Tax Attic: The Forecast Worksheet

A couple of weeks ago, Deb and I went to see ‘Dunkirk’, the movie. It was interesting to me to see how the producers would play out what I knew to be the real story. Deb, however, did not know as much about the story of Dunkirk, so I helped to explain parts of the movie to better help her know what was going on. The British were up against it, so to speak. War was raging in Europe. The Hitler-led German blitzkrieg had steam-rolled through Poland, Belgium, Holland, Denmark and others and were on their way to doing the same thing to France. The Germans had a majority of the British professional army, about 300,000 soldiers, trapped on the beaches of Dunkirk. If that army perished, it would have been a large nail in the Island of England’s coffin. Hitler far exceeded a generational threat; he had at his disposal the war weapons, both personnel and weaponry, and momentum to totally conquer England, as he had so easily conquered Europe. The British Army, however, was saved to fight another day by a fleet of 800 plus private boat owners who sailed across the English Channel to pick up as many of the soldiers as possible. Those soldiers would be valuable as the war wore on. Last week, we went to see another World War Two show, ‘The Darkest Hour’. It was the story of Winston Churchill’s struggle as he replaced Neville Chamberlain as Prime Minister. Not the best time to be Prime Minister. He took over as the British Army was being pushed back across France to where it would eventually end up-Dunkirk. During the movie, the Army was saved and Churchill was the Prime Minister who lead England eventually to victory over Hitler. One wonders what would have happened to England if Winston Churchill wasn’t there to replace Neville Chamberlain. One wonders what kind of world we would live in today if Churchill wasn’t there. Fortunately, thank God, Winston Churchill was there.

The early results are in concerning the Tax Cuts and Job Act of 2017. Our tax preparation software provider, Drake Software, has gone to great lengths to help us answer the question that every client has: how will we be affected by the new tax law? Drake always has provided a Comparison Worksheet showing a synopsis of the current year and the prior two years. Now they have added a Forecast Worksheet showing the current year, 2017, and detailing what the 2018 tax return would look like with the same information. Apples to apples is the saying so the comparison is useful. What we have found is that every return we have prepared so far will pay less tax and the refund will be greater in 2018 than 2017. In some of the cases, the refund is substantially greater. That is good news. The bad news, in my mind, is that the national media downplayed the TCJA2017, publishing the news that a large portion of middle America would not benefit from the law. This doesn’t seem to be true. Perhaps they could have used Drake’s Forecast Worksheet to make better projections. Of course, the tax season is really just beginning. This last Monday, the 29th, was the first day that the Internal Revenue Service began accepting tax returns. Refunds will begin being issued on Feb. 15 but returns with the Earned Income Tax Credit, Child Tax Credit, Additional Child Tax Credit, or the Educational Tax Credit may not have their refunds issued until Feb. 27. We will continue monitoring the Forecast Worksheet results and will pass on that information from time to time. This is Jerry Coon signing off.

 

Jerry Coon is an Enrolled Agent.

He owns Action Tax Service on Northland Dr in Rockford.

Contact Jerry at www.actiontaxservice.com