Lion EA

The IRS used to issue refunds on Thursdays, so our clients with direct deposit would see them in their banks on Fridays. Then, the IRS started issuing refunds every day (every weekday?), but stopped publishing their schedule! I just use the IRS line about 90% within 21 days on their filing instructions, as well as the Where's My Refund link, so clients can track it themselves. I also hand out IRS Pub. 2043 to clients who ask me more questions: https://www.irs.gov/pub/irs-pdf/p2043en.pdf

Haven't done one of these in years. I think -- without having done any research recently on this topic -- that since mom passed with a life estate, this acts like any inheritance. If mom were still alive with a life estate and a house sale, then I think the calculations are necessary to attribute to mom and to kids. You're going to need to research, sorry!

If it was a completed gift, the children's basis is the parent's basis the day before the gift. If the "gift" included a life estate, written or implied, the children's basis is the DOD FMV. If a 1099 arrived, report it.

If it's on a paystub, it's usually pre-tax payroll deductions plus the employer part, so ALL PRE-tax. If the client wrote a check to his HSA, that would be after-tax.

Exactly. Enter it on B. Then on the next line put a description something like "Reported on Form 1041, Name, EIN" and put a negative number for the amount received after DOD (cash basis taxpayer).

Hobby income.

Did you enter AGI instead of Prior Year Earned Income Amt?

These memories stay with us, trust me!

My gal had some obscure document with withholding that I'd copied, so I had a copy to put in client's folder with her return. And, I'd scanned, so I had it electronically and could keep with 8879 electronically; although, I still do that with paper. She was actually in my office and replaced each of her papers in her own files (from home) the way she wanted to store them. But, I couldn't find the original what with her taking each document out of my hands to replace in her own filing system. She's a huge worrier, so I was definitely panicked knowing a piece of paper had to be somewhere in my office. I tried to stay calm and gave her the paper copy as if it was her original. She seemed to buy that and left happy. But, I tore the office (just one room in my house) apart the rest of the day. I printed from my scan to keep with her paper 8879. I didn't find her original until I used the copier days or more later. I find it hard to stay organized with the client sitting here moving papers around. I have an L-shaped desk and usually move papers from in front of the client and me as we discuss them, or in rare cases actually prepare the return, to the leg of the L AWAY from the client; but she takes each of her documents back into her briefcase. In her case, it was TWO clients; two cousins always come together to get their taxes prepared, because only one has all the documents organized for each of them, the organizer being the worrier. All's well that ends well.

I don't use ATX, but I do get warnings if a line wasn't computed. Sometimes, I forgot to label an entry T/S instead of J. But, sometimes it's telling me I have to compute that line. You do have to review the form. Do you know that T made all the payments on a J mortgage, for instance? Or, how can it assign the prior year CGCL without knowing whose investments generated the gain? You're the tax adviser and the tax preparer. If you know the state(s) well on that return, you know when the federal results warrant looking at the state(s). With CT only, I seldom need to look very hard. For multi-state returns, especially including states like NY or CA that decoupled from federal law, I've done almost everything from printing a MFJ state copy (after I've completed the federal split for reference) and making margin notes plus checking the tax brackets all the way up to preparing the MFS states in my software completely before offering my clients the results and my fees, so they can make a fully-informed decision. My software always includes the MFJ vs MFS. For the vast majority of my clients, it's overwhelmingly MFJ by thousands or tens of thousands of dollars, so I don't even look at CT or even NY unless my client has asked for a complete analysis. You get a feel for what tweaks you can and can't make to federal, what could change your state(s), how big the difference needs to be so you can charge for your work, etc. Review a few MFJ vs MFS forms to get a feel for how to work with them. Then look at your home state to see how much of a difference it can make, or not.

I think the IRS is waaay too understaffed to check that, and a lot of other things. But, WE all check. It's also mid-February, so we're all overwhelmed right now. I asked because I was genuinely worried that I missed something new in the SECURE Act, or whatever; wasn't trying to call you out. (It just sunk into my head today that we can/have to compute kiddie tax under the TCJA rules AND under the SECURE rules to see which is best for each client. Luckily, my kiddies haven't come in, yet.)

We've all been there! I had a missing document from a very nervous lady. Luckily, she was also a bit overwhelmed putting her documents back where she wanted them as I finished with each one. After she left, I was checking everything I'd ever done in case I stapled her document to someone else's and, of course, worried that I'd actually SENT it to someone else. Days or weeks later I found her document when I opened the top of my copier; it was on the glass. I don't copy much anymore, now that I scan a lot and lots of clients upload to my portal. Huge relief.

And, when they are expense reimbursements only, do they NOT issue 1099s?

