WHERE THE FAKAWI

The Internal Revenue Service has officially announced that the deadline for filing the 2019 Form 1040 has been moved from April 15, 2020 to July 15, 2020. 

This means it is not necessary to either mail a finished return or submit a Form 4868 – request for automatic extension – to the IRS by April 15^th.

Previously the Service announced that it would not charge interest and penalties for payments made between April 15 and July 15, 2020 – but that the actual filing date was not extended.  The Service has now announced, via Notice 2020-18 –

“ . . .the due date for filing Federal income tax returns and making Federal income tax payments due April 15, 2020, is automatically postponed to July 15, 2020. “

This automatic extension applies to tax returns and payments due April 15, 2020 for individuals, trusts, estates, partnerships, and corporations.  It also applies to “Federal estimated income tax payments . . . due on April 15, 2020.”

I personally will continue to work to prepare the returns I have received as soon as possible.  While, no longer having the original April 15^th deadline hanging over my head, I may work a bit more leisurely, I do not intend to make any change to my daily tax season schedule .  I certainly do not intend to stretch my season out till July 15^th. 

Clients with refunds will want their returns done promptly so they can get their money.  And those who may owe will want to know how much, even though payment does not need to me made until July.

The only change is that I will not stop work on April 14^th as planned (actually April 13^th, as the 14^th is usually spent writing up the extensions), and will postpone my annual recuperative trip to the Jersey shore for a week or two, assuming the hotel will be open.

It is my intention that all returns for which I will receive all the necessary information in a timely fashion will be finished before the end of April.  As of this writing I have actually either completed, received a package from, or heard from just about all of my 1040 clients.

What this postponement of the filing deadline means is that I will probably have only 1 or 2 actual GDEs (the E is for “extension”) this year – as 1 client waits for K-1s from multiple limited partnership investments to arrive before filing and another is just a procrastinator.

TTFN

WHERE THE FAKAWI – NUMBER ONE

An early entry to address an issue receiving a lot of press recently

Just like the rest of the country, some of my clients are getting smaller refunds this year.  But the number to compare on your 2018 and 2017 tax returns is NOT the refund, or balance due, amount but the TOTAL TAX amount.  This is the number on Line 15 of the 2018 Form 1040 and Line 63 of the 2017 Form 1040, or Line 39 of the 2017 Form 1040A.

Your refund is a factor of your withholding.  It not a reflection of any change in your tax liability – the actual income tax you are paying.  In February of 2018 the IRS revised the income tax withholding tables to reflect the changes made by the GOP Tax Act.  It appears the IRS was too “liberal” in its revisions – perhaps instructed to do so by the government to make it look like you were saving more from the tax changes.  The problem is compounded when you have several sources of income from which federal income tax is withheld. 

With my clients, I specifically noticed substantial decreases in withholding from NJ state pensions.

The IRS realized its FU and has slightly revised the way it calculates the penalty for underpayment of taxes as a token response.

Two important points -

(1) The additional amount received in each weekly paycheck as a result of the revised withholding is NOT a true indication of the savings from the GOP Tax Act. 

(2) The fact that this year’s refund is less than last year does not mean you are paying more tax under the GOP Tax Act.

If your 2018 income is basically the same as 2017 and your refund is $2,000 less than last year, or you actually owe Sam $1,000 when you got back $1,000 in 2017, but your federal income withholding was $3,000 less than last year YOU HAVE PAID $1,000 LESS IN FEDERAL INCOME TAX.  You got an extra $3,000 from Sam during the year and now have to give $2,000 of this “loan” back.

The trouble with getting an extra $50 or $60, perhaps more than you should be getting based on reality, in your paycheck each week is that you spend an extra $50 or $60 each week and end up with surprise when your refund is less than it was last year. 

The real issue here lies in the fact that the criteria for claiming federal withholding allowances has completely changed with the GOP Tax Act.  The current Form W-4 on file for most taxpayers is no longer relevant.  The IRS has attempted to revise the Form W-4, but has not been very successful.

Back to the 1040s!

