4 January tax moves to kick off Happy New Tax Year 2017

Hello, 2017. For some of us, you sure took your sweet time. Others think you arrived a tad too soon.

Few of us, however, are as ready to get our taxes as done-diddly-done as is Ned Flanders, Homer Simpson's annoying cheery neighbor.

If you click the image, you'll see a GIF that gives you a good idea of Ned Flanders' obsessive-compulsive tendencies.

While even a dedicated tax geek like myself thinks Neddie is a bit too filing gung-ho for the first day of the New Year, we all should take advantage of January's 31 days to get our 2016 taxes in order and lay some groundwork for our 2017 taxes.

So, mustering as much Flandersesque exuberance as I can, here are four tax things to think about in January.

1. Get organized: Set up a collection point for the 2016 tax documents -- W-2s, 1099s, year-end account statements, health insurance verification -- you'll soon be receiving. And move any tax material you already have -- charity receipts, mileage records for business use of your car last year, estimated tax payment records -- into this central tax filling receptacle.

It can be as simple as an accordion folder, with documents dropped into the appropriate slots. Or separate folders/envelopes holding the material. Or a filing cabinet drawer. Or if you're totally digital, a special folder on your home computer.

Just get everything you have on hand together and get ready for the final docs you need. That way you can file your 2016 return quickly, easily and as soon as the Internal Revenue Service will accept it. That day is Monday, Jan. 23, the official start of the 2017 tax filing season.

2. Pay your estimated taxes: Speaking of dates, it's another weird tax calendar in 2017.

The first deadline of the tax year is Jan. 17 instead of Jan. 15. This is the due date for your estimated tax payment for money you got September through December and no taxes were taken from it.

It's two days later this year because the 15th is on Sunday and Monday the 16th is the federal Dr. Martin Luther King Jr. holiday. That pushes the deadline to file this fourth estimated tax payment to the next business day, Tuesday, Jan. 17.

The table below can help you mark your 2017 calendar for this year's estimated tax payments.

Payment #	Due Date*	For income received in
1	April 15	Jan. 1 through March 31
2	June 15	April 1 through May 31
3	Sept. 15	June 1 through Aug. 31
4	Jan. 15 of the next year	Sept. 1 through Dec. 31

*If the 15th is on weekend or federal holiday, the estimated payment is due the next business day. 

3. File early and possibly for free: While Jan. 23 is the day the Internal Revenue Service will start processing tax returns, both those electronically filed and the paper ones that some folks still insist on snail mailing, some filers might be able to get a head start.

If you're eligible to use Free File, the IRS-tax software manufacturers' partnership that offers free online tax preparation and e-filing, you can start using that option on Friday, Jan. 13. Pretty lucky, even for filers who are paraskevidekatriaphobic.

You can find a link to Free File on the IRS.gov home page. It's open this year to taxpayers whose income is less than $64,000 regardless of filing status.

4. Be patient: Of course, as Isaac Newton probably said when he did his taxes, for every tax action, there's an equal and opposite tax reaction.

Even if you file as soon as you can this month, you could find yourself waiting at least a couple of extra weeks to get your refund if you claim the additional child tax credit (ACTC) or Earned Income Tax Credit (EITC) or both.

A provision in the Protecting Americans from Tax Hikes, or PATH, Act that became law in late 2015 requires the IRS to hold refunds for returns that claim one or both of these two refundable tax credits until Feb. 15.

The reason? Lawmakers are concerned that some folks are faking these claims to get bigger refunds. There's also the worry that tax identity thieves are using real filers' data and these credits to file for fraudulent refunds.

The thinking is that with extra time to process such returns, the IRS can make sure all ACTC and EITC refund requests are legit.

And even though the mandated refund delay is mid-February, the IRS warns that when you take into account weekends and the President's Day holiday, some affected filers may not have actual access to their refunds until the week of Feb. 27.

More moves this month: These four tax tips are just a few of the things to think about as we start a brand new tax year. You can find more January Tax Moves in over in the ol' blog's right column.

