Tuesday, October 12, 2021

WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENIN’

 

* Patience is still needed.  Roger Russell reports “Service levels hit new lows at swamped IRS” a ACCOUNTING TODAY.  

Paper returns have piled up — there are 5.5 million Form 1040s and over 4 million business returns that have been opened but not processed. The goal is that by year-end, the paper returns will be processed. However, there are an additional 4 million returns anticipated by mid-October.”

A reminder – do not call or email your tax preparer to ask about your late refund.  There is absolutely nothing he or she, or you, can do to expedite the processing of your tax return or the issuing of your refund!

* From Professor Annette Nellen at 21st CENTURY TAXATION – “Let's Avoid Unnecessary Costs and Complexities” –

Let's look at all of the new credits and be sure they meet principles of good tax policy including equity, neutrality and simplicity. Also, let's be sure each has three good reasons why it is needed and that there is no alternative other than providing a tax rule.”

Right on, Sister Annette!  More complexity in the Tax Code we don't need.

* Kay Bell tells us “Farmers and ranchers in most of U.S. get drought tax relief” at DON’T MESS WITH TAXES.

* And Kay explains “ABLE accounts offer tax-favored savings help to disabled individuals”.

*  The JS Tax Corporation’s WEEKLY TAX TIP gives us “Five Tax-Loss Harvesting Tips”.

THE LAST WORD

Please read and share AMERICA IS NOT A CHRISTIAN COUNTRY.   

It is very important that this be understood.

TTFN












Thursday, October 7, 2021

ATTENTION NEW JERSEY TAXPAYERS

 FYI -

According to the Internal Revenue Service (highlights are mine) – 

Individuals and households affected by Hurricane Ida that reside . . . in Bergen, Essex, Gloucester, Hudson, Hunterdon, Mercer, Middlesex, Morris, Passaic, Somerset, Union, and Warren counties qualify for tax relief. 

This means that individuals who had a valid extension to file their 2020 returns, due to run out on October 15, will now have until January 3, 2022 to file. The IRS noted, however, that because tax payments related to these 2020 returns were due on May 17, 2021, those payments are not eligible for this relief.”   

And according to the New Jersey Department of the Treasury (highlights, again, are mine) - 

“. . . the New Jersey Division of Taxation is following the lead of the IRS and extending tax filing and payment deadlines for certain taxpayers impacted by Tropical Storm Ida.

This means that individuals who had a valid extension to file their 2020 returns, scheduled to run out on October 15, will now have until January 3, 2022, to file. In addition, taxpayers may be eligible for abatement of penalty and interest on underpaid tax that would normally accrue during the period of the postponement.

Be aware that if you owe Uncle Sam additional tax with the eventual filing of the 2020 Form 1040 (or 1040-SR) you will still be assessed penalty and interest on the amount due because, as the IRS announcement correctly stated, “tax payments related to these 2020 returns were due on May 17, 2021”.   A valid extension is only an extension of time to file - and not time to pay.  But, surprisingly, Uncle Phil may abate late payment penalty and interest.

TTFN









Wednesday, October 6, 2021

CORPORATE INCOME TAX RATES

 


Just a reminder.  Regardless of the rate charged - corporations do not pay federal or state income tax.

Income tax is a corporate expense – a part of overhead.  Income taxes paid by a corporation are included in the price charged to customers and clients for goods and services.  And it could also reduce the amount paid out as dividends to shareholders.  So, the individual consumer/investor ultimately pays 100% of all corporate income tax either by increased prices or reduced dividends.

I have always believed corporations should have a “dividends paid” deduction – corporations should be able to deduct from taxable income dividends paid to shareholders.  If this were instituted there would be no need for special lower tax rates for qualified dividends (although the lower rates would remain for long-term capital gains) – all dividends would be taxed as ordinary income – and really no need for Section 199a.  

And, of course, all industry-specific or general corporate loopholes and special deductions and credits should be repealed.

Am I wrong in my thinking on either issue?

