THIS JUST IN!

The IRS has released its first response to the court case that shot down its tax return preparer regulation regime:

"IRS Statement on Court Ruling Related to Return Preparers

As of Friday, Jan. 18, 2013, the United States District Court for the District of Columbia has enjoined the Internal Revenue Service from enforcing the regulatory requirements for registered tax return preparers. In accordance with this order, tax return preparers covered by this program are not currently required to register with the IRS, to complete competency testing or secure continuing education. The ruling does not affect the regulatory practice requirements for CPAs, attorneys, enrolled agents, enrolled retirement plan agents or enrolled actuaries.

 

The Internal Revenue Service, working with the Department of Justice, continues to have confidence in the scope of its authority to administer this program. It is considering how best to address the court’s order and will take further action shortly. Please continue to check this site as additional information becomes available." 

JUST SAY "NO" TO HENRY AND RICHARD

Why do I advise individuals not to use the services of a “fast food” tax preparation chain?  Here are two reasons -

(1)    As I have continually pointed out, Henry and Richard, and the others of their “ilk”, ain’t cheap!  Why?  While, like anything else, the market affects the price of tax preparation, the major factor affecting the fees charged is overhead. Let’s look at the overhead of these “fast food” chains.

Because the storefronts where these chains are located are usually in high traffic commercial areas, and often shopping malls, the rent is generally very high. And an important factor – H+R Block and Liberty and Jackson Hewitt storefronts are only open during the tax filing season, yet they must pay rent on the property for the entire year.

These chains have excessive advertising budgets during the season, spending millions of dollars on constant tv and radio spots as well as print advertising telling you not that they competently prepare accurate tax returns but simply to come into their office and walk out with a check. Hey, doesn’t H+R advertise during the Super Bowl.

H+R Block et al are corporations, and have highly compensated upper level corporate officers and employees with generous employee benefits. A while back the Associated Press reported that “H&R Block Inc. CEO Russell Smyth received compensation valued at $5.3 million in fiscal 2009, the year he took over leadership of the nation's largest tax preparer”.

With commercial preparation chains I expect that the actual cost of preparing the return - salaries paid to the seasonal preparers and the training of these preparers - is one of the smallest items in the budget.

As I have always said – when you use Henry and Richard you pay fancy restaurant prices for fast food service.  To be honest I am not being fair to fast food franchises – I have actually received good service at McDonalds and Burger Kings.  

(2)  A few years ago the Government Accountability Office (GAO) conducted a study which resulted in a report to Congress titled “Paid Return Preparers: In a Limited Study, Chain Preparers Made Serious Errors”. This study was one of the reasons the IRS began its investigation into the regulation of tax return preparers. 

The GAO sent undercover agents with two different tax scenarios to a total of 19 offices of 5 “fast-food” commercial tax chains, including H+R Block, in a metropolitan area. In only 2 instances was the correct refund calculated, but all 19 returns contained errors.

I was surprised when I was told by the GAO at an IRS Nationwide Forum that not one of the 19 preparers in the study had asked to see the undercover taxpayer’s prior year’s return!

Other undercover operations, by the office of the Treasury Inspector General for Tax Administration (TIGTA), local tax agencies, and consumer protection organizations, have found similar results.  These findings have led to the current IRS tax return preparer regulation regime.

My mentor always said he wished that H+R Block would open an office next door to us.  He felt we would make a fortune correcting the errors made on H+R-prepared returns.

It is better to be safe than sorry.  I recommend that you do not use a “fast food” tax preparation chain to prepare your federal and state income tax returns.

 

Of course I must end with the following disclaimer -

 

Iit may actually be possible that the best tax preparer, at the best price, for your particular situation may be an H+R Block, or other fast-food chain, employee. But this is only because of the education, experience, ability, temperament, and other factors that are specific to that individual preparer.

TTFN

A PAY CUT OR NOT A PAY CUT, THAT IS THE QUESTION

I recently wrote a piece for www.TheStreet.com about the expiration of the 2% payroll tax “holiday” titled “Everyone Got a 2% Cut In Pay”.  A reader commented –

“’So starting Jan. 1, everyone got a 2% cut in pay!’  WRONG, wrong, wrong!!!  The rate went back to what it had been for YEARS.”