They're listed under the new countdown clock keeping track of how many days we have until our returns (or in my usual case, my extension request) must be on their way to the IRS in April.

As happened last year, calendar quirks in 2017 push the filing deadline once again to April 18. But we'll worry about that in a couple of months.

For now, check out the January tips at your leisure, based on your personal filing situation and/or how coherent you are after ringing in 2017 earlier today.

source http://feedproxy.google.com/~r/DontMessWithTaxes/~3/p3gDAbGgrqA/january-2017-tax-moves.html

Some tax penalty amounts increase in 2017

One of the big sticks that the Internal Revenue Service wields is penalties for our mistakes or willful disregard of tax laws.

Some of the penalties were increased in 2016 thanks to law changes. Others are hiked each year if inflation so warrants.

Here's a roundup of some major tax penalties changes ahead in 2017.

Don't file, pay more: The biggie for individual taxpayers is the charge for late filing.

In 2016, if you filed a return more than 60 days after the due date or any extension to file that you got, then you faced a penalty of the lesser of $135 or 100 percent of your unpaid tax.

Starting in 2017, the Internal Revenue Service is getting a bigger fee from your tardiness.

Thanks to a provision in Trade Facilitation and Trade Enforcement Act of 2015 that was signed into law in February, if you were more than two months late filing your 2016 Form 1040, you were slapped with a penalty of $205 or 100 percent of your due tax, whichever amount was smaller.

Beginning in 2017, thanks to inflation, if you fail to file a tax return within 60 days after it's due (including extension time), you'll get slammed with a penalty charge of $210 or 100 percent of the amount of tax due, whichever is less.

Tax pros, too: While we individual taxpayers will be penalized for our tax filing failures, the folks we seek tax help from also face possible financial consequences if they knowingly understate a taxpayer's liability.

In situations where a tax preparer comes up with a filer's tax due that is less than it should be and the reason is because of what the IRS deems is an "unreasonable position," the tax preparer could be hit with a penalty of $1,000 or 50 percent of the payment the preparer got for filing the return, whichever is greater.

Basically, the IRS wants to discourage the use of tax strategies that a preparer knew, or reasonably should have known, were not realistic.

And where a tax preparer uses, in the IRS' estimation, willful or reckless conduct to get the taxpayer's liability to an amount lower than it should be, the penalty increases to the greater of $5,000 or 50 percent of the income from the return or claim for refund.

More tax preparer penalties: In addition to the penalties for understating clients' tax bills, there's a variety of other fines a tax preparer could face for failing to complete some other tasks.

These amounts are adjusted for inflation each year. For 2017, the amounts that tax preparers could face are:

Tax Preparer Action	Penalty per Return or Refund Claim	Maximum Penalty
Fails to furnish a client with a copy of his/her return.	$50	$25,500*
Fails to sign return. When a preparer is paid to do taxes, he/she must sign that 1040 (or 1040A or 1040EZ).	$50	$25,500*
Fails to furnish identifying number. This goes along with the signature mandate.	$50	$25,500*
Fails to retain a copy of the return or other filing list.	$50	$25,500*
Fails to file correct information returns.	$50 per return and item in return	$25,500*
Negotiates of a taxpayer's check. This is a fine for a preparer who receives a taxpayer's refund check, endorses it and deposits it as a third party check, even if the preparer and taxpayer have agreed to the process. Basically, the check negotiation fine is aimed at return preparers who charge based on taxpayer refund amounts.	$510 per check	No Limit
Fails to be diligent in determining a filer's eligibility for the American opportunity tax credit, the child tax credit, and/or the Earned Income Tax Credit (EITC).	$510 per check	No Limit

*Increase of $500 from 2016 maximum penalty amount

Passport revocation: Finally, if you're planning on some international travel, you best pay the U.S. Treasury before you buy that transcontinental airfare.