TTYL

WHERE THE FAKAWI - #1

The floodgates have opened!

As always happens, prior to my annual 30+ year traditional visit to Monmouth County NJ for “house calls” as returns arrive I get them done and out promptly.  But once I return from my trip the “do be done” box begins to fill.  I now have 18 returns in that box, and 1 in the “red file” (to be done).

The season has gotten off to a good start – I am at least on par with last year’s work completion, and may be somewhat ahead.  I will have a better picture at the end of February.  No major client issues have arisen yet – and minimal returns have spent any time in the “red file” so far.  No weather or equipment issues either.

FYI, my phone has not been on during these past first weeks of the tax filing season.  So every day I have been “behind closed doors” – although I have been checking emails regularly throughout the day and responding promptly where appropriate.  To be perfectly honest I have enjoyed being able to work without interruptions.  I may put the phone, but not the answering machine, on going forward, but have not decided yet.  I have become spoiled.  In any case – the best way to contact me is always via email at rdftaxpro@yahoo.com – even on Wednesdays. 

Before I go - a holiday message.  On this President's Day let us remember past Presidents who had intelligence and competence and cared about America and its people, as we struggle to deal with the current one, who clearly does not.

OK – back to the 1040s!

TTFN  

WHERE THE FAKAWI III - THE HALF-WAY MARK

The 2017 Tax Filing Season (February 1 through April 18) is now half over!

 

I have completed and put in the mail 116 sets of returns during the first half of the season.  Given I completed 229 returns before calling it quits on April 17 last year I have done slightly more than half that number already.  And the 2^nd half actually has a little more work time (despite losing an hour this Saturday night) – since I will have less days “on the road”.

 

Although the IRS has announced that actual returns filed are down from last year at this time – that is certainly not the case with me.  I

 

 have only a handful of “red files” (need more info) and only a handful of returns received in February to complete.  And the “to be done” box is not as full as it usually is at this time.

 

Cash payments are also slightly up from the same time last year.

 

So all is going smoothly – and hopefully it will remain smooth and I can end the season with a minimum amount of GD extensions!

 

Talk to you again on April 1^st.

 

TTFN

 

 

 

 

 

 

 

 

 

 

 

 

WHERE THE FAKAWI II

One month down – one and a half to go!

 

I am ahead of last year (in completing returns, but, unfortunately, not in fee collections).  I have completed 90 sets of returns during the first month of the tax season - more than completed the same time last year!  Many of the returns I completed in late March and early April last season have already been done. 

 

I have either heard from, made arrangements with, or completed the returns of over half of my client mailing list.

 

The “to be done” box is not as full as it usually is this time of the season.  And I have only 3 “red-files” (need more information).

 

I have been “behind closed doors” Monday and Tuesday (and, of course, today, as it is Wednesday), with the phone turned off.  It has been wonderful, but I guess I will have to plug the phone back in on Thursday morning.

 

There have been no problems to deal with, neither with computer and equipment issues, the weather, or actual tax return issues.

 

Let’s hope the season continues to run smoothly – and I can end the season with minimal GD extensions!

 

I will check in with you again after March 15^th.

 

TTFN

 

 

 

 

 

 

 

 

 

TAX SEASON WHERE THE FAKAWI - #2

February is half over – so just two months left.

 

I have completed 35 sets of returns during the first two weeks of the season.  And I have either done, received, or made arrangements with about 31% of my client list so far. 

 

I am ahead of last year at this time – I had done 28 sets and heard from 26% of the herd by 2/14/16.  A good sign.

 

No issues yet this season – processing, computer, or weather.

 

As is usually the case, for the first two weeks I have been completing returns as they are received, with at most a one day turn-around.  Now the floodgates will open, and turn-around time will gradually increase until it becomes about two-weeks.

 

Now – back to the 1040s!

 

TTFN

WHERE THE FAKAWI - #2

The, or I guess my, 2016 tax filing season (February 1 – April 17) is 1/3 over!

I have completed and mailed out 74 sets of returns.  I am a bit ahead of last year’s first-third statistics.   