We are both right.

Beginning with the first paycheck issued in 2013, all employees had 2% more withheld for the Social Security component of FICA tax.  So everyone’s pay was reduced by 2% - a 2% pay cut.

But this was NOT a tax increase.  As the comment writer correctly pointed out, the employee’s share of FICA tax merely went back to the way it had been for many, many years prior to the enactment of this temporary tax benefit.

The 2% payroll tax cut was a temporary measure that applied to 2011 and 2012 only.  It was a political gimmick.  As I pointed out in my piece, it was the latest reincarnation of the rebate check political gimmick that was implemented during the Dubya years.

The rebate check/credit became the Making Work Pay Credit under BO, which was replaced by this 2% payroll tax holiday. 

The rebate check caused more problems than it was worth (as I observed here at the time – “These checks cost the IRS a fortune, created tons of confusion, and resulted in millions of errors on 2008 tax returns! And it is doubtful that they did anything to stimulate the economy.”) and the Making Work Pay Credit FU-ed withholding.  As a method of distribution, the payroll tax holiday was “more better” (i.e. caused less administrative problems) than its predecessors.  But it was a political gimmick all the same.

The original rebate check, like New Jersey’s original homestead rebate checks, was a way to buy votes.  Originally the NJ homestead rebate check went out on November 1st.  The hope was that taxpayers would say, “Look what the Democrats just gave me” and run out on Election Day and vote for all the Democratic candidates.  Prior to the issuance of the federal rebate checks taxpayers often received a letter from their representative idiot in Congress telling them that the check was coming.  “Look what the Republicans just gave me.  I will thank them by voting Republican!”

This 2% payroll tax holiday is a great example of the danger of “temporary” tax benefits.  Taxpayers get used to them, and when they expire it appears that there has been a tax increase.  It never should have been passed in the first place.  It never should have been extended for 2012.  And the idiots in Congress were right not to extend it for 2013. 

TTFN

RULES FOR DEDUCTING NON-CASH CONTRIBUTIONS

In light of the recent report by the Treasury Inspector General for Tax Administration which found that “Taxpayers Don’t Comply With Reporting Requirements for Noncash Charitable Contributions” I thought it would be appropriate to review the rules for claiming a “non-cash contribution”.

You can claim a deduction for the “fair market value” of property, including used items, donated to charity.  According to the IRS, fair market value is the price a “willing, knowledgeable buyer would pay a willing, knowledgeable seller when neither has to buy or sell.”  

You are responsible for determining the fair market value of the items you are donating.  The charity to which you make the donation is not required to, and in most cases will not, provide you with a value.  Click here for the Salvation Army valuation guide. 

If the total value of items donated to a charity in a single day is more than $250.00 you must have a written acknowledgement from the donee organization with the name and address of the charity, the date of the contribution, and a description of the items donated.  The acknowledgement must also indicate whether you were provided any goods or services by the charity in exchange for the donation (this is very important).

You must complete and attach to your Form 1040 IRS Form 8283 if you are deducting “non-cash” contributions totaling more than $500.00.  The following information will be needed:

•  the name and address of the charity(ies) to whom you made the donation(s),

•  the date of the contribution(s),

•  the fair market value of the items donated, and

•  how you determined the value – i.e. “Salvation Army valuation guide”

If any one individual item has a value of more than $500.00 you must also list

•  the date you acquired the property

•  how you acquired the property – i.e. purchase, gift, inheritance, exchange

•  the cost or adjusted basis of the property

If any one individual item has a value of more than $5,000.00 you must provide a written appraisal of the item and complete Section B of IRS Form 8283.  The appraisal must be made by a “qualified” appraiser who has earned an appraisal designation from a recognized professional organization or has otherwise met minimum education and experience requirements prescribed by IRS regulations, regularly performs appraisals for compensation, demonstrates verifiable education and experience in valuing the type of property being appraised, and has not been prohibited from practicing before the IRS at any time during the 3-year period prior to the date of the appraisal.  To find a qualified appraiser go to www.appraisers.org, the website of the American Society of Appraisers.

