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Retrospective look at 2017 tax filing season


JimTaxes

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Few takeaways from the season with over 1,000 returns filed.
 
Everyone has their own way of running their office and some of these comments may not be how others do things, 
not saying my way is the best way, just it works best for me.
 
Tax Extenders required me to keep a list of returns on hold, kind of a nuisance but not too bad
 
Tax Organizers - never used them, really dislike them.  In fact client that use tax organizers from prior accountant or make up their own create double work.. let me work off the tax documents, 1099s, W2s, etc.
Codes on W-2 - I have seen no impact, no change in return with Codes C or DD.. in times of tax crunch I have not entered Code C or DD amount.. Do those figures for those codes go anywhere or have any impact?
 
Mileage in Schedule C. If client brings in documented business miles of 10,000 is total miles that important?
 
Drop off or budgeting time for meeting with clients.. for years I had clients drop off and would work on return and then meet up again to finish that up.. Switched to preparing returns with client here about ten years ago.. would never go back to the drop off method. clients is here to answer questions, which almost always come up.. if something is missing, like real estate taxes we can look it up online.. client has screen facing them where they can see return being prepared.
 
Drivers license - for tax year 2016 Ohio told me it was optional so I stopped getting that info in mid tax season last year.. Had a lot of missing DL info for tax year 2017.. should be better shape in this area for next filing season.
 
Injured Spouse. - I found out it is quicker to send in 8379 by itself
 
Civil Service 1099 - why can't they fill in taxable amont?
 
W-2 verification code.. I am sure I missed typing some of those in.. how much does it really matter?  
 
1099-Div with Foreign tax paid but not showing foreign income. Short of calling fund, what can you do besides estimate?
 
Basis on 1099-B.. years ago was a big problem.. not too many missing basis ones this year
 
Her kids, his kids, our kids, joint kids, his year, her year.. those can still be a messy pain.
 
HUD statement.. why now called Closing Disclosure?
 
ROTH on MFS. why is income limit $ 10,0000
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Jim:

My thoughts on some of these:

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Tax Organizers - never used them, really dislike them.  In fact client that use tax organizers from prior accountant or make up their own create double work.. let me work off the tax documents, 1099s, W2s, etc.

I use them, to sort items into a consistent order, and indicate missing items.  You are right, each practice is different.  But they work for me and mine.

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Drop off or budgeting time for meeting with clients..

I meet with the clients and get what is needed.  Sort info and ask questions.  I will not do a return in front of a client.  tomato/Toemato.  But I do want to institute a "fast Track" process for the easier returns. 

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Injured Spouse. - I found out it is quicker to send in 8379 by itself

I had my first experience with this last year.  I have one now, do they apply after the fact?

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Civil Service 1099 - why can't they fill in taxable amount?

Retiree's since about 2006 have the amount filled in, those prior to that, it was the same deduction as last year.  But still, PITA.  The tax software should carry over that you are doing Simplified General Rule and just calc it for you.

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W-2 verification code.. I am sure I missed typing some of those in.. how much does it really matter?  

I thought that were using this as a indicator to the IRS that the W-2 would match what the employer sent.  No.  Its just an algorithm of the numbers on the W-2 that a scammer can create.  Stupid.

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Basis on 1099-B.. years ago was a big problem.. not too many missing basis ones this year

Certainly appreciate this info now.  However, we still have to be careful.  The cost basis amount on the 1099-B may not be the same as in the detail worksheets.  Reviewing the detail has saved my clients nice dollars.

Some of mine:

Learning from AbbyNormal how to do extra customization of the "master" forms to speed things up.

How much longer until the IRS slips April 15th to the 30th or May 15th?

Why won't ATX let us, after we have created an extension client Efile, continue to work on that file without blowing up the extension efile...

Now that Direct to Charity RMD's are permanent, the IRS needs to add the box to the 1099-R for any amounts sent to charity.  Those CP-2000's are getting tiresome.

Does anyone here use the Client Portal as provided by ATX/CCH?

The ATX system this year was pretty stable.  Seems that my wireless network was the one slowing me down.

I am going to cut back on client visits or times next year. Instead of 1/2 hour, 20 minutes.

Rich

 

 

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My biggest complaint with ATX was that I couldn't enter a zero on Form 8606 Line 19 for a client with a ROTH distribution Code J.  He had a qualified distribution that included earnings.  Code Q would have been appropriate, but since it wasn't Code Q,  blah, blah, blah.  You can print any positive or negative integer in that blue box but not a zero.  Sometimes you want to see a zero in a box.  My client did.  So I wound up cutting a "zero" out with scissors and gluing it in the box.  Ran a copy for the client.  Sure did.  ATX said IRS would understand that a blank box meant zero.  They have more confidence in the mind reading ability of IRS than I do.  We'll see.

Similar problem with Form 8962, column f.  I could not create the e-file allocating 0% of APTC on a return.  I had to use 1%. 

