Leaderboard

BINGO! And why would anyone with common sense design a two half-pages form instead of a one page form? Answer: just so some politicians can say 'postcard'. I need to meditate to lower my blood pressure.

What they called your computer is semantics. It doesn't matter what they call it but rather what the OS does. Embrace the new OS, there is no way around. Soon your Windows 7 computer will have more holes than a strainer and you will put your client's data at risk. I have not seen an industry (Tax preparation) with more information about people than the one we have on our computers AND yet we are hesitant to upgrade just because semantics. Keep in mind that after Windows 7, Microsoft released Windows 8 and then windows 8.1 and then it came Windows 10 1703, then Windows 10 1709 and then Windows 10 1803. Based on this information you have two facts: 1.- You will not be able to skip Windows 10 because it will continue to be Windows 10 for a while. 2.- Your Windows 7 OS is very old if you notices the OS versions that came after it and soon will have many security vulnerabilities.

As Jack said, this is what I would do. I would keep my Windows 7 machine on the network and using it as needed until the MS stops updating it. Then, I would turn it off and turn it on ONLY when I really need and then turn it off again. I will have the password handy because after you don't use it for a while it is easy to forget the password. Also I would have the installation codes handy for years 2016 and on since those years have password security when opening them.

I have a machine with Windows XP in my network. I have years 2002 - 2005 on it. Those years are not compatible with WIN 7. Believe it or not, we have used it 3 times this tax season. People are getting notices for not filing for many years, and the IRS asked for the old returns to be filed. When Win10 is forced upon us, I will also keep a WIN7 machine in the network for just the same reason. Those years from 2006 and forward that are not WIN10 compatible, will stay on that machine. This process is easier than trying to get old programs to work with the new OS.

You are overstating the risk with lots of hyperbole. Windows 8.1 is on extended support until January 2023. Windows 7 Pro is receiving extended support from Microsoft until January 15, 2020, which means that Microsoft is still issuing updates and patches for all known security risks until that time. I receive weekly security risk definition updates and large monthly software updates and patches..

I too don't have the patience to digest 180+ pages, but I did do a search for "rental." All that came up was rental of tangible property to related businesses. So it looks like real property rentals aren't included. I'm not at all sure, and I'm waiting for a digestible summary by people smarter and more patient than I am to be available. I do have to wonder who came up with these intricate, convoluted pieces of the legislation. The formulas for deciding how much of a deduction people get, particularly those in the phase out range, looks like someone put some tax and legal terms into a hat and pulled them out randomly to stick into that particular section. W-2 wages plus depreciable tangible property is part of one formula. Taxable income minus capital gains (except PTP income) is in there somewhere. What do any of these have to do with the other? Is there rhyme or reason? I'll settle for reason. I'll even settle for rhyme if it will help me remember what's going on here. As it stands, it's gobbledegook!

