Corduroy Frog

Does anyone remember how H&RBlock started? And why their home office is in Kansas City? I'm not old enough to remember, but apparently the 1954 tax code was brand new, replacing the 1935 code. In those days the changes did not occur every year - they didn't have software whereby congress could get away with screwing around with tax law (even in the middle of tax season). But the changes in the 1954 code were prodigious and people needed serious help. So H&R Block was founded to meet the needs of the people, and were located close to the IRS service center in Kansas City. For H&RB, the rest is history. The original box office tax store. I haven't seen much of Jackson-Hewitt and Liberty in recent years - maybe TurboTax has eaten their lunch. Yes, the often-advertised "free" TurboTax. Get it and [poof] you will be just as smart as a CPA.

Does anyone remember Roni Deutsch? Never saw as many litigious charges against a firm in my life. Deservedly so, if you believe the fallout. All industries have ethical concerns that can fall by the wayside in the light of enhancing revenue or puffing their wares. Bankers do not necessarily have your best interest at heart - in spite of any outward image. Life insurance industry, ditto. Stock brokerage firms as well.

If you do right and act right, there will always be those that will disparage you. I myself have had times when I was not the most popular kid on the block. Once I went nearly 12 months without posting at all because some were indignant with my questions. There is a benefit to continue - to help others and receive help yourself. I don't know who or what has made you feel unwanted, but unless it is a substantial human element, there is no need to stop.

Yes a divorce is needed but he won't do it. The tax preparer can't fix stupid. It's all I can do to fix myself.

He will not file for a divorce. I've been telling him this for 2-3 years. This is his second wife from China. The first Chinese wife divorced him after he was injured big time in a motorcycle accident. Go figure......his tax preparer should avoid getting sucked in to his personal oddities.

I've been doing taxes a long time. Makes me wonder if I started all over again as a green person, would I choose to become a tax preparer knowing what I now know? Will there be a supply of new preparers to replace us when we quit or retire? Getting into the business now is worse than several years ago. In addition to tax law which changes more rapidly (thanks to Congress and politics), there are now requirements which drag us into a modicum of IT. And EA requirements because the laws change so frequently. And dealing with the IRS is no great pleasure of life either.

Thanks to all respondents. Sounds like most of you agree with me --- MFS. If he wants relief he needs to get a divorce.

A high income taxpayer (pharmacist) married a woman from China (Peoples Republic). She made frequent trips home and got caught in the pandemic in 2020-2021 and couldn't leave the country. I filed joint return for the pharmacist based on a sworn statement that she was living with her parents and had no income in China. Fast forward to 2023. She has not returned and refuses to come home to her husband in Alabama. He has begged her to return but she simply refuses and is never coming back. For 2023 I filed Married filing Separate and it cost him a wheelbarrow full of money. As of 12/31/24 she still refuses to come home, and says she will never come back to America. The pharmacist will NOT diveroce her. What filing status for the pharmacist.

I encourage questions in the off-season, because it usually involves selling something. I would rather inform them than to deal with a surprise at filing time. I will not charge unless research is necessary, and I don't go through the misery of collecting until the next tax season. I put a reminder in their file so I won't forget. Almost all those calls involve a taxpayer selling something. And it's amazing how many people believe if they replace the property with more expensive property, they are off the hook. That treatment has been gone for decades.

How many such avoidance answers do you encounter? "Same as Last Year" "Deduct as much as you think I can get away with" "Little Johnny stayed exactly 50% with me and 50% with my ex-wife" "Don't claim any more revenue than the 1099s I received." "I paid Hernando Valaquez exactly $599 for the work he did." Government overreach? Some of my customers are as honest as the day is long. Others are questionable and give answers such as the above. (if they do this, I never let them off the hook) Others are basically good but take the position that "I am as honest with the government as the government is with us." i.e. not honest at all.

Not at the time of the gift, but by the time the return is filed. Thanks folks for the correction.

