Friday, January 18, 2019


What are the options for explaining Trump’s attitude and actions toward Russia?

1. Trump is the biggest moron ever to hold public office in America.

2. Trump hero-worships and envies Putin, and authoritarian leaders like Putin, and wants to be accepted and liked by Putin.

3. Trump, being the ultimate narcissist, is being easily “played” by Putin who praises Trump and appeals to his narcissism.

4. Trump is delusional and, obviously incorrectly, believes that he can do anything better than anyone, including running the country, and that anyone with intelligence would want him in the White House; he accepts Russian help as being nothing wrong, and ultimately assisting Americans to do the right thing by putting him in the White House.

5. Trump wanted to, and probably still wants to, build a "Trump Tower" in Moscow, and needed/needs the support of the Russian government.

6. Putin has documentation of illegal or “perverted” acts by Trump and is blackmailing him.

7. Trump is an active, affirmative and intelligent agent of the Russian government.

There are really no other options.

I do not believe #7 is true. I will never give Trump any credit for intelligent thought or intelligent action.

The real explanation is a combination of the first 4 options, and, obviously, most definitely option #5.  And, also obviously, in any context #1 and #2 are true statements.

While #6 is possible, it is less likely than the first 5.

Regardless of which option or options explains the situation TRUMP MUST GO!

What do you think?


Thursday, January 17, 2019


Here is what the IRS had to say in yesterday’s IR-2019-03 (highlight is mine) -

The Internal Revenue Service announced today that it is waiving the estimated tax penalty for many taxpayers whose 2018 federal income tax withholding and estimated tax payments fell short of their total tax liability for the year.

The IRS is generally waiving the penalty for any taxpayer who paid at least 85 percent of their total tax liability during the year through federal income tax withholding, quarterly estimated tax payments or a combination of the two. The usual percentage threshold is 90 percent to avoid a penalty.”

This move is in response to the fact that the new withholding tables for 2018, created to reflect the changes made by the GOP Tax Act, were, as I suspected, a bit too "liberal", to make taxpayers think the Act was putting more money in their pockets than it actually was, and the fact that most taxpayers did not properly revise their withholding to properly cover the substantial changes made to deductions and the elimination of the personal exemption deduction.

When I first saw the headline, I was excited.  But not after reading the 2nd paragraph.  While reducing the penalty threshold from 90% to 85% is a good and welcomed action, and will provide some relief to applicable taxpayers, some of my clients included, it is not a big deal.  I would have liked more.

Taxpayers still have two other ways to avoid or reduce penalties for underpayment of federal estimated taxes –

* if the 2018 payments, via withholding and/or estimated payments, is 100% of the 2017 tax liability (110% if the 2017 AGI was over $150,000 or $75,000 if Married Filing Separately), and

* “annualizing” income and deductions for the year to determine the specific tax liability for each of the 4 estimated tax periods and applying actual payments made for each period.


Wednesday, January 16, 2019


One of the good things to come from the GOP Tax Act was the elimination of the individual “shared responsibility penalty” for not having “minimal essential” health insurance coverage for the full year effective with tax year 2019.

Actually, the law and the penalty remain intact – the Act just set the penalty at 0.

So, beginning in calendar year 2019 you no longer need to maintain health insurance coverage for each member of your household.  Unless you live in New Jersey.

The presentation on NJ state tax updates at Saturday’s NJ-NATP “Famous NJ State Tax Seminar” I “reviewed” here on Monday discussed the “New Jersey Health Insurance Market Preservation Act” – the new NJ health insurance mandate.

To quote the opening lines of a Lerner and Lowe song from MY FAIR LADY - "Damn, damn, damn, damn."

Thankfully this does not affect the 2018 Form NJ-1040.

According to the Act’s webpage (highlights are mine) -

Beginning January 1, 2019, New Jersey will require its residents to maintain health insurance.

The law requires you and your family to have minimum essential health coverage throughout 2019 and beyond, unless you qualify for an exemption.

Failure to have health coverage or qualify for an exemption will result in a Shared Responsibility Payment when you file your 2019 New Jersey Income Tax return.

If you are not required to file a 2019 New Jersey Income Tax return – you are exempt from this mandate.”   

Similar to the disappearing federal shared responsibility penalty, the NJ penalty is calculated and paid as part of the NJ-1040 filing.

What is the NJ Shared Responsibility Penalty (SRP)?

Your payment amount is capped at the cost of the statewide average premium for Bronze Health Plans in New Jersey, as determined by the New Jersey Department of Banking and Insurance.

