A Week in Perspective
New PTIN System Set in Motion by IRS – On Tuesday, the IRS officially implemented its new Preparer Tax Identification Number (PTIN) system. From now on, all tax preparers will have to be issued PTIN (even if they already have one) in order to be qualified to prepare and submit tax returns for their clients in 2011. This included all paid classes of tax preparers including CPAs, enrolled agents and tax attorneys. This is in line with the IRS initiative to properly register and regulate the thousands of tax preparers in the country.
Tax Professionals Must Now Pay The IRS For The Right to Prepare Tax Returns PTIN’s Are Now For Sale – Well, now a tax professional must buy the right to prepare a tax return. I suppose this isn’t any different from having to pay a fee every year to renew my CPA license. Just one more thing to add to my overhead costs.
Problems with PTIN Online System? Don’t Wait to Register – Tax preparers heads up, according to the new IRS rules, you have until January 1, 2011 to register for your PTIN (preparers tax identification number). I’m getting a little concerned about the IRS’s ability to GET IT DONE by the January 1, 2011 due date.
Online PTIN Application Now Available, But… – The IRS released the final regulations for the new PTIN process for tax professionals. There’s an FAQ available, too.
Don’t you feel more competent already?
Is it reasonable for Congress to demand “Plain Talk” from the IRS? – Bottom line: if we Americans want a tax code that we can understand, we need to demand it directly from Congress. This is my favorite post this week.
Don’t Let a Rule of Thumb Rule Your Wallet – Rules of thumb are great little guidelines when you’re talking to large groups of people. A perfect example is the “rule” that you should have “1.5 times your annual salary by age 35″ described in the recent retirement checklist from CNNMoney. If you’re in that age group, you can read that rule of thumb and quickly compare your current retirement savings to get a general idea of what kind of shape you’re. If you have $5,000 and you make $35,000 a year, you might be panicked enough to start beefing up your retirement savings. If you’ve make $35,000 a year and you’ve got $100,000 socked away, you’ll probably feel that you’re ahead of the game. There’s just one problem…
Varying cost of living – it depends on the lifestyle you aspire to.
Taxes on garage sale earnings – The federal tax laws provide for IRS collection of tax on capital gains. So, notes IRS Publication 525, “if you sold an item you owned for personal use, such as a car, refrigerator, furniture, stereo, jewelry, or silverware, your gain is taxable as a capital gain.”
But who’s ever had a capital gain on an exercise bicycle, old toys or an out-of-style suit sold at a garage sale?
Now we know what happened or is happing with Monica L. over at Confessions of a CPA. She landed a job. Nicely done Monica. She explains in her post First Days.
Tax-Exempt Tips For Oct. 15 Due Date –
BlogRoll Beans – September 28th edition.
Cure for the Financially Overwhelmed - Do you experience any of these symptoms when thinking about your personal finances: Budget dizziness, Debt fever, Sweaty emergency fund palms, Late fee hair pulling, Banking knots in your stomach, Retirement savings rash. If you experience any of these symptoms when you think about your finances, I am not a doctor but I believe you have what is called financial overwhelmedness.
Tax cut timing could be costly
Bye, Bye Paper – The IRS has announced that they will no longer be sending tax packages to individuals or businesses. Later in the year, they will send a card to taxpayers (ind and business) who prepared their own paper return last year notifying them of the change and telling them how to obtain the forms they need.
Tax Help News: Seven Deadly Sins of Tax Resolution Every Taxpayer Needs to Know
Tax Foundation Releases Two Reports Focusing on High-Income Taxpayers – The Tax Foundation has released two reports focusing on the expiration of the Bush-era tax cuts and high-income taxpayers: one examining top marginal effective tax rates by state, and another profiling demographic characteristics among top earners.
Should the IRS Give Taxpayers an Itemized Receipt? – What is provided to a taxpayer with a $5,400 tax bill? Nothing. For many Americans, the amount they pay in taxes is larger than any purchase they make during the year, but studies show they know almost nothing about where that money goes to.
US Savings Bonds – What Are Savings Bonds and How do They Work?
The Importance of Cash Flow Management – One of the most important aspects of managing your personal economy is understanding where your money is coming from, and where it is going. You should also know when all of this is happening. Cash flow management in your personal finances is important, since it keeps you from overdrawing your account and helps you plan ahead for larger expenses. When you know how money flows through your personal economy, you are in control.
What is the Difference Between HSA and FSA Accounts?
Use Flexible Spending Account Balance by End of Year – If your health insurance plan provides a Flexible Spending Account or FSA option I highly recommend you use it. You are getting a tax break for every dollar you put into the account. If you use those dollars toward eligible healthcare expenses then you never pay taxes on that money.
