Yardley CPA

Thanks very much for the replies. Yes, electing to carry forward the 2015. Can someone provide a brief explanation on what would have happened had it been carried back two years? Had there been a gain in those two years, would an amended return need to be filed to recognize the loss?

It's been a long season and I'm happy Tax Day has finally arrived. Thanks very much to each of you who continue to willingly and unselfishly provide sound advice to those in need. It's very much appreciated and what makes this forum so great! My very best to each of you for a healthy and restful offseason! An interesting article that appeared in todays CPA Letter Daily email: http://www.thetaxadviser.com/newsletters/2016/apr/transparency-for-individual-taxes.html?utm_source=mnl:cpald&utm_medium=email&utm_campaign=18Apr2016 Transparency for Individual Taxes How can individuals understand their taxes beyond whether their Form 1040 yields a refund or payment to the government? By Annette Nellen, Esq., CPA, CGMA April 14, 2016 Tax Section A taxpayer’s completed tax return provides a great deal of information to help the taxpayer understand his or her tax picture. Supplemented with information about taxes paid that are not on the federal or state income tax form, the picture improves. The figures and average and marginal tax rates can be further enriched by comparing them to data about other taxpayers. Practitioners can provide additional information to clients to help them understand what is and is not taxed, how reform proposals might affect them, and even what happens to their tax dollars. Both federal and state governments offer online “taxpayer receipts” to help taxpayers know, broadly, how their tax dollars are used. There are frequent proposals from lawmakers and think tanks for other types of “receipts” to provide broader context for understanding the relevance of figures on tax returns. This article reviews some of these receipts and proposals and provides a table that can be adapted by practitioners interested in providing additional tax information to clients. Clients should find this information useful in better understanding their tax picture beyond the income tax return they file, how law changes might affect them, and, broadly, where the money goes. Sampling of taxpayer receipt tools In 2011, the White House launched a taxpayer receipt website. This tool allows input of one’s federal income taxes paid, as well as Social Security and Medicare taxes. It then shows taxpayers how much went to broad federal expenditure categories as health care, national defense, family security, interest on the debt, veteran’s benefits, and education. Most of the broad categories can also be broken down into major subcategories. As of April 5, 2016, the website had not been updated to provide figures for 2015, only for 2014. The Utah state government’s taxpayer receipt online tool (at transparent.utah.gov) asks individuals for their state income tax and an estimate of state sales tax. It then provides a receipt showing how the funds were used for key spending areas, such as public education, social services, and infrastructure. It also provides color circle graphs to help show the relative size of each spending category. The California taxpayer receipt tool only asks for state income taxes to create a receipt of how the funds were spent (despite the fact that many Californians pay more sales tax than income tax due to the high filing threshold for income tax). Federal proposal The Taxpayer Receipt Act, H.R. 3855 (114th Congress), would add new Sec. 7529 to create a federal tax receipt. If it is enacted, it would require the IRS to send every taxpayer filing a Form 1040, U.S. Individual Income Tax Return, a receipt showing how income and payroll taxes paid are used among “major expenditure categories for the fiscal year ending in such taxable year,” as identified by the Congressional Budget Office. The 29 categories and subcategories specified would be supplemented with any others that exceed 3% of total federal outlays. The receipts could be provided electronically. In addition, the IRS website should enable taxpayers to create a receipt on their own. Similar bills have been introduced in prior sessions of Congress, such as S. 437 (112th Congress). Greater transparency possible The tools and proposals noted above are a good start on better transparency about government spending, but more is needed, and much of it can easily be accomplished. Incorporating additional information and feedback makes the tool more than a taxpayer receipt, but a transparency tool for better understanding federal or state spending, tax preferences used, average and marginal tax rates, comparison to taxpayers in other income