One of the many articles that have been and will be discussing the new tax form... https://money.usnews.com/money/personal-finance/taxes/articles/2018-08-07/everything-you-need-to-know-about-the-new-tax-form Everything You Need to Know About the New Tax Form From deductions to withholding tables, there are plenty of changes to expect on the new 1040 tax form. Before the tax law overhaul, the Trump administration and Republican-led Congress touted a postcard-size income tax return form designed to simplify filing your taxes. In June, the Internal Revenue Service and U.S. Treasury Department released a draft copy of the new 1040 income tax form. However, critics say that while the tax return is shorter, it may actually be more complicated than ever. If you want to start thinking about taxes, the new draft copy offers a glimpse of what's in store for the 2019 tax-filing season. Read on for a primer on what changes to anticipate in light of the Tax Cuts and Jobs Act, which was passed last December. The size of the form is bigger than an actual postcard. "There is no postcard, just a shorter Form 1040," says Steven Weil, an enrolled agent, president and tax manager at RMS Accounting in Fort Lauderdale, Florida. He adds that while the form is shorter, it requires a taxpayer to use extensive schedules, or forms the IRS requires filers to prepare, along with the tax return when they have certain types of income or deductions. "Take a look at the new form, and you will find it covers a half page on the front and a half page on the back. If it were truly a postcard, it would have room for an address and return address, as well as a stamp on one side," he adds. It's good that the IRS isn't actually sending tax forms on an actual postcard, Weil says, emphasizing that it would be a gift for identity thieves combing through mailboxes. "Most returns today are filed electronically, anyway," he says. Despite the hype, the new form may not make it simpler to file your taxes. "It will no longer be possible to just copy this year's information on the return, using last year's return as a model. When you consider the change in the form, the change in the rules – as to what can no longer be deducted when itemizing, for example, the lack of exemptions and a higher standard deduction – most of us in the tax business expect to see lots of new clients that are more confused than ever," Weil says. Abby Eisenkraft, an enrolled agent and CEO of Choice Tax Solutions in New York City, agrees. "The form reduces two pages to one page but necessitates six additional schedules," she says, referring to additional paperwork that the taxpayer will need to calculate things like deductions. "And this does not include the additional schedules one needs to report self-employment, rental real estate, sales of securities and so on," she adds. Kelly Wright, director of financial planning at Pinnacle Advisory Group, a Columbia, Maryland-based wealth management firm, also thinks the tax form looks more complicated. "No one wants more taxes. However, reducing the size of Form 1040 will not make tax preparation more simple, nor does it affect taxes due in any way. A postcard[-size] 1040 form will simply be a shorter, more confusing form, based on many of the same taxes and deductions that still exist," Wright says. That last part troubles Wright. "Many available deductions and credits are not listed on the IRS draft form," he says. "The IRS simply removed many of the helpful steps that guide people in preparation of their taxes. As much of that direction is now absent, it is possible some will simply think it does not apply to them." Tax withholding tables are different. In February, the IRS changed the tax withholding tables that determine how much income tax should be taken from your paycheck, calculated by the number of allowances you claim and how much you earn. If you haven't reviewed what's in withholding since the new tables came out, now is an ideal time to check. If not enough has been withheld, you could end up owing taxes. Your state taxes may increase. "The standard deduction has increased substantially for federal tax but not for many states. This means state taxes will increase dramatically for many taxpayers, one of the hidden caveats of [the Tax Cut and Jobs Act]," Wright says. Many deductions will disappear. Many deductions will vanish next year, including the personal exemption, the alimony deduction and the deduction for moving expenses. Miscellaneous deductions have also been eliminated, which means that unreimbursed business travel and mileage will be gone, along with the home office deduction. Some deductions will remain, however. The standard deduction will increase to $12,000 for individuals (from $6,350 under the previous tax law), and $24,000 for married couples filing jointly and surviving spouses (up from $12,700 from the 2018 tax-filing year). And head of household filers will see an uptick in their standard deduction to $18,000, up from $9,350. And there is a new qualified business income deduction, which has to do with noninvestment business income, which has caused a lot of confusion, Eisenkraft says. "The new tax act left more questions than answers, with tax professionals waiting for the Congress and the IRS to clarify. We are eight months in and still don't have answers," Eisenkraft says. "Unfortunately, this is not simplification at all, and many tax professionals will be increasing their fees because of additional education requirements, staffing and the complexity of the requirement reporting."

https://myatx.blogspot.com/2018/04/windows-10-april-2018-update-releases.html?q=windows+10 Microsoft is releasing a content update to Windows 10. These content updates can potentially make your software not open as designed temporarily No thanks! Others reported printers and other peripherals not working after Win10 updates. I just need my OS to work and stay out of my way.

I run VMWare and have a virtual XP machine for old software, if needed. It's not as simple as having an old XP machine around, but it works.

If any of you are NAEA a members, the July/August 2018 issue of EA Journal,has an article written by David Fogel, EA, USTCP, on the 199A deduction. Now that the regs. are out I plan to re-read his article.

