Monday, April 23, 2018


I survived my 47th tax season . . . .and I’m here!

This season I got an answer to the question posed by the Beatles decades ago (at least for me) – you still need me, and some of you still feed me, now that I am 64!

Once again, a successful year.  I ended the season with only 26 GDEs (by now I expect you know what this stands for) – similar to the previous 2 years.   And once again not a single GDE was due to my workload!  Every single return received in my hands by March 18th, with all the necessary information, was completed and returned to the client, as were quite a few received after that date.  

Also again, no auto, computer, equipment, or weather issues.  And no word of any IRS or state refund or processing delays or FUs - so far.

I was truly “locked behind closed doors” for the entire season.  I was up at my desk each morning between 4 and 5 AM during this time, and when February 1st came around I forgot to plug my phone in at 9 AM each morning.  After about a week I got spoiled – I enjoyed working through the day without the interruption of the phone (even though I have always screened calls) – and never plugged the phone in (unless I was expecting a specific call).  I did, however, constantly check my email accounts, and responded promptly when appropriate.  I found that, from my point of view, not having the phone on did not adversely affect the preparation of returns.

After preparing each tax return this season I also calculated the tax on 2017 income and deductions using the new tax law and rates of the GOP Tax Act, to see how clients would have fared if the Act had been effective for 2017.   I found that most would have paid less – ranging from $2.00 to several thousand – but a handful would have paid more.  I included the result of my calculation in my “The Word” explanatory memo that accompanied finished returns.  One thing I learned from this exercise is that many returns will be much simpler next season and beyond, because I found many clients would no longer be able to itemize under the new law.  I am NOT complaining.  

Obviously, I will still need to report gains and losses from investment sales on Schedule D and deal with the special qualified dividends and capital gains tax rates, report rental income and expenses on Schedule E, and calculate credits for college tuition.  But there will be a lot less Schedule As, and many clients will be filing the equivalent of a short form.

The one change from the GOP Tax Act that was effective for 2017 – returning the AGI exclusion threshold for medical expense to 7½% - did indeed benefit quite a few of my clients.

Taxpayers could no longer remain silent on full-year health insurance coverage, as they could last year, and I actually had to calculate a pro-rated Obamacare individual responsibility penalty for 2 clients (my first time using this procedure).  A handful of clients had to reconcile advance premium credits, and I was able to save a married couple $1,500 by having them make a $1,000 deductible IRA contribution (to be explained in a future post).

I continued to do absolutely nothing more or different for returns claiming the American Opportunity Credit and the Child Tax Credit, other than include IRS Form 8867.  As the season progressed I considered, to save time, creating a pro-forma Form 8867 with my name and PTIN and the questions on Page 1, and the last question, all answered ‘appropriately”, so I would just have to enter the client name and number and answers to the credit specific questions when the form was needed.  I will definitely do this next season.  As you probably know by now, I strongly oppose and denounce (as I do arrogant arsehole Donald T Rump) the additional excessive due-diligence requirements for these credits.

The ridiculous retroactive one-year only extension of several expired tax benefits that the idiots in Congress included in the “Bipartisan Budget Act of 2018” signed by Trump on February 9th did not cause any problems for me.  I did not, and will not, have to amend any 2017 returns to include these extended benefits.

On the state side, I used NJWebFile to electronically submit NJ returns whenever possible, and permitted by the client, and used the state’s somewhat enhanced fill-in form when needed, and took advantage of the excellent NY state truly enhanced fill-in Forms IT-201 and IT-203.  Of course, all my federal returns were prepared manually.

Like last year there was a delay in the beginning of processing returns by the IRS – the Service began processing returns on January 29th, later than last year’s January 23rd start date.  But, of course, I did not begin to prepare returns until February 1st.  And for the first time  in history the April 17th filing deadline (once again the 15th fell on a week-end and the 16th was Emancipation Day, a legal holiday in Washington, DC) was extended to April 18th when, as fellow taxblogger Kelly Phillips Erb explained in her post “Don't Panic: After IRS Problems, Taxpayers Get An Extra Day To File” –

Following computer system issues which appeared early on the April 17 tax deadline, the Internal Revenue Service (IRS) has announced that taxpayers will have an additional day to file and pay their taxes. . . . The system issues were discovered early in the morning on Tax Day. Despite these problems, some taxpayers were able to file and pay their taxes online. However, since millions of taxpayers were expected to file at the last minute, out of an abundance of caution, the IRS has extended the deadline.”

As usual the season ended for me the day before the original deadline – on Monday, April 16th – with the mailing of the GDEs.  I actually prepared my last Form 1040 of the season on Saturday.  The additional day meant nothing to me – I left for my annual post-season recuperation at the Jersey shore on the morning of April 18th.  

