Early feedback tax season 2019

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#1
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what is your early feedback so far? here is mine, looking forward to your replies. 1.) work flow seems about the same as last year maybe a little bit more with a slight increase in new clients 2.) I've been implementing my across the board fee increase of about 10% with not too much resistance and most clients have been understanding 3.) I haven't had any client make any comment or even imply that taxes are more simple this year just because more taxpayers are taking the standard 4.) More and more clients seem to prefer not meeting in person anymore and completing their taxes via email. I would say I'm at about 80% who email me their info and 20% the old fashioned meeting hence why I switched last year from full year office lease to a coworking space where I pay on an as needed basis. 5.) quite a few clients are receiving a lower refund than last year due to decreased withholding and not happy about it although they appreciate me explaining that they received more of their refund via an increased pay check during the course of the year 6.) This year I've been trying to be more proactive advising schedule c filers to change to an S-Corp to save in self employment taxes, which will also increase billing for next tax season by filing more business returns. 7.) the time to complete a return hasn't changed much although I would imagine the new tax forms and how everything flows on the return will be much more difficult for do it yourselfers. Wishing everyone a good tax season.
 

#2
chris  
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Similar here. Almost everyone 'gets it' but they don't really remember the extra income in their paycheck and I know they are disappointed with lower refunds. I also see two ends of the spectrum:

1. Single mom who works part time claims HOH, gets generous child support from her ex and gets EIC and better child tax credit. She hit the lottery this year.

2. Single widow who hit the SALT cap (leaving $5K stranded), worked less hours last year and is losing $5K worth of employee expenses...so the combination of all that means her usual $4K tax refund on fed goes down to $80. She's not going to remember our conversation last year, I can guarantee that.

Not sure on the switch from sch-C to s-corp. Most of mine are sole proprietors who provide a service, so tough to say that the salary should be different than 100% of net. Also I know most of them won't be able to handle running an s-corp correctly, or the added expense of hiring a payroll service plus bookkeeping/tax prep.
Site admin and software developer for TaxProTalk.com and https://TheSiteFactory.com
 

#3
ATSMAN  
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I am spending way more time comparing 2017 and 2018 returns to explain why their refund is lower than last year and then adding back the lower withholding amount to show that their refund would have been higher if the same amount was withheld. Most get it but a few clients are still clueless!

Also having some issues with clients who were able to deduct medical expenses but are precluded because of $24,000 standard deduction MFJ. This one family had 7 members so their exemption was $29050 last year and on top of that they were able to deduct medical expenses. With the loss of personal exemption amount they were feeling the pain!

I must have spent an addition hour trying to explain it :roll:
 

#4
makbo  
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Don't forget, the higher income taxpayers, at least those not in the states that were targeted for SALT limitation, are not having any angst at all, they are very happy with their big tax cut. The middle and lower income ones are the only ones who are going to have cash flow problems due to smaller refunds, not the rich folks.
 

#5
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re Makbo's comment: as my billionaire next door client put it after the 2016 election: "I despise our new POTUS, but I'll love how he will reduce my tax bill."

But that's interesting that smaller individual clients are more willing to just sent you the docs without face to face. Have seen that trend with higher income clients for years but not the little clients. This year so far the same.
 

#6
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Last year, I opted for the ProFX "Projector" module. I provided every client with a projection of 2019 using 2018 data. They could see last tax season the effect of the new changes. Thankfully, I also cautioned them about the withholding reduction impact during the year so there should be no surprises this tax season.

If there any gasps or groans, I will remind them of the 2019 projection we did and pull it up on my screen for them to see (again).
 

#7
ATSMAN  
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Just as a FYI from IRS:

The average refund is down about 8% under the first full year of the overhauled tax code, according to data released by the IRS on Friday. Refunds averaged $1,865 compared to $2,035 for tax year 2017.

The total number of returns received also dipped during the first week of the season ending February 1, down from about 18 million to some 16 million so far in 2019.
 

#8
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And as I have already explained to multiple people complaining about their refunds being down, they started receiving benefit in early 2018. All it takes a quick look at their pay stubs and they can see reduced withholding for the same compensation.

People just look for reasons to complain, without finding any answers as to WHY something may be occurring.
 

#9
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any more updates on this topic now that we are in mid February and presumably in the heart of the season?
 

#10
ATSMAN  
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Folks are not happy with their refund! I have to constantly add the reduction in withholding to the refund amount to show the effective refund. Folks who were 4 or 5 members in the family are really seeing the impact of loss of exemption amount :(
 

#11
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same here $80 a week extra didnt feel like much during the year however having $4,000 less in tax withholdings sure hurts at tax time. I'm a little surprised what you said about 4 or 5 members feeling it, wouldn't the increase in child tax credit and reduced tax rate at least offset most of the reduced withholdings issue?
 

#12
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I have not broken into my individual returns in a material way yet. Still focused on passthroughs...

I'm hoping the beefed up child tax credit mitigates some of the under-withholding for the middle income clients. We'll see...

I plan to work on two individual returns today/tonight.

Some of my individual clients were already materially under-withheld last year and I encouraged them to submit new W-4s. Even offered my help if they needed it. No dice. I'm sure I'll have even more of an argument for new W-4s if it's worse this year.
 

#13
taxnoob  
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Having a difficult time having to explain just because their refund is less doesn't mean their total tax bill was more.
Many felt that as a result of their lower refund, that their tax bill was higher this year. (Stay away from political discussion at this point).

Definitely less people qualified to itemize this year - however, I still plugged most of employee expenses for state purposes.
 

#14
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From latest BNA Tax Planner update:
"Caution! The Tax Cut and Jobs Act has raised numerous questions of interpretation concerning the deduction computed by this worksheet. At date of publication of the program, little guidance from the Treasury or the IRS was available with regard to many of these issues. This part of the help file explains how these computations are performed by the program. Carefully examine the row descriptions for this worksheet. Contact Bloomberg Tax Technology if you have questions. Rely on our interpretations only if you agree with them."
 

#15
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Some clients still haven't received their brokerage year end tax statements either paper on online. e.g. UBS

What's up with that? Wasn't the deadline for sending those out Feb 15th without any extension available?
 

#16
ATSMAN  
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I have two UBS clients who just received the 1099-B in yesterday's mail. Perhaps it is in transit.
 

#17
CathysTaxes  
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I received mine the other day
Cathy
CathysTaxes
 

#18
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My guess is the additional reporting requirements for 199A REIT dividends and PTP income.

Received mine back in late January (Fidelity).

Most of my clients have gotten them in the past week if they haven't gotten them previously (mix of brokerage houses).
 

#19
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so far I would say I only lost 1 to 3 clients due to "simplification" of the new tax code and gained at least 10 due to the "complexity" of the new tax code, lol. I'm ahead of last years pace as far as number of returns and revenue received for February. I always try to account for every single client by mid February, I.e. I have an excel worksheet with the following categories and broken down into percentages 1.) completed returns 2.) info received 3.) meeting scheduled 4.) waiting on e-file forms and payment 5.) heard from however info not yet received 6.) not heard from 7.) lost clients 8.) new clients.
 

#20
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Still no UBS statement online or in mail as of this morning for a client. Would have thought they all get released at once, but apparently not.
 

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