Here is a summary from the Journal of Accountancy: The IRS issued proposed regulations on Wednesday regarding the qualified trade or business income deduction under Sec. 199A, which was enacted by P.L. 115-97, the law known as the Tax Cuts and Jobs Act (TCJA) (REG-107892-18). At the same time, it issued Notice 2018-64, which provides guidance on how to compute W-2 wages for purposes of the deduction, along with FAQs. The proposed rules include a way that taxpayers can group or aggregate separate trades or businesses and an anti-abuse rule designed to prevent taxpayers from separating out parts of an otherwise disqualified business in an attempt to qualify those separated parts for the Sec. 199A deduction. The deduction, which is in effect for the first time in 2018, allows owners of sole proprietorships, partnerships, trusts, and S corporations to deduct 20% of their qualified business income (QBI). The deduction is generally available to taxpayers whose 2018 taxable incomes fall below $315,000 for joint returns and $157,500 for other taxpayers. The deduction is generally equal to the lesser of 20% of the taxpayer’s QBI plus 20% of the taxpayer’s qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income, or 20% of taxable income minus net capital gains. Deductions for taxpayers above the $157,500/$315,000 thresholds may be limited; the application of those limits is described in the proposed regulations. The IRS is requesting comments on all of the proposed rules, which must be received within 45 days of the date they are published in the Federal Register. The Service noted that, although the rules will not be effective until published as final in the Federal Register, taxpayers may rely on them until then. The regulations address a variety of subjects. Prop. Regs. Sec. 1.199A-1 contains the operational rules, including how to determine the deduction for taxpayers with incomes at or below the threshold amounts and for those with incomes above the thresholds. It also contains definitions of the following terms: aggregated trade or business, applicable percentage, phase-in range, qualified business income, QBI component, qualified PTP income, qualified REIT dividends, reduction amount, relevant passthrough entity (RPE), specified service trade or business (SSTB), threshold amount, total QBI amount, unadjusted basis immediately after acquisition (UBIA) of qualified property, and W-2 wages. The definition of a trade or business is also in this section; the IRS decided to apply the definition of “trade or business” contained in Sec. 162(a) because the definition of trade or business under Sec. 162 is derived from a large amount of case law and administrative guidance interpreting the meaning of trade or business in the context of a broad range of industries. This will provide for administrable rules that are appropriate for the purposes of Sec. 199A and that taxpayers have experience applying, and the IRS believes it will reduce compliance costs, burden, and administrative complexity. Prop. Regs. Sec. 1.199A-2 contains rules for determining W-2 wages and the UBIA of qualified property, both of which are components in calculating limitations on the deduction. The rules for determining W-2 wages are based on the rules under the repealed Sec. 199 deduction for qualified domestic production activities, except, unlike Sec. 199, the Sec. 199A W-2 wages are determined separately for each trade or business. Prop Regs. Sec. 1.199A-3 restates the definitions in Sec. 199A(c) and provides additional guidance on the determination of QBI, qualified REIT dividends, and qualified PTP income. Prop. Regs. Sec. 1.199A-4 contains aggregation rules allowing separate trades or businesses to be grouped when applying the Sec. 199A rules. The IRS rejected comments suggesting the application of the grouping rules under Sec. 469, the passive loss provision, and instead proposed a flexible method that looks into common ownership, shared services, and other commonality, but specifically excludes SSTBs from being aggregated under the rules. The regulations impose a duty of consistency that requires that once multiple trades or businesses are aggregated into a single aggregated trade or business under Sec. 199A, taxpayers must consistently report the aggregated group in subsequent tax years. Aggregation allows for ease of administration and was one of the AICPA’s recommendations in a letter it sent to the IRS in February. Prop. Regs. Sec. 1.199A-5 defines specified service trades or businesses and the trade or business of performing services as an employee. The regulations include an anti-abuse rule designed to prevent taxpayers from separating out parts of what otherwise would be an integrated SSTB, such as the administrative functions, in an attempt to qualify those separated parts for the Sec. 199A deduction. Prop. Regs. Sec. 1.199A-6 contains special rules for RPEs, PTPs, trusts, and estates that these entities may need to follow for purposes of computing the entities’ or their owners’ Sec. 199A deductions. Prop. Regs. Sec. 1.643(f)-1 addresses concerns regarding the abusive use of multiple trusts by confirming the applicability of Sec. 643(f). Sec. 643(f) permits the IRS to issue regulations to prevent taxpayers from establishing multiple nongrantor trusts or contributing additional capital to multiple existing nongrantor trusts in order to avoid federal income tax. Notice 2018-64, issued contemporaneously with the proposed regulations, contains a proposed revenue procedure with three methods for calculating W-2 wages (1) for purposes of the limitation based on W-2 wages to the amount of the deduction for qualified business income under Sec. 199A; and (2) for purposes of the reduction to the Sec. 199A deduction based on W-2 wages for certain specified agricultural and horticultural cooperative patrons. — Sally P. Schreiber ([email protected]) is a JofA senior editor

This is good news: It is not uncommon that for legal or other non-tax reasons taxpayers may segregate rental property from operating businesses. This rule allows taxpayers to aggregate their trades or businesses with the associated rental But it doesn't look like regular residential and commercial rental income qualifies for 199A.

I especially agree with the comment that the form changes may cause more confusion with the increased possibility of missed deductions.

Sadly, just federal. It would be quite a task to do one for all states with an income tax.

Great explanation Lee, thanks. A nurse for 45 years, she deserves a medal. From personal experience I know they are special people who don't get enough recognition.

Part B can only be postponed without penalty as long as you have qualifying employer provided health insurance. Just went thru this with my wife who just retired several months ago at age 69 after being a nurse for 45 years. She had to prove she had qualifying employer provided health insurance so that she could avoid the penalty being added to her Part B premium. My wife signed up for Medicare Part A at age 65, because once you turn age 65, most employer coverage considers Medicare Part A to be primary, which would be a nasty surprise if you turned 65 and hadn't signed up for Medicare Part A expecting your employer health insurance to pick up everything. In which case this TP may be making a serious mistake ! Also Part D ( Prescription Coverage) can not be postponed, because I missed the deadline by 30 days 6 years ago and now I pay a $3.30 monthly penalty which is added to my monthly Part D premium.