Terry D EA

Judy, I am of the opinion that this should be pinned at the beginning as it is very valuable information that we all will need now or very soon.

Judy, I absolutely take any and all of your advice as solid and yes, I do believe your response and genuinely appreciated all of the help you have given me over the last 23 years of being on this board. My statement was not to attack CPA's. I have great respect for the profession and am sad that I am too old to take the advanced courses to obtain a CPA license. My wife still wants me to, but I don't think I have it in me. The general contention is when a person has the letters CPA behind their name, the answers or position taken is gospel. One of my instructors in college was a CPA and wouldn't touch taxes. The statement these folks got was they "have" to pay "all" of the cap gains in the quarter of the sale. As you say, we do have a pay as you go tax system and I did say that "generally" to pay the gains tax in the quarter of the sale is true but, I used the annualized method because they do not have enough withholdings without figuring in the gain due to the spouse improperly filling out a W-4 form. They will have enough with the estimated payments to avoid the penalty. Hopefully the spouse gets the W-4 correct. Please don't take offense to may statement as none was intended toward you or any other CPA.

Not getting into any arguing match at all. Thanks for the advice though. I am meeting with these folks tomorrow and will put both scenarios in front of them. As you said, their choice. I know they’ve spent some of the funds on another property and some other things. They’re panicking because of what they were told. My advice was to take the total estimated gain and put it aside to pay each quarter. Did they do that???? Don’t know and if they haven’t, not my problem either. I just needed to hear I gave accurate advice.

So, this would apply to a statutory employee as well correct? A statutory employee is not a "Trade or Business".

Got it. Thanks everyone

My client sold a second home and closed on it January 2022. Does not meet and exclusions and was a rental for one year so depreciation recapture applies to calculate the gain. Got all that. I calculated the gain and prepared estimated tax payments for them to make to avoid any failure to pay estimated tax penalties. They have spoken with someone who claims a CPA has told them they "have" to pay all of the capital gains tax at the end of the quarter of the sale. I have looked and looked and looked and cannot find anything other than a statement that says "Generally" you pay at the end of the quarter of the sale. There is no have to etc. They will have withholdings from both of their jobs but not enough to forgo paying estimated taxes. The only thing I am willing to change is to make the first quarter of 2022 a larger payment because that is when proceeds were received. Am I missing something? Is there another reference that I haven't found that says you MUST pay all of the capital gains in the quarter the home was sold. No mention of this in either Pub 523 or 701 either. I agree, it is a good idea but other circumstances need to be considered. I just wish after the third or fourth time explaining this to the client they would listen. No disrespect to CPA's but frequently wrong advice is given. Ok rant over.

Agree with all the above. Ask for records for the second home to take into consideration improvements, repairs to the building and property. Also, the expense of the sale. Check out Pub 523 and Pub 701. There is a good list of items to include as expenses or improvements to accurately calculate the gain.

Thanks Pacun, this client is from Mexico and I did ask for the consular ID as well. I knew I could prepare the return with the fake ID and did instruct to amend 2020. Amending 2020 is their choice and I told them they were legally required to file an accurate tax return. Like you, I'm not sure if the spouse has an ITIN. They might be scrambling to get one. I guess we'll see. Can you still send the ITIN app with the filing of the return?

In 2020 client told me he was single. I don't think this was on purpose as he was using an interpreter who evidently misunderstood and revealed to me they thought that if the other person (spouse) did not have income, then they did not have to prepare any taxes. With that said, I asked if the spouse had a SS#, answer no. I asked to see the W-2 for the spouse and they openly admitted the SS# was invalid. I asked for an ITIN, they stated they had it at home and would like to reschedule. I stated several times they should seek the advice of someone who they could openly communicate with and not use an interpreter. They want to make sure everything is correct and still want me to amend 2020 and file 2021. If I proceed, I am assuming the 2021 return has to be mailed due to the invalid SS#. Any other suggestions?

Have a client who brought me their son's documents to prepare his taxes. The son is over 18 and lives temporarily in another state serving an internship. Once they're over 18, can we still discuss the tax return with the parents? Is this a gray area? I don't have the permission of the son to do so. Just want to CYA.

If you're talking about the SEE fee as the exam fee, they were $185.00 each. That's what I paid. I wonder what do we get for the 140.00 fee.

Finally got the statement.

Boosting this up. This poor student is doing everything they know to get the account statement from the college. The latest info, the lady at the college who handles this has advised her she does not need to include anything from form 1098T and she doesn't need one. Ok we discussed that, but the student is clearly telling me there was an excess between the financial aid and what was actually spent. I believe those amounts are taxable income even though the student has not received the funds but they remain in her account is constructively received. Any suggestions on how to proceed? I asked if I could contact the school so waiting to hear.

First off, QuickBooks is horrible at tracking inventory. Only method it can use is the cost method. As already mentioned, your client may not have it setup right. I had a manufacturing company that was in multi-user mode which enabled the employees who had access to literally screw up the inventory hence large adjustments that I insisted were red flags. I feel your pain with this but hopefully your client can shed some light on this to help you.

Don't know what software you're using. I went with Drake back when the 2012 (I think that was the date) debacle occurred and have not looked back. I was an ATX user for a number of years, all that way back to the roaring tiger when it was Sabr until CCH bought them and it seemed the software was never the same. Drake is always on top of things but just like others, when it is out of their control, nothing they can do. Example is the Pub 536 wait.