I have either done, received in the mail, or made arrangements with 51% of the names on my mailing list – again slightly ahead of last year.

The “to be done” box is not “chock-a-block” yet – but it is getting there.  And there are only 2 “red files” (need more information), and they are completed as soon as the missing information arrives.

As reported in my first Where the Fakawi, there have been no issues – processing, computer, or weather – so far.

 

I think I will lock myself behind closed doors March 1, 2, and 3 so I can do as many of the returns received in February without interruption.  I have vowed not to start on returns received in March until all returns received in February are done - or red-filed.

I will report back on my progress at the half-way mark.

TTFN

WHERE THE FAKAWI - #1

2 down – 9 to go.

Weeks of my tax filing season, that is (Feb 1 – April 17).

 

I have done and mailed out 28 sets of returns already.  And I have either done, received, or made arrangements with 26% of my client mailing list so far (probably actually a slightly higher percentage – I have not been to the Post Office to pick up Saturday’s arrivals as I was “out of state” this week-end).

I expect I am a little ahead of last season – certainly not behind.  I did have some surprise “early birds” so far this year.

There have been no issues – processing, computer, or weather – so far.  Let us hope that continues

Prior to this week-end I was getting returns done and mailed out (or red-filed – need more info) as they arrived.  Now the backlog begins.

I picked up 12 sets of returns this week-end.  Before leaving on Friday I had 9 returns in the “to be done” box and 2 “red files”.  I can only guess how many returns are waiting for me at the Post Office as we “speak”.

So the season is off to a good start. 

OK – back to the 1040s!

TTFN

WHERE THE FAKAWI?

For my clients, and those who are interested -

The, or I guess my, 2015 tax filing season (February 1 – April 14) is 1/3 over!

I have completed and mailed out 63 returns – which is not bad for the first third of the season.  I don’t remember if I saved my last year’s daily log – and if I did I don’t know where to put my hands on it easily – but I think I am, if not at the same point, a bit ahead of last season at this time.

I have either done, received in the mail, or made arrangements with 49% of the names on my mailing list – which I am sure is ahead of last year.

The “to be done” box is not “chock-a-block” yet.  And there are only a few “red files” (need more information), and they are completed as soon as the missing information arrives.

I have yet to do a return where I did not check the “full-year coverage” box, although there may be one in the red files.  And I have not done any returns, other than my own, that involved a Form 1095-A.  I received one, and was about to start it, when the client emailed to tell me his 1095-A was one of the 800,000 FUs.

We were told this was going to be one of, if not the, worst tax filing seasons ever – but it is actually been one of my better ones so far (as far as smoothness of operations). 

I do not accept any new 1040 clients.  But if I did I would most definitely not accept any new clients who would be applying for the Earned Income Credit or who did not have “full-year coverage”.

Let us hope I continue to be productive, and things continue to run smoothly, so that I can give a similar positive “where the fakawi” at the half-way mark.

TTFN

WHERE THE FAKAWI?

 

It has not gotten that bad yet . . .

 

Only one month to go and I have either completed, received, or heard from all but about a dozen clients (that I expect to attempt to file on time).  The "to be done" boxes are chock-a-block. 

 

Forget the corn - the pile of 1040s to do is as high as an elephant's eye!

 

I had at one point cleaned out the "red file" box (need more info), but it has grown again.  I am getting them done as the missing information arrives.

 

There are 14 returns received in February that must be done before I begin on packages received in March.  I expect to have these completed by this time next week (knock on wood).

FYI - I have been locked behind closed doors, and my phone has been unplugged, since this past Wednesday.  This will continue through Monday (SPD).  Historically the office has always been closed on SPD - a carryover from my mentor's practice - although that does not mean I am not working away on 1040s.  Monday will be devoted to Irish clients.

The answering machine will be back on Tuesday - but I will be relatively inaccessible for the rest of the "season" and the machine will truly be for messages only.  You can leave an "our we there yet" message - but it will only be responded to if we are truly there.

