Monday, May 27, 2024

Friday, May 24, 2024



* TaxGirl Kelly Phillips Erb wants you to subscribe to the weekly FORBES.COM “Forbes Tax Breaks” email newsletter.  

* Russ Fox discusses an issue that I, too, have dealt with (in my case concerning separate returns) in “The ‘Joy’ of 1959 Technology” at TAXABLE TALK.

* At ACCOUNTING TODAY Michael Cohn reports good news for tax pros – “IRS cuts PTIN fees” -

“ . . . the application and renewal fee would be reduced to $11, plus an extra $8.75 for payment to a third-party contractor. That was considerably lower than the 2023 fee of $30.75 for renewing or obtaining a PTIN. The move came after a federal district court ruled last year in the case of Steele v. United States that the IRS was charging excessive PTIN fees from fiscal years 2011 to 2017.”  

I still do not understand the need the need for a payment to a third-party contractor.

* More disaster relief – “IRS announces tax relief for taxpayers impacted by tornadoesin Ohio; various deadlines postponed to Sept. 3, 2024”.

* And Kay Bell reports “Iowans hit by April 26 tornadoes get disaster tax relief”.


Friday, May 10, 2024



*  Kay Bell lists “10 tips to help you deal with an IRS tax notice” at DON’T MESS WITH TAXES. 

Good advice from Kay.  However, she fails to mention that if you receive a notice for a return prepared by a tax professional send/give the notice to the preparer immediately.

And as for item #7 – I personally doubt you will get much help by calling the IRS, if you can get through to an actual person.  Questions about the notice should be directed to your, or a, tax pro.

* A client (from before I retired) shared with me Michelle Lodge discussion “The Importance of IRS Form 8606 For Heirs of IRAs” at FORBES.COM.

Of special note is the section on “Tax Implications for IRA Beneficiaries”.  Taxpayers who inherit an IRA account should contact the Executor of the Estate to find out if the deceased taxpayer had been filing a Form 8606 for IRA distributions received prior to passing – and get a copy of the last Form 8606 filed if the answer is yes. 

The beneficiary not only inherits the IRA account but also any carryforward basis.  A “basis” in an IRA comes from previously non-deductible contributions, either directly to the IRA or from any retirement account that was rolled-over into an IRA.

If you have ever filed a Form 8606 and have a carryforward basis you should include a Form 8606 with every subsequent tax return, even if you did not receive a distribution from your IRA.  This way you will not forget the carryforward basis and if you change tax preparers the new one will know that a carryforward basis exists and will properly apply it to future distributions.

Of course, I take extreme exception to her advice to “always work with a knowledgeable CPA”.  For years I have been saying that the correct advice is “always work with a knowledgeable tax professional”!

* Nick Defenthaler discusses “Roth IRA Conversions & IRMAA: Don't Get Hit with Surprise Medicare Surcharges” at THE STREET.

The potential of an IRMAA needs to be considered in many tax scenarios – including whether to file joint or separate returns.


Tuesday, May 7, 2024



* Were you following Russ Fox’s annual “Bozo Tax Tips” series at TAXABLE TALK? 

* Kay Bell tells us “Fake business tax credits, bogus charities, and phishing and smishing all make the2024 IRS Dirty Dozen list” at DON’T MESS WITH TAXES.

* And Kay was also “Checking out the 2023 tax returns of Biden and Harris”.

Of course we will never see moron Trump's tax return.

* Michael Cohn reports “IRS free tax pilot enticed 140K taxpayers” at ACCOUNTING TODAY -

“ . . . 90% of respondents ranked their experience with Direct File as excellent or above average, and 90% of the respondents who used customer support also ranked the experience as excellent or above average.”

I have been calling for this type of program for years.  I look forward to its universal availability next tax season.

Kay Bell also discusses the pilot program in “Direct File usage exceeded expectations, but future of IRS-run free tax prep program unclear” -

While Ways and Means Democrats were receptive to Direct File and Yellen’s comments, GOP members were less enthusiastic. Republicans questioned the cost of the program, as did some of the private sector tax software companies.”

It is no surprise that commercial tax preparation software companies oppose a free Direct File program – it is bad for business.  And no surprise it is opposed by GOP politicians – either because they oppose anything, however good or appropriate, that is backed by Democrats and, more cynically, because they are probably financially backed by the software companies.




Monday, May 6, 2024



As I contemplate the possibility of retiring from writing about income taxes I am making a special offer to my fellow tax preparers.

I will send you, as an email Word attachment, my recently updated and expanded collection of Tax Professional Forms, Schedules, and Worksheets for only $5.00.

I have created these forms, schedules, and worksheets over my 50+ years as a tax pro.  Many are given to clients to compile information needed to prepare their tax returns.

Be advised these forms are copyrighted material and for use in your tax practice only.

Send your check or money order for $5.00, payable to TAXES AND ACCOUNTING, INC, and your email address to –


Go here to see what is included in this compilation -



Tuesday, April 30, 2024



Sadly, the discussion of tax law and tax “reform” never involves issues of fairness and equity in the law.  It only involves political agendas.

There have existed for years several true inequities in the tax law – some that penalize taxpayers and some that erroneously benefit taxpayers.

For example - the way Social Security, gambling activity, and hobby income is taxed, the disallowance of legitimate required “out of pocket” employee business expenses, the double taxation of corporate dividends, limiting the deduction for state and local taxes, using the Tax Code to distribute social welfare benefits, and the deduction for depreciation of buildings (real property).

If you combine the current methods of taxation of Social Security benefits and gambling activity it is possible that a taxpayer who has $1,000 in gambling winnings and $2,000 in gambling losses – who has actually lost $1,000 – can end up paying federal income tax on $1,850.

Social Security benefits should be taxed the same way other retirement account income is taxed, with an annual allowance for the recovery of employee contributions.

Legitimate “out of pocket” expenses directly related to the production of all classes of income should be allowed as an “above-the-line” deduction that reduces AGI – just like the expenses of a self-employed individual and expenses related to rental income reduce AGI. This includes gambling losses, the expenses of an income-producing hobby, the income or principal based management fees charged on a brokerage account (and perhaps investment interest), necessary or required employee business expenses, and legal fees for all types of settlements and judgements.

Expenses claimed as an Itemized Deduction on Schedule A should be limited to indirect “general” costs of living – like medical expenses, state, local and foreign taxes, mortgage interest, charitable contributions, and casualty expenses. 

So, what do you think?


Monday, April 15, 2024



Please remember, absolutely NOTHING is more important for the future of America, and ultimately the world, than making sure Trump is NOT returned to the White House and today’s Trump-embracing and Religious Right-controlled Republican Party does NOT gain control of Congress.

The greatest enemies facing America. True American values, and American freedoms and democracy today are NOT Russia, China, or radical fundamentalist Muslims – it is Trump, the Republican Party, and radical fundamentalist (actually fake) Christians.

I very sincerely believe that if Trump wins and/or Republicans gain control of Congress it will be the beginning of the end of America as we know it.

It is vital that EVERY intelligent and patriotic American vote against EVERY Republican candidate in EVERY election at EVERY level in 2024!