DOCUMENTING 2021 DEDUCTIONS
I expect by now you have prepared and submitted your 2020 federal and state tax returns and are waiting, patiently, for your refunds.
Did you find it difficult to compile all the necessary 2020 information and documentation to give to your tax preparer? The more organized you are at tax time the more likely you will be able to take full advantage of all deductions, credits and tax-saving strategies available. And the more organized you are the lower your tax preparation fee.
Taxpayers are required to keep good contemporaneous records and documentation of all items of income reported and all deductions and credits claimed on their income tax return in the manner prescribed by Congress, the IRS and the US Tax Code.
Go out and buy an accordion file folder. Label the first pocket “Income Tax Returns”. This is where you will put your copy of your 2021 federal and state income tax returns once completed. Use the other pockets for documentation of specific sources of income and expenses.
During the year put acknowledgements, receipts, statements and other forms of documentation for qualified expenses in the applicable pocket. If a document is not self-explanatory, write a brief description on it.
Be aware that some deductions require special record-keeping or additional information. This guide will explain in detail what documentation you need to save.
It is better to save too much documentation than too little. Even if you normally do not itemize, it is a good idea to keep records and receipts for all "itemizable" expenses just in case.
Keep records and receipts during the year with the assumption that your return will be audited. While chances are this will not happen, if your return is chosen for review it will be a blessing to have everything well documented in advance rather than having to start from scratch and reconstruct the necessary supportive documentation.
I have created the 2021 GUIDE TO TAX RETURN RECORDKEEPING to help you in gathering and organizing your tax “stuff” and help you to pay the absolute least federal income tax possible.
My guide contains detailed text covering what is taxable and deductible and what information and documentation you will need to properly prepare your 2021 tax return, and forms, schedules and worksheets for compiling and identifying the documentation you will need to provide to your professional tax preparer in 2022. It discusses in detail –
The cost of the Guide is only $10.95 sent as an email attachment – the text in pdf format and the forms, schedules and worksheets in Word format. A print version sent via postal mail is also available for $15.45.
Send your check or money order for $10.95 or $15.45, payable to Taxes and Accounting, Inc, to -
THINGS NO ONE EVER TOLD YOU
Like her mother Judy Garland, Liza Minnelli has had issues with drug and alcohol dependency over the years.
I remember a friend, also a singer, telling me that one night in the 1980s when she was with friends at New York City’s famous, or perhaps infamous, Studio 54 Liza, who neither she nor her friends knew, came up to them and said, “You must try the coke that is circulating.” She was not talking about soda.
Her signature song is, of course, “Cabaret”, from the Broadway musical of the same name. Liza won an Oscar for Best Actress in a Leading Role for her role as Sally Bowles in the movie adaptation.
The song “Cabaret” tells of Sally’s London roommate, Elsie, who dies young from “too much pills and liquor”. It was Elsie who told Sally that “life is a cabaret” and that you should live life to the fullest. In the original song lyrics, Sally sings –
“I made my mind up back in Chelsea, when I go, I’m going like Elsie.”
At a certain point starting in the 90s, after a successful stint in rehab, Liza changed the lyric when singing “Cabaret” in concert. She now sang –
“When I go, I’m NOT going like Elsie!”
LBJ TOOK THE IRT DOWN TO 4th STREET USA. WHEN HE GOT THERE WHAT DID HE SEE? THE YOUTH OF AMERICA ON LSD!
While I may be among the “last of the dinosaurs” - preparing all my 1040s manually – in some ways I was way ahead of my time.
For example, I have been using acronyms in notes and correspondence to friends, family, and clients, and in my writings, for decades before the IM, DM and texting, beginning back when, while there were lots of twits around, none of them “tweeted”. It started when I put “HVD” in the “memo” of the paychecks I wrote for employees of the Art Center in Summit back in mid-February of 1980. I started using WTF in the early 90s.
Americans have always been fascinated with acronyms – “a word formed from the initial letter or letters of each of the successive parts or major parts of a compound term”. Like FYI for For Your Information.
