Corduroy Frog

Depends on your state and your software. Drake (for example) allows you to enter a different taxable amount for Federal and State. Dividends which are tax exempt for Federal purposes are not always honored as tax exempt for states. Your state is Missouri, so I don't know.

Thanks to all who responded. Good to know there are other old fossils besides me.

I suppose I am sorta giving away my age when I ask: Is there a FONT that produces a very noticeable distinction between a "6" and an "8"?

Thank you. Putting numbers into this scenario. SEP $13,800 apiece for husband/wife partners, Total SEP $27600 if they choose, and doing so means they can't have a Roth. But their total (modified) AGI is $228,000 which is under the $230,000 which by its own merit would allow a $7000 Roth if no SEP,. But if no SEP, their AGI rises to $245,600 ($228,000 + $27600) and the absolute phaseout for allowing a ROTH is $240,000. So either decision they choose results in no Roth.

Thank you. Client is an LLC, disregarded entity choosing to file as a partnership. And yes, Drake is forcing an entry on line 16 of Schedule 1. Research from IRS Pub 590-A states specifically "IRA" and does not include SEP in the language. Apparently the pervasive feeling is that the language implies SEP should be included, and Drake has decided that as well. The language would be less confusing if all manner of deferred retirement plans were stated, but that is not the case. Even the IRS has not so stated. Thanks again Judy. Others who have viewed the question have not opted with an opinion and I don't blame them.

Struggling with a client who wants to contribute to a ROTH, and borderline to possible phaseout. The phaseout worksheet, so long as the $230,000 threshhold (MFJ) is not exceeded, allows $7000. However, from the $7000 the taxpayer must subtract amounts for "other IRAs" There is no contribution for an IRA, but there is for a self-employed SEP. When the instructions refer to "other IRAs" does this mean strictly IRAs, or do they really mean IRAs to include SEPs? They have no IRAs, but Drake is subtracting SEPs. Is this correct? Thank you in advance.

I think the critical factor on deducting losses is the intent of making a profit, if not currently, an intent to stay in business long enough to make a profit. I believe this factor is so overwhelming that little else matters. The 3 in 5 is an IRS guideline (and a guideline they would be very happy to apply). Of course, the client will always claim the profit motive is there, but the practitioner must use judgement. One good sign is if losses are declining over time, or losses can happen in economic situations (such as pandemic). Example: I had a building contractor suffer losses in 2021 when the price of lumber went up exponentially on fixed price contracts. Farmers have a longer leash, and an ultimate sale of farmland will usually overwhelm years of farm losses. And not working farmland productively will ultimately ruin the value of the land, unless timber is grown. Some claims of profit are ridiculous, such as horse breeding. I have lost some clients because they have insisted on claiming large and ridiculous losses.

Hobby is a bad deal. Even though you can't take a loss, you still must claim gross income as "other income" without deducting any expense. And yes, it is taxable.

Talked to Drake again this morning. Their response was "You must have a smart phone to obtain the authentication feature. We don't have an alternative and we're not going to have one." Very bad....

Judy, I went to the topic but all the various posts simply tied my brain in knots. I called Drake today and told them I would not use that crazy rectangle thing and they haven't called me back. If I am a poor tax man, I'm an even worse IT man. When Drake has a solution I'll post here. Thanks to all

Thank you Judy. I'm one of those people who don't use a smart phone so I can't snap that crazy-looking rectangle. I'll call Drake tomorrow. But thanks for your very detailed step-by-step instructions.

Just e-filed my first return last night and received the ack back today. Smooth as silk. Nothing requiring authentication. I was expecting to receive a six-digit (or more) thing to enter for authentication, but did not. Is Drake handling the authentication at their transmission level??

You've got to wonder whether these upgrades are really to "serve you better" or whether they're really for Microsoft.

The newsfeeds have stopped since I followed Lee's instructions.

I followed Lee's instructions, even though some of my icons were different (probably I have a different version than Lee). So far, so good. If they recur, I'll holler. Thanks

Have been using Firefox for years, instead of Google Chrome. After years of use, all-of-a-sudden I'm getting interrupted by News messages from Firefox. They are all news, but rather obscure in the current stream of current events. And of course, you can click on the messages to see more (I don't). Can anyone tell me how to block these messages, or if this can't be done, maybe recommend another browser? I've been hearing a lot about DuckDuckGo.

Thank you ladies.

A client has approached me about changing her LLC from a partnership (1065) to a subchapter S (1120-S) She believes this will reduce SE tax. I know this is not totally true. Admitting to my ignorance, honestly I don't know how to do it, or if it can be done without shutting down the partnership and beginning another entity from scratch. Can someone furnish a link to IRS code or reg if it is allowed. A link to a published commentary containing advice would also be helpful.

If I remember Farmington is on 8 mile rd. Thank you, and stay warm up there.

If you don't wish to publicly publish Brighton as your town, you can send me a private message.

Mr. Pencil - you remind me of some tax guy I met in Michigan. By chance, do you (or have you) practice in Brighton, MI?

Good points from this group. I wonder if it is my responsibility to file an amended return for the error. Probably my ethical responsibility to inform him it should be filed, but I don't think I should be required to do so.

Correction. My edit timed out. He is not my employee. He is my customer. Dan, thank you for your response. You are quite authoritative.

Dan, to specifically answer your question, he is now my employee. I saw this in reviewing a prior year return. I understand there are problems with a 1099 and a W-2 for the same year. The 1099 payment was made prior to start date of employment. I was told the CPA did endorse the plan. There are times I am mistaken but don't deal in untruths.

In this new age, only military personnel can deduct moving expenses (I think. Correct me if I am wrong). A taxpayer from Nashville moved to Huntsville Alabama to take a new job. Prior to employment, his new employer gave him $10,000 to move, and issued him a 1099-MISC for $10,000. The $10,000 was to pay for moving expenses, and he was allowed to apply expenses against the $10,000 in revenue. He claimed the revenue on a Schedule C, as well as the expenses appertaining thereunto. Is this allowed? The question is NOT whether the IRS likes it or not, nor is the question whether it is ethical. The only question is whether it is allowable. The deductions are not business expenses, but personal expenses. But the revenue is claimed as well, and is not business revenue. Not my customer. But a CPA at the new employer endorsed the idea.