Lion EA

Send it to whoever files the Plan's tax return.

CT is one of them. CT-NATP is writing legislators for urgent guidance, sooner rather than later. Here's a letter I cut & paste (with typos) that you can use however it works for your state. I'm off to get vaccination #2 and really hoping for no side effects, because I have an S-corp to complete plus two more on extension but need to calculate the CT payments they need to make. I felt it prudent to let you know what my firm has written to our State Reps about the unemployment. Why not write to yours and as for guidance. Feel free to cut and paste. Thank you Robert Hartmann, CT NATP Secretary for the letter: "Dear Rep., Last night the IRS released more details on how to report the new exclusion of up to $10,200 (per spouse) of Unemployment Compensation. We have been recommending to our clients who have received unemployment that they wait to file. We are not ethically thrilled about the prospect of having to file amended returns for a fee to cover our costs, if not time, later in order that taxpayers might receive a portion of their refund now. We have been in touch with DRS about this matter but they have had nothing to report thus far. Can you tell us if there is any consideration in the House for CT to exclude unemployment compensation from income tax? I’m happy to talk with you about this, especially if we are able to offer input. We are in the office constantly these days if you would like to call." Click below to find your State Representative and their contact details: https://www2.cbia.com/ga/CT_State_Representatives/-AZHOUSE

Form 8915-E

New Exclusion of up to $10,200 of Unemployment Compensation More In Forms and Instructions If your modified adjusted gross income (AGI) is less than $150,000, the American Rescue Plan enacted on March 11, 2021, excludes from income up to $10,200 of unemployment compensation paid in 2020, which means you don’t have to pay tax on unemployment compensation of up to $10,200. If you are married, each spouse receiving unemployment compensation doesn’t have to pay tax on unemployment compensation of up to $10,200. Amounts over $10,200 for each individual are still taxable. If your modified AGI is $150,000 or more, you can’t exclude any unemployment compensation. The exclusion should be reported separately from your unemployment compensation. See the updated instructions and the Unemployment Compensation Exclusion Worksheet to figure your exclusion and the amount to enter on Schedule 1, lines 7 and 8. The instructions for Schedule 1 (Form 1040), line 7, Unemployment Compensation, are updated to read as follows. Line 7 Unemployment Compensation You should receive a Form 1099-G showing in box 1 the total unemployment compensation paid to you in 2020. Report this amount on line 7. Caution. If the amount reported in box 1 of your Form(s) 1099-G is incorrect, report on line 7 only the actual amount of unemployment compensation paid to you in 2020. Note. If your modified adjusted income (AGI) is less than $150,000, the American Rescue Plan enacted on March 11, 2021 excludes from income up to $10,200 of unemployment compensation paid to you in 2020. For married taxpayers, you and your spouse can each exclude up to $10,200 of unemployment compensation. For example, if you were paid $20,000 of unemployment compensation and your spouse was paid $5,000, report $25,000 on line 7 and report $15,200 on line 8 as a negative amount (in parentheses). The $15,200 excluded from income is $10,200 for you and all of the $5,000 paid to your spouse. If your modified AGI is $150,000 or more, you can’t exclude any unemployment compensation. Use the Unemployment Compensation Exclusion Worksheet to figure your modified AGI and the amount you can exclude. If you made contributions to a governmental unemployment compensation program or to a governmental paid family leave program and you aren't itemizing deductions, reduce the amount you report on line 7 by those contributions. If you are itemizing deductions, see the instructions on Form 1099-G. Caution. Your state may issue separate Forms 1099-G for unemployment compensation received from the state and the additional $600 a week federal unemployment compensation related to coronavirus relief. Include all unemployment compensation received on line 7. If you received an overpayment of unemployment compensation in 2020 and you repaid any of it in 2020, subtract the amount you repaid from the total amount you received. Enter the result on line 7. Also enter “Repaid” and the amount you repaid on the dotted line next to line 7. If, in 2020, you repaid more than $3,000 of unemployment compensation that you included in gross income in an earlier year, see Repayments in Pub. 525 for details on how to report the payment. Tip. If you received unemployment compensation in 2020, your state may issue an electronic Form 1099-G instead of it being mailed to you. Check your state's unemployment compensation website for more information. Unemployment Compensation Exclusion Worksheet – Schedule 1, Line 8 Enter the total of lines 1 through 7 of Form 1040 and Schedule 1, lines 1 through 7. Include the full amount of unemployment compensation you received in 2020 on Schedule 1, line 7. Use the line 8 instructions to determine the amount to include on Schedule 1, line 8 and enter here. Do not reduce this amount by the amount of unemployment compensation you may be able to exclude. Add lines 1 and 2. Enter the total of line 10b of Form 1040 and Schedule 1, lines 10 through 21. Subtract line 4 from line 3. This is your modified adjusted gross income. Is the amount on line 5 $150,000 or more? [ ]Yes. Stop You can’t exclude any of your employment compensation [ ]No. Go to line 7 Enter the amount of unemployment compensation paid to you in 2020. Don’t enter more than $10,200 If married filing jointly, enter the amount of unemployment compensation paid to your spouse in 2020. Don’t enter more than $10,200 Add lines 7 and 8 and enter the amount here. This is the amount of unemployment compensation excluded from your income. Subtract line 9 from line 2 and enter the amount on Schedule 1, line 8. If the result is less than zero, enter it in parentheses. On the dotted line next to Schedule 1, line 8, enter “UCE” and show the amount of unemployment compensation exclusion in parentheses on the dotted line. Complete the rest of Schedule 1 and Form 1040, 1040-SR, or 1040-NR. Page Last Reviewed or Updated: 12-Mar-2021

