taxes96786
Level 9

I see from this site that many are already preparing 2020 returns.

I remember the year that created numerous delays to preparing a return due to tax law changes that were being made that would affect the returns.

Is anyone concerned that this may happen again given the statements of projected President Elect Biden who stated that he will eliminate Trump's tax cuts, raise the capital gains rates and possibly eliminate the step-up on basis of real property?

Skylane
Level 11
Level 11

 I won’t start preparing returns til 2/1... later, if I can get away with it... between late tax law changes (generally the extenders), and the perennial software issues, it’s a lot less stressful to wait... not sure how (or why) anyone would prepare 1040s before information returns are issued... a sure recipe for amendments.  I enjoyed the 7/15 deadline so much last year that I’m planning on putting at least 40% on extension whether they like it or not... 

As for Biden tax law changes, they can’t realistically happen until TY 2021(at the earliest). 

If at first you don’t succeed…..find a workaround
abctax55
Level 15

"...I see from this site that many are already preparing 2020 returns."

I don't think that is true; people are test driving the software to become familiar with it and possibly using it for year-end projections/tax planning.  In doing so, bugs are discovered & are being reported.  

"*******Tax software is no substitute for a professional tax preparer*******
( Generic Comment )"
IRonMaN
Level 15

I must be blind - I don’t see anybody preparing any returns yet since I’m thinking it might be just a tad too early to have received any 2020 W-2s or 1099s.


Slava Ukraini!
taxes96786
Level 9

@IRonMaN W-2s and 1099s aren't the only documents required to start preping a return. But I think the other post is correct in they are probably just getting familiar with the program even though the questions aren't phrased in that manner.

My real question was paragraph 3 of my post.

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rbynaker
Level 13

Most software companies do beta testing with a group of enthusiastic customers.  Intuit just releases the software three months before they're done with the programming.  Let the paying customers do the testing for you!  I find things like "401(k) limits haven't been adjusted for 2020" to be pretty ridiculous.  Those numbers have been publicly available for an entire year now.

I have a spreadsheet I use for QC and for tax planning.  The first thing I did when I rolled it from 2019 to 2020 was to update all of the inflation adjustments.

I'm not too concerned about 2020 tax law changes at this point.  The probability of a second round of 2020 stimulus checks to dead people gets smaller each day.

I think the biggest mystery for the time being will be deductibility of PPP expenses.  For those I'm planning a "wait and see" approach pending Congressional action.

If Congress can agree on any of the various Biden proposals, I suspect they won't be implemented until TY2022.

 

BobKamman
Level 15

Exactly what is a "projected President Elect" ?  Perhaps it involves projection of executive-order abuse by former presidents.  For those who really want to be paranoid, consider this:

The Trump administration has a dirty little secret: It’s not just planning to increase taxes on most Americans. The increase has already been signed, sealed and delivered, buried in the pages of the 2017 Tax Cuts and Jobs Act.

President Trump and his congressional allies hoodwinked us. The law they passed initially lowered taxes for most Americans, but it built in automatic, stepped tax increases every two years that begin in 2021 and that by 2027 would affect nearly everyone but people at the top of the economic hierarchy. All taxpayer income groups with incomes of $75,000 and under — that’s about 65 percent of taxpayers — will face a higher tax rate in 2027 than in 2019.

...By 2027, when the law’s provisions are set to be fully enacted, with the stealth tax increases complete, the country will be neatly divided into two groups: Those making over $100,000 will on average get a tax cut. Those earning under $100,000 — an income bracket encompassing three-quarters of taxpayers — will not.

https://www.nytimes.com/2020/10/31/opinion/republicans-biden-taxes.html

rbynaker
Level 13

@BobKamman wrote:

For those who really want to be paranoid, consider this:


And pay particular attention to the source.  It's an OPINION piece in the NYT.  I call BS.

Can someone smarter than me (like perhaps folks who write opinions for the NYT) please explain this math:

"People with incomes between $10,000 and $30,000 — nearly one-quarter of Americans — are among those scheduled to pay a higher average tax rate in 2021 than in years before the tax “cut” was passed. The C.B.O. and Joint Committee estimated that those with an income of $20,000 to $30,000 would owe an extra $365 next year"

I'd like to see an example of someone making anywhere in the $20-$30K range who would owe more tax in 2021 than they would have prior to TCJA.  The only fringe cases I could come up with are when kids age out of the $2K credit.  At those levels a more accurate terminology might be "would have their negative tax (federal tax subsidy) decrease by $365 next year".

rbynaker
Level 13

@BobKamman wrote:

Exactly what is a "projected President Elect" ?


A President Elect is a person who has been elected president but has not yet taken up office.  In this country presidents are elected by votes of the Electoral College.

At this time, no presidential candidate has any votes at all.  Joe Biden is projected to be the winner when the Electoral College meets on 12/14.

TaxGuyBill
Level 15

@taxes96786 wrote:

who stated that he will eliminate Trump's tax cuts, raise the capital gains rates and possibly eliminate the step-up on basis of real property?


 

Is he abolishing Congress and taking over as dictator?  The President does not have the power to create laws like that.  He may be able to influence Congress to some extent, but he does not have the power to do any of that himself.  So if that is what he said, he is just blowing a lot of hot air (like all of the politicians do).

As for any law changes that do eventually happen, *IF* any of those changes that you listed do happen, there is NO WAY they would happen quick enough to happen for the 2020 tax returns.

qbteachmt
Level 15

Why not just set aside all of the rhetoric and politics in a Software Community and recognize the Programs are not ready for end users at this time, because so many components are not even finalized by the IRS, much less released to be updated into the programs?

You don't have to get all huffy or throw around adjectives or superlatives. Just look at the condition of your Tool. You know, the program you use to do your job. If that is not ready, then no one is preparing 2020 returns at this point.

*******************************
"Level Up" is a gaming function, not a real life function.
rbynaker
Level 13

@TaxGuyBill wrote:

As for any law changes that do eventually happen, *IF* any of those changes that you listed do happen, there is NO WAY they would happen quick enough to happen for the 2020 tax returns.


Also, generally speaking, laws that *increase* taxes are not retroactive.  Chances are anything passed in 2021 would not take effect until 1/1/22.  There is a House rule that makes such a proposal out of order:

"It shall not be in order to consider a bill, joint resolution, amendment, or conference report carrying a retroactive Federal income tax rate increase."

The problem being that Congress is self-governing so it's just an extra hoop to jump through to vote to change/suspend the House rule before they vote on the actual bill if they want something retroactive.

 

BobKamman
Level 15

@rbynaker 

And then there is the President-elect as Congress used the term in enacting Public Law 88-277 

BobKamman
Level 15

@TaxGuyBill "Is he abolishing Congress and taking over as dictator?"

Don't you read the news?  He just said, "What's sauce for the goose is sauce for the gander."

BobKamman
Level 15

@rbynaker And pay particular attention to the source.  It's an OPINION piece in the NYT.  I call BS.

Anything anywhere is opinion.  An editor had the opinion that one piece of "news" was worth publishing and  another was not.  At least it cites sources.  Our comrade in mid-Pacific apparently relies on something heard in the barber shop from someone who saw it on an Australian's cable channel.  

What I find interesting about the failing NYT is that its shares are selling for 230% more today than the same date four years ago.  Manhattan media companies turned out to be a better investment than Manhattan real estate.  

Ephesians3-14
Level 8

NYT Reference - LOL

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