Wednesday, January 28, 2009
Tuesday, January 27, 2009
"We are pleased to announce that National are published on the NTI website. Visit www.nti-inc.com to browse the fabulous 2009 conference locations, each featuring renowned speakers and hot topics for 2009.
The 2009 Conference Schedule, is highlighted by some new locations: Turks and Caicos, Greek/Mediterranean Cruise, Oregon, Carmel, China/Vietnam Cruise, and much more!
CPE Meetings, NTI's conference planner, is accepting reservations and we can assist you with any questions regarding our 2009 conferences. NTI has extended their Early Registration Discounts -- call or or visit the website for the details.
CPE Meetings' NTI Conference Specialists can be reached at 1-800-558-8491. We look forward to seeing you in 2009!"
Monday, January 26, 2009
It seems that I have found exactly what I was looking for with the AT&T Divestiture Basis Tracker from Denver Tax Software!
I discovered this when I did a “Google” search for “Alcatel-Lucent tax cost basis”. On top of the page was an ad “Baby Bell Cost Basis”.
The Basis Tracker software was advertised to “Quickly compute the tax basis for AT&T, the Baby Bells and the other companies that the Baby Bells merged into”. One could download the software immediately for a special discounted price of $79.00 for orders placed before 1/31/2009. The regular Price was $119.
I promptly ordered the download, along with a disc of the program for an additional $7.00 (to be mailed to me). As I was working on a specific client I entered the information I had on the original AT+T purchase and in a flash the software generated a report showing, in either Summary of Detail, all the various stocks, with allocated basis, that one would have on hand as of today (1/26/09) which I could save and print out.
I did a quick test of 100 shares of Lucent purchased in early 2006 and the system provide the correct number of Alcatel-Lucent shares resulting from the merger/acquisition. I have not done any further testing.
Is anyone out there familiar with this software package? I, and I am sure my readers, would be interested in hearing of your experiences with the program.
Friday, January 23, 2009
The January 2009 issue of the New York State chapter newsletter is also available. Click here.
FYI the NJ chapter website – www.njnatp.com - has information on the free IRS Stakeholder Liaison National Phone Forum on “Return Prepare Penalties Under IRC 6694” on Jan. 28, 2009.
Tuesday, January 20, 2009
I am not along in my opinion - it is worldwide! Or so says this article from comcast.net.
Now if only you would forget about refundable credits.
What am I talking about?
Over the past 35+ years I have developed many specialized forms, schedules and worksheets for use in my 1040 practice. Some of my “homemade” forms are given to clients to help them provide me with the information I need to properly prepare their returns. Some are used as “memos” to the client’s copy and my office file copy to back-up items reported on the returns. Others are used as attachments to the returns. They have proven helpful to me in my practice, and I believe you will find them helpful in your practice as well.
The package will be sent as a “word document” email attachment. You may edit and revise the forms, schedules and worksheets as you see fit to personalize them to your firm, to customize them be more relevant to your particular practice or clients or for specific professions, or to update information for annual COLAs or tax law changes.
Please be aware that this is copyrighted material and is for your internal use only.
A. SCHEDULE A –
1. Supplement to Schedule A
2. Medical Expense Worksheet
3. Medical Expenses – Out of Pocket Analysis
4. Charitable Contribution Listing – for non-cash contributions
5. Charitable Contribution Record – for cash contributions (2 pages)
6. Charitable Mileage Record
7. Contribution Worksheet
8. Employee Business Expenses – generic format, can be customized for different professions
9. Employee Business Expenses – Police Officer – example of customized
10. Conventions, Conference and Education
B. SCHEDULE C – (some of these forms can also be used for employee expenses)
1. Allocation of Expenses
2. Automobile Expense Worksheet
3. Auto Mileage Log
4. Business Expenses of a Freelance Writer
5. Business Travel Record
6. Computer Use Log
7. Election to Deduct Organization Expenses
8. Employee Expense Report
9. Employee Time Card
10. Home Office Deduction Worksheet
11. Cell Phone Log
C. SCHEDULE D –
1. Cost Basis Worksheet
D. SCHEDULE E –
1. Multi Family Building
E. GENERAL –
1. Alternative Minimum Tax Worksheet
2. Does Not Have To File
So send your check or money order for $3.00 payable to ROBERT D FLACH LLC along with your email address to –
TAXPRO FORMS SCHEDULES AND WORKSHEETS
ROBERT D FLACH LLC
72 VAN REIPEN AVENUE
JERSEY CITY NJ 07306-2806
You can read what my fellow blogger Bruce the “taxguy” has to say about this package here.
Hey – it’s only $3.00!
