Some BUZZ is better than no BUZZ.
* The IRS reports “West Virginia storm victims qualify for tax relief; various deadlines postponed to Nov. 3”.
* Russ Fox is currently running his annual series of “Bozo Tax Tips”. Click here to check out the series.
* Sean Mullaney, the F.I. TAX GUY, explains in detail “What are Section 199A Dividends?”
* The “IRS reminds taxpayers to access or create an IRS Online Account today”.
TTFN
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Back when I still prepared 1040s (and 1040-SRs) I was fascinated by the differences in the Year-End Consolidated 1099 Tax Reporting Statements issued by the various brokerage and mutual fund “houses” – Ameritrade (before being bought by Chuck), Charles Schwab, JP Morgan, Prudential, Merrill Lynch, TIAA, Wells Fargo Advisors, etc. and Fidelity and Vanguard Brokerage Services. Each house’s statement was different.
All started off with the basic required 1099-DIV, 1099-INT, 1099-OID, 1099-MISC, and 1099B format with summary numbers for total ordinary dividends, qualified dividends, capital gain distributions, Section 199a dividends, foreign tax paid, exempt (Municipal) interest and exempt interest dividends, Treasury and Savings Bond interest, bond premium, etc. What was different was the format and information provided in the accompanying “supplemental” statements. The format and extent of supplemental information is different for each “house” consolidated tax-reporting statement.
As a tax preparer the more extensive and detailed the information provided the better.
The supplemental listings provided detailed individual information for the specific stocks, mutual funds, and interest sources. For dividends the statements identify the total, non-qualified, qualified, capital gain, Section 199a, etc. components of each separate investment – some in “spreadsheet” format and some in separate listings. Obviously, I preferred the spreadsheet format – I did not want to add up the separately listed components of a specific mutual fund investment to come up with the total ordinary dividends for that fund.
All 1099-B statements provided the individual short-term and long-term sales listed by specific investment broken down into Schedule D categories A, B, D, E, and F. I wanted a summary compilation listing the totals on one page for the categories and sub-categories (like the one on the first page of the Fidelity Brokerage Services statement), which not all houses provided.
Some statements included a listing the percentage of qualified US government obligation income for specific mutual funds and the state and territory specific percentages for municipal bond mutual funds – and a few actually applied the appropriate percentages to the individual fund investments (more better).
Only one house provided everything I needed in the perfect format, with actual references to tax form and schedule lines – TIAA (Teachers Insurance and Annuity Association). And not on all statements, but only on the “enhanced” statement provided to “preferred” customers. I only had one client, a former college professor, who received this statement for several years but, sadly for me, she changed brokerages toward the end of our association.
These statements are mailed to taxpayers and are also available to download online at the house website. I found that there was a difference in the statement from Fidelity Brokerage Services mailed to customers and the one available online. The one that was mailed did not include all the supplemental detail that the online statement did. I told clients who invested with Fidelity to send me the online statement and not the one that was mailed to them.
I always wished all brokerage and mutual fund houses would produce their year-end tax reporting statement in the same format with the same amount of detailed information – preferably the format and information provided in the enhanced TIAA statement.
TTFN
* Robert W Wood explains “IRS Forms 1099 Can Be Wrong. Here’s What You Can Do About It” at FORBES.COM.
Do not just assume a 1099 form you receive to report income is correct. Always check the form against your own records. And also check to make sure the Social Security number is correct. Not just Form 1099-NEC but also 1099s from banks and other payers for interest and dividend income.
A bank may issue one Form 1099-INT for all the accounts – savings, money market and CDs – that belong to the same name and Social Security number. There may be 6 or 7 accounts listed on a 1099-INT. It is important to verify each account listed on the form to make sure all of them belong to you. One of my clients received a 1099-INT last year with someone else’s account, that earned $300+ interest, included in the listing! Had he not carefully checked the form he would have paid close to $100.00 in unnecessary federal and state income tax. If you find an error on a Form 1099-INT go to the bank immediately and request a corrected form.
* The IRS “Tax Time Guide” tell us to “Use Where’s My Refund? tool to track refund status”.
* It’s that time of year again – “Dirty Dozen tax scams for 2025: IRS warns taxpayers to watch out for dangerous threats”.
* The saga continues. Russ Fox reports “BOI Reporting Again Voluntary” at TAXABLE TALK.
* NJ has changed its previous policy regarding the $50 property tax credit for senior and disabled homeowners who don’t have to file a state income tax return, The NJ Division of Taxation explains “How to Claim Your Property Tax Credit for 2022 and 2023”.
TTFN
* Congratulations to Russ Fox on the 20th Anniversary of his blog TAXABLE TALK – “20 Years Ago Today . . .”
* The latest in the BOI saga – “FinCEN Extends Beneficial Ownership Information Reporting Deadline by 30 Days; Announces Intention to Revise Reporting Rule”.
“With the February 18, 2025, decision by the U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336(E.D. Tex.), beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) are once again back in effect.”
* The damage of the Trump/Musk Administration has hit the IRS. Michael Cohen tells us “IRS lays off thousands of employees” at ACCOUNTING TODAY -
“The threatened layoffs of Internal Revenue Service employees appeared to be underway Thursday, with estimates of between 6,000 and 7,000 employees being laid off at the agency in the middle of tax-filing season.”
