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Here is an article from Forbe's magazine that deals with the 20% Qualified Business Income Deduction. It's a long read, but provides many examples. The problem with the QBID is in determining what is qualified income and then later dealing with limitations on W-2 income, exceptions and depreciation. Hopefully, when the regs are issued some of the confusion will be cleared up, but that's just a hope. At the end, the suthor states - "With no regulations, no form instructions, and most unfortunate of all, no one who helped craft the bill or vote on the thing who actually understands what it says, it may be a while before clarity is forthcoming. So for now, I"m all ya' got." Have fun reading - https://www.forbes.com/sites/anthonynitti/2017/12/26/tax-geek-tuesday-making-sense-of-the-new-20-qualified-business-income-deduction/#3bf1c5e444fd

Each return should go into a separate envelope, each marked with the year and form (ex. 1040-2015). Then the separate envelopes can be sent together in a larger mailer envelope. Always, mail Certified with return receipt. If all the returns are sent together without separating them, the mail clerks pull everything out and staple it together, so only the return that is on top gets processed. If you wait until the 29th, 2015 and 2016 can be Efiled.

IRS should be able to do nicely without 11,000 employees because now they have several hundred thousand of US doing their work for them. We have due diligence requirements for EITC, ACTC, education credits, and now HOH. When will we get time to do the actual tax return?

I feel sure it will require a new form which will CLARIFY the matter.

For those friends who know me, and ask, I have suggested they wait until July to revisit their W4 information. By then, they can extrapolate their income for the year, and what they have has withheld so far, and make any desired adjustments. I hope not, but prepare for, the calculations to be on the light side, not the conservative side, since those with a R after their name, and likely many with a D after their name, will want to "bank" on their home voters believing they gave them a raise :).

I think they're pretending that the Standard Deduction almost doubled and most people take the Standard Deduction. And the people with dependents get $500 to $1,000 more in credits, in general. Then figuring what the reduced tax amount would be on average. That's what I think. Honestly, I'd have to rip out my phone if all my clients needed to know what % to have withheld. Then they'd be mad at me at filing time because they got small refunds. Unless I want to have the whole conversation about how much do you want them to keep all year? I'm good with leaving things alone right now as far as W-4s are concerned.

When I was reading the bill I noticed several interested clauses: 1. If your W-2/W3s are not timely filed, the deduction will be disallowed. 2. If you have a "Qualified Business Loss", the QBL will be carried forward and will reduce any future QBI. Fun Times

Knew I saw that someplace. I had a webinar Tuesday, a live class Wednesday evening where the speaker continued on long after two 50-minute hours, and a CT webinar today. My brain is mush already!

Super funny jklcpa......People are strange.....When you're a stranger.....

Ouch! That could be a HUGE penalty.

I can see item 1. Since the owner controls the W2 submission, and may need those figures as their limit, this actually makes, dare I say it, sense.

The substantial understatement penalty, as it relates to the 20% passthrough deduction, has a lower threshold also. That section of the JCTA specifically states that 5% is to be substituted in irc sec 6662 instead of the prescribed 10% for other understatement-related causes.

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Anyone ever notice that if you do the calculations on the current W4, the result is way more exemptions than anyone wants to claim? My son had to fill one out recently and called me to ask why it told him to claim 3 exemptions (he's single, no exemptions except himself). I've had a lot of clients who tried filling the form out themselves and called with the same question. The IRS has a long history of trying to get people to break even, with their withholding roughly equal to their liability. They seem to have given up because people love those big refunds and they can't convince them to change. My guess is that the new tax tables approximate the breakeven scenario, just like the calcs on the current W4s. With the old system taxpayers could manipulate their withholding by changing the number of exemptions, which is no longer an option. So in Illmas's scenario, the taxpayer might see $71 more each paycheck, but maybe $11 is his lower liability and $60 is from the $1600 refund he used to get--now being given to him in installments of $60 X 26 weeks. 2019 refund = $40.

I h ave one client who gets irregularly spaced bonuses that are processed differently from regular payroll (as if for a separate employee). Those bonuses ALWAYS have insufficient tax withheld. The standard W4 calculations are useless - we have had to base on expected wages, expected bonus with under-withholding, and add the under-withheld amount to the regular wage amount. It's always a nightmare, but it can only be done by saying "$131 per pay period more tax" rather than mucking about with exemptions.

No, I called them back in November or December because I knew come 1/1 they would be swamped. I had a wait but it wasn't horrible and I got a very helpful person. Turned out that I didn't need to call at all because I got a Get Transcript account earlier in the year.

Have you tried calling recently? Either the lines have "High call volume - call back later", or "there are callers ahead of you. The wait is 30 to 60 minutes." Yesterday I waited over 90 minutes and the line disconnected.