It seems that I prepared about 20 less sets of returns during the season this year.  A couple of clients, aware of my announced retirement after 3 more seasons, did seek out a new more local preparer, telling me so, and I lost some clients due to death.  And I expect I did not hear from a couple because they no longer need to file a return (although I do invite clients in this situation to continue to send me their “stuff” anyway and I would verify that they did not need to file, which I did for a handful).  I did not accept any new clients – keeping true to my policy – although I did do a first return for one or two dependent children of existing clients.

So, there you have my commentary on the 2018 tax filing season.  I end with my usual question for fellow tax pros – did I miss anything?

(I am truly showing my age with the title of this annual post.  I remember as a child in the mid-1960s watching the American version of the popular British satire THAT WAS THE WEEK THAT WAS – aka TWTWTW – the grandfather of Comedy Central’s THE DAILY SHOW.  It was hosted by David Frost and featured Phyllis Newman, Henry Morgan. Buck Henry and Alan Alda.  The first line of this post is a hat tip to Stephen Sondheim, adapting a lyric from an iconic FOLLIES song.)


Tuesday, April 17, 2018





1040s NO MORE.


Today I honor the memory of Maurice "Moe" Barry - 


Monday, February 19, 2018


The floodgates have opened!

As always happens, prior to my annual 30+ year traditional visit to Monmouth County NJ for “house calls” as returns arrive I get them done and out promptly.  But once I return from my trip the “do be done” box begins to fill.  I now have 18 returns in that box, and 1 in the “red file” (to be done).

The season has gotten off to a good start – I am at least on par with last year’s work completion, and may be somewhat ahead.  I will have a better picture at the end of February.  No major client issues have arisen yet – and minimal returns have spent any time in the “red file” so far.  No weather or equipment issues either.

FYI, my phone has not been on during these past first weeks of the tax filing season.  So every day I have been “behind closed doors” – although I have been checking emails regularly throughout the day and responding promptly where appropriate.  To be perfectly honest I have enjoyed being able to work without interruptions.  I may put the phone, but not the answering machine, on going forward, but have not decided yet.  I have become spoiled.  In any case – the best way to contact me is always via email at – even on Wednesdays. 

Before I go - a holiday message.  On this President's Day let us remember past Presidents who had intelligence and competence and cared about America and its people, as we struggle to deal with the current one, who clearly does not.

OK – back to the 1040s!


Thursday, February 1, 2018


And now what you have been waiting a year for – my annual posting of:



On the first day of tax season my client gave to me a Closing Statement for the purchase of a home.

On the second day of tax season my client gave to me 2 W-2 forms.

On the third day of tax season my client gave to me 3 mortgage statements.

On the fourth day of tax season my client gave to me 4 Salvation Army receipts.

On the fifth day of tax season my client gave to me 5 Form K-1s.

On the sixth day of tax season my client gave to me 6 1099s for dividends.

On the seventh day of tax season my client gave to me 7 cancelled checks.

On the eighth day of tax season my client gave to me 8 useless items.

On the ninth day of tax season my client gave to me 9 medical bills.

On the tenth day of tax season my client gave to me 10 stock sale confirms.

On the eleventh day of tax season my client gave to me 11 employee business expenses.

On the twelfth day of tax season my client got from me a finished tax return, 11 employee business expenses, 10 stock sale confirms, 9 medical bills, 8 useless items, 7 cancelled checks, 6 1099s for dividends, 5 Form K-1s, 4 Salvation Army receipts, 3 mortgage statements, 2 W-2 forms, and a Closing Statement for the purchase of a home.

And, of course, on the thirteenth day of tax season the client gave to me a corrected Consolidated 1099 from Wells Fargo Advisors!


And so the 2018 Tax Filing Season – my 47th - officially begins.  Open the floodgates and bring on the 1040s!

As is my custom, due to the demands of the filing season I will be taking my annual “tax season hiatus” from posting to THE WANDERING TAX PRO and THE TAX PROFESSIONAL. 

Between now and April 17th I will barely have time to relieve myself let alone blog!  Nor will I have time to respond to comments. If a comment requires a response I will do so after April 17th.


I am NOT accepting any new 1040 clients (or any other kind of tax preparation clients). So, don’t email me asking if I can prepare your 2017 tax returns.  THE ANSWER IS A MOST DEFINITE "NO". 

I will be publishing a WHERE THE FAKAWI post occasionally here at TWTP to keep my clients up-to-date on my progress during the season and to report changes or additions to my tax season policies and procedures. Clients can also keep track of my tax season progress by following me at TWITTER (@rdftaxpro).

