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A major hiccup in the IRS' plan to "simplify" tax filing is that many states have yet to conform to the IRS changes (and several, including California, have indicated they won't be). Read below to see how these "two sets of rules" affect you.....
Because many states (including California) aren't conforming to all changes, tax return filing still involves calculating all of the previously-known deductions.
But it will now have to be done, effectively, as two separate tax returns. That's because the IRS return won't flow directly into the state return like before.
So in order to avoid missing deductions at the state level, you'll have to ensure the state tax return reflects the differences in law.
What You Need To Do
We're recommending our clients continue recordkeeping, just like they did prior to tax reform. This way, no deductions are missed on the state level for those items that don't conform to the IRS changes.
Most specifically, this could pertain to things like unreimbursed employee expenses, professional advisor fees, state/local taxes, moving expenses, etc.
We've Got You Covered!
If you have us prepare your taxes, there's really nothing new for you to do. Simply provide your information as you always have, and we'll be sure all is applied correctly!
We've updated our Client Checklist and Worksheets to be even more user-friendly in gathering and providing your info. Simply indicate on the checklist those items that pertain to you, and the checklist will tell you exactly what documentation we need for your tax return prep.
We're always working to improve our systems to be of better service to you.
Because many of our ideas come directly from you, please email us any specific requests you have and we'll be sure to consider them!