Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

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Archive for January, 2018

Checking out the new tax law…

Posted by taxguru on January 31, 2018

I intentionally avoided discussing the new tax law over the past several months as it went back and forth between the House and the Senate and was lied about in the press. Besides the heavy doubts surrounding the ability of the GOP in DC being able to pass any significant legislation, it would have been a big waste of everyone’s time dissecting and analyzing provisions that wouldn’t become part of the actual law.

With all of the promises that this latest reform of the tax code would make everything so simple and fair that doing our taxes would be so much fun, this gave me such a case of deja vu because it exactly mirrored the analogy I have been using for decades to describe how tax laws are created and the changes they undergo as they move through the legislative processes.  The poster I designed decades ago to graphically illustrate this is just as relevant to this latest handiwork by our rulers as it was back in the 1980s.     

Now that a unified bill has been passed and signed into law, it’s time to take some serious looks at exactly what it contains.  Just like our rulers in DC who voted on this bill, those of us in the real world don’t have time to read and try to interpret all 500 or so pages of the actual legislation; so we rely on professionals who have done that and produced easy to follow summaries.

While there is a very good chance that many people will save some money on their tax returns because of the new law, the actual amounts will vary on a case by case basis.  The figures being bandied about by our rulers in DC, as well as the calculated "costs" of the new law have been pulled out of their recta, as are all such predictions from everyone in DC, including the GAO, OMB, CBO, WTF, et al.  They have never been right when it comes to comparing their supposedly detailed calculated predictions with the real world results and there is there is absolutely no reason to expect these latest predictions to be any more accurate.   

One thing is certain.  This new law does not simplify the tax game one bit.  As always, every attempt by our rulers in DC to make taxes so simple that we practitioners will have no more work ends up doing the exact opposite.  It’s another case of increased job security for those of us in the tax profession.  All of these new changes to the Tax Code actually give us many more more opportunities to help clients structure things to save on the amount of taxes they pay. 

There may be some different rules for the Tax Game, but there are still plenty of ways to "game the system," to borrow a favorite phrase of the Left.  Even with robots and other forms of automation taking over various occupations, there is no way any kind of artificial intelligence can replace the tax saving abilities of a skilled and knowledgeable professional tax advisor, especially one who utilizes the tax savings strategies of the TaxCoach system

As I have done in previous years when significant new tax laws have been enacted, I am planning to post links to handy summaries of those laws to share with readers.  If anyone has seen a good summary that they would like to share, please send me a link to it and I will include it here. 

While the pickings are a bit sparse right now, during the traditionally slow holiday season, I do know that most tax research services, including the fine folks at TaxCoach, are planning to release their analyses in the early part of January.

Here is what I have come across so far:

From my favorite tax reference service, The TaxBook19 Page PDF Summary

From Forbes: Tax Geek Tuesday: Making Sense Of The New ‘20% Qualified Business Income Deduction‘ (31 page PDF version)  Thanks to Ohio CPA Dana Stahl for passing this along to me.

From TaxCoach: They are planning a lot of detailed guides, which I will be sharing here.  Here is their first one page summary.  

From RIA (another thanks to Dana Stahl):

Special Study on Business Tax Changes in the "Tax Cuts and Jobs Act" (20 page pdf)

Special Study on Individual Tax Changes in the "Tax Cuts and Jobs Act" (23 page pdf)

Special Study on S corp, partnership & other changes in the "Tax Cuts and Jobs Act" (11 page pdf)

A new two page brochure from The TaxBook.

The National Association of Realtors has published an analysis of the new tax law as it affects Realtors, homeowners and real estate investors.  I learned about this 1/31/18 from the weekly marketing webinar with the TaxCoach group, which has been on the forefront of learning how to utilize the new tax law to help clients minimize their taxes. 

     23 Page PDF downloadable version

     Web Version

From Intuit: Tax Reform Law: What Clients Should Know  (1 page PDF)

Posted in NewTaxLaws | Comments Off on Checking out the new tax law…

CRA-App

Posted by taxguru on January 30, 2018

Americans aren’t the only ones who love to joke about their tax agency, as we can see in this skit from a recent episode of the CBC’s news satire show, This Hour Has 22 Minutes

I have never had any first-hand experience dealing with the CRA, but it does appear that there are some similarities to our IRS.

Posted in CRA, humor, video | Comments Off on CRA-App

Tax Day is April 17 This Year

Posted by taxguru on January 9, 2018

Everyone has long recognized April 15 as the official tax return filing and payment deadline because it’s been beaten into our heads for all of our lives.  It signifies the official end of the year’s fifth season, Tax Season.  However, because of the calendar, with weekends and an obscure holiday that is only recognized in the nation’s power center, it’s been a number of years since the deadline has actually fallen on April 15.

That’s the case once again for 2017 individual income tax returns (1040) according to this recent press release from IRS.

April 17 Filing Deadline
The filing deadline to submit 2017 tax returns is Tuesday, April 17, 2018, rather than the traditional April 15 date. In 2018, April 15 falls on a Sunday, and this would usually move the filing deadline to the following Monday – April 16. However, Emancipation Day – a legal holiday in the District of Columbia – will be observed on that Monday, which pushes the nation’s filing deadline to Tuesday, April 17, 2018. Under the tax law, legal holidays in the District of Columbia affect the filing deadline across the nation.

Posted in TaxDay | Comments Off on Tax Day is April 17 This Year