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Alright. I sent three returns for clients who didn't want to take advantage of reporting the early distribution over three years. I used Form 5329 only. They were accepted. THEN I happen to read on the ATX Form 5329, under Part I, that we don't use this Form for coronavirus related distribution. I noticed just now that the IRS pdf for 2020 Form 5329 does not have that instruction against using the form for coronavirus distribution. Just throwing this out there. No idea if we that used 5329 should amend to include 8715-E or not. I have three others that I will hold onto an

You mean you're not deducting it already! Those are standard office supplies.

Agree with those above. 5 minutes of your time in reporting it can save many headaches of having to deal with the IRS down the road.

Yes. One breath of air is all it takes. I can't find documentation, but if the child is on the tax return, it should cover stimulus, too. Sad....so sad though.

Thank you! He is still a captain for SkyWest and living in Colorado. He should get a promotion next month to check airman. He will be one of the youngest to get this chance. (Sorry, I am a proud mom.)

These 0h Rita titles always throw me off: No way I have made 37 errors already shut up.

Anytime there's a new tax law after the year begins, tax preparers get to deduct all the chocolate they want as a business expense. Or wine. Or liquor.

Definitely unethical and illegal for a child/student to claim his own dependency, get EIP/RRC, etc., IF HE CAN BE CLAIMED BY ANOTHER. As you point out, a high earning child could be providing more than 50% of his own support, so it is possible, ethical, and legal IF YOU KNOW HE CANNOT BE CLAIMED BY ANOTHER. Have parents and child fill out a support worksheet with you, and keep it in your files to document the outcome. I have one coed angry with me, because "all her friends are doing it." But her parents are happy to keep the education and other credits, and they DO qualify to claim their

According to that article, they will not. The bottom line here is that, once again, we tax professionals are under the gun. The IRS imposes so much pressure on us with zero compensation, zero thought, zero zero zero. "We'll fine you if you don't do this, don't do that, don't dot your i's and cross your t's, and do it in a powder keg in split second time. Oh, and we won't compensate you for it." They shaved all this time off our prep time, and no extension. Can you tell I'm a little ticked off? I'll shaddup now. Sorry. Not sorry.

Amazing how all the sudden these dead beat kids of my clients are "miraculously" on their own and not a dependent anymore. Tom Modesto, CA

I agree and report it, claiming the exemption. A client signs a lot of paperwork during their closing and might not know they received Form 1099-S in their packet, or it might be mailed to their old address. It takes almost no time to report it and exclude it; but it takes a lot of time to answer the IRS letter, calm your client, and even figure out what happened in the past.

But don't neglect those states that "decoupled" from TCJA such as New York, where a state-only 2106 can bolster itemized deductions even yet. And not just teachers; I've filed several clients who'd become remote-only employees last year and so, newly qualify for the office-in-home deduction. Asking whether such folks have upgraded their Internet and/or wifi and/or hardware, increased their bandwidth to accommodate more/faster video, simply bought a rug to improve acoustic, setc. has yielded more of a deduction, as well.

The excess distribution will be closed out to retained earnings that will create a negative balance. That will happen when the shareholder has used up stock basis. Some others here may also suggest creating a shareholder loan, but I'd caution that this should be fully documented and make sure that is the shareholder's INTENT, including paying it back with interest that at least meets the current AFR. Also talk to your client about not using the S corp as his or her personal checkbook.

Looking for your topics? - All stimulus-EIP topics are in the COVID forum All e-filing issues, including e-filing prior years, are in the E-File forum All posts related to the health insurance marketplace, 8962, splitting the APTC between returns, etc - all are now in the ACA forum

Everybody hates bad news, but the only bad news here is all the tax law changes and delays, and if you feel Eric is doing a good job with the site don't forget to click on the "Donations" link, lets show our appreciation to him.

Y'know, sometimes the instructions HIDE the information until AFTER you ask. I think it's to keep us humble, or something.

A novel idea is much better than a novel coronavirus! Tom Modesto, CA

The proper handling of this situation is to fill out the 1099R input with the distribution in box 1, the taxable amount in box 2a, and enter the rollover taxable amount in 2b. It is reported as if the taxpayer did a 60-day rollover. On the explanation tab, I state this was rolled over before August 31 per regulations issued under the Cares Act. That will show the distribution correctly on the tax return and prevent any future notices.

I have always reported it then claimed the exemption to ensure that my client doesn't get a letter, which I would have discuss with the client and respond to the letter.

That would be considered stockpiling and is against the rules of being an ERO. Transmission of the returns is supposed to occur within a reasonable time after the ERO has all the required information and signed documents in order to process the return, and any more than 3 days delay is stockpiling. The exception to this rule is for returns prepared and ready to e-file prior to the IRS' MeF opening date for the filing season. See pub. 1345.

If I get yelled at for not attaching the pdf, I'm implicating you as well Abby. Just be forewarned!

I've only done totals for over 10 years and I never attach anything and no one's yelled at me yet. I don't care what form instructions say. They are not the law.

Not for nothing, I pay my financial planner plenty and he makes me plenty more. I'd do anything not to drive that bus! LOL And yes, it broke my heart to lose that deduction. Since it's a cost related to making taxable income, I couldn't understand why we lost it. I just about ran out of wine on that one.