Back in December 2015, the Fixing America's Surface Transportation Act, or FAST Act, became law along with its authorization of the State Department to revoke, deny or limit passports for anyone the IRS certifies as having a seriously delinquent tax debt.

When this tax law took effect in 2016, the trigger was $50,000 in overdue taxes. It stays at that amount in 2017 thanks to low inflation.

Paying taxes is bad enough, so make sure you don't do anything that will force you to pony up even more in penalty payments.

Wrapping up inflation amounts: Inflation affects every part of our lives, including taxes. These penalties that are adjusted each year to keep them in line with how prices generally are going up are the final part of a 10-part series on tax-related inflation adjustments for 2017.

Welcome to Part 9 of the ol' blog's series on 2017 inflation adjustments.
You can find links to all 2017 inflation posts in the series' first item: 
Income Tax Brackets and Rates.
Today we look at changes to the foreign earned income exclusion amount
and how that inflation adjustment affects the housing tax break
available to U.S. taxpayers working abroad.
Note: The 2017 figures apply to 2017 returns that are due in 2018.
For comparison purposes, you'll also find 2016 amounts to be used
in filing 2016 returns due next April.

My completion of the series is cause for celebration on my part (and I hope yours, too, faithful readers) on this final day of 2016. Sorry for the delay. The IRS released its annual inflation adjustments in late October, but other tax items just kept popping up that demanded my attention. Plus, I also had to sandwich in some bill-paying work in there.

But as the saying goes, better late than never. Even with tax filing, although you'll pay a penalty!

And while this final inflation-focused post technically is #9 (#10 on tax deductible mileage rates leap-frogged it), today's rounding out of the series also means that the full collection of 10 tax year 2017 inflation posts (note the link to the first one, which has all the other post links in the blue box above) makes 10 this week's, and the year's final, By the Numbers figure.

You also might find these items of interest:

• How to avoid estimated tax penalties
• Missing the Dec. 31 RMD deadline could be very costly
• 4 steps to take now if you missed the tax filing deadline

source http://feedproxy.google.com/~r/DontMessWithTaxes/~3/DXKzybSQqEQ/some-tax-penalty-amounts-increase-in-2017.html

New Year will means new Carolina addresses and taxes for some NC/SC border residents

You might have seen the suggestion that you move to lower your tax bill.

I love old ads like this one for Dodge commercial trucks courtesy Alden Jewell via Flickr. Folks making this vintage move look much happier than they ever do when relocating in real life.

That usually tongue-in-cheek recommendation didn't make my 12 year-end tax moves list, but all y'all are welcome to join me here in no-income-tax Texas. I must warn you, however, that if you buy a home, property taxes could eat up a chunk of what you're saving by not paying state tax on your earnings.

Well, some folks in the Carolinas are about to change their tax residences without moving one stick of furniture.

And they're going to be dealing with, among other things, different and potentially confusing tax changes, too.

New Year's border, tax shift: On Jan. 1, 2017, resolution of a years-long border dispute in York and Gaston Counties along the North and South Carolina border will mean that 19 homes technically will be in another state.

Or in both of them.

Three homes now in North Carolina will end up in South Carolina. Sixteen Palmetto State homes, however, will be in the Tar Heel State when the New Year arrives.

And one woman told a local TV station that the new state line will go right through her home's master bedroom.

One of her neighbors also shared with CBS affiliate WBTV the two 2017 tax bills he's already received. They show he owes South Carolina real estate taxes on his home, but North Carolina property taxes on his backyard.

One of his concerns is that each jurisdiction has different homestead exemptions. I'm wondering if the yard alone will even be eligible for this common tax break, since there's no actual residential structure there.

North and South Carolina as depicted by mapmakers in 1834

Tax and other hassles: The split property issues are particularly ironic since, according to the North Carolina Geodetic Survey's web page, the program's mandate is to resurvey ambiguous sections of the state's borders and county boundaries to, in part, facilitate emergency 911 services, building inspections, school assignments and, you got it, real estate property assessments.

