Yardley CPA

Hi, Margaret...I'll have to go back in my file and find the exact charge, I recall it being in the $325 range. Online, the price is $450 but I was able to purchase it for less. I did not include a technology charge as at the beginning of last year I increased my rates, for many clients, about 20% to 25%. In some instances a bit more than that. The portal is a nice feature and does offer advantages over sending everything via email. As I mentioned, my clients seem to have transitioned to it well. There are some that still prefer to conduct business via email and I hope over time they will see the benefit of the portal.

In past I encrypted all my attachments using the Adobe's pdf encryption option. It's worked well for me and my clients found it easy. Last year I subscribed to ATX's portal. My clients love it and I found it very easy to navigate and use. I'll subscribe again for the coming season.

I provide each client with the summary, the comparison, and the planner. I find its so important to plan for the next year to ensure the whithholdings are where they need to be (or at least close to where they need to be). I only provide planning for the next tax year. I zero out the rest of the columns. Would be nice if there was a checkbox you could click to do that automatically on the planner. This year, I made sure all of my clients received the Federal comparison (wish there was a State) and I highlighted the AGI, Taxable Income, Tax, and Withholding amounts. More often than not, I'd say at least 75% of the time, the new tax law benefited them. In may of 2018, I contacted all of my clients to make sure they checked their withholdings. Some did, some didn't. Oh well.

Congratulations!!! The very best to the newlyweds!

Great idea, Joel.

I'm assuming she is speaking about renewing ATX? Maybe not?

After seeing this, clients shouldn't complain about their fees. Who am I kidding, they'll still complain.

I'm sure everyone recognizes that employer sponsored healthcare evolved over time. Long ago, employers did not offer healthcare...I think it started with employers offering health clinics for employee care and grew from there. In any event, today it's a common part of benefit packages offered to employees. I currently pay 30% of my family coverage, about $520 per month. I'm very thankful my employer picks up 70%. It's a PPO that offers me and my family the ability to go to basically any medical care provider we choose. I recognize how very fortunate I am to have this coverage. More and more employers in my region are opting out of traditional healthcare plans and offering High Deductible Health Plans...HDHP's. Given the high cost of medical coverage, I think we'll see much more of this.

Is there a way to increase the last two IRS Estimated Payments? Client currently has the payments automatically deducted from their bank account and they would like to increase the amount of the last two. I assume I can provide them with paper coupons to make the additional payments. With that said, wondering if there was a way to increase the automated payments without calling the IRS (not even sure that would work anyway.) Has anyone used this site before: https://www.irs.gov/payments

Thanks for both replies. I was under the impression that 1099 Misc forms were entered on the Schedule C and that the IRS was looking to match those within their system. Obviously, my understanding was incorrect and you do not need to enter each 1099 you receive, as long as the total income is greater than the total of the 1099's. Thanks again!

Second year preparing return for this individual. Last year the return was MFJ and I mainly dealt with the wife. This year, since the divorce, I am dealing with the exhusband and filing MFS. This client is a freelance photographer. When I prepared the return last year, the wife provided me with about six 1099 misc forms showing compensation he earned from them. This year he indicated he had received the 1099's back in January but "trashed them". His gross income this year is slightly higher than last years. I asked him to try and obtain copies of the 1099's since the IRS will be looking to match them once the return is filed. I explained what would happen if we did not report each of the 1099's on his return. It's his preference to move forward without including them since he does not want to go back to his clients and ask for a copy or even try to obtain an abstract from the IRS. Do I have any liability in moving forward and filing in this manor?