The world of emails and text messaging has created a whole new appreciation for and vocabulary of acronyms – BTW (By The Way), LOL (Laughing Out Loud), MIRL (Meet In Real Life), TFB (guess).
In my wanderings on the web I found an online “Internet Acronyms Dictionary” and discovered that AAAAA was not a group for drunk drivers but the American Association Against Acronym Abuse.
Government, at all levels, has always been famous for its acronyms. We all know what the FBI, the CIA, and the DMV are. And, thanks to television, we are also aware of SWAT, JAG, CSI and NCIS.
The military is especially enamored of the practice. A PFC could be promoted to become a CPO. In military speak PABST does not refer to Blue Ribbon Beer but to Primary Adhesive Bonded Structure Technology. And let’s not forget the infamous WMDs – Weapons of Mass Destruction.
Some acronyms have become actual words. A classic example is “snafu”, a military acronym for Situation Normal, All Fouled (not the original word) Up. The word “radar” is actually an acronym for RAdio Detection And Ranging, as the word “laser” is for Light Amplification by Stimulated Emission of Radiation.
I was told many years ago by, I think, a teacher that the equivalent of the “n” word for persons of Puerto Rican extraction came from a US Immigration category stamped on the papers of certain individuals arriving on Ellis Island – Spanish, Portuguese, Indian and Colored - although I cannot find any real documentation of this online. I do know for a fact that I am a WASP (While Anglo Saxon Protestant).
It is, however, an “urban legend” that the “n” word for Italians came from the fact that, as illegal aliens in the 30s and 40s, they were With Out Papers, or With Out Passport. According to Wikepedia “wop” is taken from “the Neapolitan ‘guappo’, meaning dude or thug. The word defines those who belong to the Guapperia o ‘Camorra’, a criminal organization similar to the Sicilian Mafia located mostly in the province of Campania.
Acronyms are certainly in frequent use in my profession – taxes. The AGI (Adjusted Gross Income) has been around for at least as long as I have been in the business, and there is now the non-gift bearing MAGI (Modified Adjusted Gross Income). And many are all familiar with the dreaded AMT (Alternative Minimum Tax).
TRA 86 (the Tax Reform Act of 1986) created a whole new set of acronyms. Under TRA 86 a PAL (Passive Activity Loss) needs a PIG (Positive Income Generator). There is ACRS (Accelerated Cost Recovery System) and MACRS (Modified Accelerated Cost Recovery System), both the result of FACRS (Foolhardy Acts of Congress under the Ruse of Simplification).
Many taxpayers save for retirement with either an IRA (Individual Retirement Account), a SEP (Simplified Employee Pension plan) or a SIMPLE (Savings Incentive Match PLan for Employees). One of the more complicated areas of the Tax Code concerns the NOL (Net Operating Loss).
As I have said before at THE WANDERING TAX PRO, I have often found errors in tax returns prepared by a CPA.
I belong to the NATP (National Association of Tax Professionals) and, at one time, the NSTP (National Society of Tax Professionals) – as well as AAA (Automobile Association of America) and AARP (American Association of Retired Persons). Over the years I have also briefly belonged to the ASTP (American Society of Tax Professionals) and the NSA (National Society of Accountants). I have often attended tax seminars sponsored by the CSEA (California Society of Enrolled Agents).
I have been using WTF for years. Back before my mentor Jim Gill retired and handed me his tax practice, he had given me a return to work on. Included with the client’s “stuff” was a listing of deductions on which there was one item whose nature I was unsure of. So, I wrote “WTF?” next to it and put it in the “Need More Information” box. A few days later Jim said that the client had been in and they were not sure what I had meant – but thought it might be “What’s This For?”. I told him he was close and explained what it actually stood for.
I use certain specific acronyms in my blog postings. Those of you who read THE WANDERING TAX PRO are aware that I hate GD extensions. A client asked what the GD stood for and I told him “exactly what you think it stands for!” It is not Government Deferred or anything like that. I often speak ill of the DFB’s in Trenton or Washington, a reference to our federal and state elected representatives, and provide the “clean” version as Damned Fool Bureaucrats, although that is not really what it stands for. When I discuss a FU you could interpret this as a Foul Up, but you would be wrong. Again, it is exactly what you think it stands for. FFR is For Future Reference and SGTM is Sounds Good To Me.