Yes, you read that correctly.
The Soft Skills You Need to Get Hired There are Old School tactics and there are New School tactics for every facet of job seeking. One key to your success today is knowing how to capitalize on your soft skills. Wondering what your “soft skills” are? Read on!
H&R Share Prices Expected to Drop due to IRS Action – H&R Share Prices Expected to Drop Due to IRS Action. In the next tax year, the IRS has declared they will no longer supply tax preparers the ‘debt indicator’ of a taxpayer. The debt indicator is a code the IRS has provided every year to tax preparers that indicate the amount of tax refunds the taxpayer is entitled to receive. The debt indicator information supplied by the IRS would include any amounts of child support, back taxes and other debts that would reduce the amount of refunds.
Making Work Pay Credit not likely to be extended – Congress’ effort to stimulate the economy included pushing through a series of tax breaks in 2009. The centerpiece of the legislation was the Making Work Pay Credit, which was intended to provide tax relief for working and middle class families. It may not last beyond this year. The idea was to allow more taxpayers to have cash in their pocket during the year, as opposed to at tax time, by adjusting the amount of earned income withholding.
Tax Reform Discussions in 2011? – “Rep. Levin seeks early action on tax reform next year” reports that the House Ways & Means Committee chair wants to have lots of tax reform hearings in 2011. He says: “We’re serious about looking at our tax code.” The Hill also reports Congressman Levin saying that reform needs to happen in a non-election year.
Something about tax cuts from The Onion – Follow her link it is a must read for sure.
ARE WE BEING RUN BY ARSEHOLES? – THE DAILY SHOW had a bit that asked the question “Are We Being Run By Arseholes?”. The answer they came up with was an obvious “Yes”.
Tax breaks in the new small business bill
Small Business Jobs Act of 2010 – On September 27, 2010 (Monday), President Obama signed an additional economic stimulus bill – the Small Business Jobs Act of 2010 (H.R. 5297).
Small Business Jobs Act of 2010 Into Law – What it Means for You
HR 5297 Small Business Jobs Act of 2010 Outline of Tax Stuff – This is wonderful. Thanks Stacie.
Buying Long-Term Care Insurance To Save For The High Cost of Assisted Living – There’s a great deal of talk today about the “graying of America.” Thanks to advances in medical technology, many people are now living 20 or more years beyond normal retirement age. However, quite a few of these people must deal with poor health during those years. And, the increased longevity, coupled with expanded health care needs, can place enormous social and financial strain on these individuals and their loved ones.
A week about What is a Series LLC and more. Be sure to check out the whole week of post over at Diane Kennedy’s US Tax Aide blog.
An great answer to a frequent question Ask the taxgirl: Reporting Income Not on a W-2
Also today another round up A Post Wall Roundup.
The blogroll works now Thanks Joe.
Currency – A New Financial Site for Young Adults – Currency offers great content, featuring writing from over 25 leading personal finance writers (including yours truly!) from various backgrounds, including journalists from major publications, best-selling authors, and a variety of bloggers from different genres such as personal finance, career advice, travel, lifestyle, and related topics. The articles are written in a fun and informative manner, featuring a more personal and conversational approach than you will find at most financial websites.
In a blogging friend scurry to get his clients extensions done, he posted yesterday A TAX FIX, directing you to his other writing gig as he hasn’t been posting at TWTP in his effort to “GIT-R-DONE”
Three Quickbooks Shortcuts to Save You Time!
Homemade Gift Series #3: Caramel Apple Jam – So what exactly do you do with eight and a half pounds of apples? You make something with them, of course.
A Week in Perspective
THE NEW E-FILE MANDATE – “. . . An individual or couple may engage a tax professional, such as me, to prepare the federal income tax return that he/she/they is/are required to file. While, as is the case with just about every situation where a person or company provides goods or services for compensation, the preparer has certain legal and ethical responsibilities regarding the preparation of the return, the tax pro is hired by the taxpayer to simply prepare the return. . . .”
In the post mentioned above (please read the whole post), my friend asked many a tax bloggers/professionals for our response “I am very sincerely interested in the comments of my fellow tax professionals, and especially my fellow tax bloggers (are you listening Annette, Kay, Kelly, Mary, Trish, Bruce, Dan, Jim, both Joes, Russ, etc.?) on this post.” Of all of us out here and those ask of in particular I was disappointed in the number of us who have responded.
A few even chose to respond by a post on their perspective blogs A Line in the New Jersey Sand and It Depends on What the Meaning of the Word ‘Is’ Is. The rest of the comments can be read here including mine.
In his post I AM RIGHT – BUT A LOT OF GOOD IT WILL DO ME! RDF concludes what we have all said.
