Sara EA

PA preparers correct me if I'm wrong, but in my experience local and school taxes for W2 employees are withheld for the exact right amount. If you paid too much I believe you have to give an explanation. The only times I've had to file PA local and school returns is for Sch C clients who don't have withholdings.

No idea what HRB would charge. I would charge at least $150, more when I have to do the currency conversions. You may also have to determine interest, convert it, and add to Sch B or Form 8938, which is another charge. Get paid for your work.

In 2022 CT is no longer taxing pensions if AGI is less than $100k MFJ and $75k everyone else. Couple has AGI of $110k. If they file jointly their pensions are fully taxed. If they file separately, none of their pensions is taxed. The difference can more than make up for the increase in federal tax. Is this for real?? CT only did this when the powers that be finally realized that when people retired they skedaddled out of the state. Did they not think it through?

Maybe I've gotten fed up with 100-page brokerage statements, but I've been entering just the totals for each type of gain (short, basis reported, total proceeds, basis, wash sale total; then onto short, basis not reported etc.). If there are only a few entries I do the trades individually, but the totals end up with the same bottom line and that's really all IRS cares about. Remember when we had to send the brokerage statements with the 8453?. We all knew they just went into a dumpster in Austin and if the IRS ever audited any of those returns they'd ask for the statements anyway.

If there are no employees at all, and the owner doesn't work there either, how does the corp make money? If the corp paid the health insurance, who did the paperwork and wrote the check, a volunteer? Unless you've stumbled across the only corp in the world run entirely by bots or AI, I'd pass on this return.

Just like all the sales people who entice people about the tax credits for solar panels. Nice credit if you buy them; not eligible if you lease them like many people do.

If no one wants them, at least they can be put to good use! I had an estate that contained a bunch of "old liquor bottles" that ended up selling for over $22k.

The penalties for not filing 1099s are large enough that I wouldn't want to take the chance. If your experience makes you comfortable with nominee choice, go for it.

The problem with using the nominee route is that you have to issue 1099s to the nominee.

Tom, congress often writes laws that give the secretary of whatever agency the responsibility of determining the operational rules and regs. In the case of tax, most in congress don't understand the whole thing so often defer the practicalities to the Sec of the Treasury. That's why IRS issues so many regs, just making whatever congress passed workable. "Sound tax administration" is probably something left to the Secretary and thus the IRS. I think the agency did the right thing; I just don't know why they took so long to notice this could cause taxpayers problems. Sure, some states didn't give out the money until late in the year, but the others paid out earlier and IRS could have studied the matter then and applied whatever decisions they made to the late comers.

Enter the 1099B as usual. For the sales that occurred after death, start another line and put "IRD reported by {estate EIN}." Then enter the after-death amounts as a negative number. Do the same for any interest or divs paid after death. Be sure to include those amounts on the 1041 with the line reading "IRD reported to {decedent SS#}." In essence, you're reporting the 1099B amounts to match the IRS records, then backing out the amounts that belong to trust. You will have to comb those 68 pages for before and after transactions, so charge accordingly!

Only taxpayers in GA, MA, SC, and VA have to report their payments as income if they itemized in 2021. All other are home free. The 1099MISC presents a matching problem though. I'd put it in and then back out all but a dollar with the explanation. If you back out the entire amount, the statement will not be sent with the efile.

You can always amend the 2021 estate return, changing nothing but marking it as final so IRS isn't looking for another one. That puts the onus on the beneficiary to voluntarily report the income. Remember that the Code states that all income regardless of source is taxed, unless exempted by the "grace of congress." Six of one and half dozen of the other. I'd go ahead and file the final 1041. Remember the explanation as to why the estate has been open for more than two years.

Me too.

Tom, you only have to amend if you included the payments in income. The IRS statement pretty much says that none of these payments is taxable. I think they did the right thing for "tax administration."

While you don't have to file the 1041, if there are probate and legal fees that are substantially more than the income and can benefit the beneficiary, go ahead and file.

And after all the trouble just opening the notice from VA, it tells you to go to their website to get your 1099G!

Income is taxed in the year received, so the divs will be taxed to the estate. Now to solve the $10k mystery. The taxpayer must have had some kind of basis in whatever it was.

Just make sure he had some foreign income, details of which should be buried in the brokerage statement somewhere. The credit only applies to foreign income so the carryover will reduce the US taxes on that income. I had a client with several thousand in FT credit carryovers who kept questioning me about why I wasn't applying them. He had liquidated all his mutual funds and had no foreign income, so the carryover was wasted after ten years.

Of course it's not illegal to merge personal and business accounts, but it sure creates an accounting and tax audit nightmare. Was that gas fill up for the business van or the wife's car? The trip to Staples for back-to-school supplies or office copy paper? We have clients whose monthly bank statements are four single spaced pages of everything from morning coffee to bars to the occasional business website bill. Their reconciliations cost a lot because they take so much time. Also makes it impossible to tell how much money you're making or spending--should you raise prices, buy that new piece of equipment?

He should just apply for an EIN--it's easy enough to do. Best argument in favor is that he won't have to give his SS number to clients. Operating without an EIN makes me wonder if his business banking is combined with his personal, which is a big No No!

Best to file an extension.

This guy does not need or qualify for HOH. To satisfy due diligence, you need documentation that son lives with him. What do you list on Line 5 of the 8867? Report card? Doctor statement? Mom's testimony isn't listed as one of the supporting docs. IRS doesn't usually complain unless both parents claim the same kid, but still....

Years ago SSA sent people annual statements showing their projected benefits calculated on their past contributions and projecting their current income to stay the same for the rest of their working years. It's amazing how many business clients found religion and began showing more realistic profits. Like others, I would ask a lot of questions of this guy who supposedly supports kids on $12k a year in VA. He certainly doesn't need HOH status as single would yield the same result and prompt less suspicion. He can't supply more than half the cost of the household on that income. I'd have a heart-to-heart with the guy and disengage.

In addition to the Code, the instructions for Form 5695 do say when installation is complete. Don't know why FAQ say differently.