The following are examples of what the SRP could be:

Individual taxpayer:

Minimum: $695
Maximum: $3,012

Family with two adults and three dependents and household income of $200,000 or below:

Minimum: $2,085
Maximum: $4,500

So, like the federal penalty had been, the NJ penalty ain’t cheap.

In addition to the exemption for NJ residents who are not required to file a NJ-1040 there are other exemptions that are similar to the exemptions under the federal Affordable Care Act, including “affordability” and a gap in coverage of less than 2 consecutive months.  These are explained in a link on the webpage.

Just when I thought I no longer had to be concerned with health insurance coverage on the federal Form 1040 for my clients this comes along.  What a PITA!  At least NJ taxpayers would not need to pay the penalty to both Sam and Phil.


Tuesday, January 15, 2019


* John Smith lists “9 Time Saving Tax Preparation Tips” at INSPIRATION FEED, a new blog for me.

While I certainly agree with John’s #6 - Work With An Expert – he has it wrong when he says, “Working with an expert and qualified CPA will work wonders for you.”  The correct advice is working with an expert and qualified tax professional will work wonders for you.  A specific CPA MAY be an expert and qualified tax professional, and working with that specific CPA may work wonders, but the mere fact that a person is a CPA does not in any way, shape or form indicate expertise or qualification, or even knowledge or competence, in the area of 1040 tax preparation.
See my article “Don’t Assume”.

* Another new tax blog for me – THE TAX SAVINGS BLOG by tax pro Tony Nova.  I first heard of it via a reference in a Spacebook group to “My two rules about tax preparation fees”.

Back when I was accepting new clients off the street at my storefront office, I also subscribed to his Rule #1 – “If your question about the fee is our first topic of conversation then my policy is to decline interest in preparing your tax return.”

I remember when a new client came into our office in Jersey City and the first thing he said to my mentor was, “How much will it cost for my return? 

Jim replied, “It won’t cost you a penny, because I am not going to do it!

* Robert W Wood reminds us “IRS Forms 1099 Come Soon: Taxing Investors, Sharing Economy & Everyone Else” at FORBES.COM  

The post correctly tells us that 1099s must be in the mail by January 31st.  However, taxpayers with brokerage accounts should not run out and have their returns prepared.  Most likely they will receive at least 1 “Corrected Form 1099” from the brokerage, probably in early March.

* Once again “Tax Refunds Delayed In NJ This Year”, as reported by Tom Davis at PATCH.COM.

The NJ Division of Taxation, meanwhile, says it is taking steps to protect New Jersey taxpayers from refund fraud and identity theft. These enhanced efforts will result in early filers getting their refunds starting March 1. Normally, refunds come as early as mid-February.”

*  I was recently reminded of the great resource that the IRS website is.  It has a page on “Tax Reform Provisions that Affect Businesses” with links to lots of good info and resources.

And the IRS has also issued FS-2018-18 “Reconstructing records after a disaster; IRS provides tips to help taxpayers”, as well as other helpful Fact Sheets.

*  Jason Dinesen adds a new word to his “Glossary” post series – “Railroad Retirement Benefits”.  He identifies the differences between Tier 1 and Tier 2.

* Following in Henry and Richard’s footsteps.  Jeff Stimpson of ACCOUNTING TODAY reports “Jackson Hewitt to pay some $187K for misleading ads”.

Tax preparation franchiser Jackson Hewitt Tax Service will pay more than $187,000 to resolve allegations that it violated Massachusetts consumer protection laws with “\’misleading and deceptive advertisements’, according to Massachusetts Attorney General Maura Healey.”


Monday, January 14, 2019


Just as I always knew, before he retired, where one of my 1040 clients would be every year on New Year’s Eve – he was the technician that worked the machine that dropped the ball at midnight on One Times Square – you can be sure where I will be (barring weather or health complications) on the second Saturday in January every year - at the APA Hotel Woodbridge in Iselin NJ for the “Famous NJ State Tax Seminar” presented by the NJ chapter of the National Association of Tax Professionals.

In the almost three decades that this event has been held I have missed only a few offerings, due to snow.  This seminar is a “must attend” for any tax professional who prepares NJ state individual or corporate income, payroll, inheritance, and/or sales tax returns, and certainly worth, for me, the 2-hour 100 mile drive each way.

The event always includes a breakfast and lunch buffet, both now offered in the seminar area, which I prefer.  Last year the lunch buffet was limited to salads and sandwiches, and I had commented that I would prefer it include hot items.  Someone was listening, as this year the lunch buffet included cold salads and sandwich makings and several hot offerings.  I was pleased.  And the breakfast buffet continues to be among the best of those offered at tax seminars I have attended over the decades.