Well, his early-onset Alzheimer's doesn't show up as a rare disease. However, wife's check was definitely for driving him back and forth to another town for the trial, and no 1099, so I think her money is not taxable. And, husband's check is for the exact same amount as wife's, so maybe also for travel time. At least I know what type of questions to ask wife and, of course, for any documents, contract, whatever paperwork they signed or received for participating in the clinical trial from which they received stipends. She is organized and keeps everything do do with money (she's self-employed and they have a partnership and two kids that work). The odd amount of $748 each suggests mileage reimbursements -- I hope! Thanx, all.

NO 1099s were received, and the amount was greater than $600 to each spouse. So, I was hoping that payments to medical research guinea pigs might be nontaxable. But, the couple told me about it; and I told them it was probably taxable for federal and state income tax, so they're expecting it. I'm continuing to search, but I haven't had a client in a drug trial before, so trying different search terms.

Yep, follow the flow, especially on the states. You're still the preparer and do the thinking. Your software can do some heavy lifting for you, keep you from typing in three sets of returns, for instance, and do lots of math, if you have everything in the right place. But, you have to follow the tax law of three governments.

Good point, Judy. You always have to follow the flow. The fed MFS can be added and compared to MFJ as one check. But, the states have their own rules. Follow the flow on each state for reasonableness. NJ, for instance, adds back into income some Box 12 retirement contributions, so the income the two states are reporting will never add up to the federal income. NY and CA and ... allow itemizing even if standard on fed. You have to prepare the returns, but your software can do a lot of the math and save a lot of data entry for you as long as you get your T/S/J labels. I don't use ATX, but my software starts with a MFJ vs MFS grid that I can adjust like any spreadsheet. If the mortgage was joint and paid joint, in the grid I'll try something other than 50/50 to see what benefits the couple as a whole. So, I can make a lot of changes easily and change again before I actually split. See what your software will do to help you help your clients.

I have a H/W who each received under $800 and NO Form 1099-MISC for participating in a drug trial. The husband has early-onset Alzheimer's; the wife drove and accompanied her husband. Is this taxable income to the H/W each? They do not do this for a living, so no Schedule C, right? They did this in hopes of helping the husband. Other income? This is the first time I had clients in a drug trial.

I've had a few with one spouse with large medical. And, I've had a few where one spouse made little enough income and could take just enough of the deductions to bring tax to zero/or a lower bracket, saving all the rest of the deductions for the higher earner. I don't expect to see many now with the higher standard deduction.

Depending on your software, you can probably label everything T and S on the MFJ federal return with both states and have your software create the two MFS returns. Delete a state from each MFS return. You'll e-file the MFJ federal plus one MFS with AL only/no federal plus one MFS with PA only/no federal. Yes, three sets of returns. But, you're really only doing the work to create the first MFJ federal return with two states. Then your software is doing all the calculations to create the next two sets of returns. Follow the flow to see if you need to make any adjustments. Just make sure your lines all add up to the MFJ return, except the taxes, of course.

Sara, if one spouse itemizes while filing MFS, can the other really take the standard while MFS?

I had an AT&T retiree who received a W-2 each year for his free telecommunication services. Eventually, the tax on that income was more than some of the cheaper phone plans, so they stopped using AT&T and went with a family plan from another company. But, it had been a bargain for many, many years.

I think it has to do with inherited property, which is not your case. You probably want to enter Various and then Long Term, however you do that in your software. (In mine, I enter 99/99 for the software to enter Various, and I enter L for it to be treated as long term.)