The cost of the appraisal is not included in the amount of the charitable donation.  You can, however, deduct the appraisal fee as a “miscellaneous” itemized deduction, subject to the 2% of AGI limitation.

Whenever you contribute used appliances, electronics, books, clothing, furniture or household items you should always make and keep a detailed listing of the items donated with the condition and value of each set of items (i.e. 6 pairs of men’s pants, good condition, $60.00, 5 pairs of men’s shoes, good condition, $75.00).  You may want to attach a copy of the listing to Form 8283 when filing your Form 1040.  

You cannot deduct the contribution of a used item of clothing or household item to a church or charity unless the item is in at least "good" condition (except for a single such item with a documented appraised value of more than $500).  Donations of clothing and household items with a minimal monetary value, such as used socks or underwear, are also not deductible.

When donating used clothes and household items to charity you should go with the ‘old reliables’ like Goodwill Industries, the Salvation Army, Vietnam Veterans of America or your local church – this way you are sure to be giving your items to a legitimate charity. In many cases the charity will come to you to pick up your donations. And if you are putting your donations in a “drop-off box” make sure the name of the charity is clearly indicated on the box. While these boxes may be convenient it is “more better” to drop off your donation at a local Goodwill or Salvation Army store or donation center, where you can get a signed receipt.”

If you purchase new items to contribute to a food, toy or clothing you can deduct the actual cost of the items donated.  The same reporting and documentation requirements discussed above for used items will apply.  You should make a separate purchase of the items you will donate – do not group together with the purchase of items for your personal use – and save the store receipt. 

Be advised that you must donate the items to a qualified charity.  You cannot claim a deduction for clothes or other items given directly to an individual or family – such as a winter coat you give to a homeless person, or foodstuffs given to a family whose home has burned down or was destroyed by SANDY.  You must give the item to the Salvation Army or the Red Cross, who will in turn distribute it to a needy individual or family.

When you donate a motor vehicle (car, motorcycle, boat, or airplane) to a church or charity the amount you can deduct depends on what the organization does with the donated vehicle.

(1) If the organization sells the vehicle without significant interim use or material improvement your tax deduction is limited to the gross proceeds from the sale.

(2) If the organization intends to temporarily or permanently use the vehicle in its operations, or make "material" improvements to the vehicle before selling it, or sell the car to a "needy" individual at a price that is significantly below market value, or give the car to such an individual, you can deduct the "fair market value" of the vehicle. 

You can use the "private party value" for the vehicle, adjusted for mileage and condition, as listed in the Kelly Blue Book (www.kbb.com) or a similar established used vehicle pricing guide.  As discussed above with other “non-cash” contributions, if the fair market value of the vehicle is more than $5,000.00 you must obtain a formal appraisal. 

In order to claim a deduction of more than $500.00 for donating a motor vehicle to charity, you must include Copy B of the IRS Form 1098-C, which is completed by the charity, with the filing of your Form 1040.

The Form 1098-C will include the name and Taxpayer Identification Number of the donee organization, the vehicle identification number, the date of contribution, and information on what the charity did with the vehicle.  Form 1098-C must be issued within 30 days of either the date of the contribution or the date of the disposition of the vehicle by the donee organization.  The charity can give you a statement in lieu of Form 1098-C as long as it contains all the necessary information discussed above. 

Any questions?

TTFN

CHECK IT OUT!

Check out my reactions to the new court case that put a temporary end of the IRS tax return preparer regulation regime.  Click here and here and here.

WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’ – FRIDAY EDITION

“A liberal is someone who feels a great debt to his fellow man, which debt he proposes to pay off with your money.”–G. Gordon Liddy

* Check out my Tax Tips “Document Your Charitable Deductions, Taxpayer” and “Consider All Your Options” at MAINSTREET.COM.

* Russ Fox of TAXABLE TALK tells you “What $4.95 Buys These Days” – my ebook “My Best Tax Advice”.

Thanks, Russ, for the plug!  Glad you enjoyed the book.

