GLGACCT

Thank you both for the replies.

Printed return with Federal Client Letter, with Federal Estimates, State Client Letter and State Estimates combined. Client wants to pay estimates via Direct Debit. On the State Estimated Letter it says: There is no payment due for the 1st through 4th installments. Yet coupons are attached with payments and on the E-file tab all looks correct. Changing to mail option, the State Client Estimated letter is correctly spelled out. Federal estimates print correctly with Direct Debit: The first payment in the amount of $XXXX is due on April 18, 2023 (electronic payment). Is there a check box somewhere that I am missing for State?

Thank you for the replies. On this estate, previous returns have been filed and this will be the final return. The executor wants to file the tax return and mark it final as to avoid any future problems. There is only one item of income to be received and little to no expenses, as this estate has been open for a few years. When marking the return as final, the income becomes distributable via a K-1 and the sole beneficiary/executor will pay tax on the income. Prepared a few 1041’s, in the past but all have been over $600, never had one under $600 in the final year. This estate is under the minimum threshold to file, but it’s the final year and a distribution of cash will be made to the sole beneficiary. The $600 threshold is tripping me up. If TP wants to file a final return, is the income fully taxable to the beneficiary via K-1 as the estate is terminating regardless of the $600 threshold or do you override the return inserting the $600 exemption even though the exemption is not allowed in the final year, but the return is under the $600 threshold (have not come across any examples that this is allowed) or is there another way to finalize that I am missing?

Will be filing a short tax return to wrap up an Estate, the income will be under $600. On a final return the income would be passed to the beneficiaries via a K-1 and the exemption of $600 will be lost. However, this estate is under the minimum threshold to file, but it’s the final year and a distribution of cash will be made to the sole beneficiary. What is the correct way to file the final return?

Lawyer elected a calendar year on the SS-4 for a Decedent's Estate 1041 rather than a fiscal year. Knowledgebase has the following info: e-file Rejection: F7004-904-01 - "Form 7004, the tax year ending date ("TaxPeriodEndDate" specified in..." in an 1120, 1120S or 1041 return. Full Rejection Text "Form 7004, the tax year ending date ("TaxPeriodEndDate" specified in the "ReturnHeader") must match the data in the e-file database unless one of the checkboxes in Line 5b - "Initial Return", "Final Return" or "Consolidated return to be filed" is checked." Resolution This can occur when your client is filing as a calendar-year filer, but the IRS has their Employer Identification Number (EIN) on-file as a fiscal year filer, or vice versa. Check your input to confirm that the fiscal year end date is correct. If it is, contact the IRS at 1-866-860-4259. Confirm the fiscal year date they have on record matches what you have on file. The fiscal year is correct for the decedent, the SS-4 incorrectly shows a calendar year. Should line 5b Initial return be checked as that is for a short year in order to e-file the extension and if so will any other complications arise when the return is finally submitted or is there another way to correct this issue?

The correct citation is § 1.6107-1(b)

From IRB 2012-11 8. Retention of Records Proposed §1.6695-2(b)(4)(ii) required that a tax return preparer must retain the records described in §1.6695-2(b)(4)(i) for the period ending three years after the later of the date the tax return or claim for refund was due or the date it was filed. All tax returns for the LLC's should be kept by the company permanently, not by the preparer. You may not want to volunteer any additional information as others have mentioned.

This is what Abby was referring to: However, it can be done but will take some effort and may not be worth the time involved, because Kofax interprets those fields as a text field, those fields need to be deleted including the boxes themselves (otherwise you have a check box within a box). Then the check boxes or radio buttons will need to be inserted for each line and formatted for appearance. There may be other ways, but again may not be worth the time involved when you can mouse over the existing box and place an x.

Thanks for the informaton. To clarify the executrix is a beneficiary along with another sibling. Each beneficiary wanted a house, travel was required to both states in order to settle the estate. However, the executrix's inherited house was damaged in the storm and was in the process of being deeded over to her. While still in the Estate at the time of the storm, it is technically hers.

Out of state client is settling her father's Estate, she needed to travel two different states. Is mileage tax deductible on the 1041? Also, one house was damaged in the recent storm, and she needed to travel once again to another state, would that also be deductible as the house has not yet been transferred out of the Estate?

That is the one, I am on a slightly older version. I believe there is a free trial on the Kofax website if you wanted to demo it first.

Just looked again at the site it only gives town and state no address or telephone.

IRS website Directory of Federal Tax Return Prepares https://irs.treasury.gov/rpo/rpo.jsf

Inside ATX, you print the Questionnaire to a pdf file. Open the file you just created in Kofax. At the top of the screen go to Forms. Select Form Typer (this converts to a fillable pdf). Save it, then upload or email it.

You are correct, in NJ you can not offset a k-1 loss against other income, hence the carryover to be used against future k-1 income. If you have income next year, the full net profit from next year's k-1 will flow to line 21 of next year's NJ 1040, and then a portion of the loss will appear on line 35 of next year's NJ 1040. Lines 30 - 35 are reductions and will reduce NJ taxable income. Unfortunately, you will not be able to reduce taxable income in NJ this year.

It is my understanding, that NJ does not allow you to take the loss, but rather carry it over to future years to offset the income. If you had income, column A would be filled in on NJ-BUS 2 and appear on line 21 of the NJ-1040. Then lines 7-11 on NJ-Bus 2 would also be filled in offsetting the carry over loss but be reduced by the adjustment percentage on line 10 and appear on line 35 of the NJ-1040 as a reduction. Also, in NJ if you are paying taxes to other states, you do get a credit as well see NJ Sch NJ-COJ/NJ-DOP.

Have you looked at NJ - Bus 2?

Unfortunately, no answer to your question. But have you talked to the TPA who set up the FSA plan, as he may be able to offer more guidance on the matter.

TP calculated non-taxable portion of a 1099-R based upon a percentage when he rolled over the funds into an IRA over 15 years ago. TP is now deceased. How should the taxable amount of the 1099-R be calculated for the final return? Can probably calculate using the simplified method, but would not know what was taken over 15 years. TP did his own returns by paper every year, records are lacking. Client will be going on extension. Any recommendations?

Unfortunately, can not get the prior year worksheet from the previous accountant. Used two programs to recalculate the amount of the tax free benefit as well as doing it by hand and came up with the same answer. However, the non-taxable portion does not agree with the prior year tax return, only by a few hundred dollars. I have the annuity from the current RRB-1099 and the year of retirement. Could the annuity have been different years ago or is there a missing component?

Thank you for the response, I looked under the tabs and do not see anywhere to make the adjustments. The only thing I can do is manually adjusted Interest Income on the NJ 1040 and then change the business income by the Interest and also to deduct the remaining 50% of meals. I am looking for validation to see if this is the correct way to do this or am I missing something?

Currently, I am evaluating ATX software, while entering in a Schedule C with Business Interest Income and meals among other things the federal return works perfectly. However, for the State of NJ adjustments need to be made to Federal and I do not see a way to do that other than overwrite the numbers manually. I am sure I am missing something somewhere. In this particular case Business Interest Income on Federal is part of Schedule B, for NJ it needs to be adjusted and called Business Income, also, the State of NJ allows 100% meal deduction. Is there an adjustment screen or do you manually override Interest Income on NJ and add it to Business Income and then also reduce Business Income by the remaining 50% of meals. Any help would be appreciated. Thanks