TTFN










Tuesday, October 5, 2021

WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENIN’

 

*  Something to think about, from the NEW YORK TIMES – “The I.R.S. Can Register Voters as Well as the D.M.V., and Maybe Better”.

* Kay Bell, the yellow rose of taxes, starts the month off with “4 tax moves to make & deadlines to note in October 2021”.

* If you haven’t already done so, please read my post “Why I Speak Out”.  

* And don’t forget to check out this week’s ramblings at BOBSERVATIONS.

* Bob Carlson explains “What You Need To Know About The Confusing Roth IRA Five-Year Rule” at FORBES.COM.

* Jim Bkankenship tells you “How to Check Your Social Security Benefits” at GETTING YOUR FINANCIAL DUCKS IN A ROW.

It is a good idea to check your Social Security account regularly for errors.  I have had clients in the past who discovered omissions on their account.  If there is an omission, which could affect future benefits, you have a limited time to fix the FU.

THE LAST WORD

We must NEVER give Trump any respect or consideration because he is a “former President”.  We must not compound the error of putting Trump in the White House.

Remember – Trump was not elected President by the American people in 2016. He was put in the White House by the outdated and ineffective Electoral College

Trump MUST be investigated, indicted, tried, convicted, and incarcerated for his many crimes the same as any other America.

TTFN











Monday, October 4, 2021

WHY I SPEAK OUT

 

"If you're not part of the solution, you're part of the problem."  

"One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors."  

The only thing necessary for the triumph of evil is for good men to do nothing.”

Historically this blog has only touched on politics when discussing tax policy.  But for the last 6 years I have felt it necessary – actually vital – to speak out here at The Wandering Tax Pro.  This is because ignorant, incompetent and totally self-absorbed reality tv cartoon clown Donald Trump was taken seriously as a Presidential candidate, won the nomination of the Republican Party, and was put in the White House despite having lost the election by 3 Million votes.  This was, to me and other intelligent Americans, surprising and truly disturbing.

Donald Trump the man is a cancer.  He has already destroyed the Republican Party and could destroy America if not stopped.

Trump cares about absolutely nothing or no one but himself.  He is completely devoid of humanity and intelligence, does not possess a single redeeming positive human quality or value, and has never performed a single totally unselfish act in his entire adult life. 

I sincerely believe the greatest threat to America, the American people, American values, and American democracy is Donald Trump and, by embracing Trump and his lies, the Republican Party.

I will continue to vocally and aggressively oppose and denounce Trump and today’s Republican Party, here and elsewhere, until he is convicted and incarcerated for his many crimes and the Republican Party is either replaced or returned to normalcy.

As I have always said – it is not politics, it is patriotism.

TTFN












Friday, October 1, 2021

WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENIN’

 Once again, I didn’t want to end the week without any BUZZ.

* Guess what?  IRS still behind in processing returns and issuing refunds.”  So Kay Bell tells us at DON’T MESS WITH TAXES.

IRS Commissioner Charles Rettig had admitted that "despite our best efforts, pandemic-related issues are still causing us to experience record levels of activity that continue to affect operations across the agency, including the processing of tax returns and refunds."

He reported “the inventory of remaining individual tax returns is being reduced, even as the IRS is receiving 2020 returns that are coming in prior to the Oct. 15 extension deadline.”

Kay reminds us –

Until the IRS gets everything back into more normal pre-COVID ranges, we're all stuck with the frustration caused by the large amount of manually processed returns, limited information on tax return processing status, refund delays, and the difficulty reaching IRS employees, especially when seeking help in connection with new tax issues from recent legislation.”

What does Kay recommend?

. . . patience. And maybe a yoga and/or meditation class or app.”

* Ken Berry (not the actor – I do believe he has gone to his final audit) discusses “2021 Tax Deductions for Self-Employed Business Vehicles” at CPA PRACTICE ADVISOR.  

Remember - employee business expenses are no longer deductible on Schedule A.

