Sat, 03 Feb 2024 00:37:02 -0800WeeblyThu, 28 Dec 2023 08:00:00 GMThttp://thetaxspecialists.biz/blog/news-for-2023The big news for 2023 is that I have closed my office and will work from home going forward, until I retire several years from now. I have had a marvelous career as a tax accountant and it has been a pleasure getting to know the many clients who have come to me over the past 36 years. I am truly grateful for each of you, and I am honored that you have chosen me to assist in helping you in the preparation of your tax papers.
]]>Sun, 07 Feb 2021 20:32:45 GMThttp://thetaxspecialists.biz/blog/covid-protocols-for-the-2020-tax-seasonAll clients must wear a mask which covers nose and mouth to enter the building.
I will allow no more than one family unit in the office at one time. If the office is occupied, please wait in the hall until the previous clients have left. 

Clients will place their papers on the receptionist desk and step back out of the office while I retrieve them. Once I have done so, I will ask you to come back into the office and remain in the lobby while I retreat to my inner office. We will keep at least 10 feet of distance between us while we discuss your taxes.

On the return trip to pick up finished work, the papers will be opened and ready to sign on the receptionist table.]]>Sat, 18 Jan 2020 00:00:31 GMThttp://thetaxspecialists.biz/blog/tax-changes-for-the-2019-filing-season2019 marks the end of the healthcare coverage shared responsibility payment. There is no longer a penalty for not having health insurance. This means that Form 8965 is no longer used.

The Form 1040 has expanded to two pages!! (Surprise Surprise) Plus, there is a new form 1040-SR for seniors who were born before January 2, 1955. The line numbers are identical to the 1040, but the fonts are larger, and a cheat-sheet for the standard deductions appears on the front page. The form is supposed to help make it easier for seniors to prepare their simple returns. However, for tax professionals, it is just one more unnecessary form to keep track of, and I probably won't use it in my office.

Also there are fewer numbered schedules this year. You may remember that last year, there were six additional schedules, along with the one page 1040. Well, that turned out to be a mess, and so this year Schedules 2 and 4 are combined into one schedule, the new Schedule 2, and Schedules 3 and 5 have been combined into the new Schedule 3. Are you confused yet?

Regarding IRA and pension reporting:  the IRS went back to using separate lines to identify each of these distributions, so lines 4 a and 4b report Ira distributions and the taxable amount and lines 4c and 4d report pensions and annuities and the taxable amount. This is very similar to how it used to be on the 1040 prior to 2018.

Standard deduction amounts have increased. For 2019, the amount for single or married filing separately is $12,200. The amount for married filing jointly or qualifying widow is $24,400. The amount for head of household is $18,350.

There is a simplified worksheet for figuring the Qualified Business Income Deduction, Form 8995. There are some income restrictions, and you can’t be a patron in a specified agricultural or horticultural cooperative. Those who can’t use form 8995 will use Form 8995-A.

New this year is a question at the top of the Form 1 regarding the acquisition, sale or exchange of any virtual currency. (Bitcoin, etc) These transactions are reported line 8.

Finally, there are some extended tax provisions. Certain benefits that had expired at the end of 2017 were reinstated. These include the tuition and fees deduction, the deduction for mortgage insurance premiums, non-business energy property credits, and alternative fuel vehicle refueling credits. The irony of this extension is that it applies not only to 2019 taxes but also to 2018 taxes, which means that if you didn’t take any of these credits in 2018 but you are eligible to take them, you will now have to file an amended return in order to take advantage of them. For Oregon residents, I am assuming that they will reinstate the subtraction for tuition, retroactive to 2018. ]]>Mon, 21 Jan 2019 18:34:57 GMThttp://thetaxspecialists.biz/blog/tax-changes-for-the-2018-tax-season​The Tax Cuts and Jobs Act, as the new tax bill is called, is a major overhaul in the tax code. In fact, it’s the most extensive tax code overhaul since 1986. Below are some of the many changes beginning on January 1, 2018. 

*The personal exemption deduction is eliminated. (In 2017, the amount was $4,050 per person.) *The standard deduction amounts have effectively doubled. For single or married filing separate the deduction is $12,000. For married filing joint or qualifying widow the amount is $24,000. For head of household the amount is $18,000. (Comment: Under the new law, couples who have just one child age 17 or older will owe more taxes this year than last, all other conditions being equal, from the previous year. And it only gets worse as family size increases. The doubling of the standard deduction simply cannot make up for the loss of the personal exemption amount for large families.)

