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That is a beautiful thing, right there. I might have a little tear in my eye. You have changed my life.

My idea for a W4: Enter the % you want withheld (min 8%). You can still claim exempt if you expect your EIC or other credits to zero out your tax. This will help part-timers, especially if their hours vary and sometimes have no tax withheld due to low hours in a pay period. Then everyone will be having a discussion about what % they're having withheld and people will start to understand what their effective tax rate is. And if they're under/over withheld, they can easily increase/decrease the %.

---> I suspect 90% of the "unaffordable" code uses are false. And 100% of them are not caught. I came to this conclusion thru guessing. <----- Rita: Your methodology is unassailable. I should have taken your "Probability and Statistics" class after having spent all that time as your star Algebra pupil 15 years ago.

My apologies if that combination is the universal symbol for weed or something.

In the past I have gained two new clients each whose former preparer died from a heart attack. Both of them were fairly young and about my age at the time. That got me thinking that this job does come with its health risks. While I do work long hours they are interspersed with stretching, exercise, and drinking water. I never allow myself to get stressed and smile when a client is freaking out on the phone about their tax bill (I do no face to face). As it has been said, it's just not worth it, they can't pay us enough to have their stress transferred to us. I've only done 3 extensions since yesterday as my cut off is 1 week before due date so from here out just extensions will be prepared, and that is a really good feeling. Take care of yourselves everyone, life is short, don't let them make it shorter.

John H and the other have already said it; I'll just reiterate. YOU have to control YOUR business and your clients. They WILL resist at first; be firm but polite with them - and let them go if they insist. Not one of your clients is worth a heart attack or a stroke on your part. Not one. Tell them the extension is their good friend; that your return goes on extension (if true). Blame the new tax law; blame the IRS that lets banks and brokerages send materials out 6 weeks later than the deadline used to be. Tell them when you rush to meet a deadline you worry you might miss something. Whatever. I work hard for my clients, and I put in long hours. But I will not and do not (any longer) half-kill myself for them. I have found, over and over again through the years (because I'm a slow learner, it seems) that the clients for whom I do the most, at THEIR insistence, are the ones who then leave in a huff (probably bad-mouthing me) when I make a mistake due to rushing for them and at their insistence. To heck with that! Our letter says we must have ALL materials in-house BY March 15th. It also says that any returns not completed AND FILED by 4/1 WILL be placed on extension. We put returns on extension that are done! If something comes up and the client does not get us the signature forms (forgets, kid gets sick, their arches fall - who cares), WE are covered by the extension and don't need to worry about them one little bit. Take charge. The clients worth keeping will respect you; the others you don't need. Their leaving will make way for more good clients!

Taxpayer is a family member. Not the smartest cookie in the box, but we love him just the same. Signed up for Obamacare, eligible for the APTC. All good, his income and his spouse income properly estimated. The amount of the PTC and the cost he paid is pretty much right on....EXCEPT....his wife and he got into a fight and she left him at the end of October. He cannot locate her, as she moved to another state and blocked his calls to her cell phone. He has no option but to file MFS. Guess what, that means an otherwise qualified individual who is right in the wheelhouse of who this law was supposed to help, cannot use the PTC because of the MFS status. I know, he can file as abandoned/abused and get around the penalty...But it just seems so unfair to me that when life happens, and your situation changes, here comes uncle Sam to slap you in the face again because you could not foresee that your life was going to change dramatically before the end of the year. Taxes are not fair, but this is insurance, not tax. I so wish that the testing of income for PTC was the prior year AGI. It would make things so much fairer (is that a word) if you had some certainty on what the maximum you will have to pay for the required insurance the government requires you to buy. We would never by auto insurance, homeowners insurance, or life insurance based on a cost we did not know until the year was over. Just think if you bought an auto policy in January for the year, and then in May you got into an accident and State Farm calls you up and says you have to pay another 4K on the policy because you estimated that you would not have an accident, but since you were wrong, here is the bill. This is STUPID, STUPID, STUPID. Rant over. Tom Modesto, CA

and have a nice audit

this is an IRA nothing taxable or reportable until distributions are taken. The statement should just be an annual report to show the activity and the value. IF there is a 1099int, 1099div or 1099B, then this is not set up as an IRA. Either they are mistaken about the kind of account it is OR it was done wrong. The most confusing IRA reporting are the K-1s when they have invested the IRA in one of those PTPs or other partnerships. At first, the K-1 looks just like the ones that must be reported However, they do say IRA in I1 and I2.

