Up-to-the-minute advice, information, resources, and, on occasion, commentary on federal and New Jersey state income taxes, and the various New Jersey property tax rebate programs, and insights and observations on tax policy and professional tax practice, by 40-year veteran tax professional Robert D Flach.
Monday, December 19, 2016
WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’
Another “meaty” BUZZ – the last before
Before I begin an FYI – the 2016 Form 1040
is now available to download.It is,
line-for-line, exactly the same as the 2015 Form 1040, except for the changes
in the standard deduction and personal exemption amounts.
I totally agree with the 7 items of
“craziness” that RWW identifies.While I
do admit I am not really very familiar with the “carried interest” item, I
expect from its constant criticism across the tax blogosphere that it should be
on the list.
And I most certainly also agree with the
“bottom line” of the post (highlight is mine) -
are only a few provisions, mind you. There
are thousands of pages of tax law needing reform. Although some parts of
our tax law make sense, many do not or lead to abuses. Besides, they inject a
level of complexity that no one would wish upon anyone. We need a better, simpler, fairer and flatter tax system.”
I discuss principles of tax reform at A TAX PROFESSIONAL FOR TAX REFORM.I also
explain why I believe that a simpler tax system will not adversely affect my
business at this site.
As an aside - I would replace the word
“Trump” with the word “Congress” in the title – idiot Trump can’t change any
laws, only Congress can.
I certainly do not advocate running out in
the next two weeks to buy a car just so you can get a sales tax deduction.But if you need a new car, or have been
thinking about purchasing a new car, doing it before the end of the year might
be a good move.
Currently you have the option of deducting
either state and local income tax or state and local sales tax if you are able
to itemize on your 2016 Schedule A.
First you must do a comparison to see which
type of tax will provide the greater tax deduction.In high state tax locations – New Jersey, New
York, California, etc – there is no contest, deducting state income taxes is
“more better”.But if you live in a
state with low or no state income tax, or your age or sources of income result
in low or no state tax liability, you should take a look.
You can deduct sales tax based on an amount
in an IRS-generated table – to which you can add the sales tax paid on “big
ticket” items like an automobile.The
2016 IRS state sales tax table has not yet been published (that I can
find).You can go here and use the
calculator for 2015 to get an idea of what you will be allowed.
Some words of wisdom from Jason (highlights
are his) –
will accept whatever you put into it.
If you don’t know what you’re doing,
your bookkeeping system can turn into a massive trainwreck!”
“Should You Keep Your Own Books?
only if you feel comfortable and you know what you’re doing. Know your
limits and when to ask for help.
Being able to plug numbers into
Quickbooks does not make you an accounting or bookkeeping expert.”
* The NATP recently sent me the following
information on tax relief for the victims of Hurricane Matthew -
of Hurricane Matthew, which took place beginning on October 4, 2016, in parts
of North Carolina, may qualify for tax relief. The declaration permits the IRS
to postpone certain deadlines for taxpayers who reside or have a business in
the disaster area.
areas that currently qualify include Beaufort, Bladen, Columbus, Cumberland,
Edgecombe, Hoke, Lenoir, Nash, Pitt and Robeson counties. Continue to check the
Tax Relief in Disaster Situations page to stay up-to-date on eligible areas and
updated deadlines. The IRS expects additional states to be included in the
deadlines falling on or after October 4, 2016, and on or before March 15, 2017,
have been postponed to March 15, 2017. This includes the 2015 individual returns
on extension originally due on October 17 and the January 17, 2017, deadline
for making quarterly estimated tax payments. Also included are the October 31
and January 31 deadlines for quarterly payroll and excise tax returns.
IRS automatically identifies taxpayers located in the covered disaster area and
applies automatic filing and payment relief. But affected taxpayers and their
tax preparers who reside or have a business located outside the covered
disaster area must call the IRS disaster hotline at 866.562.5227 to request
this tax relief.”
* FYI – I have updated my “What’s New In Taxes For 2017” compilation to include the newly announced 2017 standard
mileage allowance numbers.Click here to
NO tax software
package, or online filing service, is a substitute for knowledge of the Tax
Code, and NO tax software package, or online filing service, is a substitute
for a competent, experienced tax professional.
Do you need to find a qualified and competent tax