* Don’t forget to check out my latest ramblings at BOBSERVATIONS.

* The final deadline for timely filing 2020 tax returns is October 15th.  If you have waited this long Russ Fox tells you to “Prepare to Panic!” at TAXABLE TALK

* Davie Rae explains “How Will 10 Types Of Retirement Income Be Taxed?” at FORBES.COM.

THE LAST WORD

The MAGA morons who attacked the capital on January 6th are NOT patriots.  They are traitors and terrorists, and should be treated as such by the public and the courts – including all those who instigated, incited and facilitated the attack.   

Supporting and defending these terrorists is the same as supporting and defending Al-Qaeda after 9/11.  There is absolutely no difference!

If you support or defend these traitors and terrorists or attempt to downplay the attack you, too, are a traitor to America, American values and American democracy.  This includes deplorable and despicable Republicans in Congress.

TTFN












Monday, September 27, 2021

WHAT THE TAX PREPARATION INDUSTRY REALLY NEEDS


Once again, the issue of tax preparer regulation is in the news.  There has recently been talk of giving the IRS the authority to regulate all preparers via proposed economic and budget legislation and of a revival of the Registered Tax Return Preparer (RTRP) program that was done away with by the US Tax Court in January of 2013.

The Internal Revenue Service already regulates preparers, those permitted to “practice” before the IRS, like CPAs, attorneys and Enrolled Agents, and “unenrolled” preparers, via Circular 230.  

I do not oppose requiring PTIN-holders to complete a minimum number of CPE hours in federal income taxation to maintain their PTIN.  In fact, I support this.  It is vital that every sincere and competent paid Form 1040 tax preparer take CPE in income taxation each year to keep up-to-date on tax law changes.  I have taken on average at least 16 hours of CPE in federal income taxation each year consistently for decades. 

I do oppose requiring all paid tax preparers to take a government-administered competency test, either one time or annually, to maintain their PTIN and continue to be allowed to prepare tax returns.  I would only support a one-time initial competency test if there was a grandfathering exemption for tax preparers who have been consistently preparing 1040s for at least 5 years.  After 50 tax seasons of preparing 1040s without incident I have no intention of taking a test now to prove I know what I have been doing for all these years..

I do support voluntary Form 1040 competency designations that recognize and identify the competence of unenrolled 1040 preparers.  Such a program would benefit the tax preparation industry, the taxpayer public, and the federal government. 

Currently any Tom, Dick or Harriet can hang out a shingle as a “tax preparer,” regardless of education or ability.  And, thanks to tax preparation software, any Tom, Dick or Harriet, with absolutely no training, experience or knowledge, can simply purchase a tax preparation software package and try to pass themselves off as a “tax professional”.  The taxpayer public does need a way to determine the relative competence of a potential tax preparer.

I would support the Internal Revenue Service establishing an RTRP designation as part of a voluntary two-tiered certification program that includes the current Enrolled Agent designation.

A voluntary Form 1040 competency designation would allow qualified “unenrolled” preparers the acknowledgement they deserve based on their knowledge and experience. Allowing CPAs and attorneys who prepare tax returns to become an RTRP under the new voluntary program would provide these professionals with a credential in 1040 preparation, and therefore provide recognition of their competence and currency in preparing individual income tax returns.  The CPA designation alone does not indicate the holder has any competence or currency in 1040 preparation.

A preparer, including CPAs and attorneys, would first apply for and be granted the RTRP designation by way of a test that is limited to Form 1040 preparation.  Minimum annual CPE in federal tax topics would be required once the RTRP designation was granted.  

After a year, an RTRP could elect to take a second test, with emphasis on taxpayer representation issues and other advanced topics, to become an ETRP (Enrolled Tax Return Preparer), a new title for the current Enrolled Agent (EA), and be permitted to “practice” before the IRS.  CPAs and attorneys who become RTRPs would have no need to go on to become an ETRP, as they are already permitted to practice before the IRS.