Duuuuuuude. Here's the symbol for pot:

Agree, ACA issues have been far more challenging to me than any tax laws. I suspect 90% of the "unaffordable" code uses are false. And 100% of them are not caught. I came to this conclusion thru guessing. Also, Tom, if runaway spouse was covered, not-the-smartest-but-loveable can allocate 50% to her. I don't think that's the case, but that's the only hope I have. (For this situation, not for you.)

I agree with Randall and Pacun as to our responsibility. However, I don't think that it is a bad idea to just tell her that if this loan was really for the benefit of her husband and he is the one who defaulted on payments, she should discuss this with her lawyer in case it impacts the settlement in any way. kick the ball to the attorney - that is why they get the big bucks. But our clients don't always realize what is important and I would prefer to err by advising them to consult the professional.

Remind her to tell her lawyer about this and that hubby defaulted. It's going to be income on her P&L for the divorce papers, instead of a liability to repay. That's going to make things lopsided if the proceeds were used by hubby for his biz or whatever. She needs to be able to explain this better or it's going to hurt her financially in the divorce. Maybe after reviewing her documentation, you can help her lay out the timeline for her lawyer. Well, after 15 April, if possible.

Don't worry about that case. Take it out of your mind. We all make mistakes. EVERY SINGLE year we make mistakes. Just be nice to them and go the extra mile for them in the next few years and everybody will be happy. When I realize that I made a mistake one year, I make sure those clients are treated nicely and I double check their future returns to make sure I covered everything for them.

I don't know whether to laugh or cry. I'm taking my phone off the hook when it hits. USA Today had an article on it yesterday https://www.usatoday.com/story/money/2019/04/09/tax-withholding-irs-release-new-more-complex-w-4-form-year/3401811002/.

Wow! I do just over 400 returns, and I work basically every hour that I don't have to sleep from 15 February to 15 April (I do take my son to chess tournaments, etc., but I take my laptop and keep on working -- and I haven't had any tournaments since 9 March). How do you do it? What types of returns? I'm standing in awe. I do have legal/financial work that I have to do (although nothing where there's not 'blood', as I tell my clients), but even if I did NO other work except returns, I couldn't come anywhere close to 1000.

I'm sure you forgot about me when you gave this answer! There are a few of us around who are A-OK and working for the greater good.

My RMD is based on prior 31 December balance. My Medicare premiums are based on two/three (?) years ago.

This idea gets my total support !

I agree 100%, and also not for political reasons. There are serious shortcomings in this law, many of which revolve around fairly mundane life changes. I've mostly refused to prepare returns having anything but the most basic & routine ACA issues. Had a single-mom client this year who got married in the 4th quarter. I took a couple of stabs at it and came up with figures 100% out of sync, depending upon some assumptions I made about what the rules actually SAY. I finally gave their stuff back to them and told them to try HRB or another chain. At least there they will have someone with deep pockets to cover the penalties if THEY mess it up. Sure enough, they went to the two major chains in our area and also got vastly different results. I don't know who they used (and really don't care,) but I think I could accurately guess.

Basically, it requires that you know, in advance, what the numbers will be when you file your tax return at the end of the year. This smacks of the Obamacare requirement for APTC, know what your income is going to be at the end of the year, and if you are wrong, pay up. Tom Modesto, CA

While it may result in more accurate withholdings, do they truly expect tax payers to understand what is required by the new form??

Yes, it is reported as you described. 1099-R, code 1, and subject to the penalty. The plan documents will govern when the loan actually goes into default, and whether it is a deemed distribution (not eligible for rollover) or if there is a plan offset, in which case IS eligible for rollover. Here's a Q&A from the IRS that may be helpful to you as a start: https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-loans#5

Flush this post. Victim of my own carelessness. Keypunch error on Minister's allowance.

