jklcpa

OK, I tried finding an answer to the reimbursement issue. Union plans may fall into the category of an "Individual Coverage Health Reimbursement Arrangement (ICHRA)", and that is what you need to find out. ICHRAs allow employees to choose their own plans and allow employer reimbursement of employees' qualified medical expenses including the insurance premiums. Those reimbursements are tax-free if used for qualified expenses. If this is the case with your client's reimbursement, then they are not eligible for any PTC. I think the reference is IRC sec 36B(c)(4) but would suggest you do further research into the plan's exact details. It may involve you or client contacting the union's plan administrator to be sure.

For those that rejected, did they receive the help via the APTC requiring reconciliation, were they people without any APTC that simply purchased a plan through Marketplace, or some other identifiable reason?

Excess contribution is shown on line 1h of the 1040.

Yes this! Get all the junk off the returns.

Delete the entries and the software won't create the form.

We already are agents in some instances. Preparer penalties for lack of due diligence and documentation for EIC comes to mind as one example.

There is no box or code for the QCD to be reported on the 1099R. Taxpayer should have also received acknowledgement from the charity with the details. You should make sure that the client didn't include that amount in with their other charitable deductions.

In this case it should be $14,600. What is Drake coming up with?

Sorry, there aren't many answers at this point. I found the statement below from the NY State Society of CPAs a day or so ago. Perhaps it will all be halted again through the courts where they've continued to rule that IRS doesn't have this authority, but the bill tries to change that. "This bill also follows longstanding IRS efforts to regulate unenrolled preparers, such as the Registered Tax Return Preparer Program, which was halted due to legal challenges. With support from the IRS Electronic Tax Administration Advisory Committee, the bill represents continued legislative efforts to address the growing need for oversight in the tax preparation industry. The bill is currently with the House Ways and Means Committee for review."

It hould be treated as if it never happened if withdrawal included earnings and by the date you said. Please see all of the instructions for line 13 of the 8889. https://www.irs.gov/instructions/i8889#en_US_2024_publink37971yd0e1392

For closings? It may be that you and clients will have to google something like "SSA offices near me" and then call to make sure that office still exists.

Here's the bill that has added that it would only cover those not defined in 31 USC 330, and sec 330 does include EAs, so I'd say that EAs would be excluded from this too. See what you think and if I'm interpreting that correctly. https://www.congress.gov/bill/116th-congress/house-bill/4751/text#toc-HBEE485E538604A07820A31702DCF9F75 https://uscode.house.gov/view.xhtml?req=(title:31 section:330 edition:prelim)

As Lee said, probably DOA, but the bill is specifically trying again to grant IRS authority to regulate preparers. That is what shot down the prior attempts too, because IRS currently doesn't have that authority over all preparers.

Here's some highlights about who and what would be affected, for what it's worth. I took this from a blog and eliminated the parts that pertain to CPA candidates and the parts that were an obvious sale pitch of the company's training products grant IRS explicit authority to regulate tax preparers, enforce training standards, establish integrity requirements require tax preparers to meet specific qualifications, ensure competency, transparency, and consumer protection in the tax filing process. grant the IRS the power to establish requirements for tax preparers, ensuring that only qualified professionals can legally prepare tax returns. This includes: Mandatory registration for tax preparers Increased penalties for fraudulent tax filings Training and certification requirements Consumer protection measures to safeguard taxpayer information Training Requirements - require tax preparers to complete training programs, pass a competency exam, ongoing education and training to stay updated on tax laws and practices. The Consumer Protection Aspect - by enforcing transparency, accountability, and training, this bill seeks to reduce fraud committed by unlicensed preparers who exploit tax loopholes or file inaccurate returns. Enhanced penalties and compliance measures will deter dishonest practices and ensure greater accuracy in tax preparation. Ensuring Security of Taxpayer Information - this bill would require preparers to meet data security standards, safeguarding sensitive taxpayer data from identity theft or misuse. New system of verification of preparers and i.d. #s, registering for PTIN to ensure proper identification and accountability. EROs - would have the same regulations and standards as other tax preparers. Implementation - by enhanced enforcement measures, automating processes for registration and verification, and ensuring compliance through regular audits and checks of tax preparers. Non-compliance - could result in increased penalties for tax preparers, including fines and potential suspension. Current licensed CPAs - licensed CPAs will be exempt from additional requirements under the bill.

