Tuesday, June 4, 2019
WHAT’S THE BUZZ, TELL ME WHAT’S A HAPPENNIN’?
* The big tax news last week was, as Kelly Phillips Erb tells us at FORBES.COM, “IRS Releases New Draft Form W-4 To Help Taxpayers Avoid Withholding Surprises”.
I have not yet reviewed the new draft form in detail – but it looks confusing.
As Kelly reports, “The revised form W-4 will not be effective until 2020”.
The recent tax filing season proved that the current federal withholding system is outdated. Until the withholding situation, and the W-4, is properly figured out my advice to ALL taxpayers in ALL situations is to claim “Single-0” or “Married, but withheld at higher Single rate-0” on ALL W-4s.
* Roger Russell shares the thoughts of tax professionals on “Tax Season 2019: Lessons Learned” at TAXPRO TODAY.
“In a survey of tax professionals by the National Center for Professional Education Fellowship, 74 percent of respondents said that this filing season was more difficult than last year, with over half citing the Section 199A pass-through deduction as the No. 1 issue. Ninety-six percent said they were negatively affected by the February release of final 199A regs.”
Clearly a tax pro’s experience with the season depended on the types of clients he or she has and the issues involved with the returns prepared. I certainly did not find the season “painful”, as one tax pro’s response indicated. Many returns were simpler, considering the inability of most of my clients to itemize due to the increased Standard Deduction and the loss and limitation of deductions. While I may not agree with the changes on a philosophical level, I did not complain about the reduced work and agita that resulted.
Two good observations from fellow tax pros in the article –
“We also learned that there’s a difference between a tax preparer and a tax professional. . . . A true tax professional took the time to go over the return and explain to clients how they gained from tax reform, and how they lost.”
I have always provided a detailed “The Word” memo with a finished return explaining the differences between the current return and the previous year’s return and what needs to be done going forward.
And perhaps most important –
“This filing season underscores the need for professionals who understand what a return should look like without having to rely on their software.”
Sadly, many tax preparers today are merely data entry clerks and not true tax professionals.
* Speaking of the effect of the GOP Tax Act, over at DON’T MESS WITH TAXES Kay Bell posts about a recent study that concludes “TCJA produced little economic benefit in first year”
“It's May 22 report on the economic effects of the TCJA found that the most expansive tax reform since the major 1986 Tax Reform Act is that the 2017 bill basically had a negligible effect in its first year on the U.S. economy.”
Most of my clients actually paid less federal income tax under the GOP Tax Act, but unfortunately, due to the “IRS withholding FU”, either got smaller refunds or owed more tax, some much more, when filing their 2018 returns.
* FYI, the IRS issued Rev. Proc. 2019-25 with the calendar-year 2020 inflation-adjusted figures for the annual HSA contribution limits. It also includes the minimum deductible amounts and maximum out-of-pocket expense amounts for high-deductible health plans.
* Attention Tax Pros - one last try at a monthly newsletter for tax professionals to share information and resources and encourage discussion of issues of interest and importance to the tax preparation industry. Check out the June 2019 issue ofTHE TAX PROFESSIONAL. Your thoughts and comments are welcomed and solicited,
* Jim Blankenship asks “Are you leaving Social Security benefits on the table?” at GETTING YOUR FINANCIAL DUCKS IN A ROW.
“It happens more often than you think. Without a good understanding of the rules, you might make a move that results in leaving Social Security benefits on the table.”
THE LAST WORD
It is literally impossible for me to find anything positive to say about Donald T Rump.
He is devoid of humanity. He is incapable of sympathy and empathy. He is totally self-absorbed and cares for nothing or no one but himself.
He has absolutely no redeeming qualities. He is certainly NOT funny, generous, smart, knowledgeable, kind, caring, concerned, compassionate, honest, loyal, trustworthy, dependable, or competent.
He is not a good husband, a good father or a good friend.
He is a totally worthless piece of garbage.