There are presently 172 4868s in our efile manager, and that number will grow.

Thanks everyone for your great input.

Hey, Possi: Lots of those liquid tears drops things all day long. Refresh Plus lubricating eye drops. And DO give the evil eye to any complaining clients now. Hey, David: For those I know will owe, I use the 100/110% of last year's liability formula. For long-time clients, I can pretty much eyeball it. For those that do ES payments also, I make the extension payment a huge one that will cover April and June ES also, all to be reconciled when the return is prepared. If I've been the slow one, I do a more thorough computation. Did one last night for a complaining guy, just went through with round numbers against his 2017 summary with his 2018 documents and told him to pay $25,000 and $8,000. It's down from the year before (which is why I took the time and didn't do the 110%) so he'll pay it. I often look at how much paid with 2017 extensions and how 2017 turned out to calculate how much to pay with 2018, for those that don't vary much from year to year or I can see at a glance they're up or down. But, most e-filed extensions were done via "batch" and are zeros. Many of my clients followed me from Block more than a decade ago, so were not used to extensions. I have a lot of push-back. But, they know, and I remind them when they drop off or don't have all their documents. I want to work all year and earn more money. I don't want to turn down their referrals, but do need time to review with new clients. Extensions.

Thanks. The doc said it's an infection in the eyelid. Wonderful. I see a specialist Thursday. In the meantime, I'll try not to look at the children directly.

I'm on the slide to retirement and have filed zero extensions as I'm traveling all summer and into the fall. So far, so good and it will nice to leave without any "baggage"!

This is an area that I struggle with.. I have done almost 1,000 returns already and every time slot is booked through the 15th and will go into the evening. I am still getting calls.. I do not want to turn away the work and tell the client, or prospective client that I would love to prepare their returns but with the deadline here, I would be happy to file an extension and contact you in the next couple of weeks or so to complete your taxes.. most say that is fine but I get some hesitation and one person said they would "do their taxes themselves" . I cannot take on anymore physically between now and Monday other than those already slotted for appointments, well maybe with a few I still may squeeze in.

A client is sending me her tax info which she says has information on a loan taken from her 401K plan for her soon to be divorced husband . He defaulted and I am wondering how this will be reported. I would think on a 1099-R issued to her indicating a code 1 distribution. Is this correct ? She is 40 yoa.

We had a husband wife bookkeeping/tax prep firm close and leave town because both had heart attacks. Last fall, we started getting calls from businesses who needed payroll NOW, and we've been picking up a good number of individuals from them this year. It's a mixed bag though because they were crap at both bookkeeping and tax returns, so we've had to do a lot of clean up work/amendments, which is not fun. But in the long run, we added a lot of great new clients.

Form 8962 Pt I - HI below poverty level tab ,checked the box and now he's getting back $1466 that seems accurate right?

Gail, I agree with you but how do we know that the "loan was really for the benefit of her husband and he is the one who defaulted on payments"? What we know is that the wife was the one that defaulted on the payments and that's why she got the 1099-R. In any event, my clients ALWAYS ask me: "Conoce algun buen abogado que me pueda recomendar?" (do you know any good lawyer that you can recommend?). My answer is "Such an animal doesn't exist!!!!"

After assets pass from estate, heirs get stepped up basis less depreciation allowable by estate. Look up Uniform of Basis Rules per reg 1.1014-4. That can be significant if estate has a long drawn out duration.

People barely understand the old W4, so let's make it crazy complicated!

Yes, that is correct.

Oops, you understood I meant ..if they'd filed MFS... Yes, breathe. And, think about it again when you're well rested. I'm sure we all missed something that could've meant less tax for a client. But, if we were correct and legal, then it's not a big deal. Think of all the ways to depreciate. Or, take state sales tax to not pay tax on the refund next year. I have partnerships that have crazy % that the partners do not know why except some lawyer told them when they set it up that it had to be 37%/63% or whatever for a HW partnership to save taxes! I'm not going to second guess what my clients did decades ago. Don't second-guess yourself right now. Study the situation in the off-season to see if you can learn from it and to see IF, and that's a big IF, you want to do anything with your client because of it.

