mcbreck

My major concern this year is that inflation is real and it isn't going away. I was able to lock in the renewal rate for 2021 and as a new customer I thought that was pretty good. I raised my fees last year and pretty much every product in my life that I buy raised their price and I'm guessing the software companies will be raising their fee considerably. I've never been charged sales tax on my tax software or it was included in the price quoted. Why does ATX charge $95 to be their client? Is that like a car dealer putting a service fee on their new car price?

For the last decade I always renewed as soon as tax season was over. I'm flush with cash sitting in an interest free account, why not get the lowest price possible? This year I changed to another software company and when I called to buy she laughed and said "really? for next year?" So I'm guessing that isn't common? I got a nice price and am locked in if they raise prices.

Is anyone having problems with efiling with the client's privacy pin? I've efiled 4 of them this morning and all were rejected as not matching with the IRS database and I know I entered them correctly from the IRS letter.

I have a stack of people to pick up / sign / pay me today. One lady said she would come in today and drop off her stuff which is on extension. When the last one shows up, I'm going home!

I never would have figured out what you meant by logged off.

I always included the 3 zeros. It's an 8 digit number so when they enter your EA number, you have to include the 0's.

This is the first year in a lot of years that clients are driving me absolutely nuts. Gave a lady a list of questions a month ago. Two weeks ago we went through them again without her answering any of them. Today she can't figure out why I haven't gotten the taxes finished. Then she wants me to figure out if her AC replacement would qualify for a tax credit, they added a new section to their house so is that tax deductible? why didn't I deduct their 529 contribution (after 20 minutes the husband quietly admits they didn't make one)? Now she's texting that I should help them find other deductions in their lives. One lady took an extra $100k over her RMD and she's upset I didn't account for that when I did her estimated taxes.

Client is partially paralyzed and the IRS has flagged his return that he needs to be authenticated to get his refund (5071c letter). ID.me is next to impossible for him to sign up but he supposedly has but when he logs into the system, it's someone else's data. I have absolutely no clue how that's possible. When we call the number the IRS has on the letter they instruct him to visit the website and hang up. It's a wonderful system. Now I get to drive over to where he's living and see if this can be fixed together.

Crazy thought. Had a lady bring me her information on Monday and on Wednesday I delivered to her a list of questions which she acknowledged. Today she's wondering what refund she'll get even though she didn't answer any of the questions. You took a $15k IRA distribution and withheld no tax and you think you are getting a refund? Daughter of a client asked for a copy her mother's 2020 tax return. I said I need proof of POA so she sends her brother a request to order me to provide a copy. Her brother emails the same request and puts POA after his name at the bottom of the email. These are highly educated people.

This time of year the thing that gets me is the "panic" freakout that you missed something. Was doing a return and freaked out that I'd forgotten to do a trust return for the deceased wife. Scrambled for 10 minutes and remembered they picked that up 2 months ago and the K-1 was on the return. Takes my heart 20 minutes to settle down. Or the person who just drops in, I see them and panic that I can't find their return. They were just dropping off brownies to thank me because I was so quick last month when they picked up.

If they get the EIN there will likely be a letter asking why they didn't file. If they are okay with that, no need to file. If an IRS letter is going to freak them out, file it.

Last Friday a client called and started reading to me the instructions for filling out the w-4 form. When he started with the "exempt" I said "You are not exempt", he paused and continued reading. I shouted "you are not exempt" and it confused him. I'm not taking responsibility for their W-4 form in April.

It will depend upon the rest of their assets, their current income tax rate versus what they expect it to be in retirement and what happens to the markets. ROTH IRAs are great if you think you'll never run out of money while healthy.

Expenses aren't deductible if you can't prove their validity.

The IRS has the form already, why on earth would they want it sent to them again? I do what jasdlm does... I remember years ago when people used to mail the IRS a copy of their trades and at a CE conference the rep commented the IRS threw those in a locker and literally never looked at them. He said if you got audited they'd ask you for it again because it was lost.

