Sara EA

Kathy, of course there's nothing wrong with educating yourself, but I draw the line at sharing my certainly incomplete knowledge with someone who will use it for a life-changing decision. People should get solid advice from SSA (the folks there are really good in my experience) or work with a financial advisor--NOT their tax preparer. Over my career I have had several people question me about the tax implications of getting married. Really? I would think that people decide to marry because of love, commitment, to make a relationship permanent. Money might enter into a decision to do a prenup, but to get married? Talk to a marriage counselor, not your tax preparer.

I consider SS out of my bailiwick. Sure, I'll advise clients on how benefits will affect their tax situation, but that's where I draw the line. When to collect, on whose record, etc. are complex and I don't want to be responsible for giving advice that may end up not being in the client's best interest. Same goes when clients ask us legal or investment questions. Go ask an expert in those fields. Of course they ask us because they don't think they'll have to pay us extra. We had a client who called with a legal predicament and when we recommended he go to his lawyer, he admitted that the lawyer charges too much. Stay in your lane.

Anyone remember how the IRS functioned during the last shutdown? We have several audit submissions awaiting IRS reply. Will these deadlines be extended? The return extension deadline is approaching. Will Oct 15 returns be processed? Final question: Is it time to donate to this site again?

A woman I knew who was the bookkeeper for a nonprofit said she fell in love with bookkeeping in high school. When they'd pass out those practice packets with journals, checkbook registers, and fake bills for the cash, she'd take it home and complete it all in one night. Another woman was a scientist at a cosmetics company until she discovered Quickbooks. It was love at first sight. She abandoned her science degree, and now does bookkeeping for many small businesses. Some people are just born to compute, just like some are born to make music or race fast cars. Have people changed so much that fewer are being born to compute, or is the political/education system telling them that only STEM degrees count? Not everyone has that aptitude, ya think? Good thing, or who would make the music?

TexTaxToo, antiques, artwork, and rare coins and stamps are examples of items that may not be in good condition but may be very valuable. Cleaning old coins to make them look better reduces their value, and antique furniture that looks its age is the reason it's worth money. I remember tables at a Yale hangout where a century of students had carved various messages, names, etc. On sight, they were hardly in good condition, but I bet they'd sell for tens of thousands each. Also think about some famous paintings that have been stolen and stored in not ideal conditions. They're not in great shape when recovered but are still worth millions. Please give us a cite that says clothing/furniture over $500 must be appraised. Did the law change?

Over $500 requires Form 8283. Over $5,000 requires an appraisal. The $5k applies to like-kind items, so if you donate clothes all year long and the total FMV is over $5k you have to get the whole lot appraised. Same with furniture.

If FMV is over $5k, the client needs an appraisal. Is that what you meant by "approval"?

I just got a "secure message" from Detroit. No explanation, just click the link.

Perhaps the gambling winnings increased his income enough that his investment income became subject to NIIT. Take a close look at the math on the 8960.

For IRS purposes, his tax home is TX because that's where he spends his time. A quick glance at WI law says if you are domiciled in WI, you are a resident no matter where your tax home is. Since he intends to return to WI, that's his domicile. Even if he decides he'll stay in TX, he'll still owe tax on the rental income in WI (as a nonresident).

I use a small community bank, and even there all I have to do is click on the check number and up pops images of the front and back of the check. Have your clients tried that?

I have not noticed an increase in spam calls. I've used NoMoRobo for years and it's effective (and free). Get it. Between that and Comcast having a pretty good spam filter, I don't get many. Occasionally I get a call that the system announces to be from "potential spam"! or Anonymous. I have noticed a huge decrease in spam texts. For a few months I was getting multiple texts per day because there was a "problem" with my account (Netflix, Amazon, bank, PayPal, or unidentified account) or delivery of a package. I blocked a bunch but it did no good. Those have thankfully disappeared.

This is not "one little mistake." A heck of a lot of people had their personal contact and tax return data given to parties that have no business accessing it. How would YOU feel if your (and your family's) name, address, email, Soc Sec # , and income amounts and sources were shared with some anonymous others?

HRB, of all entities, had to know this was against the rules. When I worked there way back when, it was drilled into our heads. When the company started offering bank loans, mortgages, financial services, etc., each client had to sign a waiver to share their tax return info with the relevant subsidiary. I did read somewhere that some tic in the software allowed this info to be shared without the companies having full knowledge. Lawsuits are going to fly in all directions, and the offending companies may be fined out of existence.