I was not suggesting you pay anyone anything. I was just pointing out that the difference is less than $2K because they'd have paid for a second tax return if they'd filed MFJ. Did they ask about 2017? If not, please don't do anything until after the 15th and you've had a good sleep. Then, you can think more clearly about what you did or did not do in a prior year. We're all human and sleep-deprived and working against a deadline. Stay calm and carry on.

Remember this client? She sent me an email saying that Turbox comes up with them owing less tax. Exactly the amount if the 1099M info is entered on line 21 and not subject to SE tax. She wants to file the Turbox version naturally although she did offer to pay for my services anyway. I responded that the difference was due to self employment tax, she didn't owe me anything, and have a great day.

Margaret, You are a nice person. I wouldn't return any money if I am the one discovering the error, but I always amend for free if I made a mistake. So, you should amend their return for free.

It's all kicks and giggles until someone giggles and gets kicked. I think I'll have 40 - 50 extensions.

JohnH is correct as usual, probably because he was in my Algebra class 15 years ago (falsehood), and I will add that it helps to be able to say to people that I get an extension for my own return. I also tell them I know I've paid in enough and will not owe. Psssshhh, it's all good. I will sooth fears of extensions one time and one time only. I'm happy to extend the tax season, but the people having more than one panic attack about 4/15 are given a hug and my best wishes for continued success with another preparer.

Thanks, John. That puts things in perspective for sure.

David: The secret is to take control of your business (and your valuable time & health) out of the hands of your clients and put it back into your hands, where it has always belonged. Some of them won't understand - that is not your problem and they're not worth the aggravation. Maybe they need to be ruining someone else's peace rather than yours.

I am going to need hair exentsions after this tax season I while back I was speaking to another accountant and he said he no longer sends extension if he hasn’t been given the okay by the client, out maybe 20 I haven’t heard from, only about 4 have called me to send an extension.

Wow! How are you guys able to file extensions as you like. I think the same way as you all - extensions are a good way to relieve stress and pressure and extend the work season. A lot of my clients get nervous and don't want extensions. We try to explain to them that they are still in compliance and that's why the IRS allows extensions. When I explain that if they owe they should pay with their extension, they say they don't know if they will owe. Then I have to do an estimate which then takes up more time. I need to know your secret. Thanks.

We are going to have more extensions than ever, but we will be trying to finish those extension by July 1 this year. The Virginia general assembly set that as the deadline to file your return and share in the rebate they are giving taxpayers since they did not get around to revising Virginia's tax laws to coordinate with the federal changes until late in February. So we just swap one deadline for another. Like always.

We are putting everything left on extension, and I am working on my partner to just file 'em and ignore if money is owed. Not OUR fault/problem/crisis if folks gave us their docs yesterday instead of before our March 15 cutoff! But he hasn't learned that yet and is letting himself get all stressed out. Like @JohnH we'll finish some that are extended. And a few people who should have sent in extension payments will get hit with penalties later; NOT my problem. We have one return, first info came in on Feb 6th. They're not done. They may not get done until late May - because every week they are sending new material that contradicts earlier documents. I'm waiting until they say "that's it" and they've been told I'm not touching their returns again until I have *everything* in-hand. We have another; guy is *always* late, so we recommended sending in big-ish payments based on prior year info, of $20K to the feds and a smaller amount to the state. He emailed back saying it had been a good, but complicated year, and his thoughts were that he should send in $250K and $50K feds/state! That will be a fun one - for the summer! And @Possi I hope your infection AND your eye get better quickly!

Same here - I like extensions. Have always like them because they extended my filing season and therefore income-earning ability. I'm continuing to scale back this year, trying to move down that retirement glide path, so less returns overall and less extensions this year than ever before. But still they're useful. After my cutoff date, everything gets an extension if it cannot be completed on a simple "first pass". Some of those already on extension will likely be finished by or before April 15 if I decide to circle back to them, but it really doesn't matter. With extensions in place, Apr 15 is just another day on the calendar with no special significance. Today I'm working on some payroll tax reports, thanks to the extensions on the personal returns.