Haven't heard any grumbles in awhile about the need for a "contemporaneous" receipt needed to support charitable contributions. Supposedly a taxpayer under audit could not go back to his church/charity and ask for a receipt at the time of the audit. Instead he had to produce a receipt given to him at the time of the gift. A so-called "contemporaneous" receipt which had to be issued on the spot instead of retroactively. Depending on your point of view, this was justified so a taxpayer could not defraud the govt of tax money by getting a buddy at church to issue a phony document after the fact. My thoughts are that it is a government overreach and a just-as-phony document could be issued contemporaneously as not. Is this audit mindset still around??

It's incredible how far removed these people are from the real world.

Sara, surely you know the answer as it probably has happened to you: They didn't ask their tax preparer. It can work sometimes as you have demonstrated. By the way, hidden between my lines is a complaint that they never seem to adjust the child care credit for inflation. Sara, I always read your comments carefully, and believe you to be extremely astute.

I find this "benefit" to be next to worthless. Am I missing something? Clients sign up for this benefit from the employer with a resounding "Whoopee!" Reducing the income - yay, yay. Until tax time comes. First of all, if the spouse doesn't work, all of the amount (typically $10,000) gets added back to Wages. Then, assuming the spouse DOES work and you attempt to take the child care credit - the base for the credit has to be reduced by the amount in box 10, which washes out any credit in most csses. A few of my clients have gone back to their employer with a "take this credit and shove it". Again, am I missing something? As an added note: the child care credit base has not been adjusted for inflation in dozens of years, except for the year of the pandemic.

Great response Lee. TN does not permit a child under age 14 to be employed. Thanks

A client suggests that they pay their 5 year old son to take out the garbage and vacuum the office. Pay not enough for the son to file taxes, yet take a business deduction. I like the idea except it doesn't seem realistic for a 05-year old. Plus he would be exempt from social security at that age and no withholding or payroll tax deposits. "Earned income" so no kiddie tax either. Is there a code or reg that specifies a minimum age? Other than just plain ole common sense. Even with no code or reg, I'm not going to buy into the idea.

Do any of you practice in Bradenton? If so, please send me a private message and I will refer a customer to you. Thanks.

Overtime Premium was mandatory under an Obama Executive order unless the employee was making $23.46 or better. The executive order was removed by some Federal Court, I believe. Mr. Medlin, I have an Alabama employer with Quickbooks. As long as the employee was not receiving premium, QB did not exempt Alabama Earnings. QuickBooks may be treating this properly, or it may not. I don't know.

Great answer Judyl Thank you.

Husband and wife jointly own residential rental property, when husband dies. It is my understanding that the surviving wife gets one-half of a step-up. But what about depreciation? Is it reduced by half? Example: Original cost for the property was $100,000, and it has incurred $30,000 in depreciation over 9 years of life. FMV at time of death was $180,000. Surviving wife gets 1/2 of step up, or $140,000 as new undepreciated basis. Which of these is correct? Wife must maintain $30,000 accum depreciation and must continue completing the remaining 19.5 life. Wife must maintain $30,000 accum depreciation and starts all over again with 28.5 yr life. Wife reduces accum deprecation down to $15,000 and must continue completing the remaining 19.5 life. Wife has no accum depreciation at all, and starts all over again with 28.5 yr life. None of the above. Thank you in advance.

Lee, if there are items to accrue is the entity really shut down?? Thanks in advance.

Most entities of one kind or another have a "Balance Sheet", normally Schedule L or something similar. When an entity (for example, an S corp) shuts down and is liquidated to the owners, should the balance sheet reflect zeros at the end of the period, or should it reflect the balances just prior to the liquidation?

A rip off to my customers. Never have, never will. In fact, I've even lost customers because I didn't offer the RALs. I remember a truck driver telling me he just bought a rig.. He had a $1500 refund, and wanted me to write him a check instantly for about $1200 because that's what HRB told them they would do. I told him to go back to HRB if he wanted to pay that much. He couldn't wait the 10-11 days it would take for the e-file to get his money back. Then he had the nerve to ask me if I thought he would make a great living driving his new tractor-trailor truck. I was frank with him and told him he would never be able to pay off the $90,000 he borrowed because he didn't have any clue about how finances work.

Thanks Lee B. So if an entity does not know it has to file, they have not willfully violated the law. Interesting. Again, ignorance is bliss. Judy, thanks for your link.