In addition to the new addresses and property tax concerns, the soon-to-be displaced Carolinians also will have to get new driver's licenses, change voter registration and deal with changes in health care coverage and services.

But at least the children in the relocated residences will get to stay in their current schools and be eligible for in-state college tuition for the next 10 years.

Property tax, moving tax breaks: If you are secure in your state and have a pending property tax bill, paying it early -- like today unless your county or parish tax assessor/collector office is open on Saturday -- could be an added itemized deduction on your 2016 federal tax return.

That's just one of the end-of-year tax moves I mentioned earlier. Check them all out and if any or all of them apply to your personal tax situation, make sure you make them in time to cut your upcoming Internal Revenue Service bill.

And when you do make the decision to actually, physically load up the van and hit the road, some of those moving costs might be tax deductible. And in this case, you don't have to itemize to write off the work-related relocation.

You also might find these items of interest:

• Making sure your property tax bill is correct
• The mess, and deductibility, of moving
• Tax deductions that don't require itemizing

source http://feedproxy.google.com/~r/DontMessWithTaxes/~3/_duneNQLgoA/shifting-north-and-south-carolina-border-mean-new-taxes-for-technically-relocated-residents.html

Tax Preparation in Pearl River

The end of the year is here & w-2’s will soon be in the mail.   Soon you’ll be faced with the chore of completing and filing your income tax returns.
J. Slattery & Company (www.slattax.com) has provided tax preparation services in Pearl River full-time since 1982.  All taxes are prepared under the supervision & reviewed of an enrolled agent (EA) tax professionals licensed by the IRS to file & defend taxpayer’s returns.  For the best in tax prepation in Pearl River, NY — we recommend you give us a call (845)735-2511.

The post Tax Preparation in Pearl River appeared first on Slattax.com | Irs Problems & Tax Preparers.

source http://www.slattax.com/tax-preparation-pearl-river/

source http://slattax.blogspot.com/2016/12/tax-preparation-in-pearl-river.html

Missing the Dec. 31 RMD deadline could be very costly

Time is rapidly running out to make year-end tax moves, but if you're a septuagenarian, here's one that you definitely cannot afford to overlook.

If you're 70½ or older, congrats and happy, happy on all those full and half birthdays! Remember, though, that now you must take out at least an IRS-specified amount from your tax-deferred retirement account(s) by the end of the year. Miss the deadline and you'll owe a major tax penalty. (Birthday party photo courtesy Today's Senior Network)

Half birthday tax trigger: If you're 70½ and have a traditional IRA (or more than one of these accounts) or other tax-deferred retirement plans, then the tax law says you've got to start taking money out of it. In most cases, that's by the end of the tax year.

But since Dec. 31 this year is on a Saturday, you effectively have until tomorrow, Friday, Dec. 30, to take care of your RMD, unless your account administrator is working over the weekend.

These mandated withdrawals are known as required minimum distributions, or RMDS.

In addition to traditional IRAs, those accounts where contributions sometimes are tax deductible and taxes aren't collected as earnings grow, the RMD rule applies to SEP IRAs, SIMPLE IRAs, 401(k) plans, 403(b) plans, 457(b) plans, profit sharing plans and any other defined contribution plans.

RMD rules also apply to folks who inherited retirement accounts.

And while Roth IRAs, on which you pay tax before your put the money into the account, aren't subject to the RMD rules, Roth 401(k), 403(b) and 457 plans are.

Tired of waiting for tax revenue: The reason for the withdrawal requirement is simple. Uncle Sam wants his money.

He's been waiting for years, likely decades, for his tax cut on these tax-deferred retirement accounts. And he's had enough.

So once you celebrate your 70½ birthday -- I know I have a big party planned for that day -- he wants you to start taking out at least some of your taxable (at ordinary income tax rates) retirement money.

About that birth date: Despite my wisecrack about a big party for your 70½ birthday, that actual date is important. It determines whether you must take your first RMD this year, or whether you can push that initial distribution into the next tax year.

