Lion EA

Thanx, Kathy.

Kathy, let me understand. I'm old, have different types of IRAs (Traditional, Roth, SEP, and Simple), and give to charities. I can make a QCD of $100,000. My RMD is maybe $25,000. I direct my broker to send $25,000 from my TIRA directly to my church and a handful of other charities. I will show NO income from my RMD on this year's tax return. But if I contribute $7,000 to my Traditional IRA this year and do the above, I will exclude only $18,000 from my income and show $7,000 taxable income from my RMD. What happens if I contribute $7,000 to my Roth IRA instead? Do I exclude the full $25,000 I had sent to charities from my Traditional IRA?

If the IRS is really trying to stop identity theft, then why wait 8 months to query my client? The IRS is hurting the people they say they're trying to help, those earning less in 2020 and 2021 due to Covid, by making them wait a year for their refunds which include all those credits they advertise so heavily.

Congratulations!

I had two clients with the identity verification letter this tax year, and I have a very small practice. One in CO got through via phone fairly quickly. The other was hung up on, struggled on the online site, was texting me out of desperation, even though she knew I was in a tax class. By the second day, she switched to her tablet instead of her cell (she's in her 40s, but her social group does everything on their phones instead of any other device) to continue calling on her cell while navigating the website on her tablet. On her tablet, the website accepted her ID info that it would not accept on her cell. I would say she was ready to tear her hair out, but she's my hairdresser (and I'm her tax preparer -- we try to stay in our lanes) and would never tear out her beautiful long blonde hair (she probably has extensions, that's one of her skilled services). She did say she was ready to throw her cell, even with its custom case. The CO couple did move to CO last year. The CT gal has had everything the same for years, home, job, everything except a bit less income during Covid.

If I make a hologram of myself/tax preparer for my Virtual Reality Office, I want to be young, skinny, and pretty, but still believable as a really smart EA. Maybe with glasses, like a sexy librarian type? In fact, I want my Virtual Reality Office to be neat, clean, and organized, things it has not been since the beginning of 2020. And, no Hubby walking in to show me something on his tablet.

A tie-breaker rule comes into play when two taxpayers claim the same child. When all the taxpayers agree on the child's dependency, there is no tie.

Here are a lot of links for you: https://www.irs.gov/forms-pubs/about-form-1041

Probably the same as part of your mortgage/Form 1098 on Form 8829 and part on Schedule A. Or, part of your Form 1099-NEC on Schedule C1 and part on Schedule C2, which I dealt with for a client last season. I would probably NOT use the Form 1099-G but instead put the appropriate amounts directly on Schedule F and Form 4835. Or, if you want to avoid IRS matching problems, put the whole amount on or link Form 1099-G to the form with the greater part of the total 1099-G, subtract the excess under Other Expenses (you can label it "reported on form XXXX"), and enter that lesser amount on the other form. Keep notes in case you have to respond to an IRS letter in a couple years. As long as you report the amounts where they belong, report the total from the 1099-G between the two forms, and are reporting where appropriate for business purposes (NOT to avoid SE tax, for instance), you'll be able to explain what happened if questioned.

I don't have both Schedule F and Form 4835, so maybe this isn't your whole answer. I do NOT enter Form 1099-G but just go straight to the 4835 and enter directly on the appropriate lines (last year was 3a and 3b). That doesn't help with your issue of some of the reporting belongs on F and some on 4835 and IRS matching of the 1099-G.

Got that same date on an IRS e-newsletter. so 24 January it is.

Just had a call from a client. E-filed 5/17/2021. Friday 1/7/2022 she got a letter to verify her identity. Over the weekend, she tried online, but it's unwieldy. Today she called and was hung up on. She retried online and was successful at verifying her identity, but site told her the IRS would release her refund in NINE weeks! By the way, she had no luck on her smart phone, but was able to complete the process on her tablet.

My office is a spare bedroom converted to an office. So, like you, not only do I never leave my office, I never leave my house. I tend to think of myself as the age I was when I dated and then married my current husband, so nor more than 47. I'm pretty sure there were no reruns with I was young. We didn't have a TV until I was in school. It was black & white, and we got about three channels in the Chicago area.

I don't think I've left my office in two years! (75)

CCH's eSign

I use CCH's SiteBuilder for my website, which includes FileShare. CCH also offers a more robust portal.

Anyone can upload anyone's tax info on my portal. There's no way I would know if a client shared their login info for someone to upload for them. Anyone can drop a folder through the mail slot in my front door. I seldom see who it is unless I'm in my kitchen where I can see who's in my driveway. I also receive snail mail, UPS, and FedEx envelopes without knowing who did the actual shipping. However, I do email or call my clients to thank them for uploading/dropping off/sending their tax documents and to let them know I received their information safe & sound. My delivery to them is via eSign plus I mail their tax folders for the many that still want a paper return. Haven't had an in-person delivery in a long time, but if it's not my actual client then a signed disclosure.

I'll take new clients with copies of their prior returns.

Someone on some platform was counting the days, such as March 621, 2020. That's too much work, but I love it. Even my hubby (a church music director and piano teacher) has started using 8Q 2020.

Amen! Wishing a smoother tax season to us all.

https://forum.thetaxbook.com/forum/discussion-forums/main-forum-tax-discussion/307209-cash-basis-taxation

Increasing Cash does NOT increase taxability, which was your question. Yes, due to a Loan, Cash is increased, but so is Loans Payable. In non-accounting terms, it's a wash. You haven't changed the P&L. You haven't changed Taxable Income. You seem to be stuck on Cash, but even Cash isn't changed in a vacuum. And, the amount of cash or whether it increases or decreases has nothing to do with taxability -- by itself. Your question should be about WHY cash increased or decreased: was taxable Income received or were taxable Expenses disbursed? Pick up an Accounting 101 text &/or take Accounting 101 at your local community college or online.

A loan is a Liability on the Balance Sheet, a short-term or long-term liability. Cash and equivalent is an Asset on the Balance Sheet. The loan would cause Cash/Assets to increase on the Balance Sheet, but it also would also increase a Liability in the same amount. The Balance Sheet still balances, but nothing happened to the Profit & Loss Statement at all. Nothing happened to Taxable Income. Do you do his bookkeeping? Follow the flow. If you receive his books, make sure you get detail (trial balance, QB backup, something where you can drill down to transactions) and then follow the flow. Follow the flow on his tax return. You'll see where the loan ends up, both as Cash in his bank account under Assets and the balancing Liability account in the same amount. If he wants to pay more 2021 tax, he could accelerate his collections on outstanding invoices (maybe request down-payments on new invoices) &/or spend more (purchase now the supplies he'd buy in 1Q2022 anyway, pay bonuses, pay any outstanding bills he has). Look for Profit & Loss items that increase his income or increase his business expenses.

Loan proceeds are not income; loan repayments are not deductions. Those are balance sheet items, not P&L items. Only the interest on a biz loan is a deduction; in your scenario, their first interest payment would be January 2022. If they're trying to move taxable income to 2021, maybe expecting higher tax rates in 2022, then they need to accelerate collections and postpone spending/paying their own bills. Look at their P&L for possibilities.

I hate texting, typing on the tiny keyboard on my phone. But, as cbslee says, the younger clients don't check their emails often. The older ones either, if they're no longer in business and communicate mostly with their own younger family members. So, I type out my replies via email and then text them to Check Your Email. Have to do that with our own grown daughters, too.