As has become the custom, after welcoming remarks from chapter Board members the seminar begins with a “keynote address” by the current Director, of Acting Director, of the NJ Division of Taxation.  This year we heard from, still only Acting Director, John Ficara.

I repeat my comment from last year’s “review” of the seminar –

I have always felt that over the years, with very few exceptions, these presentations have been of no real substantive value to the tax pros in the audience.  I do accept that this practice is probably a good and necessary one, and, thankfully, very little time in the schedule is allotted to the Director’s presentation.  Mr. Ficara, was a good and obviously knowledgeable speaker . . . but there was really nothing of consequence to ‘take away’.  There was no time for audience questions or comments, and he did not address real systemic issues with the Division, such as its continued unethical practice of remaining ‘silent’ on taxpayer overpayments or unidentified payments.”

This year’s address was truly redundant, touching briefly on topics that were discussed in more detail by the other NJDOT representatives in subsequent presentations, and, again, nothing about the Division’s ongoing systemic issues.

To again repeat a comment from last year’s review post –

Perhaps for the future seminars registrants could be asked to submit to the chapter in advance written systemic questions and concerns for the seminar chair to present to the Director instead of the nice but mostly useless keynote address.”

The rest of the morning was devoted to the presentations of NJ state tax updates from “Jake and Company”, aka the Division’s “Taxation University”.  Although it is no longer “Jake and Company”, but now “Bill and Company”.  Jacob Foy, who had been the Supervisor of the “Taxation University”, and had been speaking each year at this seminar since 2005 (when his hair was down to his shoulders and often tied in a pony tail), in the earlier years part of the popular “Jim and Jake Show”, is now the head of the, I believe, Taxpayer Communications Unit, apparently a newly created position.  Jake was replaced as TU Supervisor by William Malkin.  Bill has some huge shoes to fill; he got off to a good start Saturday.  Good luck, Bill!

Jake has truly been very helpful to NJ-NATP and its members, and specifically to me personally with various client issues, over the years.  I thank Jake for all his help in the past.  He assured me that he would continue to attend this “famous” state tax seminars in the future.

The first topic was “NJ Tax Updates” presented by Alexis Reid, another frequent speaker at the seminar and good friend to NJ-NATP, who has also provided invaluable help to me personally in dealing with client issues and NJDOT FUs.  I will be discussing the many changes to NJ state individual income taxes in detail in an upcoming post, once the 2018 Form NJ-1040 and instructions are available at the Department’s website.  Alexis did report that the NJ-1040, and its supplemental schedules, has been substantially revised, and the instruction booklet has been totally rewritten.  I look forward to reviewing the new editions, and, again, will report on the changes in detail in the future TWTP post.

NJ business taxes were discussed next, by Christina Quinones.  There have been several changes in the area of sales tax.  “Transient Rentals”, rentals of residential property located in NJ for less than 90 days, are now subject to the NJ state sales tax, which remains at 6.625%.  Rentals that are managed by realtors – the tenant deals with, receives the key from, and pays the rent to a realtor – are exempt from the tax.  The entity that collects the rent – Airbnb‌, VRBO or other such agencies or the actual landlord for direct private rentals – is responsible for collecting and remitting the sales tax.

NJ now charges a “surcharge” on rideshare services, like those provided by Uber and Lyft.  Again, the entity that collects the rideshare fee – Uber or Lyft or the individual driver – is responsible for collecting and remitting the surtax.

There were no changes to the NJ property tax relief programs – the Homestead Benefit and the Property Tax Reimbursement – but Taxation University provided a review of the various qualifications with William Malkin and Tilesha McCall.

Actually, there was one change to the calculation of the Homestead Benefit.  It is now, in most cases, based on 5% of the 2006 property tax assessment instead of the previous 10%.  This 5% was used to calculate the benefit provided issued on May 1, 2018.  The 2019 budget provided a supplemental benefit equal to the amount paid in May to be issued on November 1, 2018.

The morning ended with a presentation by Jake on the current NJ Tax Amnesty program, which ends tomorrow (January 15th).   

As an aside and follow up to last year’s comments, I was glad that the schedule this year did not include another full presentation on NJ state inheritance and estate taxes.

After lunch was perhaps the most important presentation of the day – at least for NJ tax pros who prepare or consult on payroll – “New Laws Regarding Sick Pay” by John Baldino of Humaresco.  It dealt with the, in my opinion, ridiculous and complicated “New Jersey Paid Sick Leave Act”, signed into law on May 2, 2018, and which became effective on October 29, 2018.

