Saturday, February 27, 2016


The, or I guess my, 2016 tax filing season (February 1 – April 17) is 1/3 over!

I have completed and mailed out 74 sets of returns.  I am a bit ahead of last year’s first-third statistics.   

I have either done, received in the mail, or made arrangements with 51% of the names on my mailing list – again slightly ahead of last year.

The “to be done” box is not “chock-a-block” yet – but it is getting there.  And there are only 2 “red files” (need more information), and they are completed as soon as the missing information arrives.

As reported in my first Where the Fakawi, there have been no issues – processing, computer, or weather – so far.
I think I will lock myself behind closed doors March 1, 2, and 3 so I can do as many of the returns received in February without interruption.  I have vowed not to start on returns received in March until all returns received in February are done - or red-filed.

I will report back on my progress at the half-way mark.


Thursday, February 18, 2016


An unprecedented tax season BUZZ!  Some good stuff that needs to be spread around now – and could not wait until April.

* TAX NEWS gives us the word that “Bill To Terminate US Tax Code Gets 100th Cosponsor”.

The bill is the Tax Code Termination Act, “which would repeal the current tax code by December 31, 2019. It would require a two-thirds majority vote in Congress to change the termination date, and force Congress to approve a new federal tax system by July 4, 2019.”

The bill declares that the new US federal tax system should be "a simple and fair system that applies a low rate to all Americans; provides tax relief for working Americans; protects the rights of taxpayers and reduces tax collection abuses; eliminates the bias against savings and investment; promotes economic growth and job creation; and does not penalize marriage or families."

House Judiciary Committee Chairman Robert Goodlatte tells it like it is when talking about this bill –

. . . it's clear that there is mounting support to scrap the tax code and start work on a new tax system.  It has become all too clear that the current code is broken beyond repair and cannot be fixed – we must start over.  "While I have yet to hear an argument for maintaining our current tax code, I hear argument after argument for why we need a new one.”

To be honest, I don’t think we should wait until 2019 to rewrite the Tax Code.

I invite fellow tax pros to join me in TAX PROFESSIONALS FOR TAX REFORM.

* Russ Fox posted “The Liberty to Commit Tax Fraud” about fraud committed by Liberty Tax Service franchises near Detroit.

This post points up several items –

First of all – avoid fast food tax preparation chains.  Use an independent tax professional.

And - 

This story does show two things. First, requiring every tax professional to obtain a license won’t stop tax fraud. The alleged fraud here was started by an individual with a PTIN, someone who assuredly could obtain the former RTRP designation or the current AFSP ‘seal of approval’. Second, the Department of Justice news release notes, “In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers.” This is absolutely true, and the DOJ should be commended for their work. It also shows that licensing every tax professional isn’t needed to get rid of unscrupulous ones.”

* And further proof that fast food tax preparation chains are not your best option comes from the Comptroller of Maryland via its release from early February “Franchot Suspends Processing Returns from 16 More Liberty Tax Franchises, Four Other Tax Prep Sites”.

I talked about Liberty in my January post “Come in to the Office and Walk Out with Cash!”.  And about Henry and Richard in “A New Gimmick”.

* Now, on to more reasons you should not use a “box” (tax preparation software) to prepare your return from Kay Bell, the yellow rose of taxes, at DON’T MESS WITH TAXES, also in early February – “Tax Slayer data breach is the 3rd tax software-related security issue so far this filing season”.

Kay told us

Tax filing season is tax crime season, with yet another tax software company reporting that some of its customers' data apparently has been compromised.”

* Jason Dinesen proudly proclaimed “Why Yes, I Am ‘Just’ An Enrolled Agent” at DINESEN TAX TIMES.

Jason tells of an email he received from a CPA who had subscribed to his blog post feed, but unsubscribed upon learning that he was “just an Enrolled Agent” and not a CPA.

The AICPA believes that CPAs own the 1040 preparation “brand”, which is nonsense, and aggressively fights against any currently or potentially legitimate program that truly identified competent and current 1040 preparers.

The initials CPA have absolutely nothing whatsoever to do with knowledge, experience, competence, or currency in 1040 preparation.  The initials EA most definitely do.

* And Jason answers the question “If a cash-basis business uses a credit card for business expenses, are those purchases deductible right away, or later on when the credit card debt is paid?” in “When Are Purchases Made With a Credit Card Deductible?”.

* Electronic filing is apparently not without its issues.  PC World reported “Identity thieves obtain 100,000 electronic filing PINs from IRS system”. 

Since I prepare all my federal returns manually, and my clients mail the paper returns to the IRS via the Post Office, this does not problem does not affect any of my clients.

* From Alistair M. Nevius, J.D at the JOURNAL OF ACCOUNTANCY - “President’s Budget Proposes Many Tax Changes”.

Understand that the items discussed in this piece are not pending tax legislation, but just BO’s final “wish list”, none of which will be enacted by Congress anytime soon.

There are some items worth discussing on the wish list –

·      Increasing the Child and Dependent Care Credit.  This is perhaps the only credit I believe actually belongs on the tax return.

·      Extending the American Opportunity Credit to 5 years.  While I believe this does not belong in the Tax Code, as long as it is there it really should cover 5 calendar years.

·      Increasing the “portability” of employee pension plans.

Of course there are also many tax components that are bad ideas and should not be acted upon.

OK, back to the 1040s!


Monday, February 15, 2016


2 down – 9 to go.

Weeks of my tax filing season, that is (Feb 1 – April 17).
I have done and mailed out 28 sets of returns already.  And I have either done, received, or made arrangements with 26% of my client mailing list so far (probably actually a slightly higher percentage – I have not been to the Post Office to pick up Saturday’s arrivals as I was “out of state” this week-end).

I expect I am a little ahead of last season – certainly not behind.  I did have some surprise “early birds” so far this year.

There have been no issues – processing, computer, or weather – so far.  Let us hope that continues

Prior to this week-end I was getting returns done and mailed out (or red-filed – need more info) as they arrived.  Now the backlog begins.

I picked up 12 sets of returns this week-end.  Before leaving on Friday I had 9 returns in the “to be done” box and 2 “red files”.  I can only guess how many returns are waiting for me at the Post Office as we “speak”.

So the season is off to a good start. 

OK – back to the 1040s!


Wednesday, February 3, 2016


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, 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 –


Tuesday, February 2, 2016


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





And lots of other good “stuff”.

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


I promise you will not be disappointed.


Monday, February 1, 2016


And now what you have been waiting for –


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!