* “The 1040 is Ready! The 1040 is Ready!”  So announces Kay Bell at DON’T MESS WITH TAXES.

The 2012 Form 1040 and 1040-A had previously been published by the IRS with certain lines marked as “Reserved” for not-yet-extended “extenders”.  The forms have now been revised to identify the now-extended deductions. 

The 2012 Schedule A has also been revised to identify the option to deduct state and local sales tax.

* Thanks to Alltop.com I came across TAXGIRL Kelly Phillips Erb’s annual “2012 Round-Up: The Year In Taxes” – at her old blog site and not at FORBES.COM.

Unlike my year in review post, Kelly’s provides links to the most popular TAXGIRL posts for 2012, her favorites, and the most important.

* Jamaal Solomon, E.A. continues his TAX FACTOR series with “Tax Organizer for Business Professionals”.

* Jason Dinesen reminds those who report residential rental income to properly allocate the cost of the property between land and building in “Rental Properties and Basis Allocation” at DINESEN TAX TIMES.

I often use his suggested method of allocating land via the property tax valuation.  I have also used 75% building - 25% land as a general “rule of thumb” if the property tax valuation % does not seem appropriate.

* While I support the RTRP regime (except for testing), I do agree with Joe Kristan and others that it will not stop tax fraud.  And I do believe that forcing us to sit through 2 hours of ethics preaching each and every year is a waste of time and money.

Case in point – “CPA Faces Five Years In Refund Fraud”, as reported by THE PROGRESSIVE ACCOUNTANT.  CPAs have always been regulated, and, I believe, also must take (at least) 2 hours of ethics preaching CPE each year.  

* TAX MAMA Eva Rosenberg answers a question about “Garage Sales”.

I personally think having a garage sale to get rid of “stuff” you no longer need generates more agita than they are worth.  You can avoid agita altogether, and probably end up with more net “in pocket”, by donating your “stuff” to charity.

Be sure to check out my post on the rules for deducting non-cash contributions scheduled to appear here on this coming Monday morning.  

TTFN

THE RETURN OF A HOME OFFICE STANDARD DEDUCTION

Here is something that is new for 2013 returns - “Helping Small Business Owners and Home-Based Employees Claim the Home Office Tax Deduction”, explained by Deputy Secretary Neal S. Wolin and SBA Administrator Karen G. Mills. 

“The new option allows qualified taxpayers to deduct annually $5 per square foot of home office space on up to 300 square feet, for as much as $1,500 in deductions.  To take advantage of the new option, taxpayers will complete a much simpler version of the current 43-line form.

The new option for the home office deduction will be available starting with the Tax Year 2013 return, which most taxpayers file early in 2014.

Current restrictions on claiming the home office deduction, such as the requirement that a home office be used regularly and exclusively for business and the limit on the amount of the deduction tied to income derived from the particular business, still apply under the new option.”

Be aware that this option is NOT available for 2012 returns.

I commented on this when the idea was first proposed by National Taxpayer Advocate Nina Olsen a few years ago in my post “A Home Office Standard Deduction”.

My thoughts on this new option are along the same lines as those of Russ Fox, as outlined in his TAXABLE TALK post “Is A Simplified Home Office Deduction Better?” –

I looked at all of my clients who filed this form, and the simplified procedure would have cost every one of them money. Perhaps that’s because of my client base, but I don’t think so. Most taxpayers taking the home office deduction do keep good records, so the recordkeeping isn’t that big of a deal. After all, these are small business owners who have to keep good records anyway (or are supposed to). The reality is that $5 per square foot understates the cost of most home offices, especially when factoring in depreciation.

Simple in this case does not necessarily mean better.

As this is an option, taxpayers who qualify for a home office deduction in 2013 should calculate the deduction using both actual expenses and the optional method and choose the option that provides the bigger deduction.

One question – how will using the standard deduction option affect the Schedule A deduction for real estate taxes and mortgage interest (since these items are a component of the home office deduction)?

TTFN

WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’ – WEDNESDAY EDITION

“Collecting more taxes than is absolutely necessary is legalized robbery.”–Calvin Coolidge

* Check out my Tax Tip “Mistakes to Avoid When Finding a Tax Preparer” at MAINSTREET.COM.