Thursday, January 15, 2009
Did you know that the definition of a “dependent attending college” for purposes of the extra exemption on the NJ-1040 is slightly different then the general federal rule?
For federal income tax purposes as long as you are under age 24 and a full time student you may qualify as a dependent, and may be subject to the “kiddie tax” on excess investment income.
The federal rules further state that to qualify the student must be “enrolled” full-time in school (not an online or correspondence school) during some part of any five (5) months of the calendar year. Private Letter Ruling 9838027 allowed the month of August to be counted when the student registered on August 28 but did not actually begin to attend classes until September 2.
For NJ state income tax purposes you can claim as a dependent “each dependent child who qualifies as your dependent for Federal income tax purposes”. However the requirements to claim an additional exemption as a “Dependent Attending College” the following requirements must be met –
* Student must be under age 22 years of age for the entire tax year.
* Student must attend full-time. “Full time” is determined by the institution.
* Student must spend at least some part of each of five (5) calendar months of the tax year at school.
* The educational institution must maintain a regular faculty and curriculum and have a body of students in attendance.
The extra exemption is not allowed for 22 or 23 year old full-time students, although such students who otherwise qualify could be claimed as dependents on the NJ-1040.
There also seems to be a difference in the determination of a month that qualifies toward the 5 month test. For federal and state dependency purposes as long as the student is enrolled during the month it counts toward the required 5. However for the additional exemption on the NJ-1040 the student must actually “spend time” at the school, which appears to mean attending classes. For this purpose the student who registered in August but began classes in September would only have 4 qualifying months.
Tuesday, January 13, 2009
I have been using the 1040 Quickfinder Handbook as my tax season “bible” for almost 20 years now.
For the past few years I have also been purchasing the annual 1040 edition of The Tax Book. Last tax season I tried to use the Tax Book exclusively as an experiment. Unfortunately I found it could not replace the Quickfinder Handbook for me, and wrote about it in my post “1040 QUICKFINDER HANDBOOK VS THE TAX BOOK – AN UPDATE”.
This year I decided to try the same experiment with the CCH “1040 Express Answers” book, which I recently received in the mail. Before the Quickfinder Handbook the annual CCH Master Tax Guide had been my tax season bible, so I have a “history” with CCH. I still get the MTG each year as a gift from a broker – but use it only sparingly as a back-up resource.
So I will start off the 2009 tax filing season (for 2008 returns) by attempting to use only the 1040 Express Answers handbook and see how long I can last without having to refer to my Quickfinder. I will report on my experience at the end of April.
BTW – I just heard that Maureen Adams, the current Director of the NJ Division of Taxation, will be retiring soon. Gee, I hope it wasn’t something I said in Monday’s review of the NJ-NATP state tax seminar!
Monday, January 12, 2009
And so I looked forward with great anticipation to Saturday’s seminar.
Every other year or so the hotel FUs the room lay-out. This year, for the second year in a row, the lay-out was wrong. The room was set up so that we faced the front of the room. This method causes some participants at the end of a table to be “trapped” against a wall. The “more better” layout would have the tables face the side of the room, which allows for easy flow and egress (like that word?) for all. Luckily I arrived early enough so that I got a seat that allowed me to exit easily, without having to climb over a row of people.
In addition the tables were set too close together, also hindering the easy flow of “traffic”. This is a very popular seminar and, as usual, the room was full. It is a tribute to the seminar’s reputation that participants ignored the warnings of heavy snowfall and did not stay home. While the Woodbridge Hilton has been an excellent host and location over the years, perhaps it is time to investigate larger venues.
The seminar was opened by newly elected chapter President Marilyn Ayers, formerly the Board member in charge of such seminars.
Our first speaker was sales tax attorney Susan Feeney of McCarter English, who discussed the New Jersey Sales and Use Tax. Personally I try to avoid sales tax like the plague. I do not accept new clients who collect and remit sales tax (I actually do not accept any new clients of any kind – and if I did I would not accept new non-1040 clients). I only prepare the sales tax returns of long-time clients and friends to whom I really cannot say no. So this topic was of minimal interest to me.
I will say that Susan gave an excellent presentation. Rather than just running through the list of items subject to sales tax she dealt with current issues and concerns relating to sales and use tax.
One item of special interest involved the State of New Jersey’s intention to include a special “Schedule T” on future state corporate income tax returns (CBT-100) in which “responsible persons” for sales and payroll taxes are to be identified with a confirming signature from each person. This is not yet required - it is only a proposal. As a lawyer Susan had some serious concerns about this request and is preparing a legal statement to be made on the Schedule T, if it is added, of her firm’s clients' returns to the effect that the corporation cannot properly fill out this section due to legal and factual considerations, quoting a specific tax court case.
