Margaret CPA in OH

Resident died Dec. 17 with balance due. Executrix will pay but is this return required to be efiled? For that matter, is the federal required as well (I have to efile all others due to numbers)? Catherine, it's my friend there, so sad, so sudden. Thanks,

KC, she has no withholding as she is a sole proprietor. She just didn't pay enough inestimated payments in 2012. Had she done what the previous accountant projected, $2000 per quarter, her balance would have been about $800. She used the funds elsewhere. I think she expanded too quickly and that her rent is really high but she is in a great location so not looking elsewhere. It's mostly about prioritizing where to put one's available cash. She rents an apartment so does not even have the option to have a home equity loan and her business assets are fully depreciated now. Not a lot of options until her parents pass away. She has told me that she is due to inherit over a million from the family owned bank but for now she really wants to make it on her own for which I give her credit. She just needs to plan better, I think. Thanks again, all.

Thanks for the quick, confirming replies. I just have to be prepared to support that, although business income, it is personal for income tax. We were getting along well until the final total then I was warned that she would NOT cash in her 401(k) to pay. I sent links to IRS payment options without extensive comments. Sigh....

As noted a sole prop owes about $4000 plus Q1 est of $2000+ so needs a loan to pay. Her bank rep and financial advisor were consulted and she will either take a line of credit or loan. She said both suggested she ask my opinion as to whether it should be personal or business. Sch C income $42,000, divs $2000, HSA and sole prop insurance deduction $4500, 1/2 SE deduction $3000. I can be persuaded that the tax is due to business income however I also can be persuaded that she is paying income tax on her earnings, not terribly unlike an employee. (I'm sometimes easily persuaded) Which persuasion does this board feel? My stronger inclination is personal. Thanks!

In an earlier post from me - I really hate these things. Too many clients have no idea what I am even asking when forms or information is missing. Grrr....

Pretty much the same as you. It is indeed a struggle getting education info and HSA increasingly. "Basis? What's that? Oh, you mean I have to get the name of the organization that I gave all that furniture and clothes to last year? Of course it was worth $800 but I don't know the value. Can't you put it down? Estimated payments - oh, whatever you told me to pay, I paid it." Grrr...

Now that is funny! Sort of like the day care provide on Car Talk - Urasus Dragon.

If using ATX, when you enter an amount in box 10 and an amount in box 11, an additional entry portion appears at the bottom "Excludable from Federal and/or State Return. If you have the resources such as reference volumes from Mutual Fund Publishing Co or the information from the investment company, you can determine the amount of US Obligations and/or non home state income. There are many choices to make and the date flows to the state usually as taxable income for the percentage of investment out of state or deduction if USO's are not taxable in the state. In box 11 you can indicate where the private activity bond in box 11 is located. If more than one state, create multiple entries such that the total adds up.

Look at the top of the input form, left column, 4th box down, Complete dispostion of a passive activity. Right column for ptp.

The contractor audit (became a client after that) ended with refusal of about $20,000 in sub payments because the contractor not only did not have the tin of the subs so couldn't write refused but also did not have addresses. I do think most of us know about the 28% withholding but, in my experience, those checks have been long gone without it or the W-9. The person often writing the checks may not know to withhold. An ongoing problem many times solved only with an audit and denial of the otherwise proper deduction. It can really hurt a business bottom line.

I found it finally by doing what I should have done - look under Options/Preferences and the last tab is Backup. That shows the path. When I went merrily down it, I found lots of things. Company folder has lots of client names at 2kb, a couple of 3kb. Formset folder must be the 5 previous backups and most of those are big numbers like 1500 to 3000kb. So I'm thinking to backup the Backup folder (which I do on my external hard drive nightly). I'm not sure about the others SFA mentioned earlier - Efiles adn EFIN Enrollment. Have to go down more paths, I guess.

Also, was the client diagnosed at a level 1,2 or 3? Unable to perform at least 2 activities of daily living for 90 days? Cognitively impaired? Was assistance prescribed?

