Sunday, January 31, 2021


Anyone who believes Trump knows his ass from a hole in the ground about anything is a moron.
Anyone who believes Trump cares about America or the American people or the Republican Party is a moron.
Anyone who believes Trump cares about conservative or Christian ideology and values is a moron.
Anyone who believes Trump cares about anything but himself is a moron.

Anyone who actually listens to, believes, supports, and follows Trump is either a moron or a racist or both.

It is obvious to anyone with any intelligence that Trump is an ignorant, racist and corrupt narcissist, sociopath and wannabe dictator.
The leaders of the Republican Party and Republicans in Congress who refuse to totally denounce and disavow Trump because they are afraid of offending and antagonizing his core cult of ignorant racists have totally abandoned all integrity, credibility and honor and have proven they have no conscience.  They do not care about political ideology but only about power. The new definition of Republican - "A person who claims to have moral standards or beliefs to which his or her behavior does not conform." 

The Republican Party has become the embodiment of Trump – ignorant, racist and without a conscience.  It is no longer a legitimate ideological political party. 
We must unite America – true conservative and traditional Republican and Democrat and Independent Americans – by denouncing, disavowing, indicting, prosecuting, convicting, and imprisoning Trump.   

Friday, January 29, 2021


The last BUZZ until mid-April (after the 2021 tax season).

Be sure to return here to TWTP on Monday, February 1st for what you have been waiting a year for.

* There is a new “wrinkle” to the Earned Income Credit for 2020.  Kelly Phillips Erb explains the EIC in detail in “Here’s What You Need To Know About The Earned Income Tax Credit In 2021”.

The post identified the new wrinkle – “as part of COVID-related tax relief, you can elect to use your 2019 earned income to figure the EITC for 2020 if your 2019 earned income is more than their 2020 earned income. 

* Speaking of the Earned Income Credit - there will be a delay in processing returns in the following circumstances:

- The taxpayer uses 2019 income to calculate the 2020 Earned Income Credit and/or Additional Child Tax Credit, as per the latest stimulus package. The IRS must verify that the amount of 2019 income reported on the 2020 return matches what was reported on their 2019 return.

- The taxpayer claims the Recovery Rebate Credit on their 2020 federal return.  The IRS must verify the amount of EIPs sent to the taxpayer match the amounts reported on the 2020 return.

Apparently, the amount of delay depends on the number of returns that are being processed at any one time.

There are always delays in issuing refunds on returns that include the EIC and the ACTC, due to the PATH Act.

Refunds in general will be delayed this year, regardless of what is claimed on the return, as the IRS will not begin to process returns until February 12th this year.

And IRS processing of 2019 returns and calendar year 2020 correspondence is still be backed up.  It is more important than ever to carefully review IRS correspondence – much is wrong and based on outdated information.  Be sure to give/send your tax preparer any correspondence you get from “Sam” immediately.

* Andy Ives discusses “'Compensation for IRA Eligibility” – what does and does not qualify – at THE SLOTT REPORT.   

* William Perez has a wealth of information at THE BALANCE.  Click here and scroll down a bit to check out the posts listed under “Latest From William Perez, EA”.

* No BUZZ would be complete without something from Kay Bell, the yellow rose of taxes, author of the DON’T MESS WITH TAXES blog.  In a recent post Kay talks about “Tax tips for members of the U.S. military”.

The hypocrisy and despicability of most of the Republicans in Congress is truly disturbing.
It is also interesting how the 2016 Republican presidential candidates who railed against Trump during the primary campaign – Cruz, Rubio and Paul – have become the staunchest supporters, enablers and defenders of Trump and his lies. 
Trump supporters among the general public are clearly a “basket of deplorables”.  And the current Republicans in Congress, with too few exceptions, are also in the basket.

