Sara EA

I was taught to write explanations line by line for those that changed, although this no longer appears in the instructions. This would certainly abbreviate your text. For example: Lines a, b, c : Corrected Form NEC received. Line d: Form 1099-MISC added. Line ?: SE tax changed as result of above. No need to tell them how much the refund is, as that's in the 1040X.

I have a client who has been a miner for years, long before it was the in thing. He just put in a solar farm to help power it. In all these years, he has never earned enough crypto through mining to cover his gigantic electric bill. It may take lifetimes to cover the cost of the farm. I suppose if the price of the crypto he earned has gone up a whole lot in value these costs may be covered.

Um, Pacun, you do realize that in two years you could have zero. If you buy the rentals now, in two years they may be valued more, maybe less, but you'll still have something. And you also must realize that although your initial post said to corp would be "investing in the stock market," crypto is not stock.

Do you mistakenly have the property marked as Sect 1245? UT defaults to that. and you have to change it to Sect 1231.

If the client used MACRS, there isn't depreciation recapture on the real estate portion. Instead, basis is reduced by the depreciation allowed or allowable, increasing the cap gain. Gain is calculated on 4797, not the Sch D worksheet, and transferred to Sch D. If they used ACRS, different story.

Pretty clever to leave out bottles as "suggestions." When I worked in the office, clients often brought doughnuts and candy. I've never cared for sweets, but everybody else in the office enjoyed them. Once I got an Edible Arrangement. Now that I enjoyed. A couple of times a season clients would send in lunch for everyone, which was much appreciated. Fancy booze and wines came in too, but seemed to disappear. Go figure.

As long as the return is submitted by midnight April 18, the debit payment is considered timely. On the last day it sometimes takes a while to get acknowledgements, but as long as it was submitted it's still timely. For those last-minute filings with instructions to debit on the 18th, it may take a day or two for the debit to occur, but still considered timely because the instructions were there--same as if you mailed the return and it was postmarked on time but received later. I still have a stack of returns to do, and a bunch with missing info. I'll get some of those out tomorrow and spend the rest of the day figuring out how much the others have to pay with their extensions. Instead of having people on extension pay 1st quarter estimates, I'm adding the first quarter to the extension payment so the excess will be applied and cover the estimate. Sunday will probably be file extensions day. Tuesday will be SLEEP and EAT day.

Turtle poop? Why no cow flop?

There are no current amnesty programs that I know of. I had a client who requested amnesty when it existed, and IRS requested six years of returns. They did look at them and asked me lots of follow-up questions, so be careful. Well, they asked the attorney, who asked me. It was the one time in my career I was a Kovel accountant.

I have just called it a day and am drinking a nice cold beer. (Could be classified as any of the above.) Soon I will get ready for bed and have a hot cup of tea and see if I can get through ten pages of a book. How I miss reading good fiction, although some of my clients' tax docs might fall under that category.

I think CA is the most complicated. I was taken aback to realize they still allow misc 2% deductions that are long gone from the federal so you don't think to enter them. With MA you have to be careful that state AGI is correct. In UltraTax, it populates from Box 1, but that's not the number MA uses.

Quite a few are posting that they know they don't charge enough. Don't give your work away. If you have spent time on education, spend time on a return and with the client, charge for it. If it takes work and multiple calls and emails to get needed forms or info from a client, charge for it. If a client contacts you often throughout the year with this or that question, don't forget that either when you decide on your fee. I work at a firm and am paid regardless of what the client is charged, so I'm not making more or less money based on my billing. I just try to charge what my work is worth. We all have clients in trying circumstances and don't raise their fees sometimes for years. We probably have a client or two whom we don't charge at all some years. Then there are those who consume our time. Like one I had who asked one month about the tax consequences of selling a commercial rental. Lots of work on that question, calculating depreciation etc. Next month he asked about selling a different rental. After that it was about maybe gifting one or the other or both to a relative. Yes, his tax prep fee that year went way up. On the other hand, a client contacts me every month or two all year with this or that issue. I charge him $1500 for his individual return and don't increase his fee because I feel I'm already being compensated for the extra work. I don't usually charge for help with W4s or questions about potential 401k or IRA distributions either. I'd rather folks ask before the damage is done.

