Terry D EA

I jumped through all those hoops last year so I am registered with IRIS. Earlier in January, no problems, took a few minutes and that was it. Drake , however, does not create a .txt file to upload. But, with only one or two to do, manual entry isn't bad. I did manage to get through just a few minutes ago and got the last one filed. This one had 10 forms so manual entry was a bit of a pain. I wonder if the IRS will charge the late penalty for one day? I have no idea how to prove I have been trying for the last two days.

Has anyone else had issues with IRIS? For the last two days, I have been trying to submit a 1099 file and the page to do so only says loading. I've tried at different times to no avail. Last minute guy with 8 1099NEC to file. Regardless, the system should work.

Judy, After your earlier post, I did look into Drake and there is definitely a space to enter the reason for the late filing. So, it totally falls on me. Nonetheless, the IRS forgave the penalty. Like, Lee, mine is now first and is nearly finished for 2024. Like everything else in this business, you gotta take time for yourself. Thanks for all the information.

I The use of the zip code is never mentioned. All of the documents issued by the IRS indicated all 46 counties of SC. No, I did not give any reasons for the late filing. I do use Drake and really never thought of using the MISC screen for this. Good to know though for the future. I just did a terrible thing and assumed the IRS would follow their own rules. SC did without incident. No worries as it will not happen again. I have managed to get into a bad habit of putting my own return on extension and leaving it until the very last to take care of everyone else.

I live in Myrtle Beach SC and we are in those disaster areas. The filing deadline is extended until May 1, 2025. Yes, that means the IRA you are mentioning. Beware, I filed my LLC 1065 after Sept 15th that qualified for an extension and still got a late filing penalty. I called the IRS and got it taken care of but....... Funny thing was the notice contained an insert alerting me that I am in a declared disaster area and may qualify for relief. No Judy I don't think your lucky with searches and you are just plain good at it.

Yes, Rev. Proc. 2013-13 Section 4 .03 Year-by-year determination. A taxpayer may elect from taxable year to taxable year whether to use the safe harbor method or to calculate and substantiate actual expenses for purposes of § 280A. A taxpayer elects the safe harbor method by using the method to compute the deduction for the qualified business use of a home on his or her timely filed, original federal income tax return for the taxable year. An election for any taxable year, once made, is irrevocable. A change from using the safe harbor method in one year to actual expenses in a succeeding taxable year, or vice-versa, is not a change in method of accounting and does not require the consent of the Commissioner. An election for any taxable year, once made, is irrevocable (This is meaning if your client made the election in 2023 to use the standard method, the election cannot be changed for the 2023 year.

Wow, well we really have a lot in common. I worked as a master auto tech for years in dealerships. Always got paid on the flat rate system. Drove my wife nuts when it came time to pay the bills each month. Never got to the service manager position but was shop foreman which I really didn't care for. Also taught auto tech at high schools and community colleges for 23 years.

Judy just an additional bit. This shop owner is so meticulous, all invoices, receipts, payroll records are alphabetized in a file each month and put in a box at the end of the year and stored. There isn't an expense or item of income that cannot be accounted for. I've worked with this guy since 2007 without any issues.

No, this is an S-Corp that I maintain the books each month. I don't normally see the repair orders themselves just the income. I have the QB file setup properly. I enter all the bills and payments each month from the vendor invoices; etc. BTW, I also process the payroll. This business owner is and has always been very good at record keeping probably one the best that I have. For an auto shop of any kind, everyone loses on the dreaded comeback except the hourly employee.

Thanks for all the replies so lets see if I can clear this up. The employee gets paid an hourly rate for whatever hours he/she works each day regardless of what the task is. If the employee performs an initial repair or a warranty repair, they are still paid for x number of hours per day. That gross pay is deductible regardless of what it was used for. So, for the warranty repair, there is no additional deduction for the shop owner simply because he did not pay anyone an additional wage to perform the warranty repairs. Therefore the shop owner cannot claim any lost time for the warranty repair. Correct? This has been my thinking all along but somewhere along the line I managed to confuse the crap out of myself. I think I may have misunderstood the client and now that I see the repair orders and what took place it made a difference.

Maybe I can make this easier. I am the shop owner. I repaired a vehicle and collected 2K parts and labor. The vehicle comes back due to a failed part. I file a warranty labor claim and the part vendor denies the claim and pays for the part only. Can I deduct (write-off) the labor on the warranty repair?

Employee wages are definitely deductible. The shop charged labor by using the labor time guide. On the warranty repair order, they are writing the warranty labor repair at the same hourly rate using the shop hourly rate. That is what is confusing me. My opinion, is the warranty repair labor should be at the employee hourly rate and not the shop hourly rate yes or no?

An auto specialty (Transmission) repair shop has experienced a large number of part failures from one vendor throughout the year. The vendor will only replace the parts and will not pay the repair shop for any labor to replace the failed parts. The lion's share of these repairs are torque converter failures which requires the transmission to be removed along with other services. The specialty shop has employees that are paid an hourly rate and not commission or flat rate. I have found where if a sub-contractor was paid then no questions on the labor deduction. What I am asking is can the labor for in-house repairs be deducted? Essentially an employee is paid twice to do the same job.

