Tax preparers Feed

The King by Kevin Pluck via Flickr We thought we wanted you March, but your "in like lion" approach this year is way too fierce. Severe weather roared through the south today, with a rash of tornadoes claiming lives and destroying property. Meanwhile, a serious winter storm is heading to the northeast, making March's appearance more like a snow leopard than a lion. The only good thing about this early spate of destructive weather is that it reminds us all to be ready for natural disasters. They happen year-round. And under the new tax law, you can claim any damages... Read more →


Prior year tax returns serve many purposes. This filing season, a check of last year's return will show you what your tax liability for 2017 was. You can compare that to your final 2018 tax bill to see if the Tax Cuts and Jobs Act (TCJA) did indeed lower your taxes even though your refund this year was smaller. You'll also need past year tax data if you're applying for a major loan, such as a mortgage. And if you're electronically filing your tax return this year, you'll need data from your previous year's taxes to complete that task. Record... Read more →


The National Taxpayer Advocate this year selected 21 major problems that taxpayers encounter in their dealings with the Internal Revenue Service. I found five of those issues particularly troublesome. Every year, the National Taxpayer Advocate issue a report to Congress. The 2018 version released this week included a look at, not surprising, how the recent government shutdown affected not only Internal Revenue Service operations, but also the taxpayers who, particularly at this time of year, are relying on IRS services. Part of that annual report also includes at least 20 tax matters that the Taxpayer Advocate identifies as the most... Read more →


Most tax preparers are honest and work to help their clients. Some, however, use shady methods to make money off unsuspecting filers. Don't be one of them! More of us every tax-filing season are turning to tax professions. The 2019 filing season in particular has underscored the value that tax professionals add. This is the first year taxpayers have had to deal with the real-life effects of the many Tax Cuts and Jobs Act (TCJA) change. A knowledgeable tax preparer can help you navigate this new maze. But you need to be careful in picking the person to be your... Read more →


Hello, February! If we ever were in need of your hearts and flowers, it is now. January was tough tax-wise. We had to worry about whether the Internal Revenue Service actually would get filing season open as the longest federal government shutdown in U.S. history dragged on. It opened as promised on Jan. 28, but be patient. Plus, we're dealing with our first filing season under the many, many changes brought about by the Tax Cuts and Jobs Act (TCJA). Yep, we definitely need some tax love. And some tax guidance, whether we're earlier filers awaiting refunds or procrastinators taking... Read more →


Even if you've been filling out Form 1040 and any other associated forms and schedules for years, things will be different this filing season. This is the first year we taxpayers (and tax pros) will be filing under the extensive new Tax Cuts and Jobs Act (TCJA) changes. In addition to new tax rates and deduction amounts, there are a variety of other tax law tweaks that could affect what goes on — or now doesn't — your Form 1040, which itself is new. So before you start working with your tax preparer or open up your tax software, either... Read more →


We're almost 13 months into the largest tax reform measure enacted in more than 30 years and one thing is clear. The Tax Cuts and Jobs Act (TCJA) is in no way tax simplification. In fact, taxpayers and the professionals they pay to help make filing less taxing in every sense of the word have been struggling with just what Congress meant in way too many of the tax bill's hastily drafted provisions. Big business bill, with small biz break and confusion: Although the TCJA contains many changes that will make filing returns this year interesting for individual taxpayers, it... Read more →


Longest U.S. federal government shutdown in history be damned! That's apparently the Internal Revenue Service's motto this year. It announced last week that it will start working on our 2018 tax returns — and issue any related refunds — this filing season, which is set to start on Monday, Jan. 28, even if it's technically still operating in modified shutdown mode. The IRS underscored that commitment on Friday, Jan. 11, when it announced that taxpayers who qualify to use Free File can now access the online no-cost tax preparation and e-filing option. Yep. Free File 2019 is now open for... Read more →


Hello 2019! I'm not sure we're ready for you, particularly when it comes to the major tax code changes under the Tax Cuts and Jobs Act (TCJA). We'll deal with the real-life effects of the new tax laws for the first time when we file our 2018 returns. When that will be is still up in the air and depends on a resolution to the partial government shutdown. But even though Capitol Hill and many of Uncle Sam's offices remain in limbo, we taxpayers need to start now taking an up close and personal look at what the TCJA will... Read more →


Welcome to Part 9 of the ol' blog's 2019 series on tax inflation adjustments. Today we look at tax penalties. You can find links to all 2019 inflation posts in the series' first item: income tax brackets and rates. Note: The 2019 figures apply to 2019 returns that are due in April 2020. For comparison purposes, you'll also find 2018 amounts to be used in filing this year's 2018 tax return due April 15, 2019. IRS agents don't throw flags like football referees, but the tax agency keeps a close eye out for violation of tax rules and laws and... Read more →


