Lion EA

Do they own a house jointly? Or live in a house together and pay RE taxes and mortgage interest from joint funds? Anything at all that can be shifted to whichever needs it the most? Otherwise, book a tax planning consultation and charge for it !!

With a $100,000 jump in income the higher MFS rates wiped out any potential savings that MFS might've saved due to credits the wife can claim with her lower income. But you don't know until you try. Did you look for any J deductions that were paid with J funds that could be allocated to the H if it lowers his taxable income/lowers the tax liability for the family as a whole?

Yardley: I think the OP is filing an original return and not amending. Christian: Here's a good article from the U of Illinois Tax School helpful for original returns as well as amended; it contains a couple links to additional materials... https://taxschool.illinois.edu/post/a-narrow-window-for-married-couples-to-enhance-tax-credits/

Paper filing, claiming the daughter, will work IF the daughter amends her return first. The current state of IRS processing paper returns might mean they will get letters. Prepare them for what documents they should start gathering. IF the daughter qualifies to claim herself, then e-filing the parents' returns without the daughter would be best. IF the parents/daughter are engaging you to amend the daughter's return, then you'll want to pull her transcript or have the daughter get it for you. IF the daughter is not open and cooperative, then warn the parents about potential IRS letters and to contact you.

The daughter DID file a return and claimed her own exemption, perhaps by using the EIP portal, but it happened and is in the IRS computer system. (Probably doesn't want her parents to know.) If the parents claim their daughter and try to e-file, it WILL be rejected for using an already filed SSN. Yes, the daughter should amend, but that is her decision. Amendments are taking weeks and months, so you may not be able to wait long enough to try to e-file the parents' return. And, it still might be rejected. Paper file the parents' return. Explain to them what documents to gather to prove their right to claim their daughter. https://www.eitc.irs.gov/eitc/files/downloads/f886-h-dep.pdf

1 modification to an approved method, and then continue that modification. Read my links, Ed Slott the IRA expert and Notice 2022-6, and read the info from cbslee.

So many opportunities to save our clients money lately with unemployment exclusions, refundable credits, etc.

Within the first five years of distributions? Why? Possible penalty dating back to first year! https://www.irahelp.com/slottreport/10-rules-know-about-72t It won't count as a modification if he makes a one-time change to a method that increases his distributions going forward: https://www.irs.gov/pub/irs-drop/n-22-06.pdf

You were a good daughter. Now you'll be able to put it all behind you with a clear conscience.

It did do a security update 8/17/2022. I'm nursing it through until the next version comes out.

Wait, wait. So the iPhone 6S is newer than my iPhone 6? And, I won't need the security update? Or, I DO need a security update due to recent activities, but my phone is too old to get it?

Ah, he probably gave me his iOS update from his tablet.

So my security update may still auto happen? How will I know? My phone is old enough that the iOS as a whole no longer updates, but I'm supposed to get security updates. (Waiting it out for the next iPhone version or end of tax season, whichever comes first.)

The only thing my iPhone6 is offering to update is Facebook, and it can't. I have Automatic Updates on. My iPhone 6 says iOS 12.5.5. Hubby's iPhone11 says 15.X.X. How do I get security updates for myiPhone6? The NYC news (either CBS or NBC) had the story last night to update your iPhones from iPhone6 on, so I went to update when I got up this morning. (We were watching from bed. Hubby's iPhone was charging on his end table, and he was using his iPad, so he updated both last night.)

Been working on that for the past few years since the IRS made a point of basis for losses, sales, distributions, whatever. One of the two does have a capital account now. Baby steps.