SALT deduction cap rules finalized, safe harbor proposed By Sally P. Schreiber, J.D. June 12, 2019 The IRS issued final regulations governing the availability of charitable contribution deductions under Sec. 170 when a taxpayer makes a contribution to a state or local agency or charitable fund and receives or expects to receive a corresponding state or local tax credit or deduction in return for the contribution (T.D. 9864). Proposed regulations were issued last August (REG-112176-18). The IRS also issued a safe harbor, permitting certain taxpayers who itemize their deductions to treat charitable deductions as state tax payments. Several states have enacted programs that allow residents to make contributions to state or local agencies or charitable funds in exchange for state or local tax credits. These programs are designed to allow individual taxpayers to circumvent the new $10,000 limit on the deductibility of state and local taxes under P.L. 115-97, the law known as the Tax Cuts and Jobs Act (TCJA), by reducing a taxpayer’s deductible state and local taxes paid, while increasing the taxpayer’s deductible charitable contributions. The preamble to the regulations outlines the history of the IRS’s and courts’ positions on whether a donor has received something of value (a quid pro quo) in return for the charitable contribution, in which case the deduction under Sec. 170 must be reduced or eliminated. The IRS received almost 8,000 comments on the proposed regulations and 25 requests to speak at the public hearing. Most of the comments were positive, urging the IRS to adopt the proposed regulations without change. One group of commenters objected to the IRS’s issuing regulations under Sec. 170 when the change in law was to Sec. 164, but the IRS disagreed. It found, after careful review of the issue, that long-standing principles under Sec. 170 should guide the tax treatment of these contributions. Another group of commenters argued that the IRS should not apply a quid pro quo analysis but use a substance-over-form approach instead. The IRS declined to adopt that suggestion, having determined the quid pro quo principle provides a more sound, comprehensive, and administrable approach. New rules The regulations provide that if a taxpayer makes a payment or transfers property to or for the use of an entity listed in Sec. 170(c), and the taxpayer receives or expects to receive a state or local tax credit in return for that payment, then the tax credit constitutes a quid pro quo to the taxpayer, and the taxpayer must reduce his or her deduction for the charitable contribution by the amount of the state or local tax credit received or expected to be received (Regs. Sec. 1.170A-1(h)(3)). However, the final rules allow a charitable contribution deduction if the state program allows dollar-for-dollar state or local tax deductions instead of credits. The IRS reasoned that even though deductions could also be considered quid pro quo benefits, sound policy considerations and efficient tax administration support making an exception to quid pro quo principles for dollar-for-dollar state or local tax deductions. Because the benefit of a dollar-for-dollar deduction is limited to the taxpayer’s state and local marginal rate, the risk of deductions being used to circumvent the $10,000 limitation is comparatively low. In addition, if state and local tax deductions for charitable contributions were treated as quid pro quo benefits, it would make it difficult for taxpayers to accurately calculate their state and local taxes and federal taxes. The final rules contain a de minimis exception from the prohibition of a deduction for state and local tax credits. Under this rule, a taxpayer may disregard a state or local tax credit if the credit does not exceed 15% of the taxpayer’s payment or 15% of the fair market value of the property the taxpayer transferred. This exception reflects that the combined value of a state and local tax deduction, i.e., the combined top marginal state and local tax rate, currently does not exceed 15%. The final regulations clarify that the 15% exception applies only if the sum of the taxpayer’s state and local tax credits received, or expected to be received, does not exceed 15% of the taxpayer’s payment or 15% of the fair market value of the property the taxpayer transferred. The final regulations also include amendments to Regs. Sec. 1.642(c)-3, providing that Regs. Sec. 1.170A-1(h)(3) applies to payments made by a trust or a decedent’s estate in determining its charitable contribution deduction under Sec. 642(c). The regulations are effective 60 days after June 13, 2019, the date they are scheduled to be published in the Federal Register, and apply to amounts paid or property transferred after Aug. 27, 2018, the date the proposed regulations were published. Safe harbor At the same time as it issued the final regulations, the IRS published Notice 2019-12 in which it provided a safe harbor under Sec. 164 for certain individuals who make a payment to or for the use of an entity described in Sec. 170(c) in return for a state or local tax credit. Under the safe harbor, an individual may treat as a payment of state or local taxes for purposes of Sec. 164 the portion of a payment for which a charitable contribution deduction is or will be disallowed under Regs. Sec. 1.170A-1(h)(3). To qualify for the safe harbor, taxpayers must itemize deductions for federal tax purposes and have a total state and local tax liability for the year of less than $10,000. The safe harbor is intended to mitigate the situation in which donors to a state tax credit program who itemize deductions on their federal tax return and who have a state tax liability of less than $10,000 would be precluded from taking a charitable contribution deduction for payments to Sec. 170(c) organizations to the extent they receive a state or local tax credit. Treatment as a payment of state or local tax under Sec. 164 is allowed in the tax year in which the payment is made to the extent the resulting credit is applied, consistent with applicable state or local law, to offset the individual’s state or local tax liability for that tax year or the preceding tax year. In states and localities that permit an individual to carry forward an excess credit amount to a later tax year, an individual may treat the carryforward amount as a state or local tax payment under Sec. 164 for the tax year or years to which the credit is applied, consistent with state or local law, to offset a state or local tax liability. The IRS intends to issue proposed regulations containing this safe harbor, but taxpayers may rely on the notice before the regulations are issued. — Sally P. Schreiber, J.D., ([email protected]) is a JofA senior editor.

