jklcpa

I don't want to think about the number of returns remaining, although I do feel like I accomplished a lot in the last couple of days. I filed my returns today too! Yay, come on big money! *claps hands and dances like a silly Wheel of Fortune contestant* Just kidding. What is this vacuum thing you all speak of?

Goodness, is this more shifting of sand under our feet? Thanks for posting this. I wish I had time to read it.

SCL, did you notice that the post you quoted and questioned is almost 2 years old and the person only made 2 posts? The last time the person was on here was the day that post was made.

Yes, that is what I would do. If you want a cite, I believe it's Reg. §1.1250-3(b )(2)

Tom, keep in mind that life insurance proceeds are subject to corp AMT if the company gross receipts are high enough for it to be subject to this tax. If they are close to being subject to the AMT and life insurance is being used to fund a buy-sell agreement, you want to make sure the company doesn't fall short of the goal because of having to possibly pay taxes on the proceeds. If it's a small enough company, this probably isn't an issue.

Joan, I found where that reference came from about the states not being allowed to tax retirement income that meets the criteria I found in those articles. It is in Section 114 of Title 4 of the US Code, specifically sec 114(a) and 114(b )(I). This is the section: https://www.law.cornell.edu/uscode/text/4/114 . Here's another interesting article from a law firm that finally led me to the proper reference: NY Acts on Taxation of Nonresident Retirement Income, While Recently-enacted Federal Legislation Prohibits States from Taxing Retirement Income of Nonresident Partners

This is all very weak, but I'll share what I found so that maybe it will help you in some way. I think that 10 years might be the key for your client. I can't find an actual reference in the code or regs (somewhere in 409A maybe?) for this statement that I found in 3 separate articles that maybe you can use as a jumping off point for your further research. What I found says: Under federal source taxation law, deferred compensation earned by an employee or former employee while a resident but paid when the individual is a nonresident, cannot be subject to that state’s income tax if: i) compensation is payable over the individual’s life or life expectancy or is paid in installments scheduled over 10 or more years; or ii) the compensation is paid under certain qualified retirement plans or “excess plans”. That quote was found in the following article that is about retirement planning when it involves deferred comp and deciding on what state to live in, and how this will affect the taxes: http://www.ebsplans.com/linked/ebs%20news%20sep%2008.pdf Found this article entitled "New York Taxes A Portion of Stock Option Gain of Nonresident Retiree" http://benefitsnotes.com/2012/12/new-york-taxes-a-portion-of-stock-option-gain-of-nonresident-retiree/ and this one from the same blog entitled "Nonresident Employee Avoids New York Taxes on Deferred Compensation Payment" http://benefitsnotes.com/2013/05/nonresident-employee-avoids-new-york-taxes-on-deferred-compensation-payment/ As I said, weak at best, but I thought I may as well share it in hopes that it will lead you to finding substantial authority for allocating this income.

I would tell him to not send you any documents. If he does, I don't think that ethically you can return the documents to him since they are for another taxpayer that he does not have a POA for at this point. I know that you can't give him mom's tax return without you having either authorization from mom or for him being appointed to handle her affairs.

Anyone ever wonder why the cents column is still on the forms? 1040 and lettered schedules have this except for Sch D.

No problem, Terry. We all have those days. Lately I've had to force myself to take a short lunch break because lunch was nonexistent or running too close to dinner, and I was feeling lightheaded and nauseated a couple of times. I lost one whole evening feeling that way. Now I've been getting up and walking around any time I get an extended phone call that doesn't require screen time or note taking, and I'll grab little snacks while I'm up and moving.

The corrected forms are beginning to be available by the taxpayer logging in to the Marketplace and checking the "messages" section.