Monday, January 25, 2021


FYI – I had hoped to be able to discuss what is new on the 2020 New York state income tax returns – Forms IT-201 and IT-203 – by now.  But, according to the New York Department of Taxation and Finance website, “"2020 income tax forms will be available mid-February 2021."  So, since I cannot actually review the 2020 forms I cannot post on the changes.
* Kay Bell, the yellow rose of taxes, reports “TIGTA finds problems with private tax collection levels, payment plans and security” -
A recent Treasury Inspector General for Tax Administration (TIGTA) report says that the private tax debt collectors currently under IRS contract have brought in just a fraction — 1.79 percent of the total value of accounts — of the $30 billion in unpaid tax they've been assigned since 2017.”
Using private collection agencies is truly a bad idea for a multitude of reasons.  Past attempts have been similarly unsuccessful – but Congress believes that if at first you don’t succeed try again and again and again despite the results.
Here is what I have said about outside collection agencies in the past -
Why should the government not outsource tax collection to private agencies? 
The Internal Revenue Service, and state tax agencies, have an ethical, and I believe legal, obligation to make sure that alleged outstanding debt is properly and correctly assessed.  They have a fiduciary responsibility to the Nation, or the State, and its taxpayers to be fair, equitable, and ethical in the administration of tax collection.  They must investigate taxpayer claims that debt, penalties and interest was assessed erroneously.
Outside collection agencies don’t give a rat’s arse about the legitimacy of an alleged outstanding tax debt.  They only make money if they collect money, whether the money is actually due or not.  And they will continue to unethically harass alleged tax delinquents, as they do when collecting alleged private debts, and as they been proven to have done in prior outsourcing programs.”
* William Perez tells you how to set up a “Capital Gains Tax Calculation Worksheet” at THE BALANCE.
* Help yourself save on taxes and help the Actor’s Fund at the same time.  Check out my latest post at FRIENDS OF THEATRE AND ART.  
* KIPLINGER.COM reports on good news for those with student loan debt in “Biden Extends Student Loan Relief, Is Loan Forgiveness Next?”.
As the sub-headline explains – “On his first day as president, Joe Biden continued the suspension of student loan payments until October”.
* Bob Carlson identifies “Mistakes IRA Beneficiaries Are Making After The SECURE Act” at FORBES.COM.
* Haven’t received your second stimulus payment yet.  Michael Cohn explains “Treasury plans efforts to deliver missing stimulus payments” at ACCOUNTING TODAY.

Wednesday, January 20, 2021


Free at last!  Free at last!  Thank God almighty, free at last!  Free of the danger and damage of the Trump presidency and the Trump Administration.  When Joe Biden is sworn in as President today our 4-year national nightmare will finally be over.

Donald J Trump has proven every single day of his presidency with every single word, tweet and deed that he is totally worthless, completely devoid of humanity, and does not possess a single redeeming positive human quality or value.  Trump has been the most ignorant, the most incompetent and the most corrupt – the absolute worst – President in US history.  I will go further  - he has been the worst human being to ever hold national public office in US history.

Trump does not care about America – he never has.

Trump does not care about the American people – he never has.

Trump does not care about American democracy, American values, or the Constitution – he never has.

Trump does not care about the Republican Party – he never has.

Trump does not care about conservative or Christian beliefs, values, or policy – he never has.   

Trump does not care about his core cult of ignorant racists – he never has.

Trump cares about one, and only one, thing – Trump.  He always has and he always will.  He is the ultimate textbook example of a malignant narcissist and a sociopath. 

The legacy of the Trump presidency is the emboldening, empowering and attempted “legitimization” of racism, bigotry and white supremacy.  He has organized racists, bigots and white supremacists, his core cult or “base”,  into a unified voting bloc.

Sadly, for the rest of my life I will judge the intelligence and character of every person based on whether they supported or opposed Trump and his presidency.  There is and was absolutely no intelligent, legitimate, rational or acceptable reason for any American, regardless of party affiliation or political philosophy, to support, defend or vote for Trump.

The Republican Party has totally abandoned all credibility, integrity and honor by supporting, defending and enabling – by embracing – Trump and Trumpism consistently over the past 4 years.  The Republican Party, and every Republican member of Congress almost to a man and woman, is directly responsible for every single bad act committed by Trump as President.  The recent discovery of a conscience by some Republican Congresspersons is too little too late.  The entire current leadership of the Republican National Committee must resign and be replaced by consistent anti-Trumpers if the Party is to survive.    