What I strongly believe should be done is to create a national board consisting of representatives of all current tax return industry membership organizations to issue and maintain a universally accepted independent voluntary professional designation – CTRP for Certified Tax Return Preparer - based on testing and maintained by required annual continuing professional education in federal taxation.

In the case of all other professions, like CPAs, attorneys, architects and medical doctors, the maintenance of the professional certification designation is done by an independent industry-based organization such as the American Institute of CPAs, the American Bar Association, the American Institute of Architects, and the American Medical Association.  The new 1040 credential would be administered by the National Institute of Certified Tax Return Preparers.

The Institute would be an independent, nonprofit organization established solely for the purpose of issuing, maintaining and promoting the CTRP designation. Its governing board would consist of a representative (perhaps the executive director or board president) of the National Association of Tax Professionals, the National Society of Tax Professionals, the National Society of Accountants, the AICPA, the American Bar Association, and any other appropriate tax-related membership organization, and at least two independent “previously unenrolled” practicing tax professionals.

In order to be designated as a CTRP, a candidate must possess a valid PTIN and pass a competency test on federal 1040 tax law. A “grandfathering exemption” from this test would be allowed for:

• Tax professionals who have been consistently preparing federal income tax returns on at least a half-time basis (during the traditional tax filing season) for at least five full years and who have successfully completed a total of 48 hours of continuing professional education in federal taxation in the three-year period (36 months) prior to applying for the designation.

• Tax professionals who have been licensed or certified to prepare income tax returns under a required state program that includes a competency test.

• Individuals who have successfully completed a certificate or certification program in federal income taxation offered by an accredited educational institution or a qualified membership organization that includes testing, like the tax programs of Accreditation Council for Accountancy and Taxation (ACAT).

CTRPs would need to renew their designation every three years by submitting proof of completion of a total of 48 hours of CPE in federal taxation during the three-year period, with at least eight hours each year. The 48 hours must include three hours of “tax updates” per year (a total of nine hours) and one hour of “ethics updates” during the three-year period.

Qualified CPE providers would include accredited educational institutions and organizations/companies accepted by the National Registry of CPE Sponsors. The NICTRP would not need to separately approve CPE providers.

CPAs and attorneys would be welcome to apply for voluntary certification under the National Institute of CTRPs as a way to acknowledge and identify their knowledge of and currency in 1040 preparation.

With the institution of such a voluntary certification program taxpayers will be able to identify true “tax professionals” from among the choices they are faced with.  More accurate and competent returns will be prepared. And competent, experienced and ethical “previously unenrolled” tax preparers will finally receive the recognition and respect that they deserve. Everyone benefits.  

So, fellow tax pros, what do you think? 

 TTFN
















Friday, September 24, 2021

MY TAKE ON CURRENT TAX PROPOSALS


Kelly Phillips Erb, the internet’s TAXGIRL, recently posted “What You Need to Know About the Current Federal Tax Proposals” at her BLOOMBERG.COM blog.

It is very important to note that, as the title of her post indicates, these are “proposals” and NOT current tax law. 

KPE lists the major proposals for individual taxpayers –

“* The top individual income tax rate would revert to 39.6% for single filers making above $400,000, head of household filers above $425,000, and joint filers reporting more than $450,000. Without any Congressional action, that would still happen in 2025 (because of an earlier reconciliation).

* The top capital gains tax rate for those same high-income taxpayers would increase from 20% to 25% for all sales and transactions closing after September 13, 2021.

* The temporary expansion of the child tax credit—and advanced payments—would be extended through 2025. Additionally, changes to the Earned Income Tax Credit (EITC) and the Child and Dependent Care Tax Credit (CDCTC) would become permanent.

* There would be a 3% surtax on modified adjusted gross income over $5 million for single individuals, heads of household, married couples filing jointly, and surviving spouses. The surtax would kick in at $2.5 million for married couples filing separately.