* Jamaal Solomon, E.A. adds a “Tax Organizer for Medical Professionals” to his recent organizer offerings at TAX FACTOR.

* And guess what?  Jamaal also plugs my new special report on "My Best Tax Advice" in “Robert D Flach: My Best Tax Advice”.

Thanks, Jamaal.  I will be happy to guest post for you (after the upcoming tax season).

* And thanks to Trish McIntire for also plugging "My Best Tax Advice" at OUR TAXING TIMES in her post "Tax Book for Taxpayers"!

* Trish also provides some good warnings to taxpayers looking for a tax preparer in “Preparer Conflict of Interest”.

A good reminder –

“Bottom line is that the taxpayer is always responsible for what is on the tax return.”
 

* We go back to 2009 for a good post from Jim Blankenship of GETTING YOUR FINANCIAL DUCKS IN A ROW on “Traditional IRA v. Roth IRA – Compare & Contrast”.

* Tony Nitti of FORBES.COM correctly sets the record straight in “Dear America: Your Higher Payroll Taxes Are Not The Result Of A Tax Increase” -  

“The expiration of the payroll tax reduction is not a ‘tax hike’.

When originally enacted in December 2010, the 2% reduction was originally scheduled to last only one year, it’s finite nature evidenced by its description in the statute as a “payroll tax holiday.”

The point of the provision, as you might imagine, was to help lower and middle-class taxpayers weather the recession by putting more after-tax cash in their pockets. Specifically, the payroll tax cut replaced and expanded upon the “Making Work Pay Credit,” which during 2009 and 2010 saved individuals earning less than $75,000 up to $400 and married couples earning less than $150,000 up to $800. Because the 2% payroll tax cut reduction applied to the first $106,800 of a taxpayer’s wages, the new law could save an individual as much as $2,136, or twice that for married couples.

As 2011 drew to a close and the sun was due to set on the payroll tax cut, Congress did what it does best, agreeing to a last-minute, ill-conceived two-month extension that was not offset with any increased revenue or spending cuts. In February, they did it again, this time extending the 2% reduction through the end of 2012.”

What Tony does not say is that the Making Work Pay Credit was the gimmick that replaced Dubya’s disastrous tax rebate/credit gimmick.

* In answering a reader’s question (“Ask the Taxgirl: IRS Delayed Tax Filing Season Applies To Everybody”) another FORBES.COM blogger, TAXGIRL Kelly Phillips Erb, reminds us -

·      “. . . it’s okay to prepare your return now. But . . . while a tax preparer may be able to begin working on your return now, the IRS will not begin accepting and processing and individual federal income tax returns until January 30.”

·      “. . . you’re not getting your refund any faster from the IRS by having your return prepared now as compared to January 30.”

·      “It does not matter whether you file on paper or electronically: filing season begins on January 30, 2013.”

As I have said before – there is no delay for me and my clients, as I start the tax season on February 1^st every year.

* CPA Joe Kristan talks about my post on Choosing a Tax Preparer in his Tuesday “Tax Roundup” installment.

To be clear – I was not questioning the competency of CPAs as a group.  I merely said that the mere existence of the initials CPA after one’s name is no indication of 1040 tax knowledge, and that a CPA is NOT automatically a tax expert, as much of the public, and many journalists, falsely believe.

While I agree that the RTRP competency test has nowhere near the value of the EA exam (I would support doing away with the test altogether) – the fact that RTRP’s are required to remain current by taking minimal annual CPE in federal taxation indicates that they have proven more 1040 tax knowledge than a CPA who, while required to take CPE, is not required to take any CPE in federal taxation.

My comment is only that passing the CPA exam by itself does not imply any indication of actual knowledge in 1040 preparation.

* The Treasury Inspector General for Tax Administration has found that “Taxpayers Don’t Comply With Reporting Requirements for Noncash Charitable Contributions”.

In light of this report I will be posting the reporting requirements soon here at TWTP.