 

To be honest - at this point I cannot guarantee that any returns not in my hands by the end of today will be able to be completed in time for an April 15th deadline - but there is still some hope.  I want to end the "season" with the absolute least amount of GDEs possible. 

 

Back to work - I will check in with you again with an update at the end of March.

 

TTFN

 



THE FIRST WHERE THE FAKAWI OF THE TAX SEASON

One month down - one and a half to go!

As I say good-bye to February I have either done, received, or made arrangements with 55% of my client list – a bit ahead of last year. 

I have completed 84 returns, the same number as last year at this time.  So I am not behind on that front.  However that is only an average of 3 per day.  I need to double that average! 

Receipt of tax preparation income is up 39.5% from last year.  The fees have not increased, but some returns cost more this year because of additional work.  That is certainly good (although some of the 2014 is from 2012 GDEs completed in January).

And there are only 7 red-files (need more information).  I have been keeping on top of them - and completing the returns as the information arrives. 

I have 34 packages in the "to be done" box.  None  have been there for more than 10 days – I am doing good at sticking to FIFO.  I will complete these 34 sets of returns, if all info is available, before starting on any packages received in March! 

Don't be surprised if I add some additional "locked behind closed doors" days - or even a full week - before mid-March to the regular LBCD Wednesdays (don’t call me on a Wednesday – you won’t get an answer). 

All in all – so far so good.

OK - now back to work!

TTFAW

THE FINAL WHERE THE FAKAWI

As promised in my January client letter – any returns not in my hands as of the end of today (March 25^th), with all the information needed to properly complete the return, WILL BE AUTOMATICALLY EXTENDED.
 

Any packages I receive in the mail from now on will be put in a separate box and extensions for these returns will be submitted to the IRS on April 13^th.
 

From now until April 14^th I will be unavailable and inaccessible.  I must become a “1040 machine” and devote 10-12 hours a day, 7 days a week to preparing 1040s, with the absolute least amount of interruptions.
 

My answering machine will be on (from this Thursday on) – but I will only respond to messages with information on a return I am working on or questions about a return I have already prepared.  The machine will be on “silent mode” – so I will not be listening to messages as they come in.  I will review the messages at the end of the day and respond if I consider it appropriate.
 

Of course I will not respond to “are we there yet” messages, or emails, unless we are actually already “there”, or I have a question in order to be able to get “there”.
 

It is my goal to end April 14^th with no workload-related extensions filed.  Wish me luck!
 

Thanks for your continued patience.

TTTIO

WHERE THE FAKAWI - I NEED MORE TIME LBCD!

The "to be done" boxes are getting full (one each now for returns received in February and returns received in March) - although the "red-file" box contents are reducing.

 

So once again I must lock myself behind closed doors Monday and Tuesday this week as well as Wednesday.  I will be unavailable and inaccessible until Thursday - so don't call me until Thursday.

 

Back to work!

 

TTFN

WHERE THE FAKAWI? TAX SEASON UPDATE

One month down - one and a half to go!

 

As I say good-bye to February I have either done, received, or made arrangements with almost half of my client list. 

 

I have completed 84 returns.  That is only an average of 3 per day.  I need to double that average! 

 

And there are not too many red-files (need more information).  I have been keeping on top of them - and completing the returns as the information arrives. 

 

I am too tired to count the number of returns in the "to be done" box - but they are piling up.  So don't be surprised if I add some additional "locked behind closed doors" days - or even a full week - before mid-March.

 

As it is every Wednesday I am "locked behind closed doors" and totally unavailable - so don't call me on a Wednesday!

 

OK - now back to work!

 

TTFN



A NEW WHERE THE FAKAWI!

Back from my week-end in the Garden State.

 

I picked up 19 returns! And 7 were waiting for me in my PO box on Sunday night.--

 

I now have 39 separate returns in the "to be done" box and 5 "red files" (need more information).

 

Since I only completed 1 return in 3 days (finished one Friday morning before getting on the road) I need to lock myself behind closed doors - and work undisturbed - today (Monday), Tuesday, AND Wednesday this week to sort of catch up.