*The moving expense deduction has been eliminated, except for military families on active duty.

 *Certain itemized deductions are eliminated or greatly reduced. For instance, no more than $10,000 of combined state and local property, sales, and income taxes may be deducted. The home mortgage interest deduction is limited on all new debt. The acquisition debt limit is reduced to $750,000, down from $1,000.000.  Personal casualty losses are no longer deductible, unless those losses are attributable to a federally declared disaster area. Miscellaneous itemized deductions subject to the 2% adjusted gross income limitation are eliminated. This includes unreimbursed employee business expenses, investment expenses, (broker fees, attorney fees, etc.) tax preparation fees, and repayment of Social Security benefits. (Comment: In my opinion, the loss of unreimbursed employee business expenses is a big loss, because this means that mileage and business meals and business gifts can no longer be deducted. So, it is now very important to have the employer reimburse these expenses through an accountable plan.)

*The new tax rates are as follows: 10%, 12%, 22%, 24%, 32%, 35%, and 37%.
*The standard mileage rate per mile for business is 54.5 cents per mile. For charity, the rate is $0.14 a mile. And for medical, the rate is $0.18 a mile.
*Educators are still allowed to subtract up to $250 for unreimbursed expenses.
*The child tax credit has doubled, from $1000-$2000 per eligible child, so this is a bit of good news.

Also, although rumors abounded early in 2018 to the contrary, there is still a penalty for not having health insurance. The penalty is $695 per adult, and $347.50 per child for a maximum of $2085 per family, or 2.5% of the household income, whichever is greater.

And starting in 2019, alimony and separate maintenance payments are not deductible by the payor spouse, and not included in income by the recipient spouse. This provision is effective for any divorce or separation instrument executed after December 31, 2018.

And of course, the tax forms have been changed as well. While some forms have been simplified, new schedules have been created to provide detail lost on the original forms. And that highly anticipated postcard return is nowhere to be found. All in all, the 2018 tax season is shaping up to be one of the most challenging and confusing seasons in a long time. As of this writing, (January 18, 2019) parts of the federal government, including the IRS, are still closed. And while the IRS has said that they will do their best to process returns in a timely manner, if the shutdown continues, expect even longer delays for processing and of course for refunds.]]>Sun, 04 Feb 2018 23:45:07 GMThttp://thetaxspecialists.biz/blog/the-new-tax-billThere are new, more generous tax rates, especially for corporations, who see their rates fall from 35% to 21%.  Personal tax rates were lowered as well, with the new bottom end at 10%. Ironically, the personal tax rates expire at the end of 2025, but the corporate rates remain fixed permanently.
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At first glance, it appears that many people who don't itemize will get a tax break on their 2018 returns next year. That may true for those whose itemized deductions are greater than the new standard deduction amounts of $12k (single) or $24K (joint), especially as those deduction totals go above and beyond the new standard deduction levels. In any case, many of the old deductions are now gone, including the 2% (miscellaneous) deductions. These include employee business expenses, tax prep fees, safety deposit boxes, and union dues among others. Also gone are casualty and theft deductions. The deduction of state, property, and local taxes cannot exceed $10k. The interest on new home loans can only be deducted on the first $750k of the mortgage debt, and the interest on all home equity loans (old or new) is no longer deductible. Gone also is the personal exemption. Are you seeing a pattern here? Yes, it appears that many of the deductions which working class people hold near and dear are being eliminated. No matter though. We'll all be better off with that larger standard deduction, or so they tell us.


]]>Fri, 27 Jan 2017 16:57:04 GMThttp://thetaxspecialists.biz/blog/tax-professionals-vs-tax-software-revisitedIf you're thinking about buying some tax software and preparing your own taxes this year, consider this: Off-the-shelf tax software is no substitute for knowing the tax code, with all of its complexities, loopholes, and hidden deductions. Frankly, it is so complicated that most Professional Tax Preparers specialize in a particular area, such as Large Corporations, or Trusts, or Partnerships, etc.  Also, off-the-shelf tax software is no substitute for a competent, experienced Tax Professional. Yes, it is true that consumers can purchase this year's popular tax software for as little as $40.00 in some places. But you know the old saying: “You get what you pay for!”  ]]>Wed, 25 Jan 2017 22:25:41 GMThttp://thetaxspecialists.biz/blog/notes-about-the-2017-tax-season Will this be the last year for the Affordable Care Act?