Susan advised seminar participants to make a similar statement along the lines of “Due to factual and legal issues we are unable to determine the responsible persons at this time” on the Schedule T if it is included in the future.
Next on the schedule was “keynote” speaker Maureen Adams, Director of the NJ Division of Taxation, making her third consecutive appearance. According to the printed Agenda she was to talk on “State of New Jersey Updates”. Like last year the presentation was limited to a half-hour.
Upon introduction Ms Adams said that, considering the other presentations on the agenda, she did not want to be “redundant” and so would not talk about NJ tax issues. Instead she gave a brief civics lesson on the state budget process.
Ms.Adams presentation was totally useless – of no substantive value. The phrase “tits on a bull” came to mind as I sat there. What good is having the Director of the Division of Taxation speak if she is not going to address issues of tax administration? Or if she is not going to field questions?
As mentioned her presentation was limited to a half-hour, obviously so she could avoid being inundated with legitimate questions and comments from understandably frustrated NJ tax preparers. I expect the brief time allotment is her requirement and not the intention of the seminar planners. During her first visit to this seminar, as Acting Director, she was so inundated with and intimidated by questions and negative comments from the audience that I am sure she vowed to make any future visits limited to a brief hello before being shuffled out the door.
When previous Director Robert Thompson appeared a few years back he gave a substantive and informative presentation (I still quote one of his stories on sales tax collection to this day) and dealt honestly with questions. As did the head of the Division of Revenue when he appeared.
I did take note of one of Maureen’s comments on the current budget situation. In response to an anticipated budget shortfall, instead of cutting the tons of pork in the NJ state budget, employees are required to count paper clips! I will spare you a rant on NJ’s current corrupt political system.
Note to Marilyn et al – you can lose Maureen’s invitation next year (assuming she is still Director). Don’t waste our time. Give her half-hour allotment to Jim Gordon and Jacob Foy!
Maureen Adams’ brief token appearance was followed by a presentation on “Estate Tax Settlement” by financial planner Kevin Truex.
While not specifically a state tax issue, the topic did have its state and federal tax connection. The presentation was geared as a suggestion for an alternative “post-tax season” service that could be offered by tax preparers.
Kevin was an adequate speaker and his “handout” was excellent. He pointed out that as tax preparers we probably have available most of the information needed to “settle” the estate of a client. He also made the not surprising comment that when an attorney is involved in settling an estate it usually takes 7-9 months even for simpler estates, while in reality in his experience it should only take at most 6 weeks.
While I do not want to add this service to my “product line” I am aware of three instances where I am listed as Executor in a will, and the outline and samples included in the handout will certainly be a great help when I am called upon to carry out my duties. For more ambitious preparers I do agree that this is certainly worth considering offering this service.
Kevin indicated that for more simple NJ estates a lawyer is not required – and even in more involved estates one is only needed for specific tasks.
After lunch and a drawing for door prizes we were introduced to Brooklyn tax professional Kathryn Keane, EA, former NATP national Board member and current President of the New York State chapter, who spoke on New York State tax issues.
This is an excellent, and certainly relevant, topic – and one that should be included in the Agenda each and every year.
Kathryn pointed out that New York requires that all tax preparers who prepare 100 or more federal individual income tax returns (1040, 1040A) and use tax preparation software must electronically file all individual NY state income tax returns, unless the client “opts-out”. When asked if NJ based preparers are included in this requirement she said NYS is not clear on this issue, but she would expect the answer is yes.
New York differs from NJ in that the criteria is based on federal returns and not resident State returns. For NJ the number is lower – 25. New York also adds the requirement “and uses tax preparation software”. Since I do all my returns, except for NJ returns that can be submitted via NJWebFile, manually I would not be subject to the NY requirement if it did indeed apply.
Another interesting tidbit is that the current proposed NYS budget includes a “penalty” charge of $10.00 for filing a paper NYS tax return!
One of the major points of the presentation was that the New York State Department of Taxation and Finance was “excessive” in its efforts at enforcing compliance and collection – worse even than the NJ Division of Taxation.
On the plus side Kathryn briefly mentioned New York’s Voluntary Disclosure Compliance Program, under which state tax delinquents can come forward and pay-up what they owe without penalty or prosecution, and without the information being shared with the IRS or any other tax authority! Unlike a temporary Tax Amnesty program this initiative is ongoing and has no expiration.
The true “meat” of the day was once again reserved for, unfortunately, the last 1¾ hours of the agenda – which turned out to be only about 1½ hour due to presentation and break overruns. Of course I am talking about New Jersey Tax Changes presented by DOT representatives Jim Gordon and Jacob Fox – aka “The Jim and Jake Show”.