John began the presentation by telling us to write on the front of his handout “I did not write this law!”  He discussed much of the program in detail, fielding a multitude of questions from the audience, but did not have time to cover everything.  As I said this was a very important topic, and it was appropriate not to limit the questions.  More time should have been given to John, as there were important items not adequately covered and questions unanswered due to the time constraint.

Again as has become custom, the final item of the day was a combination of NY state tax updates and federal updates by popular NATP speaker Kathryn Keane.  The big news for NY for 2018 is the state’s “decoupling” from the GOP Tax Act.  As with NJ, I will discuss the NY changes in detail in an upcoming post when the 2018 IT-201 and IT-203 are available.

Kathryn followed the NJ state discussion with a review and update of the GOP Tax Act.  I left before this began, having already sat through 4 redundant GOP Act presentations in 2018 and because of my 2-hour drive back to PA.  As I have said for the past several years, I very strongly believe that federal topics should NOT be a part of this seminar.  It should be limited to state tax issues only – NJ and NY and possibly PA.  The time allotted to the federal portion of KK’s talk should have been given to John Baldino for the Sick Leave Act.  In addition, the 10 or so minutes wasted giving out tote bags as prizes should have also been given to John.

As usual, the NJ chapter, and the state’s Taxation University, did a great job and once again deserve my annual kudos.  And John Baldino was an excellent addition to the roster.  I hope he can return in the future to speak on a different topic.

One non-state thing I was happy to learn on Saturday – the 2020 NATP National Conference will be held in San Antonio.  I last attended a tax conference there in 2004.  At a class taught by former IRS Director of National Public Liaison Beanna Whitlock she asked the assembled tax pros who still prepared tax returns manually – without using tax preparation software.  Of course, my hand was the only one to go up.  Beanna came over to where I was sitting and said, “I want to shake your hand.  You are the only person in the room who actually knows how to prepare a 1040.”  Needless to say, I have told that story many times in many venues over the years.   


Tuesday, January 8, 2019


 A late addition to today’s BUZZ.  This just in - “IRS Confirms Tax Filing Season to Begin January 28”.

Despite the government shutdown, the Internal Revenue Service today confirmed that it will process tax returns beginning January 28, 2019 and provide refunds to taxpayers as scheduled.”

When I first read on Twitter that the White House would allow the IRS to issue refunds during the shutdown I figured Trump was expecting a refund.

For me the tax filing season always begins February 1st - regardless of the IRS start date.


* To those of you who are looking to find a tax professional to help you with the preparation and filing of your 2018 federal and state income tax returns, I strongly suggest you read thoroughly the articles I have included on my FIND A TAX PROFESSIONAL website.  Especially –


Whatever you do – don’t ask me to prepare your tax returns.  I do not, under any circumstances, accept any new clients.

* Have you seen the January issue of BOBSERVATIONS yet?  Why not?  It’s free!  

* More bloggers are posting reviews of 2018.  Over at FORBES.COM Peter J Reilly tells us “Stormy Daniels My Top Tax Story Of 2018 –Almost”.

* Key Bell, the yellow rose of taxes, lists “6 top tax issues of 2018 and what to expect in 2019” at DON’T MESS WITH TAXES.

* As we begin 2019 Russ Fox of TAXABLE TALK reminds us “It’s Time to Start Your 2019 Mileage Log”.

* I have added two new special reports to MY DOLLAR STORE especially for the self-employed – “Deducting Business Travel on Schedule C” and “Deducting Business Use of Your Auto on Schedule C”.

* I welcome veteran tax pro Trish McIntire back to blogging at OUR TAXING TIMES.  Her new post deals with “W-2s”.

* YAHOO.COM gave us “A State-by-State Look at Minimum Wage Increases for 2019” from William White of Investor Place.

* From of all places READER’S DIGEST – “13 Tax Secrets Every Smart Homeowner Should Know” by Ashley Eneriz.


When is it going to sink in to the minds of the Republicans in Washington that the person currently occupying the White House is a totally self-absorbed moron who doesn't know is ass from a hole in the ground about anything and lies every time he opens his mouth?


Monday, January 7, 2019


I have been saying this for a long time now - journalists and politicians need to stop reporting and dealing with Trump as if he was a “normal” President or politician, in the same league as any past President, presidential contender or national politician of either Party. 

Trump is an aberration.  Nothing he has said or done has been the least bit Presidential, and most of what he has said and done has been un-American.