* A $10 million limit would apply to Individual Retirement Accounts (IRAs) contributions—allowing for no further contributions for married couples with taxable income over $450,000 or singles with taxable income over $400,000. The $10 million threshold would also accelerate required minimum distributions for those accounts.

* The proposal would also disallow the so-called “back-door” Roth IRAs by eliminating conversions for IRAs and 401(k) plans for single filers making over $400,000, head of household filers above $425,000, and for joint filers reporting more than $450,000.

* The proposal would also modify the wash sale rules to include commodities, currencies, and digital assets.”      

In addition –

The top corporate tax rate would increase to 26.5% from 21% for corporate income above $5 million. (The 2017 law cut the rate for large corporations from 35% to 21%.) The tax rate drops to 18% for small businesses with income less than $400,000 and would remain 21% for all other businesses.”

Here are my thoughts on these proposals.

* I completely reject the Democratic Party tax policy of taxing the rich simply because they can afford it.  I am against punishing success and entrepreneurship.  I oppose the increased top tax rate, increased capital gains tax rate, and income-based surtaxes and surcharges.

The way to make sure the “wealthy” pay the proper tax is to eliminate all the special-interest tax deductions, credits, exclusions, and loopholes.

* I oppose the enhancements to the various “welfare” tax credits.  The one and only purpose of the US Tax Code is to raise the money necessary to fund the government.  It should NOT be used to distribute government welfare and other benefits, for “social engineering”, or to redistribute wealth.

I am not saying the government shouldn’t provide financial assistance to the working poor and college students, provide encouragements for purchasing health insurance, making energy-saving purchases and improvements and other ‘worthy’ actions.  What I am saying is that such assistance and encouragements should not be distributed via the Form 1040.

In addition, these tax credit changes add excessive complexity to an already complex Tax Code - and refundable credits encourage and result in excessive tax fraud

* I oppose limitations on investment in IRA accounts.  Savings and investment must be encouraged.

* As for the changes to the corporate tax rate, I am glad the rate is lowered for “small business corporations”.  The GOP Tax Act change to a flat 21% tax rate resulted in a significant tax increase for many smaller corporations. 

I do not necessarily oppose the increase in the top corporate tax rate.  However, I do believe corporations should be allowed a “dividends paid” deduction – subtracting dividends issued to shareholders from corporate net taxable income.  This would do away with the double-taxation of corporate profits, and encourage corporations to pay out dividends to reduce tax liability instead of trying to be “creative” a la Enron.  In addition to allowing for this deduction on corporate returns I would repeal the lower capital gains tax rates for individuals on qualified dividends (while keeping the lower rates for long-term capital gains) – as there would no longer be a reason for this.

So – I have given you my thoughts on the proposals.  What are your thoughts?

TTFN














Thursday, September 23, 2021

WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENIN’

 

* At the interestingly named TAX BUZZ blog Spencer Wilson, EA provides a lesson in “The Tax Benefits of Health Savings Accounts”.

* The IRS announces “New mailing address for some Western states as Fresno, California, paper tax return processing center closes”.   

* Check out my latest commentary at ACCOUNTING TODAY – “The SALT limitation from a different perspective”. 

What do you think?

* And also check out this week’s ramblings at BOBSERVATIONS.

* Also at ACCOUNTING TODAY, Julio Gonzalez discusses “The tax troubles of travelling entertainers”.

*  Continuing a bad practice that doesn’t work that well – Kay Bell reports “3 collection agencies awarded new IRS tax debt contracts”.

Private collection agencies have absolutely no concern about the legitimacy of the debt they try to collect - they only get paid if they collect.  Unlike the IRS, they have no interest in verifying the validity of alleged outstanding debt.  And I do believe studies have shown they are not really that effective in collecting debt.

TTFN












Tuesday, September 14, 2021

WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENIN’

 

Finally – a substantive BUZZ!

* Jeff Stimpson reports that “Many tax pros are undercharging clients: NATP” at ACCOUNTING TODAY.

