Dear Valued Client,
Picture 1800 plus tax geek preparers gathered together to hear the latest “areas of focus” at the
IRS Nationwide Tax Forum at the Hyatt Regency Chicago eleven days ago.
We just settled in to listen to the IRS presenter talk about the new “postcard” tax return. Exciting stuff.
IRS Nationwide Tax Forum at the Hyatt Regency Chicago eleven days ago.
We just settled in to listen to the IRS presenter talk about the new “postcard” tax return. Exciting stuff.
Time to say goodbye to form 1040EZ and 1040A. We now have one tax form….1040.
The “postcard” tax return has arrived. Here are picture of a draft 1040 page one and page two.
Page one has all the personal stuff. And Page two has all the financial stuff. In a nutshell
the two page “postcard” 1040 is actually seven pages. A very condensed summary form on
two pages and six separate schedules to reach the entries on the 1040 page two.
The “postcard” tax return has arrived. Here are picture of a draft 1040 page one and page two.
Page one has all the personal stuff. And Page two has all the financial stuff. In a nutshell
the two page “postcard” 1040 is actually seven pages. A very condensed summary form on
two pages and six separate schedules to reach the entries on the 1040 page two.
Notice that there are only two entries for dependents on this draft form.
IRS says it has added two additional lines for dependents on the current draft.
A new check box for Standard deduction has been added as well as additional tax benefits.
No check box for married filing jointly. It is assumed.
The January 2, 1954 date reference is to Social Security retirement age, as well as,
an increase in the amount of standard deduction.
IRS says it has added two additional lines for dependents on the current draft.
A new check box for Standard deduction has been added as well as additional tax benefits.
No check box for married filing jointly. It is assumed.
The January 2, 1954 date reference is to Social Security retirement age, as well as,
an increase in the amount of standard deduction.
Page two is where the magic happens. With just 22 lines you will see the need for an additional
six schedules to support the filing of your tax return. Note the missing personal exemption line.
It is now replaced by increased credits.
six schedules to support the filing of your tax return. Note the missing personal exemption line.
It is now replaced by increased credits.
Here is proposed 6 schedules I found on the New York Times website. It is the best available I could find.
Schedule 1 deals with income. Look it’s 37 lines long.
Schedule 1 deals with income. Look it’s 37 lines long.
See hello to the new Other Dependent Credit.
Big changes with the Child Tax Credit. It has been increased to $2,000 from $1,000.
$1,400 of this credit is refundable. We love credits far more than deductions.
Credits are actual money applied to your tax liability or refundable.
Deductions reduce income subject to taxes. Credits offer more bang for the buck.
$1,400 of this credit is refundable. We love credits far more than deductions.
Credits are actual money applied to your tax liability or refundable.
Deductions reduce income subject to taxes. Credits offer more bang for the buck.
In order to receive the Child Tax Credit we have to answer questions……
Are they a dependent?
What is their relationship to the taxpayer?
What is the dependent’s age? Is the dependent under 17 at the end of the year?
Did the taxpayer pay more than 50% of the support of the dependent?
Is the dependent’s social security card/social security number valid for employment?
For those dependents that do not meet the above listed requirements, the Other Dependent Credit is now available. The Other Dependent Credit would apply to aging parents and other qualifying dependents, as well as, children 17 years and older. The amount of the credit is $500. And it is not refundable.
Head of Household filing status has new qualifiers. Specifically dependents must
have social security number issued that qualifies the dependent for employment.
No itins work as qualifiers. IRS now requires additional due diligence for tax preparers filing tax returns
for those taxpayers filing the head of household status.
have social security number issued that qualifies the dependent for employment.
No itins work as qualifiers. IRS now requires additional due diligence for tax preparers filing tax returns
for those taxpayers filing the head of household status.
The new postcard 1040 is smaller that’s for sure, but more complicated than ever.
We will writing more as the IRS releases additional forms and schedules.
No comments:
Post a Comment