THE FINAL WORD:

I wonder if the brain-dead idiots that “star” and “compete” in steaming piles of excrement like “The Bachelor” and “The Bachelorette” realize that they were purposefully chosen by producers to be in these shows because of the very fact that they are brain-dead idiots, or if they are deluded enough to believe that it was because of their wit, charm, and talent, of which they obviously have none?

I also wonder how the hosts of legitimate news and information programs, who regularly interview kings, presidents, real-life heroes, and real actors and entertainers with actual talent feel about being forced to interview the idiots of “reality tv” garbage who have no talent or accomplishments, and have nothing of value or interest to say.  I have submitted this question to the TODAY SHOW, but have not received any response.  Matt, Al, Natalie, George, Robin, etc – are you reading this?

TTFN

CHOOSING A TAX PREPARER

Rather than repeat my annual post on CHOOSING A TAX PREPARER, let me summarize.
 

(1)  You really should not use a “fast food” tax preparation chain, like Henry and Richard, to prepare your tax return.  Fast food tax preparation chains are not cheap, and they certainly do not provide the quality of service that an individual independent tax professional does.

(2)  Contrary to the popular “urban tax myth” perpetuated by uninformed journalists, just because a person has the initials “CPA” after his/her name does not mean that he/she knows his arse from a hole in the ground when it comes to preparing 1040s.

Only those individuals who possess the “EA” (Enrolled Agent) or “RTRP” (Registered Tax Return Preparer) designations have demonstrated competency in 1040 preparation by taking an IRS-sponsored test, and are required to remain current in 1040 law by taking a minimum number of hours in continuing professional education (CPE) in federal income taxes each year.

 

An “EA” is NOT an employee, representative, or “agent” of the Internal Revenue Service.  An “EA” is an independent tax professional.

 

While CPAs and attorneys who have registered with the IRS and received a PTIN (Preparer Tax Identification Number) are permitted to prepare 1040s for compensation, they are exempt from demonstrating any degree of competence and are exempt from having to remain current by taking CPE in federal taxation.

 

(3)  And, of course, no tax preparation software is a substitute for knowledge of the tax code. And no tax preparation software is a substitute for the services of a trained tax professional!  Garbage-in, garbage-out says it all. 

As I usually end the post - it may actually be possible that the best tax preparer, at the best price, for your particular situation is either a CPA or an H+R Block, or other fast-food chain, employee. But this is only because of the education, experience, ability, temperament, and other factors that are specific to that individual preparer.

 

“Nuff said.

 

TTFN

THE REST OF THE 2013 INFLATION ADJUSTMENTS

Now that the American Taxpayer Relief Act of 2012 has become law the IRS has issued the balance of the annual inflation adjustments for 2013.  Here are some of these adjustments (all amounts below pertain to 2013 income tax returns filed in 2014) -

• A new tax rate of 39.6 percent has been added for Single filers whose income exceeds $400,000, $425,000 for Head of Household, $450,000 for Married Filing Joint, and $225,000 for Married Filing Separate. The other marginal rates — 10, 15, 25, 28, 33 and 35 percent — remain the same as in prior years.  

 • The Standard Deduction rises to $6,100 for Single and Married Filing Separate, $8,950 for Head of Household, and $12,200 for Married Filing Joint.

The Standard Deduction for a dependent is the greater of (1) $1,000, or (2) the sum of $350 and the individual's earned income (up to $6,100).

The additional Standard Deduction amount for the age 65 or older or blind is $1,200 for married individuals and $1,500 for Single and Head of Household.

• The personal exemption rises to $3,900.  The exemption is subject to a PEP phase-out that begins with adjusted gross incomes of $250,000 for Single, $275,000 for Head of Household, $300,000 for married couples filing joint, and $150,000 for Married Filing Separate.

 • The Pease limitation for itemized deductions claimed on returns of Single filers with incomes of $250,000 or more, $275,000 for Head of Household, $300,000 for Married Filing Joint, and $150,000 for Married Filing Separate.

• The Alternative Minimum Tax exemption amount is $51,900 for Single and Head of Household, $80,800 for Married Filing Joint and $40,400 for Married Filing Separate.  The 28% AMT tax rate kicks in at AMT taxable income of $179,500 ($89,750 for Married Filing Separate).