I don't want to see America regress backwards to the days when millions of people had no health care. However, as a Tax Professional, I have found it odd that this plan is being enforced through the tax code.  After all, what do Income Taxes have to do with Health Insurance Coverage??  Going forward, I would like to see a plan which doesn't require so many arcane forms. Better yet, how about a plan which doesn't rely on the already-complex tax code and thus Tax Professionals, for its administration!
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The IRS indicates that some refunds will be held until February 15. Returns which claimed the Earned Income Credit or the Additional Child Tax Credit will not be processed until February 15, even if they were filed prior to that date. Effectively, taxpayers won't see their money until the last week in February if they filed electronically, and longer if they expect a paper check.



Finally, starting this season, the IRS Taxpayer Assistance Centers throughout the country will now operate by appointment only. The days of taxpayers just walking into their local IRS office are over. Thus, the IRS further insulates itself and makes it that much harder for the taxpayer to get help. Blame it on budget cuts, I guess. : )]]>Sat, 23 Jan 2016 21:41:05 GMThttp://thetaxspecialists.biz/blog/the-2016-tax-season-is-here Affordable Care Act Reminders

If you enrolled in coverage through the Health Insurance Marketplace during 2015, you may have received financial help with the premiums through advanced payments of the premium tax credit. If so, you must have Form 1095-A before you can file your tax return. This form should be sent by the Marketplace Provider. The information is used to complete Form 8962, which reconciles the amount of the credit with the taxpayer's actual earnings.

Tax Scams

Last year, several of my clients were contacted by unscrupulous people demanding payment for taxes which they did not owe. It is important to note that the IRS does not contact taxpayers via email to request information. Also, they do not contact taxpayers by phone and ask for immediate payment via credit or debit cards, nor do they threaten taxpayers with jail sentences if the money isn't paid right away. I always advise my clients that they should not relay any personal information such as Social Security numbers, birth dates, banking information, etc. to any person whom they do not know!  

]]>Tue, 03 Feb 2015 02:29:05 GMThttp://thetaxspecialists.biz/blog/the-affordable-healthcare-act-and-2014-tax-returnsThe tax effects of the Affordable Healthcare Act (AHC) began at the start of 2014, and many people who didn't have coverage last year are in for an unpleasant surprise at tax time. In short, based upon a number of variables including income, a lack of coverage may result in a penalty which is figured on the Federal Tax Return. There are some exceptions, but if you were without coverage in 2014, this may be the year to seek the advice of a Tax Professional. I can help you determine how much (if any) the penalty is, and if you qualify for an exemption. I can also tell you what the projected penalties will be in 2015 and 2016, for those people who continue to go without coverage.   

]]>Wed, 22 Jan 2014 19:02:44 GMThttp://thetaxspecialists.biz/blog/how-are-we-different-from-the-national-chainsA new tax preparation company has just moved into the same building where I have been doing business for the past eight years. At first, I was angry and frustrated at the property manager for “betraying” me by renting space to a competitor. But, upon reflection, I realized that this new “tax mill” company is not really my competitor at all. As a matter of fact, all three “major” tax preparation chains now have locations within a quarter mile of my office! But, as I say, they are not really my competitors, because our clientele is really quite different from theirs. Here are a few major points which separate us from the chain store tax preparation companies:

1. Unlike the typical tax mill office, we have private offices for our client interviews, and one tax expert handles all aspects of the tax prep process, from beginning to completion, including the all- important exit interview, where the client has an opportunity to ask questions.

2. We take as much time as the client needs during the interviews. The client never feels rushed.

3. We genuinely care about our clients' welfare, and we treat them like we would our own family. In fact, many of them have been with us for over twenty years, so they seem like family!

4. We offer tax advice which is tailored specifically to each client's situation, because a “one-approach-fits-all” really isn't effective for anyone.

5. We are available off-season, and we encourage our clients to call us if a situation arises during the year which may affect them tax-wise.

Most of our new business comes from personal referrals from our established clients, and we are humbled and honored by their trust in us. 

So, if you've been using one of the “tax mill” prep services and you're ready for a more personal approach, or if you are looking for a tax preparer who you can rely on year in and year out, give us a call! We are always looking for high caliber clients like you!

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