Lion EA

Years ago, filing for my kids in PA with income from NY, I had to first e-file federal/PA/NY NR and then within some short time frame (48 hours?) had to fax the NY NR return to PA. Of course, their fax machines were constantly busy. It was a PA thing. Eventually, that stopped.

Scholarships in excess of tuition would be compensation. However, you'll need her bursar's statement to see the actual ins and outs. Colleges still report wrong much too often.

Sounds like your client entered a new W-4 online and claimed she was exempt from federal withholding. Help her go online and update her info for 2022.

Katherine, we're glad you're here. You've been more helpful than you know. Thank you for chatting with us. I tell my clients that I may be a sole proprietor, but I have my virtual water cooler!

Had a dad panic last summer (I think the IRS turned back on automatic dunning letters about July) and pay a second time (online both times) for his two children's 2020 returns when he got the letters threatening to levy. I calmed him down when the first letters came, but the second set of letters spooked him while laying in bed awake in pain and on meds following hip replacement, so he got up in the middle of the night and paid online a second time for both kids. I have no idea how to get back his excess payments! In normal times, I'd probably include it as ES on the 2021 returns -- but nowadays that will just hold up processing the 2021 returns, I imagine.

I used to use eServices. Then at some point, the IRS said there is "something in my file" that prevents me from holding an eServices account. I really miss it. I have a small clientele, so didn't need transcripts often. But when I did back when I had an eServices account, I could go online pull the transcripts, and see them immediately -- when I had a 2848 on file. (Way, way back, I could enter the 2848 on eServices and pull right then; but probably too many entered 2848s that didn't have the signed hard copy and lost that privilege for all of us -- IRS claimed they dropped that because not many used it. Now there's the "new" online 2848 method, but I can't do that either.) Someday when IRS Service Centers are open again (although, the nearest one is several towns away) I'll go in person to see what can be done. No one can tell me "what" is on my account that prevents me from identifying myself. I unfreeze my credit reports for them. They say my cell is not in my name; AT&T says it's been in my name since the 80s. But real live human beings (back when you could get one on the phone) couldn't adjust my "account" so I can use it. Register for an eServices account right now before you get too busy. And send in 2848s or 8821s as soon as you suspect you might need them (because it still takes time to process them). Try it; you'll like it. It's faster than if you have to talk each client through the process of opening their own accounts and downloading their own transcripts to give you.

Hard drives do fail. But sometimes they just become electronically or physically disconnected. I called my IT guy in a panic when my computer no longer had my external hard/backup drive listed. He had me restart my computer, and it found the drive. I should've know that when something fails, reboot. And, that's why I have an IT guy on retainer! Good luck, Katherine. I think with at least two methods, you're in good shape (the belt & suspenders method). I have the IT guy set up of external hard drive plus online backups that run automatically and are checked by my IT guy, and often by me. AND I have flash drives for specific folders/specific purposes, but those rely on my backing up to the flash. One's for my tax software, one for my "clients" folder, one for my own biz folder, one for a large biz client that I go to his site on occasion, those kinds of things. (I used to backup to the flash drives when a nor'easter or hurricane or...was expected, but now we have a generator so I worry less.)

And, ultimately ending up in my well water!

If you purchased crypto with fiat currency, do NOT check the box. If you acquired it in any other way, DO check the box.

In the few classes I've taken/articles I've read on cryptocurrency, NFTs usually come up. Apparently there's no official guidance but what I hear/read is that, for now, treating NFTs as you would crypto is probably the best you can do. Property. But do you treat NFT like inventory, then inventory. Did you create it; in biz. Did you receive it for something you did? Then could be compensation, earned income, or could be interest for tying up your NFT/crypto. Selling; you have your basis. No wash sales, though, at least until 2023. Buy something else with it/swap it; probably a sale. Lots and lots of unknowns.

Divorced couples, for instance, who alternate years will each claim a child, the same child -- and therefore one got the ACTC and the other the CTC. Same child. Repayment Protection is for low income taxpayers who received the ACTC but have fewer or no children on their 2021 return and meet the income thresholds.

It doesn't matter which children were &/or are claimed. It only matters how many children were &/or are claimed. Is it possible your client is low enough income that they have payment protection?

A snippet from one of the IRS letters (bold is mine): How the IRS determined your payment amounts Monthly payment amounts were initially based on information from an income tax return you filed or information you entered in the IRS non-filer sign-up tool in 2020 or 2021. Your monthly payment amount or how or where the IRS paid your payment may have changed based on information you provided the IRS through your 2020 income tax return if the IRS processed it after June, the Child Tax Credit Update Portal, or the dedicated IRS Child Tax Credit phone line. Review each monthly payment, including any changes, at IRS.gov/ctcportal, and click “Manage Advance Payments.” If you did not receive one or more payments, contact the IRS at 800-908-4184 before filing your return. We all know how well the IRS is at answering their phones!

Form 3911?

Then wait for your software to update.

Congratulations & God Bless You!

You can't, at least not to the almighty IRS. Trace the payment. It's early days, as they say on my Brit Box mysteries.

I hired an IT guy to set me up with back-ups when he set up my new computer. Well worth the money. I got a recommendation from a small tax prep firm in my NYCTATP group back when we were live; he raved about the guy he'd used for 20 years. IT guy set me up with an external hard-drive plus cloud backup. I pay him a small retainer ($150/quarter) plus his hourly rate is low for any extra work for his retainer clients. He taught me how to maintain the system; I changed the time on one drive to 4 am because I work late, I upped the frequency during tax season, and I check to make sure the backup folders contain data and check the dates. But I still ask him to check on it during his monthly checks on my system. One less thing to worry about. I can do what I do best, and use him for what he does best. Ask around to find a local guy you trust.

And, chocolate, lots of dark chocolate!

I've upgraded to CBD tincture to keep me sane, calm, and focused. Auto-delivery.

The old charitable deduction for non-itemizers was above the line, so NY added back. The 2021 deduction is below the line, so NY doesn't need to adjust NY AGI for federal deduction, right? (I'm in CT, so my NY commuters and especially NY residents don't come in until later. I haven't played around in the NY return in my software yet.)

Or, Roth contributions, right? I'm well over 70.5, have started making QCDs to lower my taxable RMDs, paused my own contributions for a couple years now, but want to make 2021 and 2022 contributions to my Roth again. Or maybe to my SEP. I wasn't using my SEP when my very part-time employee became eligible but did NOT want a SEP. I no longer have employees, so I can again contribute to my SEP. I agree with Kathy, too many choices that are similar but each with different requirements. I have a partnership client with a SEP and a partnership client with a SIMPLE and an S-corp client with a SEP and an S-corp client with a SIMPLE, and they all have differences on how the employer reports them depending on both the type of plan and the type of entity. We need more uniformity on something as basic as retirement savings. (But we all know how "helpful" the uniform definition of a child is.)

One more quirky thing for us to research.

I used the 1st year NAEA discount to join and have remained with them ever since. I used to attend the CtSEA education events for both the education and the networking. Now, my main group is the NY/CT-ATP for education and networking, because its location is closer and I can network with both NY and CT preparers (I have NY commuters and NY residents in my CT practice, not just CT residents). However, I've benefited from the NAEA publications and e-newsletters so remained a member. During Covid, I made use of my NAEA member price to take webinars from the NYSSEA and VASEA and elsewhere at the lower member price. NAEA membership also offers you 25% off CCH CPELink education and CCH publications, UPS discounts, other benefits, and a couple FREE classes.

Thanx, Kathy.