 • The Estate Tax “unified credit” exclusion is $5,250,000.

The 2013 inflation adjustments are identified in Revenue Procedure 2013-15.

TTFN

TAX PROS - GETTING READY FOR TAX SEASON

I have been preparing 1040s since 1972. Over the years I have developed a collection of forms, schedules and worksheets that have proven very helpful in my practice.  I offer this compilation to you for only $6.00!

Some of my “homemade” forms are given to clients to help them provide me with the information I need to properly prepare their returns. Some are used as “memos” to the client’s copy and my office file copy to back-up items reported on the returns. Others are used as attachments to the returns.

Please be aware that this is copyrighted material and is for your internal use only.

The package will be sent as a “word document” email attachment, so you may edit and revise them as you see fit to personalize them to your firm, customize them be more relevant to your particular practice or clients or specific professions, or update information for annual COLAs or tax law changes.

Here is a listing of most of the items included in the package.

1.  Supplement to Schedule A

2.  Medical Expense Worksheet

3.  Medical Expenses – Out of Pocket Analysis

4.  Charitable Contribution Listing – for non-cash contributions

5.  Charitable Contribution Record – for cash contributions (2 pages)

6.  Charitable Mileage Record

7.  Contribution Worksheet

8.  Employee Business Expenses – generic format, can be customized

9.  Employee Business Expenses – Police Officer – example of customized

10.  Conventions, Conference and Education

11.  Miscellaneous Expenses #1

12.  Miscellaneous Expenses #2

13.  Statement of Dividend Income

14.  Allocation of Expenses

15.  Automobile Expense Worksheet

16.  Auto Mileage Log

17.  Business Expenses of a Freelance Writer

18.  Business Travel Record

19.  Computer Use Log

20.  Election to Deduct Organization Expenses

21.  Employee Expense Report

22.  Employee Time Card

23.  Home Office Deduction Worksheet

24.  Cell Phone Log

25.  Cost Basis Worksheet

26.  Owner-Occupied Multi-Unit Rental Property Expense

27.  Statement of Rental Income and Expense

28.  Statement of Rental Income and Expenses – Vacation Property

29.  Multi Family Building

30.  Alternative Minimum Tax Worksheet

31.  Does Not Have To File

32.  Statement of Pension Income

 

This compilation is not just for tax pros - these forms are also helpful for taxpayers in keeping track of deductions throughout the year.

Send your check or money order for $6.00 (payable to TAXES AND ACCOUNTING, INC) and your email address to –

TAXPRO FORMS

TAXES AND ACCOUNTING, INC

POB A

HAWLEY, PA 18428

 

BTW - tax pros should become regular visitors to my other blog THE TAX PROFESSIONAL.

TTFN

WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’ – FRIDAY EDITION

“All taxes discourage something. Why not discourage bad things like pollution rather than good things like working or investment?” -  Lawrence Summers

From now on (until my tax season hiatus) the BUZZ will appear on Wednesday and Friday (instead of Saturday).

* Check out my Tax Tips “Do It Now!” and “Get Ready to Prepare Your Return” at MAINSTREET.COM.
 

* THE WANDERING TAX PRO has been honored as one of the “Top 25 Accounting Blogs of 2012” at THE ACCOUNTING DEGREE REVIEW.

I am listed in the “General” category – not “Tax”?.  Here is what they say about me -

“An avant-garde CPA {how dare you – I am not a CPA! – rdf}, Robert Flach takes a down-to-earth approach with his blog, The Wandering Tax Pro. Based in New Jersey {not any more – rdf}, readers will find some of Flach’s posts specific to the state; however, he also does a great job of tackling federal news including recent issues like the AMT (Alternative Minimum Tax), ATRA (American Taxpayer Relief Act), and the dreaded fiscal cliff. Though his writing style can be somewhat informal at times, it makes for a great read. Try his post ‘What Fools These Politicians Can Be!’ to read his thoughts pre-fiscal cliff resolution."