Another lingering tax deduction concern created by the Tax Cuts and Jobs Act (TCJA) is finally clearer. The Internal Revenue Service says that half the cost of business meals is still tax deductible as an allowable work-related expense. That's what the pre-TCJA tax law said. But because the Republican tax reform bill was cobbled together so hurriedly at the end of 2017, its legislative language left many confused. And the new law's interpretation created a division among tax professionals (and semantics geeks) as to what exactly is entertainment. Meals or entertainment vs. meals and entertainment: A great number of tax... Read more →


Old-school passbook savings accounts are safe, but have been paying minuscule interest over the last few years. The White House might be unhappy, but all of us with money in safer assets like certificates of deposit (CDs) or plain-old savings accounts are sending the Federal Reserve Board of Governors, aka the Fed, a big fat thank you. The Fed's decision yesterday (Wednesday, Sept. 26) to raise rates to a range between 2 percent and 2.25 percent means we'll be seeing few more pennies of earnings in our accounts. And it is just pennies. Those of us old enough to remember... Read more →


After years of being lambasted for efforts to regulate tax preparers, the Internal Revenue Service is on a roll in its efforts to oversee certain tax professionals. A recently introduced bipartisan Senate bill would give the IRS the authority that many argue it doesn't have to set standards for tax professionals who aren't subject to other professional guidelines. This is not the first time such legislation has been introduced. But those previous bills never went anywhere. However, the tide now seems to be shifting a bit in the tax agency's favor. Influential tax professional groups are among this latest legislative... Read more →


When you hire a tax professional, you want someone you can trust. In Paul Manafort's case, that apparently meant someone he trusted to file fraudulent returns. The accountant for former Donald J. Trump campaign chairman Paul Manafort told jurors hearing the bank fraud and tax evasion charges against the long-time political operative that she helped backdate documents and falsify financial records. Cynthia Laporta, who has been given limited immunity for her testimony, said the accounting maneuvers suggested by Manafort and his longtime business associate Rick Gates, who's also working with the prosecution and expected to eventually testify in the case,... Read more →


The role of Supreme Court nominee Brett Kavanaugh in preventing the Internal Revenue Service from aggressively regulating tax preparers has prompted some questions about such oversight. Currently, the IRS uses a voluntary tax professional oversight system, but is expected to continue to push for Congressional authority to implement more stringent tax preparer regulations. Those who agree with the IRS (like the agency's National Taxpayer Advocate) argue that regulating tax pros is necessary in order to protect taxpaying clients. It also, they contend, would lead to more accurate tax returns and ensure a fairer and more efficient tax system Opponents of... Read more →


Judge Brett Kavanaugh spoke at the White House after being nominated to be the next Supreme Court justice. (Official White House photo by D. Myles Cullen via White House Instagram) Federal judge Brett Kavanaugh was tapped last night (July 9) by Donald J. Trump to replace retiring Justice Anthony Kennedy on the Supreme Court Supreme Court of the United States (SCOTUS) Kavanaugh, 53, has served on the D.C. Circuit Court of Appeals since 2006, a position for which he was nominated by the last Republican Oval Office occupant, President George W. Bush. Like Trump's prior Supreme Court justice nominee, Neil... Read more →


Insightful high school seniors' essays offer valuable lessons about life, finances and, yes, taxes. As I get closer to retirement, I've begun to think what I'll do with the free time that transition is supposed to provide. One option I've considered is volunteering at tax help sites, like those offered by Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) locations. That's why as I was thumbing through the paper this morning, the story about college essays caught my eye. Ron Lieber, who writes The New York Times' "Your Money" column that runs each Saturday, this weekend... Read more →


Most U.S. taxpayers get refunds. But the time it takes to get that over-withheld money seems to get longer every filing season, at least according to the emails I've received and comments on my refund-related blog posts. Part of the reason is the annual mandated hold until mid-February of refunds associated with returns that included Earned Income Tax Credit (EITC) or Additional Child Tax Credit claims. Realistically, that money doesn't show up in many affected filers' hands until the end of February. Then earlier this year, Congress decided to renew some tax breaks after the filing season had already been... Read more →


Scott Foster, accountant by day and emergency NHL goalie for one night, makes a save in the Chicago Blackhawks win March 29 over the Winnipeg Jets. Accountants know all about pressure, especially during tax season. But Scott Foster, a Chicago-area numbers cruncher, last night ably handled even more, albeit a different kind of, stress. Foster faced, and bested, some of the National Hockey League's best. Injuries lead to NHL debut: A series of injuries forced Foster to suit up and step into the goal crease for the final 14 minutes of the Chicago Blackhawks March 29 game against the Winnipeg... Read more →


When we pay a tax pro for help, we trust that person. Sometimes we shouldn't. Most of use tax professionals to help get through tax season. Thankfully, most paid tax preparers are honest. They want to help their clients meet their tax responsibilities by legally paying the least amount of tax possible under the Internal Revenue Code. But most is not all. Some tax preparers run fly-by-night operations where they simply look to make a quick buck off of honest individuals seeking tax assistance. These pros, and I use the description advisedly, often get paid based on a percentage of... Read more →