Regardless of what you may think personally or politically of Obama, Bush, the Clintons, Romney, Saunders, or any other national politician – none have ever been anywhere near as despicable and deplorable as Trump.  And none have been unfit, unqualified or unprepared to serve as President, as Trump clearly is.  It is obvious that no other candidate could have been a worse choice for President, or any national office, than Trump.

Nothing Trump says, tweets or does is based on facts or reality.  He lies to everyone - everyday - about everything.  He has absolutely no concern for America, the American people or the world.  He is totally self-absorbed – everything must be about and for him.  When he speaks it is directly and only to his core cult of ignorant deplorable racists – and, besides feeding his ego and lining his pockets, their perception of him is the only other thing that matters to or motivates Trump.  He very literally lives for the roar of the crowd at his nonsensical rallies.

We must call a spade a shovel – Trump is an ignorant and incompetent delusional demagogue, narcissist and sociopath who must be removed from office ASAP before he does irreparable damage to America and the world.

The acceptance, defense and support of Trump by the Republican Party is unacceptable and indefensible.  The once Grand Old Party has turned its back on American values and democracy by embracing the worst and most dangerous President in the history of America.  The Republican Party has lost all credibility and legitimacy.  A new truly conservative-based political party is needed to replace the disgraced Republican Party.

Opposing and denouncing Trump is not politics – it is patriotism!


Friday, January 4, 2019


There is a multitude of changes to the tax forms and tax law for 2018 on the federal level.

The big change with the federal Form 1040 is that the old well-crafted Form 1040 is replaced with the ridiculous new “postcard” 1040 and 6 new supplementary schedules - probably the stupidest thing I have ever seen in my almost 48 years in the tax preparation business.  There is no 2018 Form 1040A or Form 1040EZ.

As for tax law, here is a comparison of 2018 and 2017 tax law to show some of what is new for individual income taxes 2018.

2018 TAX LAW
2017 TAX LAW

10%, 12%, 22%, 24%, 32%, 35%, 37%
10%, 15%, 25%, 28%, 33%, 35%, 39.6%
Single- $12,000
Married Joint- $24,000
Married Separate- $12,000
Head of House- $18,000
Single- $6,350
Married Joint- $12,700
Married separate- $6,350
Head of House- $9,350
No deduction for personal exemptions.
Deductible by payer and included in income of recipient.
Deductible by payer and included in income of recipient.
Deduction for military moves only.
Deduction for job-related moves.
Allowed in excess of 7½ % of AGI.
Allowed in excess of 7½ % of AGI.
Combined deduction limited to $10,000 ($5,000 if filing separate).
Full deduction for all state and local income or sales taxes, property taxes, and personal property taxes.
Only interest on acquisition debt of up to $500,000 is deductible. Grandfathering for existing loans of up to $1 Million of debt.  
Interest on acquisition debt of up to $1 Million and home-equity debt of up to $100,000 deductible.
Deductible to extent of investment income.
Deductible to extent of net investment income.
Fully deductible up to 60% of AGI.
Fully deductible up to 50% of AGI.
Only casualty losses from Presidentially-declared disaster areas are deductible.
All casualty and theft losses are deductible.
Not deductible.
Deductible to extent total miscellaneous expenses exceeds 2% of AGI.
Not deductible.
Deductible to extent total miscellaneous expenses exceeds 2% of AGI.
Not deductible.
Deductible to extent total miscellaneous expenses exceeds 2% of AGI.
Not deductible.
Deductible to extent total miscellaneous expenses exceeds 2% of AGI.
Deductible to extent of reported winnings.
Deductible to extent of reported winning.
Deducted in full – no limitation.
Deduction limited based on AGI.
Up to $2,000 for each child under age 17, based on AGI. AGI threshold substantially increased. Up to $1,400 is refundable.
Up to $1,000 for each child under age 17, based on AGI.  Full amount deductible.
Up to $500 for each dependent not eligible for the Child Tax Credit, based on AGI (same threshold as Child Tax Credit). No credit for taxpayer or spouse. 
Does not exist.  No credit allowed.
Adequate health insurance coverage required for entire household.
Adequate health insurance coverage required for entire household.
Single/Head of House- $70,300
Married Joint- $109,400
Married Separate- $54,700
Single/Head of House- $54,300
Married Joint- $84,500
Married Separate- $42,250
Single/Head of House- $500,000
Married Joint- $1 Million
Married Separate- $500,000
Single/Head of House- $120,700
Married Joint- $160,900
Married Separate- $80,450
Calculated separately using tax rate schedule for estates and trusts.
Calculated based on income of parents.

Information on what is new for 2018 for New Jersey and New York to follow.