The Internal Revenue Service says you reach age 70½ on the date that is six calendar months after your 70th birthday.

For example, your 70th birthday was June 30. You reached age 70½ on Dec. 30. Don't worry, you don't have to take your first RMD by the end of the year. You can wait until April 1 of the next year to take that inaugural RMD.

If, however your 70th birthday was July 1, you turned 70½ on the subsequent Jan. 1, according to the IRS calendar. Yes, the tax agency gives you a free day. And that means you don't have to make an RMD for the chronological year you actually turned 70½.

Instead, since your half-birthday is, in the IRS' eyes, on the following Jan. 1, your first RMD is due that next year, either by that Dec. 31 or April 1 of the next year.

Two RMDs instead of one: Note, though, that if you push that first RMD to April of the following year, then you'll have to make two required withdrawals in that same year.

The first one by April 1 covers your 70½ birthday requirement. The next one is for that actual calendar year and is due by Dec. 31.

Consider your overall tax situation in making the delayed distribution decision.

Even though your retirement account might be in an investment vehicle, the withdrawals are taxed as ordinary income, not at the lower capital gains rate. Taking two retirement distributions in one year could bump you into a higher tax bracket.

Take the money: But what if you don't need the account money to cover your day-to-day living expenses? You might be tempted to ignore the IRS withdrawal order and leave the retirement cash untouched.

Don't.

The penalty for not making an RMD is 50 percent of the amount of money you were supposed to withdraw.

Calculate all your account amounts: You must figure the RMD for each of your retirement accounts, based on their value on Dec. 31 of the previous year.

The best way to do this is to list the fair market value of your IRAs as of that date. Then, using the appropriate IRS life expectancy table from IRS Publication 590, figure your RMDs.

Most folks use Table III, Uniform Lifetime Table. That's an excerpt there to the left up to age 90; it actually goes to age 115 and older. And if you've saved enough to enjoy retirement well into your 100s, please give me a call!

Let's say you have one traditional IRA valued at $100,000. The Uniform Lifetime Table indicates that for the first year's distribution period (that's age 70), you divide your $100K IRA value by 27.4 years. That means your first RMD would be $3,649.64.

You also have another traditional IRA that's worth $50,000. The RMD from this account is $1,824.82.

Your total RMD for your first year is $5,474.46.

But you don't have to take the RMDs from each IRA. In this case, you can take the full $5,474.56 from either IRA.

If, however, you also have a 401(k) you left with your former employer, you'll have to take that specific RMD amount from that account. You might want to think about finally rolling that plan into an IRA to give you some withdrawal flexibility.

Withdrawal, not spending, required: Remember that 50 percent penalty? If you don't take your RMD in connection with the examples above, you'll owe the IRS $2,737.23 for missing the deadline.

Plus, of course, you owe the income tax due on the money you should have taken out on time.

You can, of course, take out more than the RMD amount. If one year your taxable income will be particularly low, it might be worth doing this.

But you can't apply any excess RMD taken in one year against future RMDs.

And just because you have to take out the money, that doesn't mean you have to spend it.

You can always put it into a taxable account and let it grow that way to fund your golden years.

Or you can transfer your RMD directly to a qualified charity. This option was made a permanent part of the Internal Revenue Code back in December 2015 as part of the Protecting Americans from Tax Hikes (PATH) Act.

Whichever withdrawal option works for you, just remember to meet the RMD rules. Soon!

You also might find these items of interest:

• 2017 inflation-adjusted retirement plan limits
• 4 popular homeowner, education tax breaks end Dec. 31
• When early retirement plan withdrawals are penalty free

source http://feedproxy.google.com/~r/DontMessWithTaxes/~3/wORztfTYJBs/rmd-required-minimum-distribution-deadline-december-31.html

Get Social in 2017: A Social Media Checklist for Tax Preparers

The 2017 tax year is right around the corner. If you haven’t jumped on the social media train, you’re likely losing out to exposure and leads. Social media isn’t a magic bullet but it can have a huge impact on growth, reach, and exposure when combined with other marketing efforts this tax season. Here are some things you’ll want to make sure you do before the tax season is underway. We’ve also included a downloadable checklist to help prepare you for the upcoming year.