And this: CONFIDENTIALITY AGREEMENT This Confidentiality Agreement (this "Agreement") is made effective as of _____________, between NAME/ADDRESS, and NAME/ADDRESS. In this Agreement, the party who owns the Confidential Information will be referred to as "NAME1", and the party to whom the Confidential Information will be disclosed will be referred to as "NAME2". NAME1 is engaged in the business of Financial Advising, Accounting, and the Practice of Law. NAME2 is engaged in a contractual service relationship with NAME1. Information will be disclosed to the Recipient during the time he is providing service, either directly or contractually, with NAME1, in order to facilitate his work with said company. NAME1 has requested that NAME2 will protect the confidential material and information which may be disclosed by NAME1. Therefore, the parties agree as follows: I. CONFIDENTIAL INFORMATION. The term "Confidential Information" means any information or material which is proprietary to NAME1, whether or not owned or developed by NAME1, which is not generally known other than by NAME1, and which NAME2 may obtain through any direct or indirect contact with NAME1. A. Confidential Information includes without limitation: - business records and plans - financial statements - customer lists and records, including customer identification numbers and financial information - trade secrets - technical information - client financial plans; client legal documents - pricing structure for fees - computer programs and listings - copyrights and other intellectual property - any information pertaining to the operation or clientele of NAME1, or other proprietary information. II. PROTECTION OF CONFIDENTIAL INFORMATION. NAME2 understands and acknowledges that the Confidential Information has been developed or obtained by NAME1 by the investment of significant time, effort and expense, and that the Confidential Information is a valuable, special and unique asset of NAME1 which provides NAME1 with a significant competitive advantage, and needs to be protected from improper disclosure. NAME2 further understands that in the ordinary course of business, NAME1 comes into possession of client information of a personal and sensitive nature, and that disclosure of this information could negatively affect both NAME1 and the clients of NAME1. NAME2 understands that it is his legal and ethical responsibility to protect the privacy, confidentiality, and security of all customer information, including business, financial, personal, and tax information relation to clients of NAME1. In consideration for the disclosure of the Confidential Information, NAME2 agrees to hold in confidence and to not disclose the Confidential Information to any person or entity without the prior written consent of NAME1. NAME2 further understands that any disclosure of confidential information related to clients violates both securities law and the ethical code developed by the American Bar Association. In addition, NAME2 agrees that: i. No Copying/Modifying. NAME2 will not copy or modify any Confidential Information without the prior written consent of NAME1. ii. Unauthorized Disclosure of Information. If it appears that NAME2 has disclosed (or has threatened to disclose) Confidential Information in violation of this Agreement, NAME1 shall be entitled to an injunction to restrain NAME2 from disclosing, in whole or in part, the Confidential Information. NAME1 shall not be prohibited by this provision from pursuing other remedies, including a claim for losses and damages. III. RETURN OF CONFIDENTIAL INFORMATION. Upon the written request of NAME1, NAME2 shall return to NAME1 all written materials containing the Confidential Information. NAME2 shall also deliver to NAME1 written statements signed by NAME2 certifying that all materials have been returned within five (5) days of receipt of the request. Upon request, NAME2 shall also deliver to NAME1 written certification that all electronic files of any type retained by NAME2 and containing information provided by or related to NAME1 has been destroyed. IV. RELATIONSHIP OF PARTIES. Neither party has an obligation under this Agreement to continue any type of relationship, employment or contractual, with the other party, or commercially offer any products using or incorporating the Confidential Information. This Agreement does not create any agency, partnership, or joint venture. VI. LIMITED LICENSE TO USE. NAME2 shall not acquire any intellectual property rights under this Agreement except the limited right to use set out above. NAME2 acknowledges that, as between NAME1 and NAME2, the Confidential Information and all related copyrights and other intellectual property rights, are (and at all times will be) the property of NAME1, even if suggestions, comments, and/or ideas made by NAME2 are incorporated into the Confidential Information or related materials during the period of this Agreement. VII. GENERAL PROVISIONS. This Agreement sets forth the entire understanding of the parties regarding confidentiality. Any amendments must be in writing and signed by both parties. This Agreement shall be construed under the laws of the State of ________. This Agreement shall not be assignable by either party, and neither party may delegate its duties under this Agreement, without the prior written consent of the other party. The confidentiality provisions of this Agreement shall remain in full force and effect after the effective date of this Agreement. Information Owner: NAME1 By: _______________________________ NAME1 Recipient: NAME2 By: _______________________________ NAME2

I received the following from someone or some company or maybe even my E&O: COMPUTER REPAIR NONDISCLOSURE AGREEMENT Agreement made this _____day of ____________, between _____________________(the “Repair Person”) and _____________________________________ WHEREAS, ____________________________(the Company) stores and maintains records and data of a highly sensitive and confidential nature, the disclosure of which to unauthorized persons or entities is prohibited by law (the “Confidential Information”); and WHEREAS, the Repair Person will be performing repair and maintenance services on or in connection of the computer or computer system owned by the Company, and in connection therewith could have the ability and opportunity to view and obtain access to Confidential Information. NOW, THEREFORE, it is agreed as follows: 1. The Repair Person shall not directly or indirectly copy, reproduce, remove, alter, delete, modify, edit, transfer, transmit, divulge, or disclose Confidential Information in whole or in part. 2. The Repair Person shall treat all of the Company’s records, data, and information, including but not limited to Confidential Information, which it has the opportunity to view or access, in a strictly confidential manner. 3. The Repair Person shall indemnify, defend, and hold the Company harmless from and against any claim or action related to or arising out of any unauthorized access to or disclosure of Confidential Information by or on behalf of the Repair Person. 4. The parties have executed this Agreement as of the day and year first above written. THE REPAIR PERSON The Company By: By: Title: Title: Owner/Accountant