https://www.irs.gov/faqs/irs-procedures/forms-publications/new-exclusion-of-up-to-10200-of-unemployment-compensation?fbclid=IwAR2PO_Zfyso02H3SQA6JTAgwkLTUU-Zmv26YdgxtbYg9UcOZNQoLnXkfWWM

1/3 or wait to e-file until after they receive their EIP3 if 2019 will get them EIP3.

If your client is a Partnership or S-Corporation, you're preparing Schedule K which does what others mentioned above. Balancing these are driving me crazy, and the deadline's Monday! Plus, we get our second vaccinations tomorrow and have heard about the side effects, so I might lose workdays.

TimberTax.org is a wealth of information. Look for the appraisal of the timber at the time of purchase/inheritance/gift or maybe an appraisal when they sold some timber.

Did he pay more than half his own support? What did he spend his $21,000 on? Did he save some of it? Did you do the support worksheet with the parents and with the student?

Ah, the energy of youth!

My clients know the earlier they come in, the less likely they go on extension. They know I like to work all year, taking off when I want to for family visits, ASP, a long weekend with hubby, etc. They know that after MLK weekend, I probably have enough returns to take me through 15 April. NO ONE came in later last year after the season was extended to 15 July. No. One. I have over 75% of my clients as of today. It's not my clients that straggle in. It's me who procrastinates, waits for "clarification," or goes back to the partnership I completed to check something that just showed up in an article or... I already put two biz returns on extension and need to get two more out by Monday, so I can start filing individual returns. I have absolutely NO worries about my clients delaying.

In a newsie (as opposed to a tax pro pub) article last night, it said that people without direct deposit can take their $1,400/person RRC3 on their 2020 tax returns! Please say that isn't so! Also, anyone read the top EIC amount for a family of four? (My kids in PA asked.)

Don't try to match up the 1098-T with anything, because they are often wrong. Use the bursar's statement for amounts. You need the 1098-T to document college enrollment and Box 8 "At least half-time student (if checked)."

Rita, my prayers are with you and your family.

You would think. They're supposed to report what was paid now. Not what was billed, which didn't help us at all. But PAID seems to have different definitions to different colleges. Some report net pay after loans and scholarships, some subtract some things but not others, some cross year-end to report the semester/school year it applies to and not the calendar/tax year. You need the bursar's statement with dates and amounts and sources and often the parents/students adding up what they paid via check/etc. I expected better from institutions of higher learning.

By the way, the "STOP DOING THAT !!" is what I say to the client. As Abby says, it costs him more to have us do the bookkeeping to move his personal expenses to Distributions and rebalance his books.

STOP DOING THAT !! I use Distributions. And, educate the client. I've used Loan to Shareholder if basis is a problem, but want it under $10,000 and going down each year. Fire him.

I save and close each open return before closing ProSystem fx. Once in a great while, usually an unexpected shut down like a power failure, I try to open a return and get a message that it's already open or locked -- but it's just me on a stand-alone desktop. It does give choices, such as open anyway. I chose the appropriate answer. When it opens, I immediately save and close and reopen, just in case. ProSytem fx had some training webinars as late as February. Support is great. Try live chat for a faster connection. Or, the virtual chat for basic issues. Or telephone but ask for a call-back if it's a long hold time. Always start with their knowledgebase. If it's not urgent, open your own ticket and request an email or call. I do that from time to time -- type in my question before I stop for the night and have an email answer waiting for me when I get back to work in the morning. I prefer emails when I want to print instructions, but telephone when I know I'll have follow-up questions, need the back and forth discussion. They have a community message board, but I haven't used it.

For a young kid who hasn't filed yet, I don't push to have him file when he/she has no filing requirement. Once a child has filed, I do push for him/her to NOT miss a year.

Always get the bursar's statement. Forms 1098-T are notoriously inaccurate. (I don't know what that says about the colleges teaching our next generation.)

I always suggest filing to start the statute of limitations running. Does he need to file Form 8938? Is he required to check the boxes on Schedule B, or only if he has a filing requirement? Is he e-filing his own FinCEN Form 114?

Bulldog, is your client a US Citizen, green card holder or tax resident? Why hasn't he filed returns?

1. Only interest and dividends on parents' returns. But, as you say, why raise their AGI? With capital gains, all must be on child's return. 2. Yes. 3. I do. It starts the statute of limitations running. No return; no SOL.

Kiddie Tax!

I don't use ATX, so you'll have to ask ATX Support.