Tuesday, August 24, 2021


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 –


+++ 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.


Thursday, August 19, 2021


* 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.”


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.


Thursday, August 12, 2021



* TAX MAMA Eva Rosenberg deals with a too-common question from taxpayers these days in her TAX QUIPS blog – “Where are your Refunds?”.

Some good information and advice from Eva (highlights are mine) –

. . . you’re probably thinking that you’ve done something wrong, and they are holding up YOUR refunds as a result. No, it’s not you.  It’s the entire process that is facing a complex series of problems.”

And –

Do NOT call the IRS – you’re going to waste a lot of time sitting on hold – and probably get disconnected before you even get to someone. And finally, finally, when you reach someone, they are going to say, ‘Uh…I don’t know’.

Do NOT call your tax professional. Their job ended when they either electronically filed your tax returns, or gave you the printed version so you could mail them in. NOT included in the fee is helping your sort out IRS problems – that’s your job.

Don’t call the Taxpayer Advocate Service (TAS). Unfortunately, this is not a unique situation. Millions of people are in the same position – TAS cannot help you.”

What you should do –

Take a deep breath.



* In celebration of “National Lazy Day” (August 10th) Kay Bell suggested some “Easy moves to help you avoid paying the lazy tax” at DON’T MESS WITH TAXES.

What is the lazy tax –

No, it's not an actual, government enforced levy. But it's a tax we've all paid at one time or another.

It's the extra we pay simply because we aren't in the mood — OK, too lazy — to take a small step or two that could save us money. In some cases, it could add up to major savings over the long run.”

* Jason Dinesen discusses “Selling Your Home When You’ve Taken Depreciation Deductions” at DINESEN TAX TIMES.

Jason is concerned with what happens when your self your personal residence at a gain, eligible for the exclusion, but you had a home office and claimed, or could have claimed, depreciation.

* Russ Fox explains why “Certified Mail, Return Receipt Requested, Is More Important than Ever” when sending correspondence to the IRS at TAXABLE TALK.


A Democratic governor was forced to resign for inappropriate behavior with 11 women - as he should be..



Wednesday, August 11, 2021


I recently received the following email –

I moved to Georgia with my wife and daughter and we recently purchased a home! I am planning on rolling over some money from a 401(k) account to my government retirement account. When I do this, I wanted to withdraw some to go into some home projects. I know when I had to do this before you suggested I withhold certain percentages for tax purposes. How much should I have them withhold?

Here is my response -

“Good luck in your new home in Georgia.

A premature withdrawal/distribution from an employer pension plan is the most expensive, and probably the worst, source of funds.  I do not recommend doing this.

1. You will pay a 10% premature withdrawal penalty.

2. You will pay 22%-24% in federal income tax, depending on your level of income.  {based on my knowledge of the taxpayers' level of income}

3. You will most likely also pay Georgia state income tax (I have absolutely no knowledge of GA state income tax).

You will pay up to at least 40% of the amount withdrawn in tax and penalties.  Only 60% of what you take will remain in your pocket.

It is “more better” to take a loan from an employer account, if the plan allows for loans, than to take an actual withdrawal.

It is also better to use home equity debt if available, which may be deductible if the money is used to “substantially improve” your home.  This is perhaps the cheapest alternative.

Personal loan interest is higher than home equity debt, and not deductible, but it is still cheaper than taking money from an employer pension plan like a 401(k).

If you MUST use a distribution from your employer plan I would have at least 30% withheld for federal income tax and an appropriate amount withheld for GA state income tax, based on your GA marginal tax rate.”

Hey, fellow tax pros – do you agree with my answer?


Friday, August 6, 2021


There is no doubt in my mind that the biggest threat to America, American democracy and American values today is the Republican Party.

By embracing Trump and his lies the Republican Party has totally abandoned all integrity and credibility.  And it has totally abandoned true conservative policy.

All true conservatives and “traditional” Republicans must vocally and aggressively oppose, denounce and disavow the current Republican leadership at all levels.

All true conservatives and “traditional” Republicans must aggressively encourage and support, financially and otherwise, Republican primary candidates at all levels who vocally oppose, denounce and disavow Trump and his lies, and aggressively oppose those who support and defend Trump and continue to spread his lies.

And all true conservatives and “traditional” Republicans must vote against any Republican candidate at any level in a general election who does not vocally oppose, denounce and disavow Trump and his lies. 

