Monday, December 10, 2018
SOME GOOD ADVICE
Some good advice from the National Association of Tax Professionals (I have been a member for over 30 years) -
NATP advises working with a trusted tax pro in light of the Tax Cuts and Jobs Act.
The recent changes under the Tax Cuts and Jobs Act can make filing a tax return simpler. The increased standard deduction coupled with the elimination of many common deductions will allow a greater number of taxpayers to file their own return; however, NATP advises taxpayers still work with a tax professional as they file their 2018 returns.
“Tax pros are indispensable when it comes to helping clients save tax and use the tax laws to their advantage,” Cindy Hockenberry, director of Tax Research and Government Relations, said. “Mistakes made because one doesn’t understand the law is costly in the way of time and money.”
Taxpayers with children, especially college-age children will see changes regarding the dependency deduction and will need to understand the rules for properly calculating the credits they are entitled to claim, and the rules for deducting college tuition costs. There have also been changes to the rules for contributing to a college savings plan.
Certain business owners who own an interest in a pass-through entity such as a partnership, S corporation or sole proprietorship are now entitled to a deduction of up to 20 percent of the qualified business income (QBI). Hockenberry said although there was a characterization that the new tax law would make filing simpler, but “there is nothing simple about [the QBI] deduction and how it’s calculated.”
“Overall, some tax professionals may see a slight drop in business this tax seasons due to some of the simplification,” Hockenberry said. “Some are expecting an increase in business because taxpayers in general don’t know how this new law will affect them and will need a tax pro to explain it to them. You can’t get that from a software program, much less, the instructions to the forms.”
FYI – while I agree with NATP that taxpayers should “work with a tax professional as they file their 2018 returns”, and that now is a good time to look for a tax pro if you do not already have one, DO NOT CONTACT ME! I do not and will not, for any reason or under any circumstances, accept any new clients. I am actually trying to “thin the herd” as I approach retirement in a few years, after having prepared 1040s for 50 consecutive filing seasons.
If you need help finding a tax pro go to my FIND A TAX PROFESSIONAL website.