Going forward Trump must be aggressively investigated, indicted, prosecuted, convicted, and imprisoned for his multiple federal and state crimes.  He must be held accountable for his multitude of “sins’.  We must forcefully say “never again”.  There must never be any degree or act of respect or honor usually provided a past President given to Trump.  He must be publicly vilified and disgraced.  History will condemn America if this is not done.   

President Joe Biden and his Administration has a big job ahead – to undue the substantial damage done to America, American values and American democracy by Trump and his Administration, and to restore America’s credibility, stature and standing on the world stage.  I wish Joe luck and give him my complete and total support.


Monday, January 18, 2021


* A warning from Kay Bell at DON’T MESS WITH TAXES – “Undeliverable COVID-19 payments offer another scam route”.
* The NATP BLOG explains “ABLE accounts can provide value for clients with disabilities”.
And NATP also discusses “Coronavirus-related distributions from an IRA or qualified plan”.
* Check out the latest “Theatre BUZZ” at my blog FRIENDS OF THEATRE AND ART
* And also check out the latest posts at THE TAX PROFESSIONAL.
* And – one more reminder - also check out my new free monthly online newsletter BOBSERVATIONS.
The best end to the story of Donald T Rump would be his eventual death broke and disgraced in prison.

Friday, January 15, 2021


The income tax filing season begins on February 1st - at least it has for me each year for 49 years.  The 2021 tax filing season begins on February 1st.  

Bloggers and journalists are falsely indicating that the tax filing season begins on February 12th.

February 12th is the date that the IRS will begin accepting and processing paper and electronic tax returns.  Period.  This is later than usual due mostly to late enacted tax legislation.

Taxpayers should not put off contacting their tax professionals with 2020 tax information if they have truly received everything needed to properly prepare the return. 

Time is a precious commodity for tax pros from February 1 through April 15.  Do not make their job more difficult by waiting until February 12 if you are not missing for any forms or information.


Tuesday, January 12, 2021


I am trying to understand the legitimacy of the new “NJ BAIT”.
As explained on the “Business Alternative Income Tax” (BAIT) FAQ page of the NJ Division of Taxation website –
For New Jersey tax purposes, income and losses of a pass-through entity are passed through to its members. However, for taxable years beginning on or after January 1, 2020, pass-through entities may elect to pay a Pass-Through Business Alternative Income Tax due on the sum of each of the member’s share of distributive proceeds. The member(s) may then claim a tax credit for the amount of tax paid by the pass-through entity on their share of distributive proceeds.”
The website of an accounting firm I found in a search tells us –
The significance of this election is that the business taxes paid by an eligible entity can be deducted in determining federal income that passes-through to the owners, resulting in less federal tax paid by the owners on their share of the PTE income.”  
I assume the entity’s BAIT payment is claimed as a state income tax deduction on the federal Form 1065 or 1120-S, reducing the net taxable income passed-through to the partner or shareholder.
But what is actually happening?  The pass-through entity is making a payment of state income tax, calculated on the income of the entity, on behalf of the partner or shareholder.  The income of the entity, before any deduction for the BAIT, is still passed-through to the individual partners or shareholders on the NJK-1 and reported on Line 21 or 22 of the NJ-1040.  The partners’ or shareholders’ individual NJGIT liability is calculated based on this income. 
The BAIT payment allocated to the partner or shareholder is in effect an estimated tax payment of NJGIT.  If the actual tax cost of the pass-through income is more than the BAIT payment the partner or shareholder pays the additional tax.  If the tax cost is less than the allocated BAIT payment the partner or shareholder gets a refund or reduces the balance due.  
The BAIT payment made by the entity is not an expense of the entity but a payment made on behalf of the partner or shareholder.  It is not an expense of the entity, but a distribution of partner capital or shareholder PTI made to the State of New Jersey.
It appears to me that this is just a scam to allow New Jersey taxpayers to legally cheat on their federal income tax return.  The GOP Tax Act limited the itemized deduction for State and Local Taxes (SALT) to $10,000.  The BAIT is a way to “work around” this limitation so taxpayers could deduct a portion of their NJ state income tax, calculated on their NJ state individual income tax return, somewhere else on the federal return.
I certainly understand what New Jersey is trying to do.  I personally oppose the SALT limit – but for a unique reason (see my post “Defending the Deductions for Taxes and Mortgage Interest”).   But what about “substance over form”?  You can call it a “credit” and not an estimated tax payment, but if it walks like a duck  . . .
To be an actual legitimate entity-level state income tax should not the election be to pay BAIT on the entity’s net taxable income in lieu of passing the entity’s income to its partners or shareholders?  The entity would elect to not pass through its income to partners or shareholders.  An entity electing BAIT would not issue a NJK-1 to its partners or shareholders, and the partners or shareholders would not report any income from the entity on Form NJ-1040 Lines 21 or 22.  Since the individual partner or shareholder is not paying NJGIT on the income of the entity there would be no BAIT credit on the NJ-1040.   
So, what do you think?


