Will the TCJA drive our clients to TurboTax?

Will the increase in the standard deduction in 2018 mean our clients will flock to cheap do-it-yourself software providers like TurboTax?

The reality, in my practice, is that many of my individual income tax clients — who are highly educated, high earners — are savvy enough to enter 99% of a TurboTax's data input correctly.

By way of anecdote, I received a new client this year who had always prepared their individual income tax returns on TurboTax. They are a husband and wife, both working professionals with W-2s, and they have kids and some basic itemized deductions (like mortgage interest and charitable contributions.) They told me they had done their return on TurboTax but wanted me to prepare their actual return to ease their concerns about the return being correct and passing government muster. When I asked them for a copy of the return, they provided a 700-page behemoth that was generated in TurboTax.

As it turns out, they followed the directions in the program and while they technically prepared their return properly, their noncash charitable contributions were listed out on Form 8283 with each shirt, pair of pants, and toy taking up a separate line. They had a few hundred pages of 8283s and accompanying worksheets for $2,000 worth of Goodwill donations.

My new clients don't need me to prepare their returns over TurboTax, but I sell peace of mind that software can't provide. I also offer pretty good tax advice too. With the confusion over the changes under the TCJA, my clients will stay and refer their friends.

New meaning to "mining" bitcoin

There was a time when the value of one bitcoin was about $130. It was in 2013, and James Howells from Great Britain claims that he owned 7,500 bitcoins that year, which were stored on his hard drive but eventually ended up in a landfill.1

Howells had been a bitcoin miner since 2009, and when he stopped mining, he reportedly broke down his computer into parts, selling them on eBay. He kept the hard drive in a drawer, however, because it contained his bitcoin private keys, and if bitcoin ever did become really valuable, the hard drive would have a record of his ledger. (At that time, his stash was already worth about $975,000.)

Howells asserts that family life and a move distracted him to the extent that he forgot about the hard drive (he forgot about his almost $1 million), and the hard drive was inadvertently thrown away in a general waste bin at his local landfill site and ultimately buried. Now he wants to dig up the landfill and find his buried treasure.

The trouble is, digging up a landfill is an expensive undertaking that Howells acknowledges will create environmental issues including dangerous gasses and possible landfill fires. But he can afford it — the value of his bitcoins today would be over $80 million. Bring on the hazmat suits!

Apparently, Howells isn't the only one to "lose" his investment. The editor of Gizmodo Australia, Campbell Simpson, claims that he too threw away a hard drive in 2012 containing 1,400 bitcoins.2 He purchased them at $25 AUD; today, their value would be over $15 million.

1 www.independent.co.uk/life-style/gadgets-and-tech/news/bitcoin-value-james-howells-newport-landfill-hard-drive-campbell-simpson-laszlo-hanyecz-a8091371.html
2 www.gizmodo.com.au/2017/05/i-threw-away-4-8-million-in-bitcoin/

Taking your tax dollars out with the trash

If you live in Orange County, your tax dollars are for the birds ... literally. Over the last five years, the county has spent $1.8 million dollars on falconry services in order to keep seagulls away from its landfill facilities.1

The program may seem like a waste at first, but according to the Orange County Register it's actually been a flyaway success. In 2013, the county's landfills averaged 458 seagull sightings each day, and three years later the sightings were down to two per day. The Board of Supervisors then decided to suspend the falconry contract to see if the birds would return. They did, so last summer they approved the program for another year.

The falconry businesses are spreading their wings across California, where 51 licenses have been given to operators in the last few years, including 23 in 2016 alone. In addition to keeping birds away from landfills, the abatement services are popular at golf courses, farms, and airports.2 Maybe Orange County isn't throwing away our money after all.

1 www.ocregister.com/2017/07/25/cost-of-falcons-defending-countys-landfills-from-seagulls-1-8-million-over-5-years/
2 www.ocregister.com/2017/01/03/bird-vs-bird-falconry-is-latest-technique-to-tackle-avian-pollution/

A few fun facts about this week's writers:

Diane FullerDiane Fuller is a woman of many talents which include writing children's poetry, taking unwitting challengers to town in poker, and whipping up Michelin-worthy dishes from scratch. Find her laughing with her two grandkids.

Mike Giangrande, J.D., LL.M.Mike Giangrande, J.D., LL.M., is an Orange County native, and you can find him doing some backyard gardening, playing with his 3 kids, or daydreaming about tee-time while he's answering Message Board questions.

Austin LewisAustin Lewis loves classic rock, despite being born a few decades late, and he goes to more concerts than anyone else in the office. Here he is in Toronto last summer, recreating the cover photo from one of his favorite Rush albums.

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