That's more detailed than I was finding on their website. However, even the website said any OR-sourced income, and the rental was profitable this year. (I urge my clients to file in loss years also, so they have the suspended losses to release when they have income or sell the property or...) I have NO idea of the history of this partnership/rental. Prior years reported losses on Line 1 and not Line 2, and never included any state-specific information. Even this year's K-1 doesn't have an OR version of a K-1. I saw "Residential Rental Texas" and "Commercial Rental Oregon" on Statement A--QBI Pass-through Entity Reporting. Her dad's been hand-preparing and then mailing to my client, because he doesn't know how to convert to a .pdf to send electronically (she has a portal on her website). I don't think that bodes well for his ability to accurately prepare his partnership income tax returns! But, he's not my client. My client talked about "investments" that her dad put in partnerships to then gradually increase the % to each child over time. She never mentioned two rentals. This K-1 is from X. X. XXX Investments, LTD, and now shows the TX and the OR rentals. The other is XXX Holdings, LTD, but has only financial investments. What's in a name?! Yes, an OR NR return. I don't think I can charge enough for this set of returns, but I'm going to try! Thanx, CBSLEE, for those details.

PS On the same K-1 is detail for TX property disposed of with a Rental loss of -1,359 and Section 1231 gain of 9,775. But TX doesn't have an individual income tax, right? So, no filing in TX. Just OR with all else falling on resident state of CT. I think the TX building was sold in 2021. The OR building is being sold now. I really have no confidence in this K-1 or the other K-1 from her dad's other partnership.

My CT resident client has a K-1 from her dad's 1065 with Box 2 Net rental of about $4,700 that includes a loss on a TX residential rental and a gain of just over $6,000 on an OR commercial rental. I don't see any minimum amount of OR-sourced income to avoid filing a NR OR return. In addition, partnership sold the building, so 1250/1231 gain. And, no capital account or basis information. Dad gave each grown kid 15% of partnership the prior year. I do NOT file the partnership returns nor dad's returns. This is the return that never ends: Fulbright son in Tajikistan, SE income before leaving, college daughter with 529 and multiple states, donated husband's car/Form 1098-C due to Alzheimer's, drug trial income, wife did Zoom classes for two out-of-state colleges, 5 K-1s with more than one revision including hand-written copies, etc. I may never finish this family; just from my end, a partnership, joint returns, and two grown kids with complexities no 19-year-olds should have! Anyway, I DO have to prepare an OR NR return, right?

I'm so sorry. Take a deep breath. We love you. Some of us (not me) know a bit about trusts and can help you, even if it's just the best questions to ask the lawyer or whatever support. So painful when family doesn't support each other. (I have a trust client where the trustee is picked on by her siblings for every decision but none provide help. She's forced to get legal help to sell the one commercial (but vacant) property to "divorce" herself from her siblings fighting her.) Hang in there. You can always vent here.

Cash basis trust? If so, then what was paid, was paid.

After applying for ERC and amending Forms 941, you amend the original income tax returns to reduce payroll expense, increase profit, including amending Forms K-1. Then you amend the original individual income tax returns that receive the amended K-1s. Labor intensive, so charge enough for your time and knowledge.

Form 1116 is for foreign tax paid. If he paid no tax to Mexico, you probably don't need Form 1116. I'm not familiar with business entities in Mexico, but you talk about a corporation. Are you sure you would report on a Schedule C? Are you preparing the corporate income tax returns or the personal income tax returns? There are preparers on this forum who handle more foreign income issues, so wait for someone more expert to jump on this thread.

I have a couple in my small practice that are selling properties in various ways. Spouse's dad has a partnership that sold a building, so my client's K-1 will reflect that. That kind of thing. And, they all need ES calculated. I'm still preparing 2021 returns and don't have enough hours in the day to recalculate 3Q and 4Q 2022 ES, especially when their % of ownership in that partnership that sold the building changed as dad gives more to his grown kids each year. Even more time-consuming if they became my clients without basis info for dad's 1065 and 1120S K-1s, and I'm waiting on all their prior returns/K-1s to compute basis, too! I am seriously going to fire some clients in October.

Charge your clients at least double what the ERC mills charged them to amend their Forms 941, and upfront, also!

This is one year, and not much you can do once the settlement is "settled"/legally designated. Use a good investment strategy to stretch his income out over his lifetime, using a mix of taxable and LTCG and tax-exempt investments appropriate to his age and place in his life cycle. Work with a well-recommended, experienced financial advisor.