jklcpa

https://www.irs.gov/retirement-plans/self-employed-individuals-calculating-your-own-retirement-plan-contribution-and-deduction https://www.irs.gov/retirement-plans/retirement-plan-faqs-regarding-contributions-what-is-a-partners-compensation-for-retirement-plan-purposes Draws aren't earnings, and guaranteed payments can't be used in isolation because the partnership could have a loss from operations that could offset some of the guar payts and s.e. income would be less than that. You have to follow the formula that starts with self-employment income and then further adjusts for 1/2 of the s.e. tax and the retirement contributions themselves. (Example - That is similar to using the reduced rate of of 20% for a retirement contribution max of 25% because that difference factors in the owner-employee's share.)

Margaret and cbslee are correct. Employee deferral should have been withheld from payroll, and those amounts are to be contributed by the end of month following the month of deferral. OP's client now wants to go back and make those changes that never occurred, and I wouldn't want to be a part of that. Also, employer contribution can't be increased unless the company was using a reduced percentage below the 3% maximum, or by inflating salary after the fact, and again, something I would not do.

Might be ATX because I transmitted returns yesterday during day and evening and again this morning, and each time received the acks a few minutes later.

Adding to what others have said, you also need to consider that being totally and permanently disabled is: not being able to engage in any substantial gainful activity because of the physical or mental impairment.

Yes, I could see it clearly from my tablet and phone but the desktop link required a log in.

Were you able to see the entire Q&A from the Bradford Tax link I shared? It had an example, but when I went to look at it from the link this morning I couldn't see it. If that happened to you or anyone else, perhaps seeing the entire example will help, so I did c&p into the box below. I also put in the calculations at the bottom as referenced by the notations to the footnotes. Sorry if the formatting is bad. The way I see it after looking at the examples below, the only way the S corp shareholders could have QBI coming from the S corp is if the net profit of the S corp itself (after owner salaries and other expenses allocated to that portion of the "activity") exceeds the guaranteed payments flowing from the partnership (after the S corp's expenses allocated to that portion of the "activity")

Found these, maybe will help: https://www.tingwimberlycpa.com/2019/07/qbi-issue-when-your-s-corp-is-a-partner-in-a-partnership/#:~:text=Guaranteed payments are not qualified,income from an S corporation. https://bradfordtaxinstitute.com/Content/QBI-and-Self-Employment-Tax-Savings-for-S-Corp-as-a-Partner.aspx

Del sch a doesn't allow its own state income tax or any other states' taxes that are claimed as an out-of-state credit against tax. So, if there's no VA credit claimed, then it can go on the DE sch a, otherwise, no.

This made me actually laugh because I've been cussing up a storm all day, mostly in my head though. Somehow my sister has pretty good timing at sending me stuff when I need a laugh, and today's meme was this one. Also, sorry for the aggravation and the hijack.

This is another strange season, for sure. Many more of my clients dropped off their information earlier than ever this year but no one is in any hurry to pick up the completed returns, even those that have nice refunds or tiny balances owed.

For a short year final corporate return, you have 2 choices: 1. File an extension and hope that the next year's forms are released before the extended date comes due, or 2. Use the latest forms available which will be 2021, print them out, and modify the date indicated in the corner of the form by hand and file on paper.

C corp returns are due the 15th day of the 4th month after year and. S corp 1120S returns are due the 15th day of the 3rd month after the corporate year end.

With a sale so close to death, the FMV at sale and death would be virtually the same, and factoring in closing cost, there is most likely a loss on the sale. Does the estate have any other assets or reason to stay open for more than a year?

Use the next day the market is open as part of the calculation. see § 20.2031-2(b)(1) where it says "within a reasonable time"

As for amending, I'd do the math and let the client decide. With figures from 12 years ago showing basis of $250,000 and $1 million in FMV at that time, what is the FMV now? We don't know the amounts of these distributions, the % of basis to be recovered, or what the tax brackets were in the open years, so we shouldn't say whether or not amending is worth it to the client.

IKR! DE revamped all of the individual forms this year to very different presentation and weren't ready until late February. That meant that all of the returns were on hold until the software was updated. Then when I thought everyone was ready to go, the DE 2210 still was in development and held up any returns that had that included.

Hi, I'm from DE and can tell you that the form existed through the end of Feb of this year, and then the DE Div of Rev made it obsolete at the beginning of March. Nothing on the state's website announced it either, and I was about to make a call when I found the software update describing the change. Nothing like wasting some time looking for something that went *poof* in the night and no longer exists! Like some other states, no signature form is required for the DE individual forms now.

Are you preparing the returns for the two ABC entities also? Do you know how the transaction for the change of ABC entity was structured? Statutory conversion, statutory merger, or nonstatutory merger? From the original post, it sounds like a streamlined process by filing a few forms and that the state allows an S corp to simply convert to an LLC, not that a separate LLC was formed and merged with the S corp. If a simple conversion, I would: make the software split the activity with 9 mos going to the S corp, whatever remaining capital at the 9 mos mark is zeroed out, and K-1 is marked as "final". No liquidation, and no gain or loss reported K-1 for ABC, LLC will show an opening capital balance equal to whatever was zeroed out from ABC, Inc in step #1 above, and the remaining 3 months of activity will be reported on that K-1 to the new ABC, LLC. At least that's what I would do with it if a conversion. If ABC had a merger transaction to go from S to LLC partnership, that's another issue altogether. ~~~~ Or, were you simply asking how to make your software do all of that?

Yes, that came in the early 2000s, and I think that has been repealed if I'm not mistaken. 121(d)(11).

Agree with Lion. Extend both and if the IRS reinstates the nonprofit status, the IRS will ignore the extension for the 1120.

I'm curious if you would still require the partners to sign this at the partnership level if you also prepare all of the partners' individual returns.

Not to derail this specific discussion, but take a look at some other posts on the IRS site that came up in my search of IRS.gov. These include: Accelerating Digital Communications to Solve Pandemic Challenges and Improve the Taxpayer Experience Enhancing Systems and Processes to Better Serve Taxpayers Taxpayer First Act - IRS Organizational Redesign Strategy, and IRS Face-to-Face Saturday Help

Direct from IRS.gov:

I'm unsure and may be wrong, but wasn't that changed back in 2008 but still may be dependent on whether the administrator allows it?

There also is no election to forgo the carryback of FTC like exists for NOLs. That seems ridiculously stupid to me that taxpayers whose unused credits are small must file amended returns.