Friday, September 19, 2014
WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’
I had a great trip to Wellsboro PA (about 160 miles away on Route 6W) earlier this week. I will post about it on Anything But Taxes Sunday.
Today’s BUZZ is rather meaty – to make up for Monday’s abbreviated installment.
* Are there still tax pros out there who have not yet read the September “issue” of THE TAX PROFESSIONAL? I am waiting to hear your comments on the items discussed in this issue!
* Jason Dinesen asks the question “Will Software Really Replace Accountants?” at DINESEN TAX TIMES.
I agree with Jason’s answer - “there will ALWAYS be a need for tax preparers and accountants”.
Jason correctly points out -
“Anyone can prepare their own taxes. Businesses can, too. The software will accept whatever the user puts into it … but it doesn’t mean it’s done correctly.”
“. . . business owners can keep their own books but it doesn’t mean they’re doing it right.”
Remember – garbage in, garbage out.
And more important, when it comes to a business owner doing his/her own bookkeeping using software –
“. . . once a business reaches a certain size, keeping the books will become a big drag on the owner. No software solution can overcome the crunch of time.”
I do not, however, share Jason’s concerns for the “tax-preparation business that relied on preparing a high volume of simple tax returns”.
Regardless of how easy it may become to submit a basic tax return, there will always be taxpayers who don’t want to be bothered doing it. And, of course, those who want to make sure they do not miss anything.
I have always said that if I did nothing but 1040As all day during the tax season, I would make more money, experience less agita, and substantially reduce the number of extensions.
* Joshua D. McCaherty reports on “The Cost of Tax Compliance” at the Tax Foundation’s TAX POLICY BLOG.
“According to the IRS, filing taxes will take taxpayers an average of 8 hours and cost $120 for each nonbusiness return.”
The post also points out that the number of pages in the CCH Standard Federal Tax Reporter has more than tripled (almost quadrupled) since I began preparing 1040s in 1972 for 1971 – from less than 20,000 to more than 70,000!
Josh’s obvious bottom line –
“A simpler, transparent tax system can greatly reduce the cost of compliance for U.S. taxpayers. A complicated tax system creates not only a huge time and money expenditure for taxpayers, but also for government officials verifying returns, which can lead to higher tax burdens later.”
* Ever wonder “How the Government Became ‘Uncle Sam’”? Find out at the USA.GOV blog.
* Take a “Quiz: 7 Surprising 2014 Tax Facts” at CNN MONEY.
One interesting fact -
“15 states and the District of Columbia impose an estate tax. New Jersey exempts the lowest level of money from estate taxes ($675,000) while Washington imposes the highest estate tax rate (19%). Both New Jersey and Maryland also impose an inheritance tax.”
So don’t die in New Jersey.
* Speaking of NJ and death taxes, Ashlea Ebeling tells us about the “Renewed Push To Kill New Jersey Estate Tax” at FORBES.COM.
* This week’s ABOUT BUSINESS LAW / TAXES: US newsletter from Jean Murray focuses on her most asked questions about business travel.
* JK LASSER in a double-play. First it answers the question “I inherited HH bonds and want to redeem them now. Will I owe any taxes?” (hint - the answer is “it depends” – what else?).
* And “he” lists “7 Deadly Tax Sins” – “actions to always avoid”.
I would add another action to always avoid – using Henry and Richard or another fast-food tax preparation chain to prepare your tax returns.
* “You Borrowed From Your 401(k) for What?” Matthias Rieker shows the reasons why employees borrow from their plan – and why this is not a good idea – at the Wall Street Journal’s TOTAL RETURN blog.
Borrowing from a 401(k) is better than taking an actual distribution – but it can be treated as one if you do not pay it back in time.
* It appears the State of NJ is offering what they call an “Easy and Convenient Way to Resolve Unpaid Tax Liabilities”.
“The Division of Taxation will send letters to individuals and businesses who have unpaid New Jersey tax liabilities from tax periods 2005 through 2013. The Division is offering interested taxpayers an easy way to resolve those outstanding tax liabilities and reduce or even eliminate their accumulated penalties and fees — if they pay the full amount due by Nov.17, 2014.”
If you do not receive a letter you can visit a Regional Office or call the DOT to discuss reduced payments.
* BARBARA’S BLOG asks “What Does the IRS Have Against Food?”. The post does a good job of summarizing many of the rules for businesses concerning deducting meals as a tax-free benefit to employees.
* The Tax Foundation addresses the question “How High Are Sales Taxes in Your State?”.
I am a bit confused. The map shows the NJ sales tax as 6.97% when it is actually 7%, and the PA tax as 6.34% when it is actually 6%. I am not aware of any local sales tax in PA.
THE FINAL WORD:
I have received many “friend” requests over the past few months from clients, colleagues, actual friends, and readers. I have not accepted any.
This does not mean I do not want to be your “friend”. I do not want to be anyone’s “friend”. Please do not be hurt or offended by my rejection of your request.
I once vowed that I would never join MY FACE or SPACEBOOK or any other such “social media” site (other than TWITTER). I did not, and still do not, see the need to make my personal life and details available to the great unwashed. If I want to share updates, stories, and pictures with friends and family I will send them an email. You will notice that there is absolutely no personal information on my SPACEBOOK page, other than a picture of my cat.
Since I no longer solicit, or accept, any new tax clients I do not need to use SPACEBOOK as a marketing tool.
The one and only reason I joined SPACEBOOK was to be able to participate in a closed “group” consisting of members of the NJ chapter of the National Association of Tax Professionals.