Saturday, January 9, 2021

Over the past 4 years I have aggressively and consistently warned that the greatest threat to the safety, security and future of America, American values and American democracy was not ISIS, Russia or China - but Trump.

It gives me no pleasure to say “I told you so”.

Friday, January 8, 2021



There are very few changes to the 2020 NJ-1040.  There are three (3) new lines, and other lines have been somewhat revised so that the 2020 return has a total of 78 lines instead of 76.

The three new lines are –

Line 36 – to enter the Organ/Bone Marrow Donation Deduction.  NJ taxpayers who donated organs or bone marrow in 2020 can deduct up to $10,000 in unreimbursed “out-of-pocket” expenses for related travel, lodging, and lost wages.

Line 48 – to enter a “Credit for Employer of Organ/Bone Marrow Donor” for self-employed employers who provided paid time off to an employee who missed work to donate an organ or bone marrow.

Line 63 – to enter the new “Pass-Through Business Alternative Income Tax Credit”.  The amount to be reported here is taken from a new Schedule PTE-K-1 provided by a pass-through entity – i.e. a partnership or a sub-S corporation – or a Schedule K-1 provided by an estate or trust.

As per new tax law –

1) The final phase-in of the increased Pension and Other Retirement Income Exclusion takes effect - the maximum deduction is $75,00 for Single or Head of Household, $100,000 for Married/CU Couple Filing Joint Return, and $50,000 for Married/CU Couple Filing Separate Return.  Unfortunately, the “Total Income” (NJ-1040 Line 27) limitation remains $100,000 – so as little of $1.00 in additional income can cause a NJ taxpayer to pay hundreds or more in NJ state income tax.

2) The 2020 NJ Earned Income Tax Credit (EITC) is increased to 40% of the 2020 federal credit.  And NJ residents who were not eligible for a federal EITC are eligible for an NJ EITC of $215 if they met the following requirements during 2020 -

· did not have a qualifying child; and

· were age 21 to 24 on the last day of the tax year; and

· met all federal EIC requirements except the minimum age requirement. 

3) The 2020 maximum employee contributions to the unemployment, disability and family leave programs, used to calculate any excess contributions based on more than one employer on Form NJ-2450, are much higher than in past years –

Unemployment = $150.03

Disability = $350.74

Family Leave = $215.84 

4) A new tax rate of 10.75% applies to net taxable income over $1 million. 

Go here to download 2020 NJ state individual income tax forms, schedules and instructions.


Thursday, January 7, 2021


A bit late – but here is the first BUZZ of 2021!

