Thursday, December 19, 2013

Tax Filing Season 2014 / predictions on what the coming tax filing season will hold in store for tax advisors and their clients.

Claudia Hill for Forbes writes: Each December as many begin to enjoy of the giddiness of the holiday season, I take the time to predict what the coming tax filing season will hold in store for tax advisors and their clients.  These are my predictions for filing season 2014:
  1. 2014 filing season will not be as bad as 2013. Congress waited until the first week of January 2013 to tell us what the rules were for 2012.  For 2013 there will be no retro-active changes, and the biennial list of expiring tax benefits will simply expire and be addressed mid-2014.  For many, delayed tax forms meant filing season 2013 didn’t start until the first of March.  IRS expects to be ready by  the end of January 2014.
  2. Higher income taxpayers with primarily investment income will be blindsided by additional taxes, and wonder why their tax advisors didn’t prepare them for the additional money they owe.
  3. Higher income taxpayers with primarily earned income (in excess of $200,000 for singles and $250,000 for marrieds) will be blindsided by higher taxes this year, and wonder why their tax advisors didn’t prepare them for the additional money they owe.
  4. The Supreme Court’s Windsor decision on the Defense of Marriage Act (DOMA) will create a need for time-consuming discussions with same-sex couple clients who recently married and find they owe additional taxes.
  5. DOMA creates a need for time-consuming discussions with same-sex couple clients who want to discuss whether they should get married and how to avoid the higher taxes they will face.
  6. Tax preparers will hear lots of complaints from their higher income clients…including how their tax preparation fees increased at the same time the balance they owe IRS is the highest it’s been in many years.
  7. As it affects 2013 individual tax returns, the Affordable Care Act turns out to be much-ado-about-nothing for the vast majority of individual taxpayers (except for those paying the higher taxes supporting it). However, filing season questions on the topic consume precious time. Watch out for clients with boomerang kids and early retirees with preexisting conditions who think they are entitled to premium assistance and expect their accountants to be an expert on how to access the Marketplace.
  8. The complexity level of Consolidated Statements from securities brokerage companies continues to plague diligent tax preparers who find themselves spending hours deciphering PTPs, WHFITS, REMICS, OID, ABP adjustments, and a variety of grantor trust investment vehicles.
  9. IRS continues to struggle to catch up with itself with needed reprogramming for law changes, fraud detection, and additional pressure to bring in revenue from automated programs.
  10. IRS continues to send out automated notices but still doesn’t answer their phones when taxpayers or their representatives attempt to respond to the notices.  Has Congress forgotten that Service is part of the agency’s name?


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