<<<<<I wonder if this will end up in the Supreme Court sometime next year?>>>>>> That's a great question. The order for the stay states the federal government has present a substantially strong case supporting the CTA and BOI is not unconstitutional and most likely will succeed. I don't think that honest small businesses that have been around for a while have anything to worry about. I have filed a few of these prior to the injunction and held the rest. After filing the few, the IRS already has all of the information. I wonder what the companies have done or are in the practice of doing that has caused them to file the lawsuits claiming unconstitutionality.

This just in. The 5th Circuit Court of Appeals has granted the federal government a stay against the preliminary injunction filed on December 3, 2024. All companies that are non-exempt must file the BOI report by the original deadline of January 1, 2025. A brief summary, the 5th Circuit opinion states the government has made a substantial case on the merits to maintain the CTA's constitutionality. Other words, this aint goin away folks. The mad rush is on.

I have to agree with the others, please revisit the worksheet. I tried to click on the one Judy posted but got an error. Try this one. You may have to copy and paste it in your browser. worksheet_for_determining_support.pdf

Thanks Tom, my client was a resident of CA when the house was sold. Nonetheless, I will ask about the 592B document. Also, I'm not sure at this time if an EIN was applied for. I am still waiting for that information as well. Thanks for your help!

Tom, This is the exact route that I have let the fiduciary know they have to do. As for filing this now, the deceased passed in January of 2024. I can't prep a final 1040 but can the 1041 and CA541 be filed now using 2023 software? It appears to me that I should wait until Jan 1, 2025 to file the form 1041. Currently, I have the fiduciary looking for the disclosure statement, and any associated expenses. I don't think they will get the 1099S until after the first of the year if they even get it at all.

Lee you bring up a very good point. I am the Treasurer of our HOA. I will have to read the by-laws and authority the officers have again to see If any officer can bind the HOA, I think that would give them substantial control. I have read D.13 several times and continue to do so. In all reality, no decisions can be made without majority board approval, and no board member can remove one of the officers/board members. In our by-laws a recommendation to remove an officer can be made but again the officer cannot be removed without majority board approval. Not one single member has the authority to do anything. The reason I stated the President is because he presides over the meetings and is the officer that communicates with media and gives orders to the management company. Probably the safe way is to include each board member as a beneficial owner.

You are correct. I'm currently dealing with my HOA in SC. Folks have to watch the 3rd parties as well. We received a solicitation for assistance with preparing the BOI report that was recommended from our property manager to engage with. They wanted 250.00 filing fee which there is none, and another $250.00 prep fee and agreed to file all required annual reports. We may need to file annually due to the change in board members if they are not re-elected. As it stands, I see the only board member to include is the senior officer (President) because he/she has the final say so, and is the go to person.

Yes. The original basis back in early 1980ish, was $128,000.00. The house sold this year for around $800,000.00 I'm giving close but approximate numbers. So, the basis steps up to the FMV at date of death. Thanks for confirming my thoughts regarding the gross income and zero tax liability. I feel fairly safe this would apply to CA in the same manner. CA is specific at stating if no income don't file the form but again, the house sale is gross income and no tax liability. CA states income of more than 10K then file.

New client's sister passed away. The client is the sister's executor and successor trustee per the revocable trust instrument and the will. Simple scenario. Sister is the grantor/trustee. Sister passes away in Jan 2024. Trust sells the house for approximately 800K capital gain. However, the trust gets the step up in basis to FMV at date of death. Three bene's that inherit the proceeds that are distributed per their percentages outlined in the trust. I think the fiduciary should file form 1041 to report the sale and distribution. Am I correct here? It is capital gain but end result is no taxable income. Also, the decedent was a resident of CA, no CA 541 if there was no income. My question is nearly the same here. Is the sale considered income even though there is no tax liability. Does that trigger the CA 541?

Tom, I had this very situation with my oldest daughter. Both lived in CA at the time. Ex received a bonus that he deliberating left off of the joint return. He also, filed the return electronically without her knowledge or signature. Needless to say, we had a fight on our hands and CA didn't make it any easier. This happened over 10 years ago so my memory is a bit foggy. We started with innocent spousal relief and didn't get anywhere and if my memory serves me correctly, the last attempt was equitable relief. Anyway, two years later the IRS nailed the ex-husband with the entire bill, plus penalties, plus interest and was fortunate they didn't go after him for fraud. This was also after the divorce decree stated it was a community expense. Only difference is the ex-husband was not my client. As was said, the IRS doesn't care what the courts say in the divorce proceedings. This has been quite a few years ago ten or more and I am pretty sure CA followed suit.

This is the way that I do it as well. I do have one client that has driver for both Lyft and Uber for a number of years. Make sure you get the end of year print out from Uber. Uber always takes a portion of the ride and deducts it from the final payout. If the issue a 1099K which in the past they have, the 1099K shows the gross amount before Uber deducts their portion so be careful there. Yes, this client has made over 20K generating the 1099K. Remember no cash everyone pays with debit or credit . I make sure I keep all documentation together. My client is actually making a living doing this. Sits at airports and other locations to pickup rides. It seems if one is aggressive enough it can be profitable.

A few years ago I had a client that had a multiple unit rental building. Trying to keep up with every little detail is a daunting task. The categories were kept at the building, land, lease hold improvements, appliances and so on. I too kept an outside depreciation schedule but for the tax return, I did lump the appliances that were replaced together as one entry leaving the detail in the outside depreciation schedule. Same with the income, one entry for the entire building. The client kept the detail on who paid and who didn't.