Thanks SFA but I just want to check to see if my files are 1kb or whatever that means. I don't know where to look. Knock wood, I have had virtually no problems and surely don't want any but do want to take precautions as are others. Just don't know for sure where to look for these little rascals!

Sooooo, where do I look? What is it called? My computer builder guy unhid all folders recently I think.

I hear you....or read you as the case may be. That is about the extent of my answering capability today anyway.

Okay, now I am nervous. Please remind how to check for backups. I went to my ATX folder but can't seem to find anything logically named as such.

I have prepared them anyway and alerted the client that late filing notices would likely be forthcoming. When I still paper filed, I would put Refused in the tin box. Now I tell the client that it is no longer a business deduction and remind them - again - not to pay the first dollar until W-9 is in hand.

Line 28 link.

Thanks, Judy. Yes we were typing at the same time. I had another response when the phone rang and I accidentally deleted it. So now I must ask about a separate Health Insurance premium deduction separate from the $3334 she pays, in her words, for HSA premium? In looking at last year's return, it shows SE HI deduction of $3280 and HSA deduction of $1350. I'm wondering now if what she is calling HSA premium is actually her HI premium. Methinks the HI insurance is what she is calling HSA premiums and the $900 drug premiums are HSA contributions. Another conversation... This is about the flakiest new client I have ever had. She is a personal trainer and her records (if you could call them that) are a train wreck. She wants to be in good order and is letting me redo her QB files. Rather, I am starting over with 2013 and letting the past die. She recorded all receipts as Received Payments without Invoices so has no QB income but $115,000 in receivables. She listed each subcontractor for her studio as a separate account. Aaarggghhh! This is the first self employed HSA for me. I have had several clients with them so know the 8889, etc. but from employer contributions and distributions. Thanks again folks!

Thanks, Lion, for replying but I guess I did not make my questions clear. She did have distributions from her HSA to pay for medical expenses. She did not pay for premiums from HSA funds. She paid HSA premiums or monthly amounts to fund the HSA. She separately paid for prescription drug coverage and wrote that she can contribute to that separately up to $1800 which is her drug coverage deductible. She separately paid $429 for dental insurance. She did not pay for premiums for anything from her HSA. Should there be additional health insurance premiums somewhere for the HDHC plan? She doesn't have any other insurance expense. If she is self employed why would not the prescription and dental insurance premiums go on Line 29 page 1 of the 1040, Self-employed health insurance deduction? My question is whether dental insurance qualifies as medical insurance but I haven't found whether it does. Subsequently I did find out that she would be subject to the excise tax and will have to complete a form to either withdraw the excess or have it deemed 2013 premium. I hate these things. Employer provided insurance was/is so much easier on my brain!

Anyone? Someone with more HSA experience that I?

The utility is called restorecompletetoolinstall.exe. I found it in the KB and downloaded. I don't recall the exact search I did but it wasn't too hard when narrowing to 2012 issues. Ask again if you can't find. I'll relook meanwhile. Here it is http://cchsfs-atx.custhelp.com/app/answers/list/st/5/kw/restorecompletetool/p/26%2C56/c/24/sno/1/search/1/session/L3RpbWUvMTM2Mzk2MzYzMS9zaWQvKkZQWUxPbGw%3D

A new self-employed client has an HSA and has paid $3335 in premiums for medical insurance only. She separately paid $900 for prescription coverage. She says she has a deductible of $1800 so can add up to that amount. She received a 1099-SA with distributions of $687 but no 5498-SA showing total contributions. This is the first HSA I have seen for a self employed person who pays; all others have had contributions from employers and both documents. My reading is that as she is under 55, contributions in excess of $3100 are not deductible and must be withdrawn with earnings by filing due date or pay 6% excise tax. This didn't happen on her 2011 return, though. What to do with the additional $900 in prescription coverage? She also pays $429 in dental insurance. Are these also deductible on page 1 as additional medical insurance? I have found prescription insurance stated as medical but not dental although it seems to me it should be considered as medical. Thanks for help with this -

Agreed!

I don't think that is allowed any longer since maybe 1986 unless it's part of the general sales taxes and lower than income taxes. Check to be sure that vehicles qualify as added tax, I don't recall.