THURSDAY, DECEMBER 29, 2005
The following appeared as the "Research Question of the Week" on the National Association of
Tax Professionals website (http://www.natptax.com):
completing the Schedule D for a taxpayer that has a lot of transactions, can the preparer attach a separate statement and
put a summary of the transactions on the Schedule D?
According to the 2005 instructions to Schedule D Page 6:
"You must enter the details of each transaction on
a separate line...Do not enter "see attached" and summary totals from an attachment in lieu of reporting the details of each
transaction directly on Schedule D or D-1."
Most of the major
brokerage houses provide excellent year-end reports with a "profit and loss" statement that ties in to the 1099B, with
the purchase and sale information in the Schedule D format. In the past, whenever I had a client with tons of investment
transactions I would "cut and paste" the appropriate pages of the year-end brokerage report that showed gains and losses for
the year and attach them to the return with "see attached schedule" and a summary of the transactions on the Schedule D or
D-1. On at least one occasion the "attched schedule" consisted of 20+ pages! This process was never questioned
by the IRS or any state tax authority.
Does the IRS now
expect me to individually list each transaction on the actual Schedule D and D-1? FYI, I do all my tax returns (400
or so) manually. Even if I used the IRS online "fill-in" Schedule D this would take up too much valuable time,
at the taxpayer's expense.
I will attempt
to get further clarification from the IRS on this apparent change. Do you have any thoughts or comments on this issue?
TUESDAY, DECEMBER 27, 2005
I got my first look at the 2005 Form NJ-1040 and instructions and
the information for the 2005 NJ FAIR Rebate and Property Tax Reimbursement yesterday. The 2005 forms, instructions and
information are available at the NJ Division of Taxation website.
For the first time in years the format of the NJ-1040 has been changed. The signature
has been moved from the bottom of Page 3 to the bottom of Page 1.
Also new on Page 1, you must now list the name, Social Security number and year of
birth for all dependents. There is space to list four (4) dependents; if there are more than four
you must enclose a statement with the information for the additional dependents.
Income and deductions are listed on and the tax liability is calculated on Page 2. Payments
and credits are listed on Page 3. Page 4 is once again Form TR-1040, the FAIR Rebate application for tenants only.
New Jersey will follow the IRS regarding extensions and now grant a single six (6)
month extension on the NJ-630.
A new deduction has been added (Line 33) for taxpayers who provide primary medical and/or dental
services at a qualified practice located in or within 5 miles of a "Health Enterprise Zone". Infomation on this deduction
is available in Technical Bulletin TB-56, which can be downloaded in the Forms section of the NJDOT website.
There is no longer a NJ-1040-EZ. The Division of Taxation has discontinued this form.
Again this year homeowners must file a separate FAIR Rebate application later in the year.
According to the DOT, "the application mailing schedule and filing deadline for the 2005 FAIR homeowner rebate have not yet
been determined." While it is hinted that the rules for and the amount of the rebates will be the same as last
year, the site tells us, "rebate amounts and qualifications for eligibility for tax year 2005 are subject to change".
For the life of me I cannot understand why the "geniuses" in Trenton insist on having homeowners
file their application later in the year, separate from the NJ-1040 filing. When the
NJ Homestead Rebate was the only rebate offered both tenants and homeowners would apply for it on a Form HR-1040. Now
that there is once again only one property tax rebate, why can't we go back to the HR-1040 filing process?
It would be much, much more convenient and practical for taxpayers and tax preparers alike
to have all New Jersey taxpayers apply for the NJ FAIR Rebate with the filing of the NJ-1040. I know
I would much rather take care of everything at the same time, instead of having to deal with homeowner client inquires about
the rebate 3 to 6 months after the end of the tax filing season. I expect that it would be more convenient
and practical for the NJ Division of Taxation as well to have everything done in one filing.
