Early Draft Form 1040 and Form 1040-SR Posted for Comment

NSTPForm 1040, Internal Revenue Service (IRS)

Early Draft Form 1040 and Form 1040-SR Posted for Comment

Early Draft Form 1040 and Form 1040-SR Posted for Comment On July 12, the IRS posted early drafts of the 2019 Form 1040-SR, U.S. Tax Return for Seniors, and the 2019 Form 1040 and related numbered schedules to IRS.gov/DraftForms. Posting drafts is part of the standard process for inviting stakeholder input into draft forms before finalizing them. Comments should be sent to WI.1040.Comments@irs.gov. The IRS will continue to work with the tax community to finalize these forms over the summer and will issue related communications later this year. The IRS expects to release the related draft instructions for comment this fall. As a reminder: the provision creating Form 1040-SR was one of several retirement-related changes to tax policy included in the Bipartisan Budget Act of 2018. If the taxpayer is 65 or older (or turns 65 any time in 2019), they will have the option to use a new simple tax form for seniors, known as the 1040-SR, when filing their 2019 taxes in 2020. The new form is provided for in section 41106 of the Bipartisan Budget Act of 2018 (BBA), a two-year budget agreement passed by Congress and signed by President Donald Trump on February 9, 2018. KEY … Read More

Divorce and Separation Information Request Added to Form 1040

NSTPForm 1040, Internal Revenue Service (IRS)

Divorce and Separation Information Request Added to Form 1040

The Internal Revenue Service plans to add a question regarding divorce and separation information to Schedule 1 of the Form 1040 next year asking taxpayers who claim a deduction for paying alimony to provide the date of their divorce or separation agreement, according to a new report. The report, from the Treasury Inspector General for Tax Administration, is mainly devoted to assessing the IRS’s overall implementation of the Tax Cuts and Jobs Act. It includes a single recommendation, suggesting the IRS revise Schedule 1 of the 1040 to obtain additional information regarding divorce or separation agreements for tax year 2019 and later. IRS management agreed with TIGTA’s recommendation and plans to program and use filters to select tax returns for audit to determine if taxpayers are eligible for the deduction for alimony payments, and to revise Form 1040, Schedule 1 to request the date of divorce or separation agreements. The 2017 tax overhaul eliminated or sharply limited various traditional tax deductions, including the alimony deduction. Only taxpayers who make payments under divorce or separation agreements entered into prior to January 1, 2019, can continue to claim a deduction for payments made, and individuals who receive alimony pursuant to these agreements … Read More

TAX PREPARATION FEES AVERAGE $273 FOR FORM 1040 AND ONE STATE

NSTPForm 1040

How much does your firm charge to prepare a 1040? How about other forms? What about the accounting and business advisory services you offer? Business Mix and Revenue Surveyed firms reported that on average 57.3% of gross income comes from tax-return preparation, 15.4% from write-up work, 8.9% from payroll services, 7.0% from tax services, 3.6% from QuickBooks/bookkeeping, 2.6% from financial statement presentation, and 5.2% from other services. Firms split fairly evenly regarding billing methods for accounting services, with about a third billing by fixed fee (35.3%), hourly (31.2%) or a combination of the two (31.8%). Most bill for tax preparation by form (39.5%), hourly (8.4%), by a combination of fixed and hourly fees (25.0%) or by fixed fee only (23.2%). Fees The average fee charged to prepare an itemized Form 1040 with Schedule A and a state tax return is $273, and the cost for a Form 1040 without itemized deductions and a state return is $176. Nearly half (49.8%) of tax and accounting practices increase tax preparation fees annually while 33.7% increase these fees every other year. For accounting fees, 37.4% increase fees annually, while 34.4% increase fees every other year. Surveyed firms expected to increase their accounting service … Read More