I realize that I am abandoning you at a time when you may need me the most – but I need to make a living!

I find it a bit amusing that the period of time when TWTP gets the most “hits” is during the tax filing season when I am not posting.

“Talk” to you when it is all over!


Wednesday, January 31, 2018


All state returns (that apply to me and my clients) are now finally up and available at the appropriate state tax agency website.

The 2017 NJ-1040 form was finally made available at the NJDOT website forms page at 11:00 AM on Monday.  As expected, there was no change to the physical format or layout of the form, except for the addition of Line 12c on Page 1 to indicate if the taxpayer and/or spouse or civil union partner is eligible to the Veteran Exemption (although the word exemption is misspelled “exeption”).

From NJDOT – items that will be accepted to document a claim for the new Veteran Exemption:

* DD-214 - Certificate of Release or Discharge from Active Duty

* DD-256 - Discharge Certificate

* WD AGO 53 - Enlisted Record and Report of Separation Honorable Discharge

* WD AGO 53-98 - Military Record and Report of Separation Certificate of Service

* WD AGO 55 - Honorable Discharge from the Army of the United States

* NA Form 13038 - Certificate of Military Service

* NAVCG 553 - Notice of Separation from U.S. Coast Guard

* NAVMC 78PD - U.S. Marine Corps Report of Separation

* NAVPERS 553 - Certificate of Separation/Discharge from U.S. Navy

* County Veteran ID Card - Veteran identification card issued by any of the New Jersey counties

* Federal Veteran ID Card - Veteran identification card issued under the Veterans Identification Card Act

Just a reminder – regardless of when you submit your 2017 NJ-1040 to the state, refunds will not begin to be issued until March 1st.

As for the New York State resident (IT-201) and non-resident (IT-203) returns - the only change to the physical format or layout of the forms appears to be the addition of a Line 60o (IT-201) or 57o (IT-203) to add a new voluntary contribution option for the Veterans’ Home Assistance Fund”, and the addition of a line 79a (IT-201) and 69a (IT-203) to allow taxpayers to allocate via direct deposit all or a portion of their refund to NYS Section 529 college savings accounts via the new Form IT-195.

The NYS standard deduction and tax rate schedules have been adjusted as per the annual COLA.  There have been a fee changes and additions to obscure state credits, but nothing that would affect any of my clients.

The "What's New for 2017" section of the NY state income tax instruction booklets says "A recent law change amended and expanded the definition of NYS source income", but does not explain just how.  When I found out just what the state is talking about I will post it here in a subsequent post.

The biggest issue facing those who file New York State income tax returns going forward – both residents and non-residents – involves the changes made beginning in 2018 via the GOP Tax Act, specifically the “conformity” of the state return to the federal return and a NYS requirement that taxpayers who claim the federal Standard Deduction also claim the NYS Standard Deduction.

The current NYS Standard Deduction for a single filer is $8,000, compared to the $12,000 federal amount for 2018.  And for a married couple is it $16,050, compared to $24,000. 

While NYS does not allow a deduction for state and local income tax or sales tax, it does permit a full deduction for real estate taxes, now limited to $10,000 on the federal return.  Many NJ residents filing a NYS non-resident return and NYS residents pay more than $10,000 in real estate taxes.  And the loss of Miscellaneous Expenses subject to the 2% of AGI exclusion reduces both federal, and conforming NYS, itemized deductions.

It has been suggested that if NYS continues to conform to the new federal rules beginning in 2018 taxpayers who file NYS returns could see a $1.5 billion increase in state tax.

New York is not alone in having to fact this problem.  If the 41 states with an income tax almost all of them at least partially base taxable income on the federal return.  New Jersey and Pennsylvania are exceptions – they do not follow the federal return and have minimal allowable deductions. 


Monday, January 29, 2018


I did some “horn tootin’” at my other blog – THE TAX PROFESSIONAL – this morning.  So let me continue the shameful tootin’ of my own horn here.  Sorry to be so “Trump-like” – although, unlike Trump, I actually have something to toot about here.

I was just notified that I was honored to be selected as #24 on the list of “Top 25 Must-Read Accounting Blogs” at ACCOUNTING DEGREE REVIEW.

In compiling the list, the editors “looked for accounting-related blogs that are active, regularly updated throughout the year with knowledgeable, useful, well-written, and engaging content.”

I am certainly in good company on the list.

FYI – the fact that I am #24 does not imply any ranking.  The blogs are presented simply in alphabetical order by title.

