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Posted

Just to remember that I had to explain to each tax payer that they could not itemized deductions just because they drove their car to their work place, makes me want to prematurely retire. 

I think after the elections and in the next year, I will have to make my tax prep retirement decision.  Any one feels the same way or am I the only one that hates form 2106. 

  • Like 2
Posted

Don't have a problem with the 2106.

 

Have a new client who hadn't filed in 2 years, did an OIC on her fed a few years ago and needs to do one for the state (no clue why they didn't do it back then). She's broke, does contract work and will owe $7k in federal taxes on her 2 returns because of all the SS and MEDA. She has no way to get caught up. I'm expecting a meltdown when she comes into the office.

  • Sad 3
Posted

I've had similar thoughts.  I've told clients three more years.  But maybe only two thru 2025 tax year.  Whatever the election results, they'll have to do something about the expiration date of the current tax law at the end of 2025.

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Posted

The 2106 was heavily abused by cheaters. The main things I like about the current tax law is a high standard deduction, so people don't have to worry about itemizing, and the elimination of employee business expenses. Make your employer reimburse you or find a better employer.

  • Like 7
Posted

It will be interesting to see what happens. Some things take more attention than before, some less, but it remains complicated and requires diligence to not miss a thing/optimize. Some get something, some lose, the nature of the beast. Personally, I do not miss tracking things to itemize, but dealing with things like QBI and PTET, and what may or may not follow, can be a forecasting issue.

Posted

The TCJA increased our National Debt by over $7 Trillion Dollars.

I think dealing with QBI and PTET is more complicated than itemizing.

I do agree that the 2106 was abused.

Tax rates are going to have to go back up or our National Debt will go completely out of control!

  • Like 3
Posted

I've reminded clients to continue to track their itemized deductions even if they use the higher standard deduction because the current law expires after 2025.  We won't know what they'll do until they do it.  Ha.

  • Like 5
Posted
3 minutes ago, Lee B said:

The TCJA increased our National Debt by over $7 Trillion Dollars.

I think dealing with QBI and PTET is more complicated than itemizing.

I do agree that the 2106 was abused.

Tax rates are going to have to go back up or our National Debt will go completely out of control!

I don't think they can ever do anything about it now.  It's too late.  They won't be able to increase taxes enough or cut spending enough.  Oh well, wait for the crash and burn.

  • Like 1
Posted
5 minutes ago, Randall said:

I don't think they can ever do anything about it now.  It's too late.  They won't be able to increase taxes enough or cut spending enough.  Oh well, wait for the crash and burn.

That scenario would end in out of control inflation like in Argentina!

Unfortunately, our representatives are more concerned about getting reelected than doing what's best for the country 😧

  • Like 2
Posted
47 minutes ago, Lee B said:

That scenario would end in out of control inflation like in Argentina!

Unfortunately, our representatives are more concerned about getting reelected than doing what's best for the country 😧

It's like watching a 3 Stooges movie.  If it weren't so real, it would be hilarious.

  • Like 2
  • Sad 1
Posted

If itemized deductions revert back to the old rules I dread the "use the number as last year" responses when asked about charitable contributions and the "I donated thousands of dollars of used clothes".

Right now about 95% of my clients use the standard deduction and I may retire if I have to go back to filing out Schedule A for a majority of them.

  • Like 3
  • Sad 1
Posted
On 8/27/2024 at 12:30 PM, Lee B said:

The TCJA increased our National Debt by over $7 Trillion Dollars.

I think dealing with QBI and PTET is more complicated than itemizing.

I do agree that the 2106 was abused.

Tax rates are going to have to go back up or our National Debt will go completely out of control!

If elected officials don't care about the debt, mua, that is me, as a simple tax preparer... just say... it is not my "jab".

 

 

  • Sad 1
Posted
On 8/28/2024 at 12:47 PM, Patrick Michael said:

If itemized deductions revert back to the old rules I dread the "use the number as last year" responses when asked about charitable contributions and the "I donated thousands of dollars of used clothes".

Right now about 95% of my clients use the standard deduction and I may retire if I have to go back to filing out Schedule A for a majority of them.

We fill out Schedule A for most clients because, in Wisconsin, some itemized deductions can flow through to the State forms.  I don't have a problem with that.  Also, I have always felt that the loss of the 2106 hurt many of my clients.

  • Like 1
Posted
12 hours ago, mcb39 said:

We fill out Schedule A for most clients because, in Wisconsin, some itemized deductions can flow through to the State forms.  I don't have a problem with that.  Also, I have always felt that the loss of the 2106 hurt many of my clients.

Same here in NY.  I do a quick calculation to see if they are close to the NY standard deduction.  If yes, then I'll ask for missing items; if not I don't bother.  Most don't come close.

  • Like 2
Posted
29 minutes ago, Patrick Michael said:

Same here in NY.  I do a quick calculation to see if they are close to the NY standard deduction.  If yes, then I'll ask for missing items; if not I don't bother.  Most don't come close.

Same here for my CA clients.    If they have a mortgage I pretty much can assume they will itemize in the state.   The one I have to watch for is older clients who have paid off their mortgage but are giving larger charitable contributions.

Tom
Longview, TX

  • Like 1
Posted
13 hours ago, mcb39 said:

We fill out Schedule A for most clients because, in Wisconsin, some itemized deductions can flow through to the State forms.  I don't have a problem with that.  Also, I have always felt that the loss of the 2106 hurt many of my clients.

Here in DE also.

  • Like 2
Posted

Virginia does not allow itemizing unless you itemize for federal either, but if you are anywhere close to being able to itemize on federal I run the numbers because VA has such a low standard deduction that sometimes it is saves enough on the state to itemize and save state taxes even though you take a hit on the federal.  

  • Like 2
Posted

In 2025 when the tax cuts expire, there is liable to be tampering with strange new twists.

One thing you can count on, however.  Federal standard deductions will remain sky-high.  All my career, they have been putting the standard deduction so high that it is out of reach.  I believe the IRS is in favor of this - gives them less to audit on a personal tax return.

Posted

when you have elderly clients, just be sure and ask them (or whoever is handling their paperwork) about nursing home costs.  Often for assisted living (as opposed to just a retirement home) all the costs are deductible and you can wipe out all (or most) of their taxable income.  Had a client who had passed away and the daughter asked me why we didn't itemize--I had no idea $6k a month out of pocket had been paid for a memory care facility.  Was able to amend but it's a mail-in return with an unknown time horizon for when the IRS will pay.

  • Like 3
Posted
1 hour ago, Lee B said:

Assisted living may or may not be deductible based on the facts and circumstances.

I went through this last year.  In my case, it was medically necessary and fit the requirements.  Client has since passed.

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