I'd charge about $500, allotting maybe $100 to the Sch C as a professional fee deduction next year. The owner of our firm said that all new clients start at $325 this year, and so far no one has balked (although we rarely take new clients so there weren't that many to complain). jkl, HRB had to have a birthdate or wouldn't be able to efile. HRB charges a lot for HOH filing status and refundable credits, if she had any of those, or maybe she got a refund advance?

In this case, the trust has its own EIN and is receiving tax docs in its EIN, so it has to file a return. If the grantor retains power of appointment, it is a grantor trust and the 1041 is blank with the explanation that Reg 1.671-4(A) governs. ATX must have a box to check for that. Then all the income and expenses go on a statement attached to the 1041 and end up on the grantee's return.

SNAP and WIC aren't expiring. Those programs along with Medicaid had expanded eligibility as part of covid relief. They're just going back to the way they were. Interesting thing about Medicaid is that if you were eligible at some point during the pandemic, you could stay on it and didn't have to recertify even if you went back to work. Now recipients have to recertify like they always did.

I don't think it's necessary to attach anything, and I don't think the IRS will even notice the attachment. The taxpayer will get a 5498 and so will the IRS. It will show the rollover.

Some expenses can be deducted on both returns. Other expenses can be deducted on one or the other but not both. I can't be of more help without knowing what expenses you're talking about. Best to look at the 706 instructions line by line for each expense. I do a lot of estates but have only done one 706 in my long career. (Not counting the one that was the final exam for one of my Master degree courses.) Same as you, the state had a lower requirement than the federal but required a proformaed Federal 706 attached. It was NOT fun.

I'd adjust the carryforwards too. Or not even bother is there is no chance the client will use up those losses in his lifetime. Speaking of losses, that $3k loss allowed to offset ordinary income has been the same since the beginning of time. No inflation adjustment ever. Perhaps congress doesn't like losers.

What expenses are you talking about? Is this a 1041 or 706? Items that are deductible on individual federal 1040s are often deductible on state returns as well (e.g., classroom expenses and student loan interest). Some aren't (e.g., bonus depreciation in nonconforming states). You're not really deducting it twice; it's just that some states allow certain deductions and not others, just like the federal allows some and not others. Two separate taxing authorities.

Using the Supreme Court's ruling, Ann gifted Bob the lot and the realtor the commission. That won't work on the tax return though because there are tax forms that need to match the returns. Ann has a 1099S for $10k and a basis of $5k + $3k selling expense = $2k gain. Realtor has a 1099 for $3k income. Bob bought for $10k (matching the 1099S) so that's his basis. Or in harmony with the SC, his basis is hers, $5k. Ann must file a gift tax return for the $17k she gave Bob.

Oil change records record mileage and may help here. I was at a liaison meeting once when the IRS person presenting said the only vehicle IRS believes has no personal use is a cement mixer. The workers may take the vehicles home at night, out to lunch, to the bank, etc.

One can either be angry or chuckle when a client tells YOU how to do a tax return. Just this week a client told me the cost of her teaching certificate was deductible as an employee business expense. I told her that went away in 2017, plus she isn't itemizing. Then she told me again it was deductible. She wanted to know what line a friend of hers should put her classroom expenses. I told her but then she said that wasn't the same as she read on the internet. I told her if she didn't trust me she could pick up her docs. I went from chuckling to testy.

Forced day off sounds like a welcome snow day for school kids. Enjoy it and sleep late.

Ringers, this is clearly a problem for after tax season. Just the time you spent on the phone could have produced a tax return or two or three. Put the new client on extension and deal with it in May. Warn him that your fee will be humongous. I would also continue with the joint venture; even though it's not correct the bottom line should be the same. I would worry more about having to explain those huge losses. Are they for real?

I have had the same experience as Michael. I didn't prepare the original returns though, just fixed the six years the IRS required. They did question some of the figures I calculated, but I had substantiation (and in some cases explainable inference) and no problems. Clients didn't have to go to jail but paid much more in penalties than they would have paid in tax if they'd reported correctly all along. And this was when there was amnesty! I think many tax pros freak out about penalties. I've been to enough meetings with IRS agents and liaisons to understand that they don't want to break tax professionals--they do consider us helpers. They look for patterns of abuse and go after those preparers. If you have numerous clients with missing FBARs you'll be looked at differently than someone having the one.