* And at FORBES.COM Howard Gleckman warns “How DOGE’s Access To IRS Data Puts Taxpayer Information At Risk” (highlight is mine) -
“The Trump Administration’s Department of Government Efficiency has pressed the IRS for permission to access individual tax return information of U.S. households and businesses. While the DOGE team says it needs taxpayer data to search out ‘waste, fraud, and abuse, such a move puts at risk deeply personal information on more than 150 million tax filers, with no clear benefit.”
The only true “waste, fraud, and abuse” is by Trump and his cabinet of incompetent, unqualified, and inappropriate arse and ring kissers.
THE LAST WORD
Here is a quote from Prof Jim Maule’s MAULED AGAIN post “Tax Rates -- Just Two Generations Ago” -
“It's a wonder what the lack of education cand do to a person. It's also a wonder what a bad education can do to a person. What's sad is what it does to everyone else.”
It is truly sad that a lack of education, or poor education, put a deplorable and despicable, crooked and corrupt, ignorant and incompetent demagogue who is intent on destroying American democracy and true American values in the White House!
TTFN
* Michael Cohn reports “H&R Block turns 70 in time for tax season” at ACCOUNTING TODAY.
Back in the mid-70’s I remember Jim Gill telling me he wished an H+R Block office would move next door to us because we would get many new clients who would need us to fix the errors Block made on their returns.
One year in the 80’s Jim got a hold of the fee schedule for H+R – and we were shocked at how expensive Henry and Richard were compared to Jim’s prices. I seem to recall H+R charged by the number of W-2s and 1099s – I think an additional $5.00 for each form.
Over the years H+R has gotten in lots of trouble for its auxiliary services, and most recently “H&R Block to Pay $7 Million to Settle FTC Case Alleging Deceptive Advertising”.
* New York and Pennsylvania state tax returns and instructions are now av available online.
* The IRS has begun to accept tax returns – but you shouldn’t race to be among the first to file. Kay Bell discusses “5 reasons to wait to file your tax return” at DON’T MESS WITH TAXES.
The first two items on the list are very important - #1 To allow for all your tax statements to arrive and #2 To ensure you have all other tax information.
Decades ago, a client came into the office to have his return prepared on February 2nd. I prepared the return and he signed and mailed it. The very next day he received an additional Form 1099 in the mail to report more income that was not included on the return he had mailed.
And if you have a brokerage account the broker will very likely issue a corrected Form 1099 in mid to late February.
* And Kay lists “7 tips for first-time tax return filers”.
I already commented on #6 – “Don’t be in such a hurry” – above. But her #7 is equally important – “Don't wait too long”.
THE LAST W
There are two types of people in America today -
People who support Trump, and
People with a brain and a conscience.
TTFN
* Michael Cohn reports “IRS to start tax season on Jan. 27” at ACCOUNTING TODAY.
Of course, before retiring the tax season would always begin for me on February 1st.
* And Russ Fox tells us “IRS Extends California Fire Disaster Area Deadlines Until October 15th” at TAXABLE TALK.
* Kay Bell provides a detailed list of “Tax statements you need to file your 2024 tax return” at DON’T MESS WITH TAXES.
* And Kay identifies “Questions to ask, and answer, before you tackle your 1040”.
A few notes –
If you received unemployment the state may not mail out your 1099-G form. You may need to go online and print it out. This is the case for NJ residents.
If you did “tie the knot” in 2024 and changed your last name, make sure you have notified the Social Security Administration of the change. As I have said here many times (going back to 2007) –
“The IRS is very picky about matching names to Social Security numbers. If a Social Security number and name reported on your tax return does not match exactly the name in the files of the Social Security Administration the IRS will remove the name and dependency exemption of that person and automatically recalculate the tax liability as Head of Household, Married Filing Separately or Single.
If you have changed your last name as a result of marriage or divorce during {the year} make sure to notify the Social Security Administration of the change before filing your tax return. You do this by submitting a Form SS-5 to request a new Social Security card. Go to www.ssa.gov/ssnumber.”
BTW, the link still applies.
THE LAST WORD
We must NEVER accept Trump as President, attempt to work with him, or treat him as any other President.
Trump is dangerous. We must vocally and aggressive oppose, denounce, and fight everything Trump attempts to do as President. And treat him as the danger to American freedoms, democracy, and justice that he is.
TTFN
How sad for America and the world that a totally worthless piece of garbage, a truly deplorable and despicable human being, a convicted felon and indicted traitor, completely devoid of intelligence, character, integrity, honor, humanity, sympathy, and empathy who does not possess a single redeeming positive human quality or value, who does not care one ounce about anyone or anything but himself and who has never performed a single totally unselfish act in his entire adult life will be sworn in as 47th President of the United States today.
For the next 4 years it will be very literally impossible to believe anything that is said by the President of the United States!
It is vital for the future of our freedoms and our democracy that every intelligent and patriotic American with a conscience aggressively oppose and denounce and fight to defeat every action attempted by Trump and today’s racist and repressive Religious Right controlled Republican Party, and going forward to defeat every Republican candidate for every office in every election at every level.
TTFN
