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This is going to be a real mess! The state of Ohio has identified 62,000 fraudulent unemployment claims for which erroneous 1099 Gs have been mailed. The state of California back in November had 77,000 active investigations of fraudulent unemployment claims. A lot of tax refunds are going to be held for months!

Well, I can now confidently state that the Jan 15, 2021 date for the $600 per person second stimulus checks to be received is irrelevant. Today, Feb 4, a client called to let me know they received their check in the mail. This was a retiree, whose first stimulus payment (last year) was direct-deposited to their bank account. So now we know that there will likely be plenty of confusion over whether to claim the second stimulus payment on the 2020 tax return, especially for early filers.

C. Complete their return now to learn how much they'll owe without the IRA contribution (worst case scenario) and hold their return. Their motivation may change with that information! Then, give them a deadline to return with their decision, say 1 April or so, after they've made or not made a contribution.

AGI is not the same as Earned Income Look at EITC for examples of Earned Income

If you have time for amendments 15 April, I'll hire you to prepare returns for me! Wait to file until client has made a decision. Give client a DRAFT return to give to bank. If he owes 15K and can't pay it now, how will he buy a house and pay closing costs, homeowner's insurance, repairs, moving expenses, etc. Maybe he should invest in his IRA instead of a house. Or, maybe he should invest in a house instead of an IRA. But with a 15K tax bill, can he afford both?

ILLMAS it depends. Let's say that someone will get 4K refund without any IRA contribution and if they deposit $6K in their IRA, they will save $2K in taxes. I would tell them that they don't need any money to fund their IRA since they would get $6K refund which is the amount they need for the IRA. In this case, I will use option A. If tax payer owes $10K in taxes but if they invest $6K in an IRA, they will owe only 8K, I will use option B because chances are that they will not have $8K to pay their liability plus $6K to fund their IRA.

They took the full 100k. I double checked with him to be sure. The Fed would probably not change over 3 years (unless like you said, they got a windfall). The Ky would help them to spread it out. I will run it by them again.

Oh, well... there ya GO! Thanks!

There is a difference between income and support. Gifts received are not income, but may factor into support calculations. Food stamps are not income, but they are support. Child support payments are not income, but they are support.

Maybe it's a "Trojan". Are they asking you to send $$$ in bitcoin to the Ukraine?

Many states have specific guidelines for those UI fraud issues - so be sure to look those up for your state, too.

Always, always, ALWAYS report the house sale and exclude the gain. The last thing anyone needs or wants is a nastygram from the IRS, two years post-sale, demanding tens of thousands of dollars in taxes not actually owed. The younger folks just have to change their pants before they call you, screaming or in tears or both, and I frequently wonder how many heart attacks those letters have caused in the elderly.

Hey, I had a novel idea and READ THE INSTRUCTIONS so kindly posted above. Sorry for the dumb question!

..... plus another $20 billion the auditors expect to uncover. 1700 claims went to one address. Now, we will probably be tod that taxes will have to be raised to pay for the fraud losses.