I'm not Deb or Jack, but if you open the tab for line 20 SS benefits and look toward the bottom you should see a line for line 20 on there that is labeled for the lump sum, that is if it still looks like it did in 2011. Click on that line for the lump sum and hop to the lump sum worksheet. The lump sum worksheet is only beneficial if the income was low enough in the earlier year(s) to which the lump relates that would make less of the benefits taxable than if they are all included in the one calculation for the current year, BUT then the taxable portion is still all included on the 2014 return, the lump sum worksheet is only to determine how much will be taxable. ATX does handle this calculation well, so you might as well try it both ways. Since the benefits are received in 2014 and are all going to be reported on the 2014 no matter what year they are for, the entire lump sum amount received will be included in MAGI for purposes of calculating the premium tax credit on Form 8962. I was trying to say that in my earlier post and didn't want to come out directly and say other information given was wrong, but there is no provision that I can find that says that only SS benefits paid for the current year are included in MAGI and prior years paid as a lump sum in 2014 are not. I don't see why this would be any different than any other income that was received during the year. The purpose of using MAGI is to take into account all of the resources the taxpayer had available during the year to pay the premiums and determine if they needed help via the subsidy. It makes no sense to exclude the lump sum payment simply because it is for a prior year, because the whole point is that it was received and available for spending toward the premiums in the 2014 tax year. Someone let me know if you find something to the contrary.

Oh no, not at all. I hardly have any clients affected, they are mostly older people with Medicare. I just had a little extra time early on to read up on it, and used some of the harder questions posted here as learning for myself too.

No, this is incorrect. Ron's client has 6-digit income. The cap only comes into play if the person is eligible for the PTC, received a large enough excess that it exceeds the cap for their filing status, then the repayment is capped. If the person exceeds 400% of the FPL and is totally INELIGIBLE for the PTC at all, then there is NO CAP, all must be repaid.

Sounds ok to me too. Amortization begins in the month the first economic benefit is realized, not the beginning of the tax year you are filing.

If the parent can claim the dependent but doesn't, they are still liable for the penalty. See below. From the instructions for Form 8965, under the definition for "tax household" it says: Tax household. For purposes of Form 8965, your tax household generally includes you, your spouse (if filing a joint return), and any individual you claim as a dependent on your tax return. It also generally includes each individual you can, but do not, claim as a dependent on your tax return. To find out if you can claim someone as your dependent, see Exemptions for Dependents in Pub. 501, Exemptions, Standard Deduction, and Filing Information, or Line 6c—Dependents in the instructions for Form 1040 or Form 1040A. However, an individual is included in your tax household in a month only if he or she is alive for the full month. Also, if you adopt a child during the year, the child is included in your tax household only for the full months that follow the month in which the adoption occurs. Dependents of more than one taxpayer. Your tax household does not include someone you can, but do not, claim as a dependent if the dependent is properly claimed on another taxpayer's return or can be claimed by a taxpayer with higher priority under the tie-breaker rules described in Pub. 501

No ownership, no deduction. Page A-6 of the Sch A instructions "Include taxes (state, local, or foreign) you paid on real estate you own that was not used for business, but only if the taxes are assessed uniformly at a like rate on all real property throughout the community, and the proceeds are used for general community or governmental purposes." Etc.

I would go with code C. From the instructions, wouldn't this first of the choices fit her situation? : The individual is a U.S. citizen or resident who is physically present in a foreign country (or countries) for at least 330 full days within a 12-month period. You can claim the coverage exemption for any month during your tax year that is included in the 12-month period. For more information, see Physical Presence Test in Pub. 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad.

Terry, yes, the n/d life insurance would be on 1120, pg 3, line 16c; on the M-1 line 3; and on the K-1, box 16, code C. Also yes, the total compensation paid + health insurance should agree with the 1120S, lines 7 and 8, unless some portion of those are reported in COGS. The total of all of that should agree with box 1 of the W-2s, and those should tie in to the 941s. That should be true unless the company also has a retirement plan that allows deferrals such as a 401K, SEP, or SIMPLE IRA plan that would be reported elsewhere on the 1120S. You might have to amend the 4th qtr 941 and W-2s if they were prepared incorrectly.

Terry, the way I understand it, for companies having less than 2 employees, continue to treat it as it was in 2013. After the guidance was issued in 2015-17, health insurance paid or reimbursed for the more-than-2% shareholder is to be treated as wages subject to FWT, reported in box 1 only, NOT subject to FICA or Medicare in boxes 3 or 5. It is also allowed as a deduction on page 1 of the 1040 as SEHI. This last topic discussed that, especially toward the end, and has a link to the 2015-17. At least that is how I think it is now. Nothing like working with shifting sands underfoot, eh? I agree with NECPA about the officer's life insurance. Not deductible.