quintiles, and even the effect of some tax reform proposals. Consider a federal online tool that would allow individuals to input key income and deduction items, income tax, and payroll tax. Helpful output from the online tool could include: A summary of federal taxes paid by that individual (or family) including those paid directly (income and payroll) or indirectly (employer share of payroll taxes and portion of the corporate income tax) and estimates of other indirect taxes (excise taxes) A taxpayer receipt such as called for by H.R. 3855, showing at least the top 25 categories and subcategories of spending. The receipt should show total federal taxes and the taxpayer’s dollars per category with the percentage of total spending represented by each spending line. Each budget category should have a link to additional information about that spending item, in terms usable to a layperson. A similar taxpayer receipt for federal spending of five years ago so taxpayers can compare today’s spending data with another reference point. The national debt and the family’s share of it, as well as the annual interest expense on that share. The taxpayer’s income quintile group and its income range and basic tax information, such as how many in that quintile itemize deductions, have capital gain income, and claim particular credits; average income tax rate; and percentage of total federal income, payroll, and excise taxes paid by that quintile. The income range of all quintiles should also be shown. The percentage of individuals who have similar types of income (wage, Schedule C, capital gains, etc.), deductions (standard, mortgage interest, charitable), and credits. The total dollar amount of some of these items can be provided as well as the total dollar amount that is claimed by the different income quintile groups. Names, email addresses, and websites of the individual’s elected officials. A comparable state tax and fiscal transparency tool would include sales and use tax, property tax, excise taxes, and other state and local taxes. A tax transparency tool for individual clients Click here for a chart (in Word document format) that practitioners can adapt to help clients better understand their federal and state taxes beyond what shows up on their income tax return. Using the tax transparency tool, individuals can compute their average federal, state, local, and combined tax based on the year’s income. They might also want to examine these figures by recomputing income without any exemptions. They might also use the percentage to estimate the tax savings from key deductions and exemptions they claim. Additional ideas The detailed income and tax information provided in the table can be used and supplemented in many ways. If there are tax proposals that clients are particularly interested in, the relevant information can be highlighted. If a deduction might be repealed, clients can easily compute the tax effect using the information in the table. The table information can further be supplemented with data from the IRS statistics website. For example, the “SOI Tax Stats at a Glance” information can be readily used to help individuals know where their adjusted gross income level falls among other taxpayers. An excerpt from the 2015 stats follows: Information on tax expenditures from the Joint Committee on Taxation and tax and budget data from the Congressional Budget Office can also be helpful. Looking forward Greater transparency of tax and fiscal information is a good idea. The complexity of the numerous elements of calculating taxable income and income tax, along with the myriad other taxes individuals pay poses challenges for attaining transparency. Use of electronic data files should help in assembling the information. Should legislative proposals for taxpayer receipts gain greater attention in Congress and state legislatures, the proposals will be broadened to provide more information, such as that noted in this article. In the meantime, many clients should find it helpful to have an option of obtaining greater detail of their tax picture from their tax advisers. Hopefully, the tax transparency tool can serve as a helpful starting point. Annette Nellen, Esq., CPA, CGMA, is a tax professor and director of the MST Program at San José State University. She is an active member of the tax sections of the AICPA, ABA, and California State Bar. She is a member of the AICPA Tax Executive Committee and Tax Reform Task Force. She has several reports on tax policy and reform and maintains the 21st Century Taxation blog . - See more at: http://www.thetaxadviser.com/newsletters/2016/apr/transparency-for-individual-taxes.html?utm_source=mnl:cpald&utm_medium=email&utm_campaign=18Apr2016#sthash.IcH7wP3S.dpuf