Just wondering what happened when you called the IRS. How did they respond to the information you provided them?

What do you mean by "using ATX to efile estimated tax payments? Electronically through the 1040ES payment option? Is that what you're referring to? I have several clients who pay estimates using this method and I've never had an issue or know of ever receiving this type of notice. We include the clients banking information on the 1040ES payment form and the payments are automatically pulled on their due dates. That option has worked well...except for when a payment needs to be cancelled. That could be an issue.

Thanks very much to all of you for your thoughts. Much appreciated.

Three brothers purchased their parent's home for $1 many years ago (probably not the best route to go, but that's how it was done). Parent's lived in the home until they passed which happened recently. Brothers are considering renting the home for a year before they place it up for sale. Intent is to split income and expenses of the rental and sale evenly. Questions: Must a partnership be formed? Does the home have any basis that would allow for depreciation. There have been no significant upgrades over the years. Since the brothers purchased the home for $1, I do not believe they are subject to any type of stepped up basis or anything that would allow them to depreciate the value of the home?? Am I mistaken? If the intent is to sell the home in the relative near term, do they simply include Schedule E's on their personal returns showing the income and expenses for the period it is rented, with no basis to depreciate?

I can't speak to converting from Drake to ATX. I can speak to my experience with ATX. It's been generally excellent. I use the program on a stand-alone desktop and have fortunately never experienced the "debacle" or other issues you may have read about. Year after year, the program has worked well for me. Have there been hiccups, yea...but not to the point that I've seriously looked to jump ship. Over the last two years, there have been a few instances where I have needed to contact ATX support. I chose the online chat option and in every instance my issue was resolved in a reasonable amount of time. I suggest testing ordering a demo of the ATX program and seeing if it meets your needs. I believe they offer some type of pilot option that would allow you to see what the solution offers. Good luck!

Can some of the Pro Series users please provide pros and cons when comparing that program to ATX. I've read through some of the strings in the Pro Series forum on this page and it seems the current users are very happy with what Pro Series offers. Many moons ago, the firm I worked for used pro series and I recall it as a reliable and robust program, but that goes back 25 years or so. Does anyone use their portal? How does that stack up?

I have one client who pays by money order every year. My bank, PNC, did not accept a money order deposit using the mobile app last year. I wonder if that changes this year? Time will tell.

I'm also in the market for a new Dell. I currently have the T1700 desktop running 8.1 pro. It's been a workhorse through four tax seasons but it's time for something new. I've always had very good luck negotiating deals through Dell's "Chat" option and I'll go that route again. It seems those representatives are very eager to deal. That's been my experience, anyway.

Tracy Lee, welcome to the Forum. With the exception of information not converting correctly, what is your impression of ATX after using it for the season?

Overall, I think this tax season went more smoothly than I originally anticipated. It didn't take that long to get used to the new 1040 format and ATX worked relatively well all season. Sure, there were some hiccups and a learning curve but it all worked out in the end. Thanks very much to all the members of this forum who give their time and lend their experience. It's such a great resource and one I value very much. Enjoy the "off" season!

Very said. What a tremendous loss.

Yes...the same on my end. Seems the "Official" page is reporting it as well.

Must the payment arrangement be taken automatically, electronically or can the client pay via an online service or credit card each month himself without the funds being taken automatically?