Here is what they have said about THE WANDERING TAX PRO -

A wonderfully eccentric, 40-year accounting veteran, Robert Flach takes a down-to-earth approach with The Wandering Tax Pro blog. Writing in an informal, instantly-recognizable voice, Flach takes on current events, politics, and money with a sharp sense of humor and a 'mad as hell' fearlessness. Posts from 2017 have run heavy on the politics, with well-informed consideration (and occasional take-downs) of government shenanigans, especially with tax reform. His up-front title, ‘Like Frankenstein, The Tax Code Must Be Destroyed’, pretty much says it all.”

I am truly honored by the selection and thank the site for the inclusion.


This will be the last BUZZ installment until after the end of my tax-season hiatus.  I will return with more BUZZ after April 17.

* The word from Michael Cohn at ACCOUNTING TODAY – “IRS to openfiling season Monday {today – rdf} with some extra warnings”.

The IRS may begin tax season today, but I do not begin my tax season until February 1st.  Don’t forget to return here on February 1st for the annual posting of THE TWELVE DAYS OF TAX SEASON!

The IRS extended impacted taxpayers’ deadlines that fell (or will fall) between December 4, 2017 and April 29, 2018 to April 30, 2018. This includes the Form 1040 deadline of April 17th (it will be April 30th for impacted taxpayers). This impacts individuals and businesses who are in Los Angeles, San Diego, Santa Barbara, and Ventura Counties who were impacted by the disasters.”

* If you haven’t already found a tax professional to prepare your 2017 returns yet you can begin your search at my website FIND A TAX PROFESSIONAL.

* More proof that politicians are idiots in “More States Considering Dubious SALT Charitable Contribution Workaround” from Jared Walczak of the TAX FOUNDATION.

Jared correctly points out “what you really need to know” - 

·         Charitable contributions to government are only deductible, per IRS guidance, if the contribution “is solely for public purposes (for example, a gift to reduce the public debt or maintain a public park).” By contrast, these contributions primarily serve a private purpose (reducing federal tax liability through recharacterization), as they do not yield any increased revenue for the state.

·         When claiming the charitable deduction, the taxpayer must exclude contributions from which one benefits. For instance, if one purchases a $250 ticket to a benefit dinner, and the fair market value of the dinner is $50, then $200 can be deducted—not $250. In this instance, the taxpayer receives a benefit equal to the entire value of the contribution in lieu of taxes (the corresponding tax credit), wiping out any deductible share.

·         Case law and IRS regulations generally require charitable intent for a contribution to be deductible, meaning that the individual does not receive a substantial benefit from the contribution. The sole purpose of the proposed contributions in lieu of taxes proposal is financial gain. (the U.S. v. American Bar Endowment, Hernandez v. Commissioner, Singer Co. v. U.S.)

·         The IRS has broad authority to classify a payment or charge as a tax based upon its real nature. If it looks like a tax and acts like a tax, the IRS and the courts could simply say that it is a tax.”

* Before I begin my tax filing season blog post hiatus at THE TAX PROFESSIONAL I do a bit of “Horn Tootin’”.   


What is the true “State of the Union”?

A dangerous, deplorable and despicable ignorant and incompetent mentally unstable malignant narcissist, who continues to destroy the credibility, integrity and stature of the White House domestically and internationally on a daily basis, is the President.

America will NEVER be great again until Donald T Rump, and all Republicans who publicly support and defend him, are removed from office.


Wednesday, January 24, 2018


Just so there is no doubt about my opinion of the current President of the United States, let me be crystal clear.

Donald T Rump is a deplorable and despicable human being.  He is a worthless piece of shit.

He is an ignorant, incompetent, and delusional mentally unstable narcissist and sociopath who is totally unfit to serve as President.

His every thought, word, “tweet”, and action is motivated and controlled by his extremely excessive narcissism and delusions of infallibility, and his desire for personal financial gain - and absolutely nothing else.

He has no “political” agenda, nor any political beliefs or convictions.  His only agenda is, and has always been, (1) feed ego and (2) line pockets, in that order.  His one and only true belief is “Trump is great and Trump is good”. 

As a candidate and as President he has rarely, if ever, made a completely truthful statement to anyone about anything.  It is impossible to believe a word that comes out of his mouth.

Trump has never shown any respect for anyone or anything, and, despite the office he holds, he does not deserve any respect from anyone.

I will constantly and consistently vocally and aggressively oppose and denounce Donald T Rump the man via any venue available to me until he is removed from office. 

I do not oppose and denounce Trump because he is an alleged Republican or conservative – he is neither.  My opposition is not political – it is patriotism.  I join millions of Americans – Democrats, Republicans, and Independents, liberals, moderates, and conservatives – who oppose and denounce Trump and call for his immediate removal from office.

Got it?