* I was truly surprised when I received my $600 economic stimulus payment in the mail on January 4th!   .
Check out this “IRS Statement about Second Economic Impact Payments”.
* I forgot to include the following “extender” extension in my December post on the 1040 components of the second economic stimulus package.  The totally ridiculous IRS Section 163(h) deduction of qualified mortgage insurance premiums as mortgage interest, which never should have been allowed in the first place, is extended for 2021.
* Good advice in Russ Fox’s annual January post “It’s Time to Start Your 2021 Mileage Log” at TAXABLE TALK – if you haven’t already done so.  
Of course, keep in mind that employees can no longer deduct un-reimbursed employee business expenses on Schedule A.  So, if you are an employee a mileage log may be important in terms of getting reimbursed by your employer it will not provide you with a federal tax deduction.  FYI, NY state continues to allow employee business expenses in excess of 2% of AGI as an itemized deduction on the state income tax return.
* Erica York of THE TAX FOUNDATION suggests “Three New Year’s Resolutions for Tax Policymakers”.
All three are good resolutions – and obviously all three will be totally ignored by tax policymakers.
* Hey – did you see my new free monthly online newsletter BOBSERVATIONS yet?  Why not?  Click here.
* For NJ senior and disabled homeowners – “Deadline to Apply for the Senior Freeze Property Tax Reimbursement Extended Again” -
New Jersey property owners who are eligible for the Senior Freeze property tax reimbursement program will have an additional month to apply for the relief program, with the application deadline now being extended until February 1, 2021.”
* Ashlea Ebeling tells us about the “Healthcare And Childcare FSA Fix For 2021, Finally” at FORBES.COM.



Clearly yesterday's chaos at the Capital was the direct result of Trump's words and deeds.

But every single Trump supporter, defender and enabler must share equal responsibility for the treasonous attack on the Capital.

Pearl Harbor was an attack on America.

9/11 was an attack on America.

The storming of the Capital was an attack on America.

There is no difference between these three actions.

After yesterday any American who continues to support and defend Trump is clearly a traitor to America and American democracy.

There has NEVER been an intelligent, acceptable or rational reason to support, defend and enable Trump.


Wednesday, January 6, 2021

WHAT’S NEW ON THE 2020 FORM 1040 (AND 1040-SR)?


Here is what is new on the 2020 federal income tax return.

While the 2020 Form 1040 is still not a full 8½ x 11 page – I have absolutely no clue why it is not – it is a little bigger and has larger print.

A new question is included after entering name(s), Social Security number(s) and address – “At any time during 2020, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?”.  All my clients, and I expect the majority of taxpayers, will answer “no”.

Page one has 15 lines – up from the 11 on last year’s return.  Much of the increase represents a replacement of what was previously an “a”, “b” and “c” designation with a number.  The line for “Adjustments to income” has an “a” for carryover from Schedule 1 and a “b” for the new “above the line” deduction for up to $300 of charitable contributions for non-itemizers.

Page 2 continues with Lines 16 through 38 (the 2019 form had only 24 lines) – again most of the additional lines are replacements of letters with numbers.  Estimated tax payments are now reported separately on Page 2 and no longer on Schedule 3.  The category for “Federal income tax withheld” is broken down into 3 items – Form(s) W-2, Forms(s) 1099 and Other forms.  And there is a new line for the refundable “Recovery Rebate Credit”.

The 2020 Form 1040-SR has similar changes.  Page 1 ends at Adjusted Gross Income (the 2019 version ended at “Taxable Income), and the “Standard Deduction Chart” that had been at the bottom of Page 1 is expanded and is now on a new Page 3.

Except for the change to Schedule 3 mentioned above, the 2020 Schedules 1, 2 and 3 appear to be the same as 2019.

There is one major tax law change that is not specifically reflected in the Form 1040 or 1040-SR but is included in the instructions.  According to the instructions for Schedule A Line 19 – “You no longer need to be younger than age 70½ to make a deduction for your contributions to an IRA.” 

As a result of the SECURE Act you can make contributions to a traditional IRA account as long as you have qualified “compensation” – taxable salaries and wages, net earnings from self-employment as a sole proprietor or a partner, nontaxable combat pay, taxable alimony, and nontaxable difficulty of care payments – regardless of your age.  You have until April 15, 2021 to make a contribution to an IRA for tax year 2020.