Michael...I do not audit my clients either but always have professional skepticism in mind as I prepare returns. I do offer my professional option and in this specific case I have asked appropriate questions. He is aware of my position and he has offered his explanations of his current situation. With that said, I was looking to find out if the program is correct in populating a NOL on line 21, even though he also has a loss this year. I have little experience with these types of losses and just wanted to ensure the program was performing correctly. Not sure if any type of election needed to be made or if should be populating line 21 as it is. Thank you again for your feedback.

Client owns Schedule C Landscaping Company. That is the only activity on his 1040. He is filing as Single with one dependent.. In 2014, Schedule C showed loss of -$47,587. This year the loss is $-12,973. ATX is showing Line 21 as Net Operating Loss Carryover of $-46.837. Is that correct? Should the carryover be populating against a loss? Line 22 of this years return totals -$59,810 (-$12,973 + -$46,837).

Thank you, Lynn!

Sorry..may have read your question incorrectly.

I believe you need to enter it in the Preparer/ERO Tab.

I have a client with a 1099=R Code G Direct Rollover. The form reflects a Gross Distribution of 1545 and a Taxable Amount of 1545. Based on the coding of G, nothing should be taxable but the way the 1099-R was issued, the taxable amount populates line 16b. I'm thinking of not including any taxable amount? Its a bit late to go back and seek a corrected 1099. Thoughts please?

Very sorry to hear of your issues, Catherine.

Without question, this has been one of my toughest seasons. ATX has treated me very well though, the program worked well throughout the season and gave me no issues at all but the complexity of some of the returns has been one for the ages. Just about another week of this and then we can throttle it back some!

Maybe she just left her computer on signed into the site?

I've filed several 1040's without phone numbers. Client preference was not to include a phone number. The E-files went through without being rejected. With that said, I did not enter anything at all in the phone number field, so maybe entering no information at all on is acceptable. I'll have to go back and check if those returns were for refunds versus having a direct debit of an amount due.

It's becoming car buying. No need for it. Stand by your product and provide the renewal amount in the email.

I understand the reasoning behind striking while the iron's hot but I still think these types of solicitations should wait until after April 15th. Received the following today: The finish line is in sight, and you’ve conquered another tax season with ATX! We hope that your year so far has been productive and profitable for both you and your business. As we close in on April 18th, we’re excited to inform you that your early renewal offer is now available. It’s the best time to renew your ATX software for the 2017 filing season, simply call your Account Manager at 800-495-4626. This opportunity is set to expire on Tuesday, May 31st. When you call, be sure to ask your Account Manager about how you can: Simplify your office workflow with CCH iFirm Practice Manager Securely share important documents with CCH iFirm Client Portal Increase your tax knowledge with industry leading CCH Research and Learning options We look forward to speaking with you soon to discuss your needs for the upcoming year. Best regards, Your ATX Team

The sad part about this is what Pacun mentioned, they will find someone to prepare the return and they may never get audited. That's the state the IRS is in these days and its unfortunate for all of us who do abide by a high level of ethics (ok, maybe I abide on a lower scale than the rest of you. ). More often than not, we hear of these types of returns being filed with no repercussions.

I recall reading on here at some point that maybe the system is routinely down on Sunday mornings? Maybe that's the case.

Is anyone having trouble receiving ACKS this morning? I receive a message that the system is offline.

I'm not familiar with it but here is some information on it: http://www.inc.com/guides/2010/05/women-owned-business-certification.html

Just wondering, are you not preparing the return because of the drama or potential drama, or because of the EITC/Schedule C issue? Does the fee of only $80 play into it at all? My questions are sincere, I'm not questioning your motive, just trying to understand it.

Would they do that to us? Absolutely they will and they wont give it a second thought.

I've said it before, I'm not looking to jinx anything, but ATX seems to be running really well this year. What problems exist?

FD...I'm curious, what is ATX not handling that requires you to go PPR with PS?

Advantage costs $1,320?? Insane. I've noticed that credits have been calculating automatically on the last few returns I've done, but no way is it worth that type of premium. I've been a loyal customer of ATX for many years, going back to the Parson days. It may be time to at least test some of the other software packages over the summer.

If the UTMA is in the daughter's ssn, I believe that type of cap gain would require a return to be filed for the daughter. I'm sure you're well aware of the filing requirements but I add this link simply as an FYI: http://www.efile.com/how-does-a-dependent-file-an-IRS-income-tax-return/