 

While I will be checking emails sort of regularly to look for answers to questions, I will NOT be answering the phone (although I may have the machine on - on silent mode - so as not to miss any important messages).

 

So - "talk" to you on Thursday!

 

TTFN

WHERE THE FAKAWI – TAX SEASON UPDATE – FEBRUARY 15th

The first two weeks of the tax season have come and gone!

Despite my move to Northeast Pennsylvania, nothing seems to be different so far. 

As of this writing I have either done, received, or made arrangements with 30% of my client mailing list.  And I have 32 returns “under my belt” (and 5 “red files” – returns that need more information).  

Don’t forget that each and every Wednesday of the season I am locked BEHIND CLOSED DOORS. I am unavailable and inaccessible – so don’t call (the phone will be turned off).

I will be “on the road” in NJ all this week-end – including my annual trip to Freehold. 

The floodgates have now officially opened and the deluge has begun.  No longer will I be able to get returns done and out as they are received.  The turn around time will now be at least a week.

 

My tax tips and articles  continue to appear at the Tax Center of www.MainStreet.com, and in the Personal Finance section of www.TheStreet.com.  Check them out. 

TTFN

WHERE THE FAKAWI

One month down, one and a half to go!

The season is going smoothly so far – and I think I am a bit ahead of where I usually am at this time, thanks to a delay in my “Freehold Day”, after which the one week or more turnaround begins.

I have been extremely pleased that most brokerages have gone beyond the letter of the law and are reporting all cost bases for which they have the information on the 1099Bs.  And I have seen separate listings, with sub-total for sales with basis and sales without basis to facilitate the multiple Form 8949 filings.  I had my first “cut and paste” job (multiple pages of sales – too many to list separately on the 8949), and it was not a problem at all.  The huge cut and paste jobs are yet to come – and I am keeping my fingers crossed.

The new format of the Schedule E was a PITA at first – I saw no need to change the format – but I am getting used to it.

I have been rising at 5AM or earlier each morning and stopping at between 5 and 6 PM each evening – as soon as I am at a good stopping point.  My answering machine (which is my secretary for screening calls) is on from at least 9AM to 5PM.  I rarely return calls – so if at first you don’t succeed, try again until you get me.

Of course I am LOCKED BEHIND CLOSED DOORS every Wednesday – and the phone is off all day.  I have already extended that to Thursday and Friday one week – and may do so another week soon.

Back to work!

TTFN

THANK GOD IT'S OVER!

TAX SEASON'S OVER! MY FACE IT HAS A BIG SMILE. AND SO IT'S OFF TO THE SHORE, 1040s NO MORE. AT LEAST FOR A WHILE.

The Wandering Tax Pro will be returning to the tax blogosphere - with more of the witty, informative and insightful posts you have learned to love - after a few days of much-needed and well-deserved recuperation at the Jersey shore.

"Talk" to you soon.

TTFN

WHERE THE FAKAWI – MARCH 1, 2011

Time for another WTF update!

• I completed just over 100 returns in February.

• As of this writing I have either completed the return of, received the “stuff” of, made arrangements with, or heard from about 57% of my client mailing list.

• There are very few “red files” – and as soon as the missing info arrives I finish the return.

The “to be done” box is truly “chock-a-block”. Hopefully things will be quiet for the next two weeks and I will be able to attack the pile with minimal distractions or interruptions.

FYI, with minimal exceptions, I will not begin work on a return received in March until all of the returns received in February are addressed.

I may again decide to extend a BEHIND CLOSED DOORS WEDNESDAY through Friday to make a dent.

Talk to you again at the half-way mark.

TTFN

IMPORTANT MESSAGE FOR CLIENTS

For my 1040 clients –

I will be extending BEHIND CLOSED DOORS WEDNESDAY this week from Wednesday February 23rd) thru Friday (February 25th).

I will be unavailable and inaccessible WEDNESDAY, THURSDAY, and FRIDAY. Do not call and do not even think about dropping by!

Thanks, as always, for your patience and understanding.

TTFN