Those of the most popular sites or those who have the most readers I was/am ashamed that so many of you did not respond to RDFs inquiry as to what you thought. He asked even with the thought ““on the record” by submitting a comment, or “off the record” by email”. You should have.
This mandate affects all of those who prepare, and I know RDF isn’t the only one who has issue with it. I use software (two different brands actually), and I have issues with it. Are you charging for e-filing your clients returns? If so, are you just sitting there counting the money you might make by being able to charge everyone? Shame on you. This country prides itself on being able to give us the freedom to choose. This mandate takes a peace of that away.
The Recession is Over – The recession lasted 18 months and just as we didn’t know there was a recession until we were well into it, we are now told it ended in June 2009.
Tax Breaks Expiring Soon – No, Not Those Tax Breaks
I found a new blog. I’ll introduce it by saying this is a worthwhile read How important is small business to the US?I have had it on by blog roll for a few days. Add it to yours if you like the way Wray writes.
Another new one I found recently and I have on my blog roll (Is that supposed to be one word? Blogroll, or Blog roll? Hummm, maybe two I think) 21st Century Taxation. The post that took me there is good. Making Work Pay Credit & Economic Stimulus – Need for Better Discussion. As above at this to your RSS feeder/reader if you like the way this blog is written.
Insider Tips to Stop IRS Notice of Deficiency- And Save Your Cash!
As in above I am wondering what has happened to Monica L. The Tax CPA and Confessions of a CPA hasn’t had a post since August 16th at one and August 27th at the other.
Monica, you still out there?
What about Stacie from Stacie’s More Tax Tips, Stacie, are you going to be writing anymore? I have to say you post are missing and we are missing your post.
Self-Employed Folks Get a (Tax) Break
Tax Help For Business Owners Who Owe Unpaid Employment Taxes or Delinquent Payroll Taxes – Are you a small business owner or an independent contractor? If yes, did you know that the IRS is stepping up their enforcement just so that they can go after taxpayers like you more aggressively? The IRS assigns a higher priority to the collection of payroll taxes than personal income taxes.
GOP Pledge to America: No New Taxes (Now Cue the Dancers)
Representing the rich … or not- What all this attention to the impending end of Dubya’s tax cuts really means is there’s been, and will continue to be, all sorts of crazy numbers crunching.
Effect of expiring tax cuts on the rich
You can’t claim the ‘Hope Credit’ just because you hope you qualify for it
Lessons from Tax Reform Act of 1986 – The Senate Finance Committee held hearings today to review and reflect on the important lessons our country learned from its experiences with the Tax Reform Act of 1986 (which Dave Williams talked about in class on Tuesday).
There is a good deal worth reading and pondering in the transcripts of those hearings.
Extended bonus depreciation, $500K Section 179 deduction await President’s signature
Maybe Building Business Credit IS the Answer- The US’s population is a little over 310 million, but 27% of them are under 20. Bottomline – over half of all adults do NOT have good credit.
What do plumbers, politicians, and professors have in common?
The folks over at TaxQueriesblog have once again asked for authors. Seems those of use who want to write about tax stuff want to do so more at our own blogs than others. I joined this group of bloggers at TaxQueriesblog some time ago, when it first came about. Sadly I wasn’t and still am not able to keep up with everything and have little time to contribute to the collection of bloggers and their musings. Here is the list of contributors thus far:
I mention all of this in an effort to maybe get more over there as authors. Please check it out and make contact with those running the show to see if you can join our ranks. Maybe I should write another post for them, I haven’t added anything since. . . It’s been awhile.
A Public Service Announcement – if you text while you drive, this is a must read!
Apologies for not referencing on any PF blogs this week. If you know of other really good ones that I don’t already have in my PF blog roll please send me a note so I can get there.
I’d in closing like to mention, that I have added a few items to help spread the tax word around. You’ll notice at the end of each post there are two buttons. One for tweeting the post on twitter, and another for Google Buzz. I a few folks use these, I am asking that if you enjoy the post or feel someone you know will, please use these to get them the info.
Also I have added at the end of both my columns, some Facebook stuff. Please use these as well. The more people we can reach with our information the more who will be informed about what is. . . .
Thanks, see everyone later.
“A Week in Perspective” what about this title?
Get this fixed. . .
Today I received notices from my local IRS Sr. Stakeholder Liaison. In his bulletin I found attached three documents/fliers on different things. The two that bother me are bulleted below.
- Preparer e-File Mandate: Paid tax return preparers that prepare 100 or more individual or trust returns in 2011 will be required to e-file. That number drops to 10 for 2012. If you not already an Electronic Return Originator, start the the process. Find out more at e-file Made Easy. You can also watch a U-Tube video.