Regular visitors to THE WANDERING TAX PRO know that I end each day’s post with TTFN (Ta Ta For Now).
AND AWAY WE GO!
There has been a long-standing tradition of making successful television shows out of popular Broadway plays and theatrical movies, from THE NAKED CITY, TOPPER and MR LUCKY to MASH, THE ODD COUPLE, and ALICE. A while back Hollywood began to reverse the trend, making inferior films based on successful television series.
The first tv series based on a play and/or movie was MAMA, based on the 1944 play and 1948 movie I REMEMBER MAMA. The show ran on CBS from July 1, 1949 to July 27, 1956. The cast included a young Dick Van Patten of EIGHT IS ENOUGH.
The second series taken from a play and/or movie was THE FRONT PAGE, starring real life journalist John Daly (who would later become famous at the host of WHAT’S MY LINE) as newspaper editor Walter Burns. It had a brief run from September 29, 1949, to January 26, 1950.
The third movie turned into a television series was THE LIFE OF RILEY, a successful radio comedy that was made into a movie in 1948. Both the radio show and the movie, and eventually the tv series, starred William Bendix as Chester A Riley. But Bendix was not tv’s first Riley.
Television’s first Chester A Riley was none other than “honeymooner” Jackie Gleason.
William Bendix was supposed to have starred in the initial television version, but his RKO Radio Pictures movie contract prevented him from appearing.
The first series was telecast from October 4, 1949 to March 28, 1950. It won television's first Emmy, for "Best Film Made For and Shown on Television". According to Wikepedia it came to an end because the producer and the sponsor, Pabst Brewing Company, reached an impasse on extending the series for a full 39-week season.
The show returned on January 2, 1953, with a totally new cast that now included William Bendix as Chester A and Marjorie Reynolds as Mrs. Riley, and lasted for 6 seasons. I remember watching it as a child.
Speaking of first actors to appear in a role and Jackie Gleason – Audrey Meadows, who became famous as Alice Kramden on the iconic HONEYMOONERS tv show, was not the first actress to portray Alice on tv. The original Alice Kramden, to Jackie Gleason’s Ralph when “the Honeymooners” first appeared as a regular series of skits on the DuMont Network's "Cavalcade of Stars" was Pert Kelton.
Kelton appeared in the original 10 to 20-minute sketches. She was abruptly replaced by Audrey Meadows as a result of blacklisting - the practice of denying employment to screenwriters, actors, directors, musicians, and other American entertainment professionals during the mid-20th century because they were accused of having Communist ties or sympathies, a practice that grew out of Joseph McCarthy’s House Un-American Activities Committee witch hunt. Instead of acknowledging she was being blacklisted, the producers explained that her departure was based on heart problems.
Kelton is most famous for her Broadway role as Mrs. Paroo, the Irish mother of the town librarian Marian Paroo, in Meredith Willson's Broadway musical THE MUSIC MAN, a role she reprised in the 1962 film version of the show.
FYI – Broadway legend Elaine Stritch played Trixie, the burlesque dancer wife of Ed Norton, for one sketch before being replaced by Joyce Randolph.
CALLING A SPADE A SHOVEL
Let’s be honest.
If you continue to believe, support and defend Trump you are –
1. a moron, or
2. a racist, or
3. you have no conscience, or
4. like Trump himself, all three.
There is absolutely no legitimate or acceptable reason for any intelligent American with a conscience who cares anything about America to support and defend Trump and his lies.
In the history of our country no one individual has ever done more damage to America, American values and American democracy than Donald T Rump.
Period. End of story.
ALWAYS LEAVE ‘EM LAUGHING
A husband and wife were sitting on their patio enjoying a glass of wine. The wife said, “I love you so much I don’t know how I could ever live without you.”
The husband asked, “Is that you or the wine taking?”
The wife replied, “It’s me – talking to the wine!”
TALK TO YOU NEXT MONTH