I know I am, and have been for decades.

* Speaking of the National Association of Tax Professionals (NATP) fee survey - it once again proves that the most expensive option for choosing a tax professional to prepare your individual Form 1040 is the CPA.  The average fee for preparing a basic Form 1040 charged by a CPA is 15.7% higher than the fee charged by an Enrolled Agent (EA), who is more qualified and trained in tax preparation than a CPA, and a CPA charges 43.4% more than an “unenrolled” preparer (no initials).

No surprise here.

And remember, just because a person has the initials CPA after his or her name does not necessarily mean that he or she is knowledgeable, trained or experienced in preparing 1040s.

FYI, the average cost of preparing a basic Form 1040 (Schedules 1-3 only) in the northeast (where I am from) for 2021 was $136.00.  The average cost of a Form 1040 with Schedules 1-3 and a Schedule A was $187.00.  These numbers are for the federal return only and do not include the fee for preparing the state return.

* Some good advice from Kay Bell, the yellow rose of taxes, at DON’T MESS WITH TAXES – “Moving? Let the IRS know.”

* There is a new format for BOBSERVATIONS.  Click here to check it out.

*  TaxGirl Kelly Phillips Erb deals with the question “How Long Do You Need to Keep Your Tax Records?” at her BLOOMBERG.COM blog.

I have always told my clients and readers that you should keep the paper copy of your Form 1040, or 1040A, plus all supporting Schedules and Forms, and copies of all your Form W-2s, forever.  This provides a permanent record of your financial history.  You never know when the information on a prior year’s tax return or W-2 will come in handy for a variety of tax or financial related reasons, or just to satisfy personal curiosity. 

* The NJ Division of Taxation’s website identifies “NJ Tax Relief for Hurricane Ida Victims” (highlight is mine) -

Taxpayers affected by Hurricane Ida now have until January 3, 2022, to file their New Jersey tax returns and submit payments for any return and/or payment, including estimated payments, which have either an original or extended due date between August 26, 2021, and before January 3, 2022. This means that individuals who had a valid extension to file their 2020 returns, due to run out on October 15, will now have until January 3, 2022, to file.”

* A timely “Weekly Tax Tip” from JS TAX CORPORATION – “Reminder: Third Quarter Estimated Taxes Due”.

* Another item that comes as no surprise to me.  Michael Cohn reports “$16B in EITC payments in 2020 may have been improper” at ACCOUNGING TODAY.

A new report, released Thursday by the Treasury Inspector General for Tax Administration, said the IRS estimated that 23.5% ($16 billion) of EITC payments were issued improperly in fiscal year 2020.”

Refundable tax credits are one of the biggest sources of tax fraud.  And the US Tax Code should not be used to distribute social welfare program benefits. 

* And also at ACCOUNTING TODAY another item from Jeff Stimpson.  The IRS reminds us that “COVID tests are eligible medical expenses” -

As giant retailers prepare to offer cheap at-home COVID-19 tests in the wake of President Biden’s new vaccine rules for employers, the Internal Revenue Service has sent a reminder that the cost of home testing for COVID-19 is an eligible medical expense.”

Of course, you must be able to itemize to claim it, and your total deductible medical expenses for the year must exceed 7½% of your AGI.

TTFN












Saturday, September 11, 2021

NEVER FORGET

 


POLICE OFFICER MAURICE BARRY
PATH EMERGENCY SERVICE UNIT
POLICE OFFICER SHIELD #1038

A Port Authority officer for 16 years, Maurice "Moe" Barry, 48, was assigned to the PATH commuter train system. The resident of Rutherford, NJ, upon hearing the reports of the terrorist attacks, was one of the first on scene when he rushed from Jersey City to Lower Manhattan and then into the North Tower to help in the rescue efforts. As thousands fled the searing flames and smoke of the Towers, Officer Barry was attempting to reach trapped and frightened workers on the upper floors. The last time he was seen, he was on his way to the higher floors to get people out.
.
Moe had a history of heroism - he was involved in rescue efforts during an airplane crash at La Guardia airport; he once climbed a bridge to retrieve the body of a person electrocuted there; he was involved in the rescue effort during the 1993 bombing of the World Trade Center; and he rescued a woman from her home, by boat, during Hurricane Floyd. Moe was also a volunteer for the Rutherford Ambulance Corps.


















