BulldogTom

CA is starting to look at challenging PL 86-272. But that was not the point of the original post. This was services provided to an end customer in CA. There is a whole discussion of "doing business in CA" on the FTB website that gets into your situation @cbslee www.ftb.ca.gov Search "doing business in CA". Tom Longview, TX

CA taxes revenue to the end customer location. So if your friend is providing a service to a customer in CA, that revenue is sourced to CA. There is no de minimis exception that I am aware of. From the FTB website - "We consider you to be “doing business” if you meet any of the following: Engage in any transaction for the purpose of financial gain within California" Then you have to look at what type of entity they are. Corps, S Corps, Partnerships and LLC all have a $800 minimum tax that needs to be paid yearly. In order to pay the tax, you need a state tax ID number. To get a state tax ID number, you need to register with the SOS. The SOS has an annual filing fee of $25 (last time I checked). If your client is a Sole Proprietor, they can just file a 540NR showing the CA profits from their business. Hope this customer of your friend is generating enough revenue to cover the cost of doing business in CA. Tom Longview, TX

Best payment ever!!!! Tom Longview, TX

I think you are. When I have replaced computers (not servers) in my practice over the years I have had to install the software for each year onto the new machine. It makes sense to me that the programs need to be installed and the installation keys need to be entered for each year. I am not a techie type person, so I could be wrong. Are you copying any other software onto your server without having to re-install? Is it only ATX that you are having this problem with? Tom Longview, TX

Correct. Tom Longview, TX

I just read the instructions for form 8832. The rules for late relief are in the instructions. @michaelmars Thanks @mircpa for the info. I learned something new today. Tom Longview, TX

I need some help understanding the new law as it pertains to ROTH SEP. I think I understand if the employer has a SEP plan and the employees can now make elective Roth contributions. I also understand that any match or contribution by the employer on behalf of the employee into a Roth SEP is taxable compensation. What I am not seeing in the material I have is an explanation of how this affects a Sole Proprietor with no employee who makes SEP contributions based on their income. Can they be Roth? Are the limitations calculated the same way as traditional SEP? What about converting balances already in a traditional SEP to a Roth SEP when the owner is the only taxpayer in the SEP? Thanks Tom Longview, TX

1099s are for payments made regardless of accounting method of payer or recipient. Tom Longview, TX

@cbslee Not arguing, for discussion purposes. If they are disregarded, they are already a SP. That is the default for a disregarded SMLLC. I made the assumption that the LLC was formed as a SMLLC prior to 2022 (bad assumption?) and they filed a tax return as disregarded in previous year(s). After reading the OP again, that may not be the case. IF the LLC was formed in 2022, then I think you are correct that they can still file as an S corp this year by filing the 2553 with the first return. However, I stand by what I said if the LLC was formed and filed prior to 2022. But I could be wrong.... Tom Longview, TX

I think you have to get to corp before you can get to S corp. Since the LLC was operating as a disregarded entity (sole prop), I think you have to convert the sole prop to a corp and then make the election to be an S. I don't think you can make a late conversion from a sole prop to a corp, and if I am correct then there is no way to get to S retroactively. This is unresearched, just me thinking through how I would approach your issue. Beware that I may be wrong. Tom Longview, TX

I have never used the forfeited funds for employee match. Suggest you make sure that is allowed in the plan doc like cbslee says. If it is, I would guess that you need 2 entries. #1 is to record the forfeiture and would be a debit to an asset account and a credit to the same expense account you use for the match. #2 is when you use the forfeiture, reverse the entry above. I used to do a lot of these. Forfeits were only used for plan expenses. We had a cash account for the plan administrator to deposit the forfeitures into. At the time of the forfeiture we debited that cash account and credited 401K ER Expense. When we used the cash to pay the plan expenses at the end of the year when the administrator prepared the statements, testing and 5500 we debited the expense 401K ER Expense and credited the cash account. Tom Longview, TX

I need to call one of my clients and see if they got their money? Tom Longview, TX

Has anyone heard any more about this? Just swept under the rug? Tom Longview, TX

I am waiting to see the IRS response to this one. Gonna get some popcorn and see what happens when a company pushes back on the IRS. Hasn't happened in a while. Tom Longview, TX

Disagree. If you make payments to a vendor via CC or Payment App, the CC company is supposed to send the 1099K and you do not send a 1099NEC or 1099MISC. That was made clear earlier this year. The IRS does not want double reporting of payments made by CC. If the church does not want to file 1099s, then pay everything to vendors eligible for 1099s via CC. Tom Longview, TX

The W9 should answer that question if the vendor filled it out correctly. In box 3 on Form W9, if they check LLC, then they are supposed to tell you how the LLC is taxed in the area to the right by putting in a "C" "S" or "P". My rule of thumb has been if they don't fill it out correctly, they get a 1099. Tom Longview, TX

I want to send out my year end client letters, and I always include information on the first day to efile in my letter. I don't see anything from the IRS yet? Any of you have a clue from your sources on when efile will open? I think it is normally the end of the 3rd week of January, but I don't remember what normal is anymore. Tom Longview, TX

Well, I think there are differences. Stock options grant a "right" to the holder to purchase something that is real... a specified stock that has ownership value based on the company that issued the stock. Derivatives are similar to a exata bet on a horse race... if the horses come in as you predicted, you get paid. If the prices of the derivative move as you predicted they would you get paid. NFTs are identifiable computer works. The first one was a "painting" of sorts created in a computer. Someone created something that is "signed and numbered" and verifiable through the blockchain recording system. No different than a numbered lithograph. Coins - I am still not sure what they are. Not trying to be combative, just sharing how I am thinking when I try and bring these concepts down to my level of comprehension. Tom Longview, TX

I don't know what it is. I think I have a handle on what a NFT is, but the "coins" are not something I can't get behind yet. Maybe someday, but right now I am not there. The IRS seems to say it is "property of some kind", and they have some rules on how to handle transactions involving virtual stuff, so I am going to follow that. Tom Longview, TX

At the risk of being censored for political commentary..... I think the cryptoverse wants regulation so they can peddle their risky investments and say they are complying with the regulators. It will give a shady investment some kind of legitimacy. Blockchain is a very interesting technology and how it gets used will be in ways I can't even imagine. I think it is one of the coolest things humans have thought of in the last couple of decades. But cryptocurrencies (the offshoot of blockchain technology) are not assets or currencies or securities or property of any kind yet. Just my opinion, you don't have to agree. Tom Longview, TX

I heard this at an update seminar last week. It may be good advice. Tom Longview, TX

I think the "proper" way to do it is the Schedule D/8949 route. The D is not only for sales recorded on a 1099B. Think of a home sale? Your method may work Catherine because the amount is not enough for the IRS to inquire about, but I think Sara EA has the "IRS" way outlined correctly. Tom Longview, TX

Is it 8949? There is a cost basis for each ticket and a selling price. Or added to Schedule 1 in full and back out the cost of the tix on schedule 1 as well? Tom Longview, TX

Never had anyone claim this. Call me skeptical. However, if you run through the 9 factors and the client shows via facts and circumstances that they are indeed in the business of gambling, go for it. Wondering if gamblers need to be registered or have a license in your state to carry on that profession? Can you get a business license in your local area to carry on that business. Do you need a business license in each of the locations that you carry on that business of gambling (like a contractor does when they work in various locations)? Lots of questions, not any answers from me. Sorry. Tom Longview, TX

Me too. Never had is questioned yet, could provide the doc if ever asked. Tom Longview, TX