* The IRS has issued a full “List of IRS forms that 1040 filers can begin filing in late February or into March 2013”.  They are mostly for obscure deductions.  Only the Form 4562 for depreciation and Form 8582 for passive losses apply to some of my clients.

* Better late than never!  Kay Bell was sidetracked by the tax compromise bill, but has finally posted “Tax Carnival#110: Happy New Tax Year” at DON’T MESS WITH TAXES.

Oops - it looks like I forgot to submit a post again!

* Jamaal Solomon, E.A. follows up his Tax Organizer for Real Estate Professionals with a “Tax Organizer for Sales Representatives” at TAX FACTOR.   

 

* Nothing new here.  HUFFINGTON POST tells us that “Congress Approval Rating Lower Than Cockroaches, Genghis Khan AndNickelback, Poll Finds”.

“While Congress was able to edge out Lindsay Lohan, the Ebola virus, the Kardashians and North Korea, it failed to best other items on the list, including Genghis Khan, NFL replacement referees, used car salesmen, lice, and the band Nickelback.”

I suppose if I had to choose between the idiots in Congress and the idiots in the Kardashian family, or the Ebola virus, I, too, would choose the idiots in Congress.  Now Lindsay Lohan is another story.

* Jim Blankenship provides a detailed “History of the 401(k)", which first appeared in 1978, at GETTING YOUR FINANCIAL DUCKS IN A ROW.

* Over at TAXABLE TALK Russ Fox expounds on the fact that “The IRS Has Failed to Provide Effective and Timely Assistance to Victims of Identity Theft”, as pointed out in National Taxpayer Advocate Nina Olsen’s recent 2012 Annual Report to Congress.

* Trish McIntire warns taxpayers who want their tax refund yesterday about “Refund Loans” at OUR TAXING TIMES.

She provides some questions to ask when a tax preparer offers a refund anticipation loan (RAL).

My opinion has always been that RALs are no good.  Period.  You should not get involved with such a usurious product.  I have also always felt that tax preparers should not be offering RALs.  Period. 

Like Trish, I also warn you about companies who allege they can prepare your return and get you a quick refund without a W-2.  You cannot prepare a proper or correct tax return without W-2(s).

You want to go to a tax preparer who will properly prepare your return – not a loan shark!

TTFN

NINA OLSEN ON THE DREADED AMT

Here are excerpts from Nina Olsen’s 2012 Annual Report to Congress concerning the dreaded Alternative Minimum Tax (AMT).  I wholeheartedly agree with her recommendation!

“The Alternative Minimum Tax Corrodes Both the Tax System and the Democratic Process -

Problem

The individual Alternative Minimum Tax (AMT) was originally enacted to ensure wealthy persons paid at least some tax. Because the AMT is not indexed for inflation {it now is – rdf}, limited to high income taxpayers, or focused on tax loopholes, however, it increasingly penalizes middle income taxpayers for having children, getting married, or paying state and local taxes while allowing thousands of millionaires to pay no tax at all. The AMT is complicated and burdensome, even for those who are not subject to it. Many taxpayers must fill out the lengthy AMT form only to find they owe little or no AMT after all.

Analysis

The AMT requires taxpayers to compute their taxes twice — once under the regular tax rules and again under the AMT rules. If the ‘tentative’ AMT liability exceeds the regular tax liability, the taxpayer pays the difference as AMT. Thus, the AMT reduces the transparency of the tax system, making it more difficult for nearly everyone one to predict what they will owe.  

The AMT is difficult to repeal because it is projected to raise a large amount of revenue. However, AMT patches have always prevented the AMT from raising these projected amounts. In other words, we have a law that grants popular tax benefits (the regular tax code), another law (the AMT) that eliminates the benefits, and then another law that undoes the elimination of benefits (the patches), usually at the last minute — a legislative Rube Goldberg contraption of unnecessary complexity. In addition, the AMT reduces the transparency of the tax reform debate. For example, any revenue estimate for the proposal must be compared to the illusory revenue supposedly generated by expiration of the AMT patch under current law. Thus, the AMT corrodes the both the tax system and the democratic process.

Recommendation

Permanently repeal the AMT.”

TTFN