If no true conservative-based alternate candidate is available true conservatives and “traditional” Republicans must vote Democrat – because Republican candidates who embrace Trump and the current Party leadership are dangerous and a true threat to the future of America.  

It is vital that all intelligent Americans take the NO GOP PLEDGE.  





Thursday, August 5, 2021



Do you use your car for business?  Here are some things you should know.
(1) Thanks to the GOP Tax Act, for tax years 2018 through 2025 employees can no longer deduct employee business expenses if they itemize on Schedule A.  This includes business use of your personal automobile.  Only self-employed individuals are allowed to deduct the cost of using their car for business travel.
(2) If you use your car for business you must keep “contemporaneous” records of your business mileage. This means that you should record the information on the day the trip occurs.  Record each individual business trip separately. Enter the date, location, business purpose and miles driven for each trip in some kind of diary, account book, or expense log. If you do not have EZ Pass you should also note any toll expenses. If you do have EZ Pass, you can identify tolls for business trips on the monthly statement.  I also enter in my travel log the quarter I put in the parking meter while visiting a client or vendor or attending CPE activities.
In addition to the business miles driven for the year you will also need to know the total of all miles driven for the year.  You should start off the year by entering the total miles on your car on the morning of January 1st in your log – and end the year by entering the speedometer reading after your last trip on December 31st. If you sell the car during the year, enter the total miles on the date of sale and enter the beginning mileage on your new car on the day you drive it off the lot.
And you should keep a contemporaneous car maintenance log to record all related expenses for the year – gas, oil changes, tune-ups, repairs, car washes, etc.  The reason is explained in item #3.  
(3) You have two options for deducting business use of your car. The simplest way is by using the Standard Mileage Allowance rate.  You multiply the number of business miles driven for the year by this rate.  The rate is set annually by the Internal Revenue Service, based on the variable costs as determined by a study conducted by Runzheimer International.
This standard mileage allowance rate applies no matter where in the United States you drive, and no matter what type, model or make of car you drive.  It is available for a car you own or a car that you lease.  It covers all the normal expenses of operating a car, including depreciation, but does not include auto loan interest or state and local personal property taxes.  As a self-employed taxpayer you can deduct the business share of auto loan interest and any related state and/or local personal property tax paid on the auto on Schedule C in addition to the standard mileage allowance.
You can also choose to instead claim the business use percentage of the total cost of maintaining your car, which includes –
•        auto club membership
•        depreciation
•        gasoline
•        insurance
•        license and registration
•        lease payments
•        repair and maintenance
•        tires
•        wash and wax
If you drove a total of 20,000 miles for the year and you have logged 15,000 miles for business purposes you can deduct 75% of these expenses.  There are special limitations on the deduction for depreciation.
It is a good idea to keep a car maintenance log to record all related expenses for the year – gas, oil changes, tune-ups, repairs, car washes, etc. – so you will have the information available to make an informed decision on what method to use. This is especially important for a new car, or for the first year you are deducting business use of a car.
Obviously, you want to use the method that gives you the greatest tax deductions over the life of the vehicle. 
Generally, in order to claim the standard mileage allowance, you must elect to do so in the first year the car is “placed in service” (the year you purchase the car or the first year you use the car for business).  If you claim the standard mileage allowance in the first year you can switch to actual expenses in a later year.  But if you claim actual expenses in the first year you may not be able to use the standard mileage allowance in later years.
If you choose to claim the standard mileage allowance on a leased car in the first year of the lease you must use it for the entire period of the lease.
The above was taken from my book “AN INTRODUCTION TO SELF-EMPLOYMENT: THE BASICS OF SCHEDULE c”.  If you are planning to start a small business, become a self-employed consultant or engage in any kind of “side hustle” this is a must read.  For more information go here.

Wednesday, August 4, 2021



I had been holding these for a BUZZ installment – but there isn’t any other BUZZ to report.

Kay Bell reports that the “IRS releases drafts of 2021 Form 1040 and schedules” and discusses the many changes to these forms at DON’T MESS WITH TAXES.

There has also been a draft version of the 2021 Schedule 8812 released.  This complicated form is used to calculate the Credits for Qualifying Children and Other Dependents to be claimed on the 2021 Form 1040 (or 1040-SR).  It appears to be a real PITA.