I will post on changes to the 2020 New Jersey and New York individual income tax returns when the forms are available.


Tuesday, January 5, 2021



Here are some "year-beginning" tax tips:

1) Resolve to become more informed on federal and state tax laws.

It is impossible to know the right moves to make in your daily financial life without a basic knowledge of the tax implications of your actions. Learn what items you can, and cannot, deduct on your tax return, including the special items that are unique to your trade or profession, and the rules governing any special situations that apply to you, and keep up-to-date on federal and state tax law changes. Even if you use a tax professional to prepare your return, the more informed you are on tax matters, the more prepared you will be when you go to your annual tax appointment. One way to stay on top of things, tax-wise, is to become a regular visitor to THE WANDERING TAX PRO.

2) Set up a good system for maintaining tax records and receipts.

Remember that some deductions require special recordkeeping or additional information, such as business meals and entertainment, business use of "listed property" such as automobiles, cell phones and computers, gambling losses, and charitable donations (see tomorrow’s posting). Your tax professional can help you in this area.

I have created a 2021 INCOME TAX ORGANIZER to help you keep track of all your income and deductions, and gather and organize the information you will need to provide to your professional tax preparer in 2022.

The Organizer, which comes in an expandable binder, contains -

* detailed text covering what is taxable and deductible and what information and documentation you will need to properly prepared your 2021 tax return,

* forms, schedules and worksheets for compiling and identifying the needed information, and

* pockets for you to keep statements, bills, receipts, and other documentation during the year by category.  

For complete information on what is in the organizer and how to order it go here. 

3) If you are planning to make a contribution to a traditional or ROTH IRA, a Coverdell Education Savings Account, a Section 529 College Savings Plan, or a Health Savings Account for 2021 do it now. 

By making your contribution on the first available day of each year you will have substantially more in the account by the time you are ready to retire, or when you need the money to pay for education or medical bills, than if you wait till the last minute.

If you make a ROTH contribution today, and later discover that you are not eligible for a ROTH, or, for whatever reason, decide you would rather have the funds in a traditional IRA, you can "recharacterize" your contribution.


Monday, January 4, 2021


This post, which I issue every year at this time, is for all the journalists and bloggers out there - although it contains information that is important for all taxpayers to know.

When writing about taxes this filing season DO NOT advise your clients to ask, consult, contact, or talk to your CPA or a CPA!

The correct advice is – ask, consult, contact, or talk to your or a tax professional.

The mere existence of the initials “CPA” after a person’s name does not in any way, shape, or form indicate that he or she knows his or her arse from a hole in the ground when it comes to preparing 1040s.

A particular CPA may indeed be competent and experienced in preparing 1040s, and many are, but it is only because of the education, training, experience, and other factors that are unique to that specific individual, and has nothing whatsoever to do with the initials “CPA”. 

And that specific individual is just one of the many choices among tax professionals.

Got it?


Friday, January 1, 2021



2020 was a year of devastation and despair.  The COVID-19 pandemic affected the life of every single person on the globe.  And Donald T Rump was still President.  The actions of Trump and his Administration exacerbated not only the pandemic but every single problem and issue America faced.
2021 is a year of hope.  Vaccines to combat the virus have been developed, tested and approved and will soon be available to all Americans.  And a new President, the polar opposite of Trump in terms of intelligence, competence, integrity, and humanity, will be inaugurated later this month.  Once again, after 4 years of a national nightmare, a person of honor who cares about something other than himself will occupy the White House – and the damage to American values and democracy done by Trump and his deplorable Administration will begin to be undone.
If things go well in Georgia, despicable McConnell and the Republican Party, which totally abandoned all integrity and credibility, and traditional Republican and conservative beliefs and policies, by embracing and enabling delusional, demented and dangerous Trump, will no longer control the Senate.

And hopefully 2021 will see the investigation, indictment, prosecution, conviction, and sentencing of Trump for his multitude of state and federal crimes.   
I look forward to a return to normalcy in 2021 – in our daily life and in the political life of America.