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