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I still think the IRS definition of "simplify" is different than mine!

I agree since they were made out of generosity and without full and adequate consideration. Also not taxable as prizes, awards.. When a gift is received from employer there can arise the question of wages or bonus. But in this situation the money was clearly given out of generosity and not for compensation.

Actually, I think it is horrible (the same as Abby did in his tiff with Medlin: "What? No percentages?") And since they killed off the number of dependents there's nothing left for the average employee to work with. It was hard to get them to fill out a W-4 before and even then they could only because they knew they were single/married and who lived with them. Now the boss gives them five pages of junk and says "Fill this out." I can imagine how that's going to go. People at small employers like a cafe will simply say "I can't do this" and hand it back to the boss who will then bring it to me. Large employers (factories) will require their people to fill it out or be replaced; they'll take it to the payroll clerk there who will say "I can't do this. Take it to your tax person." We'll also get those. As Medlin said, you can make some money out of this, but my God, at what cost? How many hundred people have I seen who are dissatisfied with their withholdings at tax time (and they'll remember who filled out that new form). There's not enough money to compensate us for the ill-will that will be generated amongst clientele when it doesn't work out. When those forms are issued I think I'll either take a vacation or, like the college kids, try to find a "safe space" where I can't be found for a good while.

Not sure how all softwares are going to change to accommodate this, but they have until next year.

This actually isn't horrible, except for the fact that you're no longer claiming a number of exemptions. But will the payroll software companies really reprogram to accommodate this anytime soon? I wonder if they're going to change the online W4 calculator at irs.gov.

Thanks for replies, friends. Always good to have support or correction as appropriate. My guess it is too late to set up a separate account but not really sure it would be needed anyway. Nontaxable income, well publicized as fund raiser and should be easy to trace the payouts for medical expenses and contributions. I will ask about possibility of retroactive accounting. Hey, most of our other clients do that, right? Happy weekend!

Margaret, I agree with your reasoning. This is how sites like Gofundme generally treat amounts collected, that these amounts are considered gifts for the person's wellbeing, treatments, or whatever the fundraiser is for. It isn't taxable income.

My client is under OIC consideration. We sent the offer 12/27/18, got the confirmation letter 3/27/19. Letter says they will respond by July 24. This weekend, I get 8 letters for my client saying they are going to levy. While you are under offer consideration, everything is supposed to stop. So I try calling collections. They are too busy to answer the phone. So I call PPS. They tell me they can't see anything on the record that shows we have an offer under consideration and I need to call the OIC folks. I call them and they are too busy to answer the phone. I am so sick and tired of these lazy (fill in the blank) never being able to do their job right. And I don't care if they are overworked or underfunded or any of that other bullcrap they put out there for justification of not doing their job. I don't have time to call them every single day until they decide to pick up the phone. It makes me feel like becoming a tax protester. The IRS SUCKS! SUCKS! SUCKS! SUCKS! SUCKS! SUCKS! SUCKS! Tom Modesto, CA

Since you co-signed the original loan, you are equally responsible for the amount on the 1099-C. There is no way to avoid it. Pay it and sue your ex for her share, in small claims court. First hand experience here, so I know my advice is sage.

Client held fundraiser for daughter's medical expenses. Employer of daughter donated restaurant profits from that evening and several folks donated auction items. As nothing was passed through an established tax-exempt charitable organization, I'm pretty sure the income would be construed as gifts and not taxable and also not deductible by any donor. Client wants to make donations from this cash to epilepsy groups but that would then be personal contributions from client, as I see it. Any other opinions out there? If so, please provide cites for my continuing education...and thanks!

I don't see anything inappropriate with that. When working in a gray area where the IRS might take a different view I think it is a good idea to estimate what an adverse ruling might cost the client. If I am reading your last post correctly, it looks like you are taking a conservative approach by valuing the 1245 stuff at cost, so the maximum recap will be depr. allowed /allowable. In regards to the H2O heater example above, even though the asset might not have any salvage value, it does have value to the buyer of the building. While that value might not be much by itself, accumulated with other items the value can be significant. For example, say there are two equal buildings for sale except one needs a whole bunch of fixtures etc replaced. The building that has all the fixtures working is going to have more value even if they are fully depreciated, vs the building that needs thousands of dollars of new stuff to make it usable. That extra value comes from those depreciated assets. I would not let the finger point at me when the question arises as to how the assets were given a zero value. Now getting back to your question as to what the auditor is going to say. That would depend on fact and circumstances and potential understatement of income. The IRS will bring in their own experts when feasible as we see in tax court cases.

Draft is available. https://www.irs.gov/pub/irs-dft/fw4--dft.pdf Changes: No "allowance" figure, Head of Household Status, Dollar amount for dependent credits, Annual other income (add to taxable wages), Other deductions (if more than standard deduction). Instructions/suggestions for handling multiple jobs in the household.

Hopefully, your client set up a separate checking account in which to deposit the proceeds, in order to avoid awkward questions about comingling the money in a n audit situation.

I switched from ATX for 2013 tax year same as jklcpa. I much prefer Drake for the same reasons as the others have mentioned. It is nice not to be afraid to do an update. Also, most updates take less than 15 seconds.

Totally agree! I did attend one of their presentations and was totally impressed! I had previously obtain a trial version of the software and didn't like it much, but after attending the presentation and having the ability to ask questions and see live demonstrations I was sold!

Policy is the same.

I switched early in 2013 when ATX reworked the 2012 program and haven't looked back. Some of the reasons I like Drake, not in any particular order: program speed update speed flawless backup ease of integration with document manager macros price exceptional customer service user forum with knowledgeable, helpful, supportive members I'd suggest to anyone thinking of switching that you try to attend one of the company's presentations and obtain a trial version of the software. The trial version I received was a full working copy of the prior year with the exception that e-filing was disabled.

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 %.