Jim and Jacob are truly the NJ tax “dream team” – the Frank and Dean of New Jersey state taxes. We were fortunate to have them back, as they were involved in, I think, a serious auto accident in 2008.
As an aside, I am glad that NJDOT’s John Kelly did not return this year. Although a truly colorful and entertaining character, John’s past appearances have been more comic relief than providing substantive information.
Jim started off by telling us that he was glad he was following a New York State presentation – after hearing about New York the NJDOT actually looks good (perhaps the only time)! He also pointed out that the DOT "administers" tax law but does not actually create the law - basically "don't shoot the messenger".
He reported that NJDOT is finally seriously matching partnership K-1s to NJ-1040s. There will be a 3-year program of increased scrutiny of NJ-1065s (partnership returns) – including enforcement of the law that requires partnerships with 10 or more partners to file the NJ-1065 electronically.
Jim told of the recent very first enforcement of the 7% withholding requirement for construction contractor services that became effective January 1, 2007. Jim has discussed this law each year for the past three years. For more information see my post “What The ….?” as well as my review of 2007’s NJ-NATP State Tax Seminar.
Jacob discussed the NJ Business Portal program. A taxpayer can set up his/her own special tax portal at the New Jersey State website to handle all his state tax and other issues in one place. We as tax professionals can have our own portal and each of our business clients can have a portal. The business clients can then allow us as their tax professional access to their specific portals - so we will be able to complete all the online tax filings for all our clients at one place (instead of having to log-in and log-off using each clients individual EIN and PIN for each filing), as well as access information about the clients’ filings and registration status.
To create a portal go to www.nj.gov and click on “Register”.
Jacob also gave us the word on the new increases in the NJ Property Tax Reimbursement Program (aka “Senior Freeze”) filing thresholds for 2007 and 2008, and the extended deadline for filing 2007 PTR-1 forms. As 2009 is an election year Gov Corzine wants to make sure that he gets the senior citizen vote. Click here for more information on the retroactive increase. He said that the state had just mailed out 2007 PTR-1 packages to about 39,000 qualified homeowners that was thought would benefit from the increased 2007 numbers. This is true – as one client just gave me her mailing yesterday morning.
I was very pleased that one of the participants asked Jacob the same question that I have been asking NJDOT for years – why can’t the NJ Homestead Rebate application for both homeowner and tenant, and for that matter the PTR application, all be included in the NJ-1040 filing! Currently tenants can apply on their NJ-1040, but homeowners need to submit a separate application, as seniors and the disabled also do for the Property Tax Reimbursement. It would seem that NJDOT would save tons of money by only having to send out one mailing instead of three.
I was told by NJDOT a few years back that the homeowner application could not be included on the NJ-1040 because the information that the state needs from municipalities to determine the rebate was not available until after May. So what! I am not asking that the rebate be processed any sooner than currently done – just that the application be submitted with the NJ-1040. All the necessary information is available to the taxpayer applicant at the time of the NJ-1040 filing!
As I have said many times before the separate post-tax season filing for homeowners especially affects senior citizen homeowners, many of whom are confused by the process and, I suspect, as a result do not file for the rebate. This defeats one of the major purposes of the rebate - tax relief for senior citizens.
Anyway - I hope that J+J decide to stay with NJDOT for as long as I remain in New Jersey – and that NJ-NATP has them back again each January.
One of the reasons I look forward to this seminar is to learn the new ways the State of New Jersey has found to nickel and dime resident taxpayers and discourage small business. It appears that the legislature has taken a year off from this practice (so far) - probably because, as mentioned above, 2009 is an election year.
All in all another great job by NJ-NATP!
In closing - it has always been my belief that the annual January State Tax Seminar should be devoted to updates on state tax law – individual, partnership and corporate income taxes, estate and inheritance taxes, sales and use tax, and payroll taxes (including SUI and SDI), with presentations from both the Division of Taxation and Division of Revenue – for New Jersey and, as many NJ preparers also do NY and PA non-resident and resident returns, New York and Pennsylvania. If, and only if, there is time left on the schedule such topics as Estate Settlement and Unclaimed Property can be presented.
The entire afternoon – 1:00 to 4:45 – should be devoted to NJ updates, with plenty of time for questions, with NY, PA and “other” presentations in the morning.
BTW – NJ tax professionals who are not already members of the National Association of Tax Professionals, and therefore automatically members of NJ-NATP, should join today. If you decide to do so I would ask that you please list my name – Robert D Flach – as a referring member.