March 10, 2025 Press Release IRS would regulate service providers with minimum competency standards WASHINGTON – Congressman Steve Cohen (TN-9) today re-introduced the Tax Return Preparer Accountability Act to provide the Internal Revenue Service with the explicit authority to regulate tax preparation services by enacting training and integrity requirements. Congressman Cohen made the following statement: “Most tax preparers are honest and trustworthy but, unfortunately, we’ve all heard or read about unscrupulous tax preparers who take advantage of customers or assist clients in claiming deductions to which they are not entitled. To guarantee that taxpayers get the quality service they deserve, the Tax Return Preparer Accountability Act will permit the IRS to establish minimum standards for accuracy and fairness.” The bill would also: Direct the IRS to implement an automated formula to identify taxpayers at risk of economic hardship; Authorize the IRS to establish minimum competency standards for federal tax return preparers and revoke the identification number of sanctioned preparers; and Recommend tax software changes, including requiring all tax software providers to adhere to prescribed information security controls and regular updates of security standards for tax software providers. https://cohen.house.gov/media-center/press-releases/congressman-cohen-re-introduces-tax-return-preparer-accountability-act

It should be on form 1120S, Line 4 "Net gain (loss) from Form 4797, Part II, line 17" for ordinary gains(losses) as long as it doesn't involve sec 179 and isn't rental related. The figure on 1120S line 4 becomes part of the ordinary income on 1120S, line 22 that then flows to Sch K, line 1.

from the 1116 instructions: Also, the $300/$600 threshold for needing to file the form 1116 isn't based on the dividend amount, those thresholds are on the foreign taxes paid or withheld, so if the foreign tax is less than $300, or $600 for MFJ, then you don't need to file the form.

The way the original post was worded makes it unclear if the 2024 RMD notice was to be the first distribution. We know only that the 2024 RMD wasn't taken, so we don't know if RMDs were required in years prior to that or if the deceased husband passed away before, on, or after the required distribution date. The original post also didn't include age of deceased husband to know if the wife was not more than 10 years younger. In addition to what TexTaxToo posted above, these facts will also affect wife's options going forward: whether she can treat account as her own, when distributions must start, and which life expectancy table to use . All of that information is in pub 590-B.

I was responding to Abby's statement that he's "never" seen the purpose of AAA. I thought that was rather obvious since my post directly followed his and considering the title of the article itself. It was meant as food for thought for all of the readership, so in future I will state something much more obvious to that effect and make sure to quote the person I am responding to so that everyone is clear on why I post something. I wasn't suggesting anything more than that. Also, as to your comment about E&P not being a factor, well maybe and maybe not. I'll agree that it may be more likely than not, but you've been around long enough to have seen the many times posters here don't know what to ask and do not give all of the facts until badgered with questions from those more experienced asking for more information or clarification. You yourself suggested that this preparer may not have the experience needed for this engagement.

The Tax Advisor article "The importance of tracking AAA and E&P in transactions involving S corps" https://www.thetaxadviser.com/issues/2017/aug/tracking-aaa-ep-transactions-involving-s-corps.html

Agree with Lee, and the withholdings allowed by SSA are flat percentages, and iirc, that percentage is applied to the net benefit after subtracting the Medicare premiums. You can test that from last year's 1099. If you have last year's 1099 for the gross figure, it should be relatively easy to get to the current year's gross without the 1099. You know the COLA increase and the monthly medicare withheld, then look to last year's withholding % and apply that to the current year's figures. For FWT, the recipient may choose from the following %s to have withheld: 7, 10, 12 or 22%.

Per share-per day is the method you've always used. Splitting into 2 separate parts of the tax year is an election and requires signed consent of all parties. You should calculate the effects on the pass-through items and on each shareholder's basis under each of the methods and allow shareholders to decide. Does the shareholder agreement specify which method should be used in the event a shareholder leaves, dies, sells shares, etc? A couple of (older) articles: https://www.thetaxadviser.com/issues/2008/dec/allocatingpassthroughitemstoscorporationshareholders.html https://www.thetaxadviser.com/issues/2010/dec/clinic-dec2010-story-09.html

Tax Advisor article on COD income in pass through entities, effect on tax attributes, and basis adjustments. It does also have a subheading specific to S Corp handling, but read it all. https://www.thetaxadviser.com/issues/2015/may/tax-clinic-06.html

No, that is only for discussing the 6% tax on excess contribs. I agree that the 6% penalty does not apply. In my original post, I gave you the direct instructions from form 8606 that tells you to include on 1040, line 4a the total withdrawn to correct this (the total of the excess+earnings). Then, 1040 4b, include only the earnings. The earnings withdrawn will be taxable, but not the excess contrib itself. Also, remember that it also tells you to attach a statement of explanation to the return. In addition to the 8606 instructions I'd posted earlier, here is the snip from the instructions for 1040, lines 4a & b: