me an email at email@example.com.