Wednesday, September 8, 2021

WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENIN’

 

* Here is “a tax planning opportunity you may not be aware of” from S. Joseph DiSalvo and Marie Madarasz at THE STREET - “Employer Stock in your401(k)? You May be Sitting on a Big Tax Break”.

* Jim Blankenship explains “How do I claim Social Security from my ex’s earnings?” at MARKETWATCH.COM.

* Michael Cohn tells us “IRS updates per diem rates for travel expenses for 2021-2022” at ACCOUNTING TODAY.

* Also at ACCOUNTING TODAY Jeff Stimpson discusses “Tax relief for disaster victims in California, Tennessee”.

TTFN












Monday, September 6, 2021

Friday, September 3, 2021

WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENIN’

 

* At the interestingly titled TAX BUZZ blog Gordon McNamee answers the question “Tax Avoidance vs. Tax Evasion - What's the Difference?

Denis Healey, former British Chancellor of the Exchequer, once correctly answered the question this way –

The difference between tax avoidance and tax evasion is the thickness of a prison wall”. 

* Kay Bell reports “IRS gives all Louisiana taxpayers Hurricane Ida tax relief” at DON’T MESS WITH TAXES -  

“ . . . the IRS announced that its offering tax relief to Ida victims. That includes pushing the Oct. 15 extended filing deadline (and other tax dates) to Jan. 3, 2022.

The tax relief applies to any area designated by the Federal Emergency Management Agency (FEMA) as qualifying for individual or public assistance due to damages from Hurricane Ida. Right now, that's the entire state of Louisiana.

However, adds the IRS, taxpayers in Ida-impacted localities in neighboring states that FEMA ultimately designates as major disaster areas also will qualify for the same tax relief.

* The NSTP BLOG explains “Taxpayers Can Protect Themselves from Scammers by Knowing How the IRS Communicates” and identifies in detail the ways IRS contacts taxpayers.

TTFN  














Wednesday, September 1, 2021

JUST SO YOU KNOW


As a general rule I oppose traditional Democratic tax policy – punishing ambition and success and excessively taxing the rich simply because they can afford it, and using the Tax Code for social engineering, to redistribute wealth and to distribute government social welfare benefits.
 
I do not necessarily oppose the government providing social welfare benefits where appropriate – just using the Tax Code to distribute these benefits
 
FYI - I also oppose unique industry-specific tax loopholes and "tax expenditures".  I believe the one and only function of the US Tax Code is to raise the money necessary to fund the government, fairly and equally.  Period.
 
That said, I vocally and aggressively oppose, denounce and disavow the current Republican Party and will actively campaign to oppose all Republican candidates at all levels who do not vocally and aggressively oppose, denounce and disavow Trump and his lies.  Not because I am a Democrat or a liberal – I have supported and voted for Republican, Democratic and Independent candidates at all levels in the past based on the candidates and the issues - but because I am intelligent, I have a conscience, and I am a patriot.
 
The biggest danger to the future of America today is Trump and his core cult of ignorant racists, and today’s Trump-embracing Republican Party who court and pander to these ignorant racists.
 
TTFN
















Tuesday, August 24, 2021

TWENTY YEARS!

Oi vey!  And OOPS!  The day has come and gone and I forgot to acknowledge it.

The very first post of THE WANDERING TAX PRO was published on Sunday, July 22, 2001.  So, I have been writing TWTP consistently, except for the annual 2½ month tax filing season hiatus, for 20 years.

I first learned about “blogging” at a presentation on “The Future of Easy Web Site Design” by Internet Consultant Lenny Charnoff at the annual National Association of Tax Professionals National Conference in New Orleans on July 13, 2001.    