K is for kilobytes and I've never had an efile rejected as being too big. The best thing to do is try it and if it won't transmit, find some software to reduce PDF size. There are many to choose from, but some will degrade the readability. But, to be honest, there's no way I believe anyone is reading attachments to efiles. Not even if the return is given extra scrutiny. I may test this by attaching PDF's of a picture of Mickey Mouse to see if anyone notices.

You get a deduction for having a sexually transmitted disease? Is that for the porn industry?

I have a better idea, I rent a bus, take them to the casino and I stay with them writing down their winnings and losses.

All I heard after Technically was blah blah blah! Like the teacher on Charlie Brown!

No calculator. LOTS of erasers. Penalized for addition/subtraction/other math mistakes. It would keep them too busy to cause other trouble, which makes it even better!

I don't have to push my clients earlier; I have to push them later, spread them out over the year. They'd all want to file 23 January if they could, if they had all their documents. But I can't complete all those returns in two months. I'm preparing partnerships and S-corporations now, so will have only one month for personal returns. My choice is to make much less money or work more months. My hubby works all year, so it fits our schedule for me to work much of the year. We schedule our own vacations, days off, mental health days.

No

I am a teacher by day. I can tell you that the majority of us spend far more than 250.00 per year. Many of us have purchased equipment necessary to work from home during the pandemic and for that reason alone have spent more the 250.0. Needless to say, the limit on that deduction is a joke and really makes little difference in the refund or amount to pay. While I love my teaching job, it is a thankless job at the same time. I could go on and on about this but wouldn't do anyone any good.

What do we tell our clients????? I tell them, even if the IRS will extend, I will close my office after April 15 and go to Bahamas. That's what I am telling them now and that's what I will tell them in March and that's what I will tell them up to April 7. But if the same person calls me on April 10th, I will tell him/her that the government extended the time to file and that my office will be happy to have their business and my office will stay open The IRS is doing the same thing because if they announce the extension now, people will relax too much.

Feel free cause I have trust issues.

Haha, if only.... This is going to be a PITA. No one kept the letters, and I have some in the phase-out range. One older client swore over and over to me that he knows the first EIP was only supposed to be $600 and he has never been comfortable giving anyone, including me, and direct deposit info. Then he remembered getting a check but said any time he gets checks, he always makes a rounded-off partial deposit and takes some cash back as mad money. He refuses to use the internet! I looked up the date for him on the IRS site. Said he found a deposit for an even $2,000 on 4/29/20, so he

#goshimisseverybody

When the IRS insists that you include an email address on returns, they are perpetuating these fraudulent activities. They tell you they will never contact you via email, insist on receiving your email address and then act shocked that people think it's reasonable the IRS would contact them via email about tax matters.

"When in danger, or in doubt, run in circles, scream, and shout!" Is that what you mean? At least it makes the others in your office leave you alone for a while.

Brightening up our day is good use of your retirement time. Thanks for thinking of us. That was turtley funny!

Maybe will brighten Y'all.s day..

Knowing I'm reluctant to file the FinCEN form, I skimmed through their 2019 return, just looking at the forms, to see if I could meet the price they wanted to pay. No way! He earns over $400,000, so things like NII and phaseout of QBID come into play, CT and NY returns, FL condo rental w/missing depreciation schedule, FIVE partnerships such as oil & gas/passive loss carryovers and restaurants in NJ, huge mortgage interest so may be some refinances with non-buy/build/renovate uses, many interest/dividend accounts plus stocks, and lots of other forms/schedules. And, she'll start drawing

I have had many clients tell me they did not receive a 1099S but when I ask for the closing packet, lo and behold! there is the 1099S. I had an interesting one this week where the homeowner was deceased, and the mother was the sole heir (no will.) The 1099s was made out to mom, sole heir of son's estate and did not show any tax identification number! I had to call the title company to see whose tax id they actually reported this in - mom or the estate.

Given all we are dealing with this tax season, I think you have to raise fees to justify all the extra time spent on each return. This tax season will be unlike any other.

You don't have to attach anything if you follow the instructions for entering data.

Isn't that what the "I" in IRS stand for - Inconsistent. All kidding aside, it is congress, not the IRS, that creates retirement plans and their requirements. What is inexplicable is why there are 9 different plans.

This happens to me at least once a year, and it takes me forever to figure it out. Per 8962 Instructions: Household income above 400% of the federal poverty line. If the amount on line 5 is 401%, you cannot take the PTC. You must generally repay all APTC paid for individuals in your tax family (but see below for two exceptions). Skip lines 7 and 8, and complete lines 9 and 10 (and Part IV and/or Part V, if applicable). Complete only column (f) of line 11 or lines 12 through 23. Enter -0- on line 24, and enter the amount from line 11, column (f), or the total of lines 12 through 23, c

A client I have cashed out a qualified plan to pay off credit card debt. She had operated a small business which she was unable to do because of merchandise supply issues so it looks as if she would not need to pay the 10% penalty. Of course, she being absent minded failed to have withholding set up. Oh well. Another client drawing significant unemployment insurance did the same darn thing. "They were supposed to have taken out federal tax". He never checked to insure they did. I can see not a few long faces this season.

The code is on the 8949, and it's conveniently H.

Yes. You never know when a 1099S is out there. What Gail said. And, if they look at her return when she's 69 and disabled, will she be able to recreate the house basis? Just report it now and start the SOL. What Patrick said. Report it. Depending on your software, just one/two lines to report and claim 121. You don't have to charge her any extra if you don't want to. But report it.