I guess you could say I had zero problems.  Arr.  Arr.

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32 minutes ago, JimTaxes said:

I don't even use ATX.. used to years ago.. I read here those for general tips and have posted a couple of tax questions, not program related.

Yeah, I couldn't really think of much you or Rich hadn't covered.  In general, education credit problems and ACA problems are the most frustrating to me.  I suspect many, many returns are sliding thru with incorrect credits, exemptions from SRP, etc.  You just do the best you can to prepare correct returns and watch business go down the street to preparers who don't know or don't care.  And let's be honest here, most people don't want their returns prepared correctly.  They want their taxes won.  And until it is a problem to submit a crappy return, we are walking into the wind.  Oh, well.  Walk on.

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Speaking of education credits and the 1098-T, I kind of remember reading how Box 1 would start to be used.. some other items

- Code V on W-2.. gains on stock options? right, requires Sch D. usually with about a break even on D, maybe small loss for fees, and for basis from 1099-B, the actual 1099-B often shows a big gain but later on in the 1099-B pages has adjusted basis!

Items so rare easy to miss:

  • Withholding tax on 1099-INT or 1099-DIV
  • Dependent Care benefits on W-2

Can be confusing

  • 1099-OID and accrued interest on those items

Big pain, often so minuscule I don't bother with

  • state exclusions of interest and dividends on back of 1099 INT/DIV

Things I learned this year, time savers

  • 8379s supposedly faster if mailed in separately
  • Long term care insurance flows through to front of 1040 for Self employed taxpayer (assuming sufficient profit)
  • on Schedule D if a bunch of sales, I scan and attach pdf. if a small amount, I code ST or LT and basis reported or not but leave date fields blank
  • Scottrade, pulled in sales from their website.. sorry to see Scottrade go.. now TD Ameritrade

Items I wish I knew more about

  • stock options
  • trust returns

Biggest concerns for 2018 tax season

  • 20% business deduction
  • Media claiming how simple returns are now and most people won't need a tax preparer

Biggest concern years down the road

  • everything

 

 

 

 

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I just enter business miles and don't worry about total miles.

I don't think W2 codes C and DD mean anything for the return but I enter them. Not entering them would literally drive me nuts.

Foreign tax on a 1099 is mind boggling sometimes. On mutual funds I don't think it's possible to enter an income.  If the tax is on a 1099 div or int - boost up the simplified method far higher because they've been informed where it was coming from. Does anyone really break down where the income came from other than "other country"? The 1099's from my firm don't break out the foreign income - you have to go searching. On a 50+ page 1099, that's not quick sometimes.

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13 minutes ago, JimTaxes said:

Speaking of education credits and the 1098-T, I kind of remember reading how Box 1 would start to be used.. some other items

That may be for the "Prospective Look at 18" thread.  And I hope it happens closer to 2018 than 2118.  And call me pessimistic, but I'm not sure our institutions of higher learning will get that right either.

Do you guys not entering total miles never have an occasion to use actual vehicle expenses?  Or Like-Kind Exchanges on vehicles? 

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2 hours ago, RitaB said:

Sometimes you want to see a zero in a box.  My client did.  So I wound up cutting a "zero" out with scissors and gluing it in the box.  Ran a copy for the client.  Sure did. 

If your pdf program has a typing function, you can add that zero into the pdf without using scissors and glue. 

I used the typing function frequently this season on the 2-column planner to highlight and make notations about the tax law changes.

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20 hours ago, JimTaxes said:

1099-DIV from mutual funds.. most often do show foreign source income.. I can almost picture in my mind an American Fund with foreign and it did not show foreign source income.. I can picture an Edward Jones 1099 where it does show, wayyyyyyyyyy in back

A ton of firms break down the foreign source income for the foreign taxes. Mine sadly does not and most of my clients have a 1099 from my firm. I don't think any mutual funds I'm seen break out the foreign source but I could obviously be wrong.

 

Actually, when I saw a ton of firms - there are really only a dozen or so firms that generate 1099s. Most brokerage firms clear through another firm and you have to read the fine print to see it.

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20 hours ago, JimTaxes said:

i enter total miles.. sometimes i estimate.. does not impact the actual tax deduction

 

It doesn't impact the deduction for mileage, but that is how I get the percentage for personal property taxes that are deductible.  In our locality, it also impacts how much the personal property tax will be the following year - if business use is more than 50%, then the vehicle no longer qualifies for car tax relief on the personal property tax bill. 

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When clients don't know their total miles, just don't put the property tax on the auto worksheet but enter it directly on Sch A.  So they pay a little extra SE tax, but at least the amount on Sch A is documented.  This of course might not help people who already reached the $10k cap on state and local tax deductions in 2018.  Thinking about that caveat, I am beginning to recognize that we have a lot to UNlearn.

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