In my opinion, 3-5 per year is unavoidably going to be categorized as earned income by the IRS. 1-2 per year can arguably by an investment program but there is no possible way the IRS will allow 3-5. Frequency of the flip is very important in determining the characteristic of the sale.

An employee can ask anything, and they will. Wise employers follow the law. Employers have enough burden, they should do only what is required, nothing more, nothing less. Employers use the most current valid W4 (other than exempt, they do not expire). If valid, they MUST follow it. Any strike through or alteration of the form makes it invalid. If no valid W4, then single zero allowances is required. There is no option on a W4 for a flat percentage. IRS Pub 15 offers no employer method for flat percentage (save for bonus type payments, which if used, will make the employee unhappy!). As both Abby and I have posted, there is a way an employee can end up with a steady dollar amount per check, but not a flat percentage. Employers may limit W4 "changes" to once in 30 days, as there are some employees who will play with their W4 fr budgeting purposes. Employers no longer have to "report" W4 to IRS if more than a certain number f allowances are claimed. Employers can report suspicious W4 forms, but I doubt many do. The IRS can issue a Lock In order to an employer, forcing the use of a certain status and allowance. The employee has a certain time to appeal such orders. If an employer does not follow the W4 as well as use an approved withholding calculation method, the employer (and likely the person preparing the payroll) can be included int he collection "chain" if the employee fails to pay their liabilities.

Be warned, ATX doesn't update the 2848 in prior years software. It's nuts that they don't and I've suggested several times that they start updating at least the last 3 years. But I'd prefer they push the form out to the last 10 years for nonfilers.

You still have to navigate the W4... unless you claim 19 allowances to have zero tax withheld and then put down additional amount desired. Back in the day, the 0% bracket represented the standard deduction. Now, for a single, weekly employee, the 0% bracket is $71. Time 52 = 3,692. So if a person claims single 1, they exclude 3,692 + 4,150 for the allowance which totals 7,842, and not the 12,000 standard deduction they are entitled to. They would have to claim 2 to get to 11,992. I would rather my low income clients be over withheld than under, and logically, the IRS would rather issue refunds than chase balances due.

I am visualizing QB payroll, it doesn’t matter how many allowances the employee is claiming but one can manually adjust federal withholding to basically anything. However I see this as a billable service to employees and not the employer, also I had clients in the past receive IRS notices to adjust their allowance, could this be a temporary end to that notice?

Here's the WaPo article: https://www.washingtonpost.com/news/the-switch/wp/2018/01/11/its-going-to-be-a-nightmare-some-bitcoin-investors-are-in-for-a-rocky-tax-season I can open on Android phone with Firefox Focus browser.

"Net Pay increase" not "tax savings". Withholding may not reflect actual liability

The reality is there are many other tax jurisdictions which use the federal "exemption" amount, and W4 information. I have no idea why, but the IRS wisely decided to come up with calculations which did not require a new W4, and did not "break" the other jurisduiction's calculations. Employers have no flat % options available, other than exceptions for bonus type payments. Employees do not like use of the allowable flat % option, since it is at higher rate than a normal calculation. There is absolutely no logic in withholding, other than to make sure it stays complicated, and for a politician to try to be able to say they increased net pay.

I grew up in a small Iowa town and we really looked forward to going to Omaha to the redemption store for S & H green stamps. We (kids) thought that it was a long drive, but now it's a bedroom community for Omaha.

I don't get it. They're pretending like we get a 4,150 personal exemption on our taxes, just as a way for people to have less withholding? Maybe I do get it, but it seems illogical. I'd be much happier if they just let us enter a flat % that we wanted withheld. When clients call up they ask what % their withholding should be and I tell them. Then they ask how they go about achieving that, and I ask if they have a friend in their payroll department. If not, I send them to paycheckcity.com.

A guy from the Washington Post wanted to interview me about crypto-currencies (because I moderate reddit.com\r\tax) but I told him I didn't know enough about it. One of the other mods stepped up, thankfully. Wish I had know more. Would've been cool to be quoted in the Post!

Silly question....they make change virtually any way they want. Tom Modesto, CA

No, it's $500, for tax years starting after 12/31/17. Yippee, starts next year.

Oh yeah, and we were our parent's remote controls.

When I was about 4 or 5 years old, my mom brought home a 13" black and white tv that she scored from S&H Green Stamps. It was a big deal to us. We were dirt poor and that was the first TV I remember us having in the house. Oh...the good ol' days. Tom Modesto, CA

It's on the new 2848 that ATX just released today.

The pass through deduction is a Form 1040 deduction reducing taxable income.