Check your profiles

How do your profiles look? Are the profile thumbnails and cover photos up to date? How about your ‘About us’ tabs and bios? You need to make sure your descriptions are fresh, the correct logos are in use, and the information about your company is complete.

In addition to corporate social media profiles, your tax preparers should check that their LinkedIn profiles are up-to-date. Have your tax preparers (and yourself) make sure they are linked to the company LinkedIn Page and check that all bios and experience reflect the work that they do. Getting more clients is the goal, so make sure your LinkedIn profile is in tip-top shape.

READ: How to Use LinkedIn as a Tax Preparer

Add Social media information to relevant marketing materials

People won’t know to connect with you on social media if they don’t know how to find you. Make sure your social media handles are on marketing materials like business cards, pamphlets, brochures, email signatures, email newsletters, your website, etc.

Create an editorial calendar

Do you have a plan for social media and blog content for the upcoming tax season? An editorial calendar is the perfect way to help you thoughtfully plan out posts, graphics, social media campaigns, newsletter topics, blog topics and any other content that needs to go out during the tax season.

READ: 5 Essentials to Developing a Client Newsletter

Set an Ad Budget

It has become increasingly harder to gain organic reach on social media because of the sheer volume of noise that’s out there. If you want to reach the right audience and make sure your best posts are seen, plan to spend a little money on social media advertising. Take a look at your editorial calendar and decide which pieces of content need to be boosted and then plan out who your audience will be and what platforms you will put money behind. We recommend checking out LinkedIn, Facebook and Twitter ads.

Choose Your Tools

If you aren’t using tools to help you manage social media, do some research now and save yourself some time! There are tools like Hootsuite that help you monitor your social media channels and schedule posts, tools like Canva that help you create stunning visuals, tools like Pocket that help you save and discover shareable content, and tools like BuzzSumo that help you research blog topics and keywords.

READ: Get More Done This Tax Season with Technology

Cross these things off your list before tax season and your social media marketing will be prepped and ready for a successful tax season. Want to make sure you’re ready and that you keep up with social media throughout the season? Download our free social media checklist!

source http://www.theincometaxschool.com/blog/social-media-checklist-tax-preparers/

4 popular homeowner, education tax breaks end Dec. 31 Among 36 tax extenders that might — or might not — be part of tax reform in 2017

With Republicans soon to be in control of Congress and the White House, the tax focus has shifted to a major rewrite of the Internal Revenue Code.

But this legislative approach means that more than 30 temporary tax provisions will disappear from the tax code on Jan. 1, 2017.

Whether they are resurrected in any new tax overhaul depends on how persuasive the various laws' lobbyists are, how committed Senators and Representatives are to streamlining the tax code and how much tax revenue is gained or lost by their continued absence or revival.

Extenders usually long lives: These tax laws, which over the years ballooned to more than 50, are known collectively as extenders because they usually are renewed, or extended, for a year or two, sometimes retroactively, by Congress.

Last December, many expiring/expired extenders were made a permanent part of the tax code as part of the Protecting Americans from Tax Hikes (PATH) Act of 2015.

Thirty-six provisions, however, were extended only through this or a few more years.

They include special interest tax breaks that, over the last decade or so, have received much public attention and derision. , such as special depreciation rates for race horses and NASCAR and other motorsports tracks; specific expensing rules for television, movie and theater performances (thanks "Hamilton"); and special excise tax rates for rum made in Puerto Rico and the U.S. Virgin Islands.

But also among the tax laws expiring at the end of 2016 are four that affect millions of individual taxpayers. Three are connected to residences; the fourth is used by students and/or their families. Below is a closer look at the exiting extenders.

