Lion EA

I had a client who kept receiving letters asking for $0. Undoubtedly due to rounding a few cents registered in the IRS computer, but the letters asked for $0. I told him to not worry about it, that the IRS would figure it out and leave him alone. After 1 more letter asking for $0, I told him to mail them a check for $0 with the payment page from the letter. He did. No more letters!

One general partner who works in the business and one limited partner who does not?

Get the bursar's statement to see what can be done for 2024. And, qualifying expenses, such as books. If the parents made too much money to benefit from the AOTC in prior years, for those years they can choose to NOT claim the college student dependent. The college student still checks that he is able to be claimed by another/does NOT claim his own dependency, but then he CAN claim the nonrefundable part of the AOTC. See if filing some amendments can get some monies back for this family.

You have a 2024 reporting requirement for the $7,000. Have the student get his bursar's statement for 2024 to see exact dates for 2024 transactions. Also, did the student purchase books/supplies/equipment in 2024 that can apply to his $7,000 scholarship/grant?

I've been hearing tax preparers extending S Corp and Partnership returns, efiling Federal only and extending CT and other states, and giving paper files to clients to mail. Extensions seem to be the most popular. CT offers the option of entering the combined biz form and the PTET form on the CT website. I am NOT going to type in a complex biz return online. I have one S Corp client that refuses extensions. Vehemently. And, due to biz travel, wants his returns, including the joint returns that need the state K-1s due to PTET by 2 March!! He's in HI or someplace for biz right now, and I dread emailing him this news.

https://www.irs.gov/businesses/small-businesses-self-employed/information-for-industries-where-tips-are-customary https://www.irs.gov/pub/irs-pdf/p3144.pdf https://www.irs.gov/pub/irs-pdf/i8027.pdf https://www.irs.gov/businesses/small-businesses-self-employed/tip-recordkeeping-and-reporting https://www.irs.gov/businesses/small-businesses-self-employed/fica-tip-credit-for-employers

https://www.irs.gov/pub/irs-pdf/p225.pdf

If he's a NY resident, won't he take credits on his NY return for taxes paid to PA and WV?

I use ProSystem fx Tax, but NOT Practice. Try Chat which answers a lot faster than calling them. Or, if you can put it aside until tomorrow, put in a ticket and you should receive your call or email by tomorrow (maybe). Or, often when you call and the wait times are long, you can request a callback as a specific time of your choosing. See if they have a knowledgebase article on launching the tray. (I have no idea what the tray is!!) CCH does have a ProSystem fx message board for users. I don't use it often, but you could try that.

I was able to stop using my big magnifying glass when I had cataract surgery and had them put in fancy lenses right before Covid. I turn 78 this year, so I'm still a youngster!

If the parents are eligible to claim the child but do NOT claim the child, then the child still is NOT able to claim herself but CAN claim the non-refundable part of AOC. How you enter that in your software, I don't know because I don't use ATX. Someone here will tell you, or contact your tech support.

I thought the tax software sent appropriate returns when required, such as a federal return to a state or a NR state to your resident state to support a credit for taxes paid. That would reduce the number of files you'd have to attach and reduce your attachment KBs.

Yes, read the trust document. (I haven't had a joint trust.)

Considering how broken the IRS is, I'd pay it to avoid time-consuming letters later. If you're e-filing with direct debit, it takes little time now to avoid a possible time-drain later. But, let your client decide.

I've heard preparers say that they run the numbers both ways, 1120 vs 1120H, to see when is better for their client for that year. Apparently, it's a year-by-year elections to file 1120H, confirm that for yourself. (Haven't had an HOA client for years.)

Using the search file option: Using IRS.gov: https://www.irs.gov/government-entities/irc-section-501c4-homeowners-associations https://www.irs.gov/pub/irs-pdf/i1120h.pdf

The 3 out of 5 (different for horses) is a safe harbor. Within that, the IRS would have to prove you're not a biz. Outside the safe harbor, the biz has to prove they're a biz using the IRS factors and other reasonable issues. It's possible a biz is changing to get out of losses or that the losses were due to natural disasters and take time to rebuild or...for more years. We usually can tell when our clients are just dabbling and it's a hobby. I had an artist who worked hard on her art and on her biz, memberships, shows, sales. But over the years, she got busier with her kids and seemed to be treating her art less businesslike. We had a chat about 3 out of 5 and IRS scrutiny, and changed her treatment to a hobby.

And, it certainly does NOT change what our clients have to report on their tax returns -- worldwide income.

I use ProSystem fx, just had an update Sunday, but do NOT have an option to keep me authenticated. I need my iPhone stuck to my wrist like that thing the quarterbacks wear!

If he paid independent contractors for services or labor, then he should send Forms 1099-NEC on a calendar-year basis. (Other qualifiers, such as non-corporation, over $600, etc., still apply.)

Someone more tech-savvy will jump in here... I have my icon pinned to taskbar. If you want it on the desktop, I think you can just drag it and drop. Then you can move icons around to fit your needs.

If you wait for an amendment to be processed, it can be a long wait. If your client needs to make any elections that have to be made on an original, timely-filed return, you'll want to do a superseding return. Otherwise, an amended return is fine. (Your state may differ.)

You don't want to make the $1,300 go away, or zero it out, until you ask a lot of questions. How much of the $1,300 is taxable? Self-employment income? Personal sales of personal goods at a loss? Transfers from family/friends for personal activities? As Slippery said, you don't get to not report $1,300 or any amount below $5,000 (or below $600 if receiving Form 1099-NEC, for example). You report worldwide income unless the law excludes it. So you have to ask your client to break out the $1,300 into the amounts from various income categories to determine if and how much you can exclude. Each software will have different ways to enter. You know what to do with biz income. The new instructions for Schedule 1 explain about Other Income and income that can be excluded.

If they're low income to the point of EIC &/or have CTC: The Protecting Americans from Tax Hikes (PATH) Act requires the IRS to hold refunds for taxpayers who claim the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) until after February 14, in order to prevent tax fraud. The IRS expects most EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards by March 3 if they chose direct deposit and there are no other issues with their tax return. Otherwise, you have a teaching moment about w/h and can be a hero by helping your clients get more in their take-home pay.

I've been using Zenwork Tax1099: https://www.tax1099.com/?utm_source=convertkit&utm_