Lion EA

I have a lot of states, but not DE. I enter the data on the federal Schedule A. I let the software populate any state schedules. I could enter directly on state forms. But so many of my clients have two or even more states; I don't want to risk missing a deduction, so I let my software populate the states from the federal. For most states, my software sends to the states whatever the states require. But, I do not know what it would or would not send to DE. And, of course, it chooses the most advantageous at both the federal and state(s) levels re itemizing vs. standard.

I work in CT without state itemized deductions. But, I have clients that work in NY, CA, and other states WITH itemized deductions. Plus, why add up potential itemized deductions when my software will do it for me?! So, I almost always enter itemized deductions on the federal return. About half my clients end up with the standard deduction for federal. But, for states like NY and CA, all flows through to the state returns. I don't have to get used to the itemization form for six different states.

Could there be a second business that's not qualified and needs a check added or removed?

I have my name printed by my software as a safety net, in case I forget. I sign the appropriate places on the client's copy and, of course, for anything paper filed. I give the client a complete copy. A few of my clients accept a .pdf electronically, but most still want a paper copy.

Did you already use AOC for four years? Do you have the bursar's statement? I might chance it on the bursar's statement showing a 2019 payment plus the 2018 with 2019 expenses billed. But, make sure you didn't use 2019 check on 2018 return. In fact, without the 1098-T, I'd review all the way back to freshman year to make sure you took paid and not billed and didn't use the AOC on four returns and...really do your DD and keep copies of 2019/2018 info. Explain to client the risk of receiving an IRS letter and to keep all documentation and returns from freshman year forward, and let them make decision, if you are willing.

Nevermind !!

I want details and pictures!

Is he for hire?

If you have a state tax return, especially one that starts with federal AGI, then do check the T&F which lowers AGI to see if it gives a better result for your client than AOTC which lowers federal tax only and not state tax.

...because donor must obtain a receipt from the charity for donations of $250 or more.

If I get a new client when I have a minute (November or December?), I enter them in my program. I learn about them, have any carryovers in place, will get a better year-to-year comparison, and might find something to ask about/amend. At the least, I'll have a better feel for 2018 vs. 2019, for instance. Otherwise, I review three years' of returns (ideal, but will settle for one or two), enter comparison data in current year program, and scour for carryovers, suspensions, you know the stuff. It's sometimes faster to enter last year's return than to find all the places to enter carryovers in this year's!

I usually make my own spreadsheet first. Then I use it to proofread the states to make sure all the amounts are where they belong.

You are not so much backing out the non resident income as you are identifying the CA only income and deductions. There are three pages of columns in Part II and Part III for Federal, Subtractions, Additions, Total using CA Law, and CA Amounts. You start with Federal and end up with just CA for everything from Wages all the way through Itemized Deductions. Then in Part IV you end of with CA Taxable Income on line 5 that transfers to Long Form 540NR line 35. There's a CA Schedule D, also, that goes by the dates residing in CA. Your software should do much of the heavy lifting, if you identified things as IN or CA and by date and entered the date CA residency began back in Part I line 3. Review the data entry on the CA screens to see if you need to enter anything manually. Then review the state returns as "government forms" to see if the "grids" divided income and deductions into the appropriate states. Does your software have a Help key? Also, read the CA part-year resident instructions.

Jim Oh Bkkr makes an outstanding point. I always look at that. Because the OP scholarship was more than tuition, it already is being used for more than just tuition, so I didn't bring it up. But, it is still possible that it must cover all tuition before the excess is allowed to be used for non-tuition. That would still leave $2,200 taxable to the daughter and give dad that same amount toward AOC, T&F, or LLC. When all else fails, read the instructions -- in this case, the terms of the scholarship.

For 2018, it was Form CA (540NR) California Adjustments - Nonresidents or Part-Year Residents, which took the bottom line on Side 4 Part IV line 5 California Taxable Income to Long Form 540NR, line 35. By the way, I had one in 2016, when the CA (540NR) was only two pages; 2018 was four pages.

Federal hasn't asked for it, yet. They use the ID PINs. But, more and more states are asking. NY has required it for some time now. CT is optional.

Yeah, and those MA drivers don't stay in the lines/borders and drift down here into CT.

You may not need to add the full scholarship to the daughter's income. Run the numbers to see how much you need to give dad the highest benefit in combo with daughter. I don't have one in my office right now to look at. But, I prepare parents and college kids at the same time, all the possible ways, and have some good federal comparisons generated by my software as soon as I do data entry. If states begin with federal AGI, then I look at the states, too, with and without T&F deduction. IRS Pub. 970 -- especially chapters 7 & 8 explaining the coordination of benefits to get the best result for your family's situation, including examples and worksheets -- covers educational benefits in some depth and refers you to other publications, such as Form 8863 instructions, and other ways to get help. https://www.irs.gov/pub/irs-pdf/p970.pdf Depending on your software, the Help key may bring up detailed explanations or publications. Don't forget to show dad how much you saved the family by going the extra mile for him!

If the dad qualifies, and if moving $4,000 or whatever is needed for dad's benefits to taxable scholarship for daughter's return, and if her standard deduction will wipe out any taxes on her return or at least keep her in a lower tax bracket than dad, then you may have a better result for the family as a whole. Please run the returns with dad taking AOC or T&F or LLC and daughter having more taxable scholarship to see what gives the whole family the best outcome. Compare that set of returns with the ones you mention above. If you can lower the family's tax liability, the dad will think you are a hero, and you will have their whole family as tax clients forever.

Most of my clients want direct deposit. I get a check, even if it's the check paying my fee. And, I have them look at and sign the Direct Deposit/Debit Report to CMA. If I'm uploading signature pages to them, that report is included with all the signature pages. More and more are choosing direct debit, also. Small amounts, younger clients, convenience, used tpo paying for things online, different reasons, but debits are appealing to more of my clients.

Did she ever treat her business as an S-corporation? Get paid in that name? Open a corporate checking account? Use the corporate EIN? You said she didn't put herself on payroll. If she didn't act like a corporation, can she continue as a sole proprietor for 2019 and you file a zero 2019 final 1120S? I'm not sure, just throwing it out there. Still need to dissolve with her state. What do you say, Abby?

I think it's a bank decision to accept or to not accept a direct deposit without a name match. The someone else would need to work with his bank to know if they will accept. I've seen it work for a kid's refund to go into his parents' account, when kid has no bank account.

You should be able to fill in an 8879 in your tax prep software, even if you have to create a dummy return to use the name you need. But, why do you need to fill in an 8879 for a client who is NOT in your tax prep software? What are you trying to achieve?

I tried it yesterday at a biz client's site. It lead me around in circles, returning me to a previous page. I created the Excel files as they directed and uploaded them successfully, but they would NOT use them. I finally typed everything in manually! They emailed Forms 1099-MISC, or at least I received mine. It does NOT appear that they mailed the one requiring snail mail. And, they did NOT file with CT as they said they would. I could NOT get "chat" to function all day long and did NOT get return emails until late this morning when I am no longer at that client's biz. (Their emails just asked me the questions I had already emailed them, so I replied with the questions in their order/format and still have NOT received answers.) The federal efiles will NOT be done until 29 January, so start soon if you want to be on time. They do NOT show their schedules until after you have paid. I couldn't find how to print client copies. I managed to print each individual 1099, but from QB and NOT from tax1099. All in all, a very time-consuming and frustrating experience that is NOT complete.

I filled in this one with my info; here's a blank for you: https://www.irs.gov/pub/irs-pdf/f8879.pdf