Tuition and fees deduction: This is an adjustment to income, also known as an above-the-line deduction that can be claimed without the hassle of itemizing expenses on Schedule A. With this deduction, which is found at the bottom of page 1 of both the long Form 1040 and slightly shorter Form 1040A, eligible taxpayers can deduct up to $4,000 in higher education expenses paid for themselves, their spouse or dependents during the year.

Mortgage insurance premium deduction: This law lets homeowners who have private mortgage insurance (PMI) as part of their mortgage deduct these monthly premiums as interest on Schedule A. Typically, homeowners must purchase a PMI policy if they can't come up with at least a 20 percent down payment on their home. The ability to deduct PMI was first enacted in 2006 and has been extended for the last decade. It's popular not only with affected homeowners, but also the housing industry.

Mortgage debt relief exclusion: In the wake of the bursting housing bubble, this law was created to provide relief to some homeowners who had their mortgage restructured or debt forgiven due to a foreclosure or short sale. In most canceled debt situations, the forgiven amount is considered taxable income. But consumer advocates convinced lawmakers that this saw was too punitive for homeowners looking to keep their homes by working with their lenders to obtain more payable terms, and the Mortgage Debt Relief Act was enacted in 2007. It has been extended for subsequent tax years … until now.

Credit for energy-efficient home improvements: This credit has been around in various forms since 2005. It allows homeowners to write off part of the cost of certain energy-efficient improvements, such as insulation, some roofs and exterior windows and doors. This latest iteration of the law that applies to specific residential energy upgrades has a lifetime credit cap of $500 and they must be in place by Dec. 31.

Better tax policy practice: The individuals and businesses that benefit from the soon-to-expire tax extenders are no doubt freaking out a bit.

But the evaluation of special-interest extenders separately, rather than in an end-of-year rush as part of a large package, is a positive tax policy move.

"It's really not ideal when you have a Congress that only acts on things when it has to," says Scott Greenberg, an analyst with the Washington, D.C.-based Tax Foundation.

"Some are good tax provisions," says Greenberg of the extenders. "Some are unideal, but on balance more good than bad. Some are straight up not worth being in the tax code at all."

Rather than consider them as a take them all or leave them all group, Greenberg thinks it's better to "just leave them alone, don't expend the political energy."

"The preferable approach," he says, "is to examine each provision one by one and decide which should be kept."

In or out of reform: Will all the expired extenders be dealt with as part of tax reform? Possibly. But not in the way that their supports hope.

They are just as likely to be jettisoned as extended. The incoming president-elect has, after all, said that any part of tax code overhaul should reduce or eliminate most of the deductions and loopholes available to the wealthy.

And if they don't make it into any code revision, many tax policy experts believe that wouldn't necessarily be a bad thing. Their thinking is that there's no need to junk up a new, presumably less convoluted tax code with temporary provisions.

Cost of a complex tax code: Greenberg agrees that the costs of an inefficient tax code need to be taken into account during the tax reform debate.

"When talking about taxes, we tend to have a laser focus on revenue. That's not a bad thing. The most important job of a tax code is to raise money," says Greenberg. "But looking at other associated costs of tax policy, the lack of efficiency or tax complexity have their own costs."

This includes the time taxpayers must spend to determine if they qualify for a tax break. There's also the inefficiency effect of changing provisions, he says.

"There is very little rationale to have temporary tax provisions hanging around. A tax code should be stable. Individuals and businesses need certainty about what you're going to be paying this year and next year," Greenberg says. "A stable tax code is good for economy and helps people make the best the decisions for the long run."

In the coming months, we'll see what time frame will guide Congress as it re-envisions our tax laws.

For now, though, if any of the expiring extenders apply to you, claim the tax break while you can.

source http://feedproxy.google.com/~r/DontMessWithTaxes/~3/LVqSPTCgrcE/expiring-tax-extenders-pose-problems-for-homeowners-students.html