Not quite Tax Day but I like that both parties are involved .....As tax time is nearing, I probably won't be coming on my blog that often. I'm hoping to just keep up with the other blogs I watch.
Get your shoe boxes ready folks!!
Nothing but problems on the fore front for filing season this year. To start things off right the IRS has announced that anyone using Schedule A, claiming education credits for students, or teachers claiming the $250 educator expense should wait until the end of February to file.This is due to the late changes in the forms.....
Quoted from the IRS
- Taxpayers claiming itemized deductions on Schedule A.
Itemized deductions include mortgage interest, charitable deductions,
medical and dental expenses as well as state and local taxes. In
addition, itemized deductions include the state and local general sales
tax deduction extended in the Tax Relief, Unemployment Insurance
Reauthorization, and Job Creation Act of 2010 enacted Dec. 17, which
primarily benefits people living in areas without state and local income
taxes and is claimed on Schedule A, Line 5. Because of late
Congressional action to enact tax law changes, anyone who itemizes and
files a Schedule A will need to wait to file until mid- to late
February.
- Taxpayers claiming the Higher Education Tuition and Fees Deduction.
This deduction for parents and students — covering up to $4,000 of
tuition and fees paid to a post-secondary institution — is claimed on Form 8917.
However, the IRS emphasized that there will be no delays for millions
of parents and students who claim other education credits, including the
American Opportunity Tax Credit and Lifetime Learning Credit.
- Taxpayers claiming the Educator Expense Deduction. This deduction is for kindergarten through grade 12 educators with out-of-pocket classroom expenses of up to $250. The educator expense deduction is claimed on Form 1040, Line 23, and Form 1040A, Line 16.
It makes little sense that the IRS has to approve part II of this form every year or that they wait until the last minute to reinstate expiring tax breaks. The above said form makes little sense in my opinion. I've been doing taxes for about 25 years now and I've never figured it out. I'm pretty sure anyone doing taxes doesn't understand it either. Not even the CPA's of the world. But who ever said IRS forms made any sense. Even Albert Einstein said,“The hardest thing in the world to understand is the income tax.”
A place called 1040 Central has a lot of information for those "do-it-yourself-ers." Did you know IRS offers FREE e-filing? Yes, yes they do!! Beware though.......I've only used TurboTax for this free service. Somewhere in the middle of doing your taxes, the program will ask if you want to "maximize" your deductions. If you say yes then it bumps you over to the next level and will charge you for the tax return. You have to start all over in order not to pay.
The one good thing that has happened this year....the IRS has implemented an act that will require all those preparing taxes to be tested and registered. As of January 1, 2011, anyone being paid to prepare a tax return MUST be registered and have a PTIN . I'm not sure what the penalty will be if you're not registered but you should know your tax professional. The testing requirement gives us until 2013 to complete but the test will be out by mid year and I plan to take it ASAP.
I'm not a CPA and really, I have no credentials. I just have my experience and my word that I am up to date on all tax laws. My continuing education equals up to approximately 50 hours every year. People always ask me if I'm a CPA when I say "no", they want to know what I am? I'm sure the IRS will give a cute little title like??? Registered Tax Professional ?? I'm not very inventive maybe the IRS is better?? Either way it is a good thing! There will be accountability for all and required continuing education. This will make it easier for the tax payer to find a reliable tax professional.
A little known fact....CPA's hire regular ole tax people (like me) to prepare taxes each year. Technically the CPA office is responsible for that preparation. The CPA reviews the tax return and will probably be the one who signs it also. Mostly I say this because of the prices people pay to have their taxes done. Know your tax professional.
Last buy not least.......do not ever expect the IRS to send you an e-mail. Don't open it or reply to it. Should you receive an e-mail, KNOW that it is a scam. You can forward this e-mail to the IRS to help them stop the phishing.
I've always said reading the tax law is like reading the Bible........everyone has their own interpretation. Don't believe me? Call the IRS 3 times with the same question and see if the answers all match.......it's NOT really that bad....I'm just saying............
Dab-a-dib-a-dab-da........ that's all folks!
“Income tax has made more liars out of the American people than golf.” — Will Rogers, humorist
The delay with Schedule A is going to cause a huge cluster!
ReplyDeletedon't I know it. All I can hope is that my clients don't wait and at least let me get started.
ReplyDeleteThe good thing about where you are is that there are so many places ordinary citizens can turn to for help.
ReplyDeleteI think our tax office guides people now. My mother the maths whizz does our taxes.
Schedule A sounds super. I wish we had that. Not even deductions for charity we don't get.
I'm so boringly cautious with money, I put aside from what I've earned to pay so I don't have to struggle to find the $$ later on.
That's a smart thing to do GG. I keep all my $$ until they pry it from my fingers!!
ReplyDeleteWe try Turbo Tax every year but consult with the Tax Consultant regarding depreciation. Turbo Tax says you can get "answers" from the online forum. Like we are going to take tax advice from OTHER clueless taxpayers!!?? My buddy advised his daughter she could deduct the cost of her makeup because she needs to look good for her retail job!
ReplyDeleteEvery year they do this thing in the news where they give a bunch of tax preparers and accounts the same "typical" household then note how all of them come up with different tax liabilities for each one.
We are thinking of using a dart board this year.
Well, I have heard of a stripper deducting her breast implants! But not makeup...LOL
ReplyDeleteWe have a professional do our tax returns. It got to be too complicated for us in the past and we just said, "Forget this shitola... Let's let So and So do it." So every year, for the last 8 years, we've had this woman we know do it for us and have been satisfied with the results every time. She asks for the same agreeable amount of money for her service each year, no matter how much we get back.
ReplyDeleteLa la la la la! I can't hear you! I am in tax time denial.
ReplyDelete