- Return Preparer Regulations: IRS will soon implement new registration, testing, and continuing education requirements for all tax professionals. All {not my emphasis} paid tax return preparers must apply for a Preparer Tax Identification Number (PTIN) and register under a new system, projected to be available in September 2010. Beginning in 2011, there will be new testing and continuing education requirements for any paid tax return preparer who is not an attorney, certified public accountant, or enrolled agent. All paid preparers will come under the rules of Circular 230.
The e-File Mandate I have already made mention of, but would like to point out one more time that this is great for the IRS but assuredly they need to come up with a plan to exclude taxpayers who do not want to e-file. Mandating 100% for us is like telling only our clients, they have to e-file. Not everyone wants to. Not to mention some software providers charge extra for us to offer this service. One scenario is the college student who is also a single mother barely making any money but yet required to file, depending on where she goes is going to be charged additional fees because now she has to e-file. {Preparer to client – “Because our firm prepares more than 100 returns we have to e-file your return and it cost $XX.xx to do this” – Fair?}
Alrighty then. . .
The second bullet, Return Preparer Regulations, this one, this one burns my hind cheeks. Now don’t get me wrong I am all for preparer regulation, yet who’s making this up? The people? By the people, for the people? Really? Examine then this situation. . . .
Now this is a great idea, but when one says all, shouldn’t that mean all? The Lawyer who has passed the bar is qualified to prepare and represent clients in tax matters. Yet Lawyers are exempt from the new testing and continuing education requirements. Because they passed the bar? What is his/her tax knowledge? Is he being tested for his competency in tax law? Not by the IRS. CPA’s, same question. What is your tax background? Are you keeping up with the preparers regulations on testing and education? You don’t have to.
As a taxpayer, who do you want doing your taxes? Someone who is being regulated and tested by the IRS, who has proven their skills as a preparer to the IRS. Or do you want someone whose specialty is divorce law and litigation, or someone who is certified at preparing and analyzing financial reports such as balance sheets, income and loss statements, or setting up an accounting system for large corps.
Now maybe I am getting this all wrong but when we say, “all return preparers” lets mean all of us. CPA’s, Lawyers, EA’s and the soon to be “enrolled” and regerstared preparers. That would be all.
So Mr. Doug, fix this. “All paid tax return preparers must apply for a Preparer Tax Identification Number (PTIN) and register under a new system. New testing and continuing education requirements for any paid tax return preparer. All paid preparers will come under the rules of Circular 230.”
“. . . and here, we, go. . .”
The first of many new costs to paid preparers is coming. When I return to the blogging world on a regular basis, I will be covering this more, a great deal more. For now, know that it begins. . .
My peers and friends in the “field” say there won’t be that much extra cost, I say there will be enough cost to the preparer that this will undoubtedly raise preparer charges thus raising the cost to taxpayers who use paid preparers, we shall see.
Honestly, I hope I am wrong.
Please see highlighted section of the below IRS news wire.
IRS Provides Guidance on Identifying Numbers for Tax Return Preparers
WASHINGTON — The Internal Revenue Service today issued proposed regulations allowing the IRS to require that tax return preparers use Preparer Tax Identification Numbers (PTINs) as the preparer’s identifying number on all tax returns and tax refund claims that they prepare. These regulations when final will implement some of the recommendations in Publication 4832, Return Preparer Review.
“These regulations allow the IRS to better identify and match tax return preparers with the tax forms and claims they prepare. This proposed PTIN system will help us ensure taxpayers receive competent, ethical service from qualified professionals and strengthen the integrity of our tax system,” said IRS Commissioner Doug Shulman.
Under the proposed regulations, the IRS will issue forms, instructions, or other guidance that will require paid tax return preparers to begin using PTINs for all tax returns and refund claims filed after Dec. 31, 2010. Currently, tax return preparers must use either a PTIN or their social security number on tax returns or refund claims that they prepare.
The proposed regulations also provide that tax return preparers must apply for a PTIN, regularly renew the PTIN, and pay associated user fees, which will be described in upcoming guidance. As part of the process, some tax return preparers would also be subject to a tax compliance check, which could include a review of the preparer’s history of compliance with personal and business tax filing and payment obligations.
Tax professionals and other interested parties have until April 26, 2010 to submit comments regarding the attached proposed regulations.
The IRS plans to launch a new system later this year through which all tax return preparers will be required to register, including those who already have a PTIN. Tax return preparers who already have a PTIN will have the number revalidated and reassigned to them through the new system, while tax return preparers who do not have a PTIN will be issued one through the new system.
It is estimated that there are as many as 1.2 million paid tax return preparers.
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