I think you need to file CO based on this, from the instruction booklet: Filing Information Who Must File This Tax Return Each year you must evaluate if you should file a Colorado income tax return. Generally, you must file this return if you were: A full-year resident of Colorado; or A part-year Colorado resident who receives taxable income while residing here; or Not a resident of Colorado, but receives income from sources within Colorado; and Are required to file a federal income tax return with the IRS for this year; or Will have a Colorado income tax liability for this year.

Margaret, maybe you should start a separate topic in general chat regarding only the COBRA as it relates to the SEHI deduction. Some of the people aren't visiting the ACA forum, and since this portion of your question isn't directly related to the ACA, you might get more input from general chat than just from me.

Might this also fall under the dollar limit for safe harbor for small taxpayers with buildings? Do the total repairs exceed the lesser of $10K or 2% of unadjusted basis of the building?

Margaret, I did a little quick reading (and googling). Sec 162(l)(2 )(B ), regarding the health insurance says: (B ) Other coverage Paragraph (1) shall not apply to any taxpayer for any calendar month for which the taxpayer is eligible to participate in any subsidized health plan maintained by any employer of the taxpayer or of the spouse of, or any dependent, or individual described in subparagraph (D) of paragraph (1) with respect to, the taxpayer. The preceding sentence shall be applied separately with respect to— (i) plans which include coverage for qualified long-term care services (as defined in section 7702B (c )) or are qualified long-term care insurance contracts (as defined in section 7702B (B )), and (ii) plans which do not include such coverage and are not such contracts. The word "subsidized" is where everyone hangs up on the issue. I've read posts where both sides of the issue are taken, depending on how one interprets the word. Here's a site with some lawyers arguing over the same issue back in 2010 (lawyers dot com discussion forum). You should take a look at the whole thread but in particular the 5th post down where the posts states that the IRS national office counsel, in advice to a field attorney, addressed the issue by stating: Note that it disallows as a self-employed health insurance deduction (a § 162(l) deduction) any premiums paid on an insurance plan subsidized by an employer. The term subsidized means that the employer pays some part of the premium cost. The normal COBRA plan requires that the employee pay 100% of the cost of the insurance plus a 2% handling fee. It is therefore not subsidized by the employer, and thus the premiums paid for that insurance is eligible for the § 162(l) deduction. This is something that IRS national office counsel noted in advice to a field attorney: "With respect to COBRA continuation coverage, we understand that in the typical situation a group health plan requires premium payments of 102 percent of the applicable premium, as permitted by section 4980B(f)(2)© of the Code. Therefore, an individual receiving COBRA continuation coverage from such a plan would not be receiving subsidized coverage within the meaning of section 162(l)." IRS FSA 1995 WL 1918547. I still don't have a good feeling about taking the deduction. Could it truly be argued that it is established under the name of the business since it is through another employer's group, whether it is subsidized or not? >This topic from 2012 on this forum also has opinions on the "subsidized" plan question. See Jainen's post #6 which is the same as some other opinions I found in my searches where he says that all employer group plans are subsidized. Anyway, that's some of what I found. I don't know if any of that is helpful.

The number of views can come from anyone searching the web that clicks on the topic, not just from members here. With everything you wrote in your first post, I wasn't sure what exactly your question was. The family size is definitely '2' unless you find that your client fails one of the dependency tests for the student, she is a dependent and she earned $6500. Those earnings take her over the threshold for being required to file a return, so her income must be included in MAGI. It looks like your client had coverage for 10 months. Does she qualify for the short coverage gap for the other two to at least avoid the penalty for those months? COBRA generally counts as having the availability of a plan outside the marketplace, as long as the policy meets minimum essential coverage. Where exactly is your question on the COBRA? I'll try to help if I'm able. ETA - if your question on the COBRA is whether it can be included for purposes of the SEHI, my reaction is that it's not. It is a continuation of a policy established under another employer's group plan, not a plan in the name of your self-employed client. You'd have to take the position that the policy is established in the name of your client's business in order to include it for purposes of calculating the SEHI.