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Pro Forma income tax return for 2018?
Old 06-11-2018, 02:44 PM   #1
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Pro Forma income tax return for 2018?

I am helping my MIL after her husband died last year. She has plenty of money for her lifestyle. But this will be her first year filing single. Wow. That is hard to write. For taxes she uses a part timer that would be no help. But during tax time she will come over and sit down w/MIL and go over the docs.

We were meeting with her Edward Jones (don't ask) and asking about witholding. He currently has very little witheld. FIL was paying quarterlies. How much I don't know.

I asked her during that discussion if she wanted to do a pro forma just to see where she is and no surprises next April 15th next year. With the new tax changes the 2017 return may not help much. Any ideas? (Free is a very good price)
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Old 06-11-2018, 02:48 PM   #2
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Try the tax calculators by HR Block and Taxcaster (google for them). They are on the face for 2017 but the end results will also have 2018 results in addition.
If the 2 calculators agree, you might have more confidence.

another one: https://www.mortgagecalculator.org/c...calculator.php
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Old 06-11-2018, 08:18 PM   #3
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This fine gentleman prepares an Excel 1040 for people to work with. He actually built a pro forma 2018 that I have started playing with:
https://sites.google.com/site/excel1...er-new-tax-law

I hope it helps.
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Old 06-11-2018, 08:30 PM   #4
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Or if you have TurboTax 2017, use the What-If worksheet and check the little box to use 2018 tax rates.
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Old 06-11-2018, 08:31 PM   #5
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Thanks for the help. Will try a couple. She doesn't need precision. Hand grenades are close enough
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Old 06-11-2018, 08:37 PM   #6
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You might even take last year's tax return income and then adjust it for 2018 changes, then deduct the new 2018 standard deduction to get taxable income. The bifurcate TI between ordinary income and preferenced income (qualified dividends and LTCG)... then use the tax tables to compute the ordinary income tax and apply 0% or 15% to get the preferenced income tax.
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Old 06-12-2018, 05:12 AM   #7
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Quote:
Originally Posted by pb4uski View Post
Or if you have TurboTax 2017, use the What-If worksheet and check the little box to use 2018 tax rates.
Good answer! Been playing with this today to determine our charitable contribution. This is the last partial year of work and we want to take advantage of a large charitable contribution to our DAF while we still have income.

The worksheet is handy, but not easy to find, though. One way to find this worksheet is to:
  • Open your file
  • Go to "forms mode" (upper right)
  • While there, click "open form" (upper left)
  • Search for "what"
  • Click the "what-if" worksheet
A nice little tool. Thanks P-before!
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Old 06-12-2018, 10:40 AM   #8
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Quote:
Originally Posted by TheRunningMan View Post
This fine gentleman prepares an Excel 1040 for people to work with. He actually built a pro forma 2018 that I have started playing with:
https://sites.google.com/site/excel1...er-new-tax-law

I hope it helps.
Thanks for posting this one. I'm playing around with it.

One of the changes for 2018 is that Sched C business income is supposed to be taxed on only 80% instead of 100% of profits. But I'm not seeing that happening anywhere. I haven't filled out every detail, just playing around trying to see where that comes in to play.

Has anyone seen where that happens?
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Old 06-12-2018, 12:11 PM   #9
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Originally Posted by Sue J View Post
Thanks for posting this one. I'm playing around with it.

One of the changes for 2018 is that Sched C business income is supposed to be taxed on only 80% instead of 100% of profits. But I'm not seeing that happening anywhere. I haven't filled out every detail, just playing around trying to see where that comes in to play.

Has anyone seen where that happens?
There is a list of the changes that have been made to the previous spreadsheet.
I don't see your change listed there. Perhaps the mod for that was overlooked?

If not there, perhaps just enter the 80% number in the spreadsheet?
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Old 06-12-2018, 03:17 PM   #10
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There is a list of the changes that have been made to the previous spreadsheet.
I don't see your change listed there. Perhaps the mod for that was overlooked?

If not there, perhaps just enter the 80% number in the spreadsheet?

Two things. The business income exclusion does not apply to all businesses so you have to make sure that yours qualifies. I have not seen IRS guidance on that yet.


Also, with respect to the spreadsheet. The upper threshold for the zero bracket for dividend and capital gains income is off just a little. I think for MFJ it is off only by $200 so it shouldn't make a huge difference when doing pro-forma returns. I have only used it for simple returns with Int, Div, Capital Gains, Pensions .....Have not looked at Schedule C, E or other more complicated forms.
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Old 06-12-2018, 03:19 PM   #11
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This has one of the better explanation of the QBI exclusion although I think it is very preliminary and well before any regs have been promulgated.


https://www.kitces.com/blog/pass-thr...9f20b-57051981
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Old 06-12-2018, 03:39 PM   #12
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I don't think any publicly available tool includes the 20% pass-thru deduction, because the IRS hasn't clarified much about it.


In addition to the good choices already mentioned, the spreadsheet at https://forum.mrmoneymustache.com/fo...sheet-updates/ provides graphs that, at least for us, provide a better "what if...?" overview than any of the others.
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Old 06-14-2018, 12:27 PM   #13
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Quote:
Originally Posted by TheRunningMan View Post
This fine gentleman prepares an Excel 1040 for people to work with. He actually built a pro forma 2018 that I have started playing with:
https://sites.google.com/site/excel1...er-new-tax-law

I hope it helps.
Thanks for the link. In the past I've used taxcaster, but this gives more detail.
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