The separate filing for homeowners especially affects senior citizen homeowners, many of whom
are confused by the process and, I suspect, as a result do not file for the rebate. This defeats one of the major purposes
of the rebate - tax relief for senior citizens.
I have written to Robert Thompson and John Tully asking them to explain the logic behind
the separate applications. If I receive a response I will post it here. What are your thoughts on this issue?
There is no word on when the Property Tax Reimbursement application packages (PTR-1 and PTR-2)
will be mailed out, but the website indicates that the applications must be filed on or before June 1, 2006. However,
as has been the case in the past, I anticipate that this deadline will be extended several times. Actually, there is
no reason why this application cannot also be part of the NJ-1040 filing.
SUNDAY, DECEMBER 25, 2005
HO! HO! HO!
FRIDAY, DECEMBER 23, 2005
CCH has published a Tax Briefing on the Gulf Opportunity Zone
Act of 2005.
MONDAY, DECEMBER 12, 2005
FYI, the National Association of Tax Professionals will hold its 2006 annual conference August
21-24, 2006, at the Boston Marriott Copley Place.
The National Society of Tax Professionals will be doing something different for 2006.
Instead of one convention they are planning four (4) educational meetings to be held on the week-end prior to the IRS Tax Forum
in each of four cities.
While the IRS has not officially announced the sites of its 2006 Forums, it is anticipated
that they will be held in Orlando, Atlanta, Chicago and Las Vegas, probably the 4 sites of the NSTP meetings, and two
other cities (one of which will probably be NYC - see my Sept 1st posting). When the IRS Tax Forum sites and dates
are announced, the NSTP will schedule the four sessions.
If the 2006 dates are similar to 2005, Atlanta will probably be at the end of July, Las
Vegas during the 3rd week in August, and Chicago at the end of August. There was no forum in Orlando in 2005 - the other
2005 locations were Houston and San Francisco.
TUESDAY, DECEMBER 6, 2005
This just in from the NJ Division of Taxation:
"Chapter 210, P.L. 2005 requires all public and private employers to give written notification
to potentially eligible employees of the availability of both the federal and New Jersey earned income tax credits when
the employer gives the employee the statement of wages and tax withholding (Form W-2) already required under current law.
The notification is to be distributed between January 1 and February 15 of each year to coincide
with the employer's distribution of the wage and tax withholding statement. The written notification must use the statement
developed by the State Treasurer."
SUNDAY, DECEMBER 4, 2005
The NJ chapter of the National Association of Tax Professionals has announced the topics to
be discussed at its New Jersey State Seminar on January 14, 2006, at the Woodbridge Hilton.
* Growing Old in the State of New Jersey, Disability and Medicare Planning - John W Callinan,
Certified Elder Law Attorney
* Recently Enacted New Jersey Legislature - John Kelly from the NJ Division of Taxation
* State of NJ Update and New Jersey Electronic Filing Requirements: Individuals, Sales, Payroll
and Annual Reports - John E Tully, NJ Director of Revenue and a keynote speaker
* Criminal Investigations and Fraud - Alan Drucker, IRS and Susan Kane, NJ
* New York and New Jersey Crossover Topics - Kathryn Keane, EA
The cost of the seminar is $165.00 for members and $185.00 for non-members if postmarked before
January 1, 2006, and $205.00 for both members and non-members thereafter and at the door. The fee includes continental
breakfast, lunch and afternoon dessert.
Registration begins at 7:45 am, with the seminar, which qualifies for 8 CPE credits, runs from
8:15 am to 4:50 pm.
The January 2005 seminar had John Tully and Robert Thompson, Director of the NJ Division
of Taxation. It is possible that the unnamed "keynote speaker" indicated above will be Robert Thompson again.
The NJ-NATP New Jersey State Seminars are usually very good and highly informative.
For more information contact Barbara Fletcher at Allorto and Fox LLC, 425 North Avenue East,
Westfield NJ 07090 or call 1-800-281-NATP or 1-908-233-7890.