I had a partnership with eight partners. As each one died, his or her heir got stepped-up basis on the value of their partnership interest at the time of death. By the time the last one died, there were eight partners including a trust with 12 beneficiaries! Actually, by the time I inherited this return, several partners had already died and basis had never been adjusted. Nothing had been sold, and there were always profits, so no returns had to be fixed. I spent a great deal of time making spreadsheets to calculate the correct basis for each partner. That's what you'll have to do. Make sure you charge for it! (Alas, in my case, our firm had handled this partnership so it was our fault that basis had never had been reconfigured, so I couldn't add a couple of thou to my fee.)

No Section 121 exclusion because she doesn't meet the 2 out of 5 year rule. Her basis is what she paid for the home plus major improvements minus depreciation. Yes, it goes on the 4797. I don't understand the desire to lower her gain. She made money from the investment and has to pay a fraction of it in taxes. That still leaves her with plenty left. When any of my clients tell me they are going to sell a rental property, I ask them to give me the sales paperwork when they do so I can tell them how much to put aside for taxes. That way there are no surprises and they expect the tax bill.

I once watched a squirrel burying nuts in my front garden. (Why not? Nice soft soil, no hard digging.) A chipmunk was hiding under a hydrangea in the other front garden. Every time the squirrel left to go get another nut, the chipmunk dashed across the walk and unburied the last nut, took it home, then returned to its hiding place.

The original owner of our firm seemed to have no rhyme or reason to his fees, until it hit the new owner and me that he was often charging based on ability to pay. That applied mainly to wealthier clients, who had exorbitant fees. Those with six-figure incomes with little more than W2s, Sch A, and bank interest were on the hook for $600 or more (and this was 20 years ago). A family-owned group of businesses that was making tons of money was charged triple just for monthly bank reconciliations compared to our other business clients. When he sold the firm, some of the clients did question their fees. We reduced most of them, many before they asked. So charging based on ability to pay works both ways. Like most of us, I do a bit of pro bono work and have a few clients whose fees I haven't raised in forever because I know they are struggling. For the majority, though, I am not one to give away my work. I have professional credentials, years of education and experience, and I give every return the time including research if needed to best serve that client. For this, I should be paid. We don't have many EITC clients, but even though they are low income we don't undercharge. There are risks involved with that category, and the extra due diligence takes time.

We use UltraTax for most tax prep, and we can enter income in all the boxes, so I don't think the IRS doesn't allow it.

Oh yeah? I had a client who had self-prepared for years and had depreciation correct down to the penny! I was impressed. Look at the prior year returns to see if depreciation was ever taken, but you don't have to amend or do anything with them. The 3115 will handle all the missed depreciation. Since the adjustment will increase current income, I believe there is an automatic election to spread the income over four years. You do have to calculate the missed depreciation. Every time I do that, I wonder if newer preparers even know how. I think we've all become a bit stupider by having software do so much math for us.

She was single at the time of the gift. Even if he was alive, gift-splitting between spouses is an election so you wouldn't need his SS unless they chose to split their gifts.

Bequests come from corpus. The beneficiaries will not get K1s for bequests. The charity will get the income and the rest of the corpus.

$203 is an odd amount, so this may be what it cost Habitat to come get the furniture (truck, labor, etc). In that case, your client is paying that bill for them so I'd add it to the donation. This s kind of like the fees that credit card companies charge for online donations. Donors are given a choice whether to pay it for the charity. If they don't, the charity pays it.

Normally it's an easy fix for congress to amend legislation to correct oversights like this. With the divisiveness in congress now, however, I'm not confident that they'll agree on anything.

I always preferred live. Hanging with other tax geeks was fun, and some questions people asked really helped figuring out things you hadn't put your finger on to ask. Since I moved to VA, however, live seminars are so far away that they would require overnight stays or hours on the road. I've adapted to online and find I get a lot out of virtual seminars if I keep taking notes and stay focused. I dropped my membership in NAEA this year, after almost 20 years. Seminars were way too far away, the online blog was sometimes informative but filled with posters just trying to be the smartest person in the room, and I realized that all I got out of my membership was a quarterly journal. The state chapter fees increased this year, and I decided that paying $365 for nothing but a journal wasn't worth it. In CT, at least I got to go to live seminars and network. They were expensive though, as NAEA spends a lot of its funds on lobbying and doesn't grant much to the state chapters to offset the cost of seminars. NATP seminars were more reasonable in price, but often they were a little too basic for me. I have retained my NATP membership.