Wow, this got shoved way down the list and I didn’t see it until now. I haven’t had any issues filing SC. Just NC with the date push back.

Yes, it is. Sad to say it is not full proof or 100% either. Just responded to a CP3291A for a client who paid using Direct Pay in June of 2021 to pay the amount proposed in the CP2000 they received. We have the confirmation statement, bank account showing the draft responses etc. I had a client yesterday insist on writing and mailing a check cause they've done it this way for years. I strongly suggested the direct draft through the software. Some folks are still old school and resistant to change. I like that idea. Drake now generates a transaction summary form for the client to sign they authorized the direct draft or direct deposit. To include a form like you mention is a small task in Drake. That way the client can't say they weren't advised of the risks.

I have been concerned about "constructive receipt" as well. Transferring the funds to the husband's account seems to fall under the "constructive receipt" as well. <<<<<there is a "loophole" such that if the grant is greater than the tuition and fees, the college is not required to issue a 1098-T.>>>>> Not being required to issue the 1098-T and telling the student they don't need it is two completely different things. I am holding this one until I get the account statement.

The is a first for me. Client paid out of pocket for part of their tuition. The remaining funds came from financial aid. The college chose to split the financial aid between semesters. For this semester, they did not return to school but plan on doing so in the future. The college did not issue a 1098-T and when asked they told the client they didn't need one. I told them to go back and ask again and get a printout of their account. The unused excess is being held by the school and a check has not been placed in the client's hands. So, the excess is not taxable income yet correct? What if she transfers the funds to her husband's account (they both attend the same school) for his education does it become taxable income? At first glance I say no, cause she never had the funds given to her. This sort of mirrors what the college told her by giving her three options which were use it for yourself in the future, accept a check, or transfer it. Opinions or a refence would be great.

Looking at Pub 501, the possibility for a married person to file HOH does exist. The language is "Considered Unmarried" and one of the reasons given is the spouse did not live in your home for the "last" 6 months of the year. A temporary absence is considered living in the home. I would proceed with this and get utility bills or some other proof of both residences. I would also ask a series of questions including a one night stay and document the answers. Do your due diligence. Maybe too extreme, but I might create a form with the questions that includes a jurat statement and have them sign it. You can't be too careful today.

Only two options, MFS or MFJ and that's it. Living together or not. The only exception I am aware of is if they are living apart for more than 6 months of the year and have a separation agreement then they may be considered unmarried. If you got married on Dec 31 at 11:59 pm you are married for the whole year.

Client brought me a 1099 Consolitdated DIV today. There are nearly 30 pages of short term and long term transactions. The broker summary page only identifies total proceeds, cost basis and gain or loss. Is it safe to use "Various Trades" with various date acquired and a middle of the road sale date on the 8949? Then attach a pdf of the broker's statement to the return and form 8453. I would like to see if the broker would provide a .csv file which I could import in Drake. If I have to enter each transaction, I will be here for the rest of the week. Curious as to how others would or have handled this.

I recently completed one of these with a lot of questions and one of those questions was the mileage. The mileage that Uber/Door Dash reports is the mileage of the trip for the customer and as Pacun stated, it may include milage when the app is turned on. They do not break it into any detail. In my case, my client has a home office for transacting their Uber business. Mind you, this person is well in the five digit figures, and spends nearly all their time driving folks, hanging out at airports; etc. To error on the side of caution, and because there doesn't appear to be any code or regulation, I did not take the commute mileage to either pick up the passenger or go to the airport. I did use the report mileage and did advise my client to keep a better mileage log. I agree with Tom and Abby on this.

I was informed earlier that NC would not accept any returns until mid-February and then Drake Support had stated February 17th was the anticipated date. This notice released Feb 14th now extends it to Feb 28th. One difference, it appears you can transmit the returns but they will stay put for processing the 14th. NCDOR Issues Update On Opening Of 2022 Tax Season Raleigh, N.C. Feb 14, 2022 Tax law changes included in last year’s budget delayed the North Carolina Department of Revenue’s (DOR) finalization of tax forms, updates for tax systems, and approval of tax preparation software. Accurately processing 2021 tax year returns and issuing refunds in a timely manner is a priority for the NCDOR. Agency employees are working continuously on testing and certification requirements that are necessary in order to open the North Carolina tax season and have made significant progress. The target date to open the tax season is the week of Feb. 28. Taxpayers can expect to begin to receive refunds in early April. We continue to encourage taxpayers to file electronically. Specifically, in regards to certifying tax preparation software, agency employees are working diligently to approve these requests. Tax software providers are notified by NCDOR once their software is approved, thus allowing taxpayers to begin filing their tax returns. Some software products have already been approved. The list of approved tax preparation software products for businesses can be found at this link. The list of approved tax software products for individual income tax can be found at this link. Other products are being approved on a daily basis. Taxpayers should routinely check to confirm if their tax preparation software has been approved. The NCDOR funds public services benefiting the people of North Carolina. We administer the tax laws and collect the taxes due in an impartial, consistent, secure, and efficient manner.

Thanks, I looked at this and it is good info. I guess I’ll start with the PPL in the morning. Is there any other contact info for EA’s