The IRS has a database of the "short names" that get submitted along with the Tax IDs and they do a matchup. I've had problems this year also and my tax software insists it isn't on their end. Here was my solution: Trust name for the last 20 years is "J L Smith Irrevocable Trust". For always the software used a short name of JLSM but this year the IRS required me to change the name to Smith J L Irrevocable Trust" to generate the correct short name of SMIT. If you are using Drake I think you can do a short name override? Don't know about the rest. My software provider said they'd never heard of such a problem. They could see that I'd filed it that way with their software for over 5 years and couldn't imagine the problem.

Had an attorney a few years ago for whom I did returns. The tax software he had me using produced what he felt was the largest number of sheets. His opinion was that if you want to charge a large fee, you should deliver a large product. The larger the product in their hand, the more complicated they think the return and the less likely they are to have questions (overwhelmed).

When we had our signing meeting, they both signed the 8879 and paid me, then the meltdown happened. I handed him back the 8879 saying he needed to give it to me when he was confident in the return. He handed it back at the final meltdown meeting and told me it was fine. The husband is a great guy and never once questioned me or the return. The stupidity of their questions and the fact they couldn't read or comprehend the 1099 was actually rather shocking to me. Their confidence in their knowledge on top of it was astounding. Met with an 87 year old client today and we were talking about her church. She said "I take some, I leave what I don't like". I told her how important it is in life to be happy and remove the negative and she said "oh, I'm happy".

I always think of our work as pretty simple, just follow the rules and use some common sense. Had a client who owed a bunch this year because of massive capital gains. The wife threw a fit, questioned my ability to do basic things on the return and brought in their children to investigate the return. I was given an email of questions / assumptions which included 6 very direct declarations that I was wrong and had prepared the return incorrectly. 1. I didn't understand that I should have not included qualified dividends in the return because they are tax free. After my explanation they'd determined I doubled their dividends by including qualified dividends in the income. 2. I had failed to include their cost basis on the sale of assets which resulted in the unusually high profits. (they were almost all distributions from managed products - actually about 99%) Then it got shifted that I should have lowered their cost basis by the capital gains distributions because they were reinvested. 3. They found a year end statement saying taxable income and tax exempt income for the year and felt I had failed to lower taxable income by the amount of tax exempt income. 4. I had failed to provide a complete breakdown of all sales with only the totals on the 1099. (all sales are on the 1099 obviously). Failing to follow their instructions. 5. I had failed to provide them with a breakdown of all the capital gain distributions (they are listed on the 1099). Again I had failed to follow their instructions. 6. I had included W2 income improperly because that's a non-profit. 7. I had failed to include all of their SALT taxes on the Schedule A. One of the spouses of the "kids" did understand why this wasn't my fault. 8. I had failed to determine their correct estimated taxes the year before because I should have anticipated these capital gains which they had previously said were wrong determined. Two of the three children are Ivy League educated adults and one has an Ivy League masters degree in business (runs a company with 1k employees supposedly). When I told the father that he would need to find a new tax person next year he said he didn't blame me at all. He expected the tax bill, was completely fine with my job and apologized for his wife and children. With the demands and accusations, no kid apologized and his wife still thinks the return is wrong.

You can't deduct on A anymore. Only time I've seen it where it was deductible was when a client paid a special fee to trade a stock on a foreign exchange - we included it in their cost basis. Otherwise I think it's very likely a lost expense. For example, wiring funds will show up often times as an expense and you can't deduct that. Look through the 1099 and see if it gives a reason for the expense and whether it should be included somewhere.

Do those "client from hell" types intentionally walk into every situation with that as their goal or is it just a quirk of their personality and they can't help it?

Some tax software is still that way. What Drake calls their "forms entry" is worthless to me.

Client has a K-1 and the K2 and K3 totaled 20 pages (with explanations). The entire downloaded K-1 package is 41 pages long.

Where did you clarify if it was the only assets? And it's still completely false because even if it is the only asset, it still can pay the tax.

The question from the OP was whether it could be done, not whether it generates the lowest tax bill. Two people said it couldn't be done which is false.