kathyc2

Mine had the daughter (my client) SSN in box 2 so I put it on her return. I've found lists of the codes that can be in box 8, but none list U1.

I also had one this year paid to adult daughter. Never seen this before. Is box 8 the Dad's SSN followed by U1? I can't find what that code means, but I'm wondering if it means underpaid?

Zero because she gave him the money to buy it, then gave him an additional 7K to boot!

Basis could be 0, 3K, 5K or 10K depending on how you look at it.

None of the special situations apply to her. Also, the 255 is only paid if there is a surviving spouse, not adult children. I just thought it strange since I've never seen it before. I've always thought it's not fair that when someone signs up benefits are delayed a month, but upon their demise that month is not made up. I looked a little to see if it might have changed but didn't find anything.

Middle aged client received what looks like 1/2 father's SS benefit for one month. Her sister received the other 1/2. Her SS is listed as beneficiary so obviously she filled out some kind of paperwork, but doesn't know detail. I'm not disputing that it's taxable to her. I've never seen this before and just curious if anyone knows what kind of situation would have benefit paid to adult children.

If he's married, check if this might be a situation where MFS has better results.

Couldn't you send an e-mail to all and tell them that they need to all agree who will be the Rep? I personally would disengage from this account as quickly as possible. If two of the partners can't be civil enough with each other to handle business, they will likely try to put you in the middle of things. Not worth it IMO.

Has it ever been that a state tax refund was taxable unless a federal benefit was received from over-paying? Less than 9.5% of returns itemize deductions after the higher standard amount. I'm guessing a good chuck of the 9.5% was limited by 10K total. So, the only ones that it would be taxable to are the middle class that itemize but don't have 10K in state taxes.

As long as each parent could have claimed child (their biological child) if they filed MFS the CTC can be allocated any way they want. IMO it's the clients call, not yours. Vast majority of time they will choose option to get most cash rather than pay debt. Do not allocate EIC, IRS will calculate that.

Sounds to me like they contributed to Roth in 2021 then realized they could not due to AGI. Since most markets were down in 2022, it's reasonable that if they had less than the 7K to withdraw. Entering codes JP does not make anything show as taxable, does it?

Just remember that the only actual costs that can be used for charitable driving are gas and oil.

The state payments are a refund of taxes paid. So, unless they took a deduction for it off of their federal return, not taxable. Even if TP does not pay state income tax, they are paying sales tax. If TP income was so low they have no state income or sales tax, they aren't going to be having federal tax either. Same general concept as credit card rebates. If the rebate was for personal purchases, not taxable as it is deemed a reduction of payment. If the charges are for business purposes, then taxable because the full (pre rebate) amount was deducted.

Technically, the NFP can pay volunteers whatever rate they want. However, anything over the 14 cents is pay and taxable income to the volunteer.

Unless the TP itemized state taxes and were not limited to the 10K, I don't see how this could affect federal tax????

14 cents. The same rate that they could take a deduction for it they itemized deductions.

If you look at the last year or two of 1040 of deceased, you be able to tell what the fund was.

How do you answer Q 15 on 8867?

I understand you are trying to be helpful, but what info would you have that would be needed in the next 30 days? If they are looking for what bank or investment accounts she had, that could certainly have changed in the last 7 years. In that case how would you know what documents to have them look for?

IN has a bill in the works that would allow pass through entities to make an election to pay state tax at the corporate level. The shareholders would then receive it as a refundable tax credit to use on their individual returns. They are saying that state tax paid by S would be a deduction for federal tax. Since it's an election i.e. voluntary, how could it possibly meet the Sec 162 "necessary" requirement? Do any other states do this?

Ain't that the truth! Not so much here, but on other boards I've seen people hold themselves out to be "tax professionals" when they are nothing more than a glorified keypunch operator. Software is a great tool and there are times when it catches my mistakes, but then again, there are other times when it gives an answer that I know if not right. Generally it's because I didn't click on a box or other. If someone doesn't have a good idea of what the result should be, they don't know to look at what has to be checked. I think those of us who "could" do a return with calculator and pencil are going the way of dinasours!

With a formation date of 2020, if the agent processing the request is on the ball, they should be asking more questions before approving. Did the principal take paychecks in 2022? If not I wouldn't even try for late relief if it was me. Hedging too close to being a fraudulent return IMO for me to put my name on the return.

The late relief is for if they meant to be taxed as a S but just forgot to submit the form. If they have already filed Sch C for the LLC in prior years, that argument doesn't hold much water, does it?

Was the LLC formed during 2022 or earlier? If earlier, it can not be backdated. If in 2022 were they acting as if they were a S all year, such as taking paychecks?

It's going to depend on how they normally book entries. The correct way under normal circumstances would be to debit employer match expense and credit 401K liability each pay period. Since the forfeiture is reducing the amount they need to pay debit 401K liability and credit match expense. A detailed description in journal entry why the entry is made for future reference.