Ringers Posted February 21, 2017 Report Share Posted February 21, 2017 Some of my senior clients are now, unfortunately, in memory care facilities or full care nursing homes which charge $75-$100 K each year, currently deductible as a medical expense, which takes their entire pension, IRA RMD, and Social Security to pay, but at least they do not owe tax on the funds used to pay the facility. Under the "new" tax proposal they would be paying tax on the pensions and RMD's even though they did not have any of the money left to spend. Happy golden years!!! Quote Link to comment Share on other sites More sharing options...
taxxcpa Posted February 21, 2017 Report Share Posted February 21, 2017 23 minutes ago, Roberts said: The current Republican tax plan is for individuals to get a $12,000 per person standard deduction. $24k per couple. The only thing that could go on the Schedule A is your mortgage interest and charitable deductions which in most of middle America doesn't get to $24k for a couple. State taxes, real estate taxes and medical would be waved as deductible items and in return the AMT is eliminated. That would make most seniors (just an estimate), ultra easy tax returns. That would help me although it would not simplify my fairly simple return since i take the standard deduction already. Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 21, 2017 Report Share Posted February 21, 2017 That standard deduction will reduce our "30% of the population" to 20%. Believe me if the software companies segment their software like quick books does, AND the new standard deduction is approved, I will be on the street with the Liberty costumes make 10 bucks per hour. The only one that can save us is the IRS if they say: ONLY EAs, CPAs and Attorneys can prepare taxes for a fee. (Of course Congress has to approve that IRS requirement) Quote Link to comment Share on other sites More sharing options...
Roberts Posted February 21, 2017 Report Share Posted February 21, 2017 From the tax seminar I listened in on - there may be a huge push to tax the increase in cash value on life insurance policies as interest / dividends reinvested. The insurance industry has always paid a lot in campaign donations to make sure this doesn't happen but it's something both parties supposedly quietly support. Quote Link to comment Share on other sites More sharing options...
Lion EA Posted February 21, 2017 Report Share Posted February 21, 2017 My seniors are more complex, in spite of paying off their mortgages so taking standard deduction. They have many, many, many sources of income: SS, IRAs, pensions/401(k)s, SEPs/SIMPLESs, capital gains, interest, dividends, and lots more interest, and maybe a part-time job or SE &/or renting out a spare room or renting their house until it sells while they move in to a smaller place (did they get 1099-S?), and LTC benefits when ill and double-checking RMDs and which were ROTHs and which were inherited and.... 3 Quote Link to comment Share on other sites More sharing options...
taxxcpa Posted February 21, 2017 Report Share Posted February 21, 2017 2 hours ago, Lion EA said: My seniors are more complex, in spite of paying off their mortgages so taking standard deduction. They have many, many, many sources of income: SS, IRAs, pensions/401(k)s, SEPs/SIMPLESs, capital gains, interest, dividends, and lots more interest, I take the standard deduction but have dividends,interest, capital gains, SS, IRA RMD, and have an installment sale involving principal and interest, but as a former tax pro, I can handle it. 4 Quote Link to comment Share on other sites More sharing options...
joanmcq Posted February 22, 2017 Report Share Posted February 22, 2017 Oh my last client could probably DIY. Wages, some interest & dividends, mortgage , & RE tax. Except for the stock options and pension payout part of his golden handshake which was earned in PA, NY and CA. If not for the NY it would still be easy. 2 Quote Link to comment Share on other sites More sharing options...
Max W Posted February 22, 2017 Report Share Posted February 22, 2017 On 2/20/2017 at 9:36 AM, Roberts said: I have a client who produced an excel spreadsheet which will do his taxes exceptionally close to what any tax return will do. He spent a massive number of hours going through everything to produce. I have no clue why he comes to me and I assume he'll do it himself eventually. Unless your clients have something complicated like a trust / estate, business / farm, rental properties - the basic 1040 client is going away for good eventually. Anyone 45 or younger is computer savvy enough to do the basic return themselves. It's not a great business model to make a living doing tax returns for the dumbest 30% of the population. It works but they generally don't make enough to pay a large fee. That's what ATX used to be - a series of excel spread sheets. That is why you could + - * / in any numeric field. Alas, those days are gone. 2 Quote Link to comment Share on other sites More sharing options...
Medlin Software, Dennis Posted February 22, 2017 Report Share Posted February 22, 2017 Nothing new, and not unique to tax prep. Food gathering, accounting, repairs, construction, all these things "could" be done DIY, but few do. The key is to "sell" the service, meaning saving the customer the time to learn and perform the task properly, allows the customer to spend their time warning using their own skills, or enjoying leisure time. A certain number will always prefer to DIY, like me, because we enjoy the process, enjoy learning, already have the skills, etc. There are plenty who would rather use their time for other pursuits. 2 Quote Link to comment Share on other sites More sharing options...
Burke Posted February 22, 2017 Report Share Posted February 22, 2017 On 2/21/2017 at 10:19 AM, Roberts said: The current Republican tax plan is for individuals to get a $12,000 per person standard deduction. $24k per couple. The only thing that could go on the Schedule A is your mortgage interest and charitable deductions which in most of middle America doesn't get to $24k for a couple. State taxes, real estate taxes and medical would be waved as deductible items and in return the AMT is eliminated. That would make most seniors (just an estimate), ultra easy tax returns. There is nothing easy about the taxable Social Security calculation unless their income is so low it is zero or so high it is 85%. 3 Quote Link to comment Share on other sites More sharing options...
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