BrewOne

I listened to Commissioner Werfel last week at the Atlanta forum and was impressed with the direction he wants to take the IRS. Some preparers might be leery of IRS free-filing, but if all you are preparing are simple returns...you didn't have job security anyway. The new hires should at least be able to figure out how to feed a scanner.

I know a full-service broker is expensive, but I have seen enough issues at tax time where they would have made a huge difference. For example, fairly intelligent client with a discount broker that had allowed him for years to put 100% of the max contribution into a Roth IRA and a 100% of the max contribution into a Traditional IRA (yes, double the allowed amount). His explanation when I finally heard about the excess contribution, "I didn't think you needed to know about Roth contributions because there's no tax benefit. What a mess to straighten out.

Look at the instructions for Form 8990 (especially "Exclusions from Filing") and see if you think they apply in your case.

I sent an email alert to my clients. The phone numbers on the email are real, they are hoping that helps fool people into clicking the link. I used the email to remind my clients that if I have an 8821 on file for them, I can check their account to see if there is any money outstanding and I will also receive a copy of any actual correspondence from the IRS.

no need for Schedule E, but taxpayer should keep a copy of the depreciation schedule generated for the time it was a rental property. Will be a factor when the property is sold (but not if inherited).

Gail, you may want to reference code Section 642(c)1 I believe the sequence is: 1) determine the amount of distributable net income (DNI) that the charity receives 2) enter that amount on Schedule A (deducted on page 1 of the 1041) 3) remaining DNI goes to non-charitable beneficiaries. As I understand it, the church would not get a K-1.

Gail, I have experience with a trust trying to claim a charitable deduction on a 1041--the rules are very strict on the language of the trust document, and in my case, there was no deduction for a $100,000 donation. Not sure if same goes for an estate, but I suspect that the charity must be named in the will and possibly it must designate that income go to the charity, otherwise it is assumed to come from corpus. I'll take a look see if no one knows the answer off the top of their head.

I would first get a Form 56 on file with IRS if that hasn't been done. Haven't been asked to provide a death certificate in some time, but if they hadn't reached retirement age, not sure if there is still automatic notification from Social Security. One general note: registered mail is for items with tangible value over the limit for insured mail; although a lost tax return could be costly, the IRS will not reimburse. Certified mail with return receipt will do the trick.

I guess the first question I should have asked was: did the IRA's have the spouse as a named beneficiary on them? It does look like the custodian screwed up regardless, if they knew the owner was deceased. Normally they would have requested the estate EIN if no one was named as a beneficiary.

Well, if getting corrected 1099's is a dead-end...an estate can be issued a refund. That refund can then be passed on to beneficiary.

how about a 1041?--report as income in respect to a decedent. just throwing that out there.

I'm trying to remember what Block did when they had payouts from their "Peace of Mind" guarantee. I'm certain they issued a 1099 if payments were part of the client's tax liability. But not sure if they did when it was just penalties and interest. The former constitutes income but the latter doesn't seem like it has the same characteristics.

Wonder what y'all would do in mc's situation--would you notify your insurer of a possible claim?

How friendly are they? I had this once and fortunately, the primary taxpayer called the IRS and straightened it out. It is an ongoing problem, partly due to antiquated technology. ATX (on the 1040-ES) defaults payments to primary taxpayer (which you can override but you can have problems either way)--secondary taxpayer can have estimated payments under their social security number and IRS doesn't attribute the payments for the joint return--just leaves the money sitting under the spouse's account. If the ex won't cooperate, it shouldn't be too difficult to show that the payments came from her. Because of this, one of my colleagues won't file a couple jointly if the secondary taxpayer has a business.

I culled the herd last year--going through old emails, I'm amazed at what I tolerated. I wonder about young people's expectations--do they think they're going to invent an app that will set them up for life? At any rate, the independent preparer is disappearing around here, even though there's a need and you can make a decent living if you offer additional services. Just not going to make a killing.

Page 88 of instructions for 1040 (for Schedule C or F), policy can be in your name or the name of your business.

This topic just came up at the NAEA board. For self-employment deduction, it appears the policy needs to be in the name of the proprietor. Pub 535

Been some years since vehicles could be part of a like-kind exchange, there should be a proper disposition. Make sure you get all the information for any vehicle a client has in service.

That doesn't sound like the MAX package of old, sounds like the ATX 1040 package, which I switched to last year and am sticking with it, even though I probably did not come out ahead, what with circa $65 for every 1041 and 1065, something like $34 for state returns other than the 3 I picked, and about $6 for every return (first 75 free). But I am semi-retired, no longer doing corporate returns or any new clients. With the May discount, ATX 1040 was $942.

https://williamsassociates.law I have referred clients to Robert Williams here in Tallahassee--he is ex-IRS. Not cheap

If you think a 1040-X may help clarify the situation, you can write on the top of it "DO NOT PROCESS--FOR COMPARISON PURPOSES ONLY"

Have you considered filing Form 8857? Been a long time since I've filed one but somewhat similar situation--didn't think my client had much of a chance (she was an accountant) but she was granted an equitable settlement (responsible for half of the debt).

Just had the opposite happen to one of my clients--IRS took out a $256 penalty calculated by the software. The 2210 was missing the 2nd quarter interest amount--if that (7%) was not filled in, might have created an underpayment. But could well be software glitch.

We have "value added" that many of the Blocks/Jackson Hewitts do not. Their numbers will continue to drop if they are relying on simple returns (usually with EITC); whereas those who need 1041's, 1065's, 1120's, 706's, Schedule C, Schedule E, Schedule F (and some Schedule D's) will continue to use tax professionals. Also representation. I try and identify value added on any return I prepare--if they would have the same result elsewhere, I might mention Tax-Aide or some free program--if they still want me to prepare their return, that's okay too.

Is there professional tax software that will run on a Mac? Just asking.