I originally decided to write a blog to provide year-round advice and information to my existing clients and to promote my tax preparation and accounting services. Back then I was still soliciting new clients. I have now officially retired after completing 50 tax seasons (actually I have one more 1040 left to do before it is truly official).  

Here is the very first post –

WELCOME TO THE NEW WEBLOG OF ROBERT D FLACH, THE WANDERING TAX PRO!

+++ The ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION ACT OF 2001, signed into law by President Bush on June 7, 2001, has made Section 529 state college savings plans (named for the section of the Internal Revenue Code) an even better way to save for your child’s education.

Earnings on money invested in Section 529 Plans grow tax-free.  Beginning in 2002, withdrawals from state-sponsored plans will be tax-free is the money is used to pay qualifying college expenses.

+++ I recently returned from the annual conference of the NATIONAL ASSOCIATION OF TAX PROFESSIONALS, held at the Hilton Riverside in New Orleans, where the keynote speaker for the opening session was IRS Commissioner Charles Rossotti 

This was the first time I travelled without having a paper airline ticket in advance.  I had no problem at check-in.

As I was walking down Bourbon Street heading for dinner at Tony Moran’s PASTA & VINO, I passed a nude bar where the hostess was offering passers-by the opportunity to “wash the girl of your choice”.  Good clean fun, “Nawlins” style!

While in the Crescent City I saw “CHERRIES JUBILEE”, a delightful comedy written by four local women, at the intimate and very company SOUTHERN REP theatre on the third level of the Shops At Canal Street upscale mall.  The show had the funniest and most innovative way to dress the set between scenes.”

An interesting coincidence.  The second post, dated July 23, 2001, talked about “advance refund checks” – Dubya’s first rebate check.  And in 2021 Americans received another “recovery rebate”, aka the Economic Impact Payment.  And that second post stated –

It is important to save the notice you receive from the IRS with the amount of your advance refund check.  The amount of the advance refund received will be needed to complete your 2001 federal tax return.”

Another 20 years?  Hey, its possible.

TTFN










Thursday, August 19, 2021

WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENIN’


* Some interesting news about what had been the infamous “47%” from Bloomberg at MSN.COM – “U.S. Households Paying No Income Tax Hit 61% of Total Last Year” – 

Nearly 61% of U.S households paid no federal income taxes during pandemic-stricken year of 2020, because of declines in income and boosts to government subsidies that wiped away tax liabilities, according to data from the Urban-Brookings Tax Policy Center.

The number of households owing nothing came in at 106.8 million, up from 75.9 million in 2019, the study, released Wednesday, showed. The 60.6% proportion for last year compares with 43.3% over the five years before the pandemic struck.”

I would be interested to know how many Americans actually “made a profit” by filing a tax return due to refundable credits.

* Kay Bell provides “6 Advance Child Tax Credit questions still being asked … and the answers!” at DON’T MESS WITH TAXES.  

* And Kay identifies “Tax-smart ways grandparents can help pay for college”.

* Ian Berger tries “Making Sense of the 401(k) Multiple Plan Limits” at THE SLOTT REPORT.  

* From Alexis Leondis at ACCOUNTING TODAY – “Working from home? The New York State taxman doesn’t care” (highlight is mine) -

New York, famed for its aggressive tax policies, is targeting those who were employed by companies based in the state but worked remotely during the pandemic. According to the state, nonresidents who telecommuted are still on the hook for New York state income taxes even if New York offices were closed due to COVID-19.”

THE LAST WORD

Today the difference between the Democratic Party and the Republican Party is not ideological - liberal vs conservative.

Today the difference is intelligence (Democrats) vs ignorance (Republicans).

Today's Republican Party has truly become the Party of morons and racists.

Today’s Republican Party stands for Donald T Rump.  It stands for ignorance, racism, treason and lies.  Nothing else.

TTFN