Friday, November 22, 2019
NATP YEAR-END TAX UPDATE SEMINAR
Monday and Tuesday of this week I attended the annual National Association of Tax Professionals 1040 Update seminar (Monday) and a seminar on “Business Tax Reporting on the 1040” (Tuesday).at Bally’s in Atlantic City. Click here for more details on these offerings.
I have been attending the annual update seminar for as long as I have been a member of NATP (over 30 years). However, it no longer has the value for me that it did in earlier years. The actual update portion is truly redundant. It is a year behind from my point of view. While NATP is teaching the 2019 Form 1040-related numbers I am reviewing and compiling the 2020 numbers.
This was the first seminar I was attending as a designated NATP volunteer, helping with the signing in, handing out of workbooks and signing out.
One new feature of the event was a pleasant surprise. For the first time the continental breakfast provided included a hot option – bacon, egg and cheese or sausage, egg and cheese on a bagel. As a diabetic I would have also preferred cereal and fruit as another option, and for the afternoon dessert break sugar-free cookies.
Monday began with New Tax Law and New Developments. The only new tax-related law passed in 2019 was the “Taxpayer First Act”, dealing with taxpayer protections and identity theft prevention. Congress is, and will be, incapable of enacting any substantive legislation on any issue until 2021.
There were few new developments, a major one being the issuance of IRS regulations dealing with the new, truly complicated, and in my opinion unnecessary Section 199a QBI deduction. Speaking of the QBI deduction, new for 2019 are Form 8995 and Form 8995-A to calculate the QBI deduction, replacing worksheets that were used for 2018. The applicable form is included in the 2019 Form 1040 filing.
We reviewed the draft of the new 2019 Form 1040 and 1040-SR, which I have discussed here in previous posts, and the 2019 supplemental schedules. What was new to me was the reduction of the previous 6 supplemental schedules to 3 – Schedule 2 and 4 are combined in the 2019 Schedule 2, Schedule 3 and 5 are combined in Schedule 3 for 2019, and the information previously reported on Schedule 6 is now on the 1040. Reporting Schedule D income or loss has been moved from Schedule 1 to a line on the 2019 Form 1040.
We also took a look at the proposed new 2020 Form W-4. Click here for a copy of the draft. There are no more exemptions to claim – you no longer indicate “Single-0” or “Married-3”. When filling it out you must follow the instructions and enter the requested information. I would recommend you do not enter any amount for “deductions”, but do enter any other income, such as interest and dividends, and do not claim any or your dependents, or at least claim only half the number of exemptions to which you are entitled.
One thing discussed was new to me - I was not aware that the $10,000 “SALT” limitation on Schedule A could have an effect on the home office deduction on Form 8829 and the rental income and expenses on a two-family home reported on Schedule E. This is something I need to review further and perhaps devote a future post to it.
Under the GOP Tax Act only casualty losses resulting from Presidentially-declared disasters are deductible on Schedule A. The workbook provided a list of these areas so far for 2019, and I wanted to share it here, but for some reason I cannot access the workbook online. When this is fixed and I am able to I will post the list.
The text also identified this IRS webpage as a source of continuing information on disaster relief.
BTW – a Presidentially-declared disaster is different from a Presidentially-caused disaster. Taxpayers cannot deduct losses from national disasters caused by Trump. Trump himself IS a national disaster.
As a point of information - my entire perspective in attending continuing professional education sessions is different now. While, as a tax blogger I have a general journalist’s interest in new tax law and new tax developments, as a tax preparer who no longer seeks or accepts new clients, and is winding down my practice, I have no interest in taking time to learn anything new that does not directly affect my existing 1040 clients, or anything that involves too much complexity or study that perhaps might affect a few clients. It is easier for me to tell the clients that the new law or development might affect, “Homey don’t play that”.
As I tell my clients, while I do believe you can teach an old dog new tricks, and I have to learn some new tricks every year, there are some new tricks this old dog doesn’t want to learn.
I was truly pleased that for the second year the update seminar did not include 2 hours of redundant ethics preaching. I had always complained in the past that I paid for 8 hours of actual tax education but only got 6.
This may perhaps be the last year I attend the update seminar. Next year I may choose the NATP Forum, also held each year in Atlantic City but at Harrah’s on the marina, instead to learn of new developments.
Tuesday’s business reporting seminar was basically a review, albeit a good review, and I really did not learn anything new.
One more item worth sharing before I go. The instructor explained that she was told why the new treatment of alimony in the GOP Tax Act did not take effect until 2019, instead of beginning in 2018 like other items. As per the Act, alimony is not deductible by the payer or included in income of the recipient for divorce or separation decrees or agreements executed after December 31, 2018. For decrees or agreements executed before January 1, 2019 the old law still applies. At the time the bill was being written 3 Congressmen, presumably Republicans, were going through divorce proceedings which would not be finalized until 2018. And as we know, most Congresspersons, apparently as we’ve learned recently certainly Republican ones, put their personal interests ahead of the country’s interests.