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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.)

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.

Please keep up posted if you actually perform this experience. Inquiring minds, you know.

I have a lot in my plate now. Can you hold that thought for me until January 2022 please?

It's a 2020 credit that you calculate on the 2020 return. EIP1 and EIP2 were just advances on that credit to get funds to taxpayers and into the economy as fast as possible. If your client (or the one who is not your client) received too much, they do NOT have to pay it back. If they received too little, it's now a 2020 credit. Yes, a family that alternates years claiming a dependent will get too much as a whole, but they are not whole. Just make sure your client gets her correct 2020 credit. And, contact your Congresspeople if you have concerns, because they're voting on EIP3 now!

Tell them you can calculate their taxable amount by subtracting their current basis that they must provide to you in a document from OPM. Their original letter when they started drawing those pensions probably has their total basis and the number of years to subtract it. Like most things, if the client doesn't have a document saying otherwise, the IRS says basis is zero. Or, send them to a free tax prep service!

Thanx, but such an important announcement should be expanded upon (or exceed three words after my three paragraph bloviation above) - therefore ... Had a truck-drivin' client tell me he went to Minnesota and it was so cold that his truck tires froze to the pavement while he was in the coffee shop. Which begs the question - "How's the weather up there?"

I know! I can't even form coherent questions to that partner. Maybe after a glass of wine. Please extend the season to 15 July so I can afford a mental health day or two, or a week. Of course, that may not help my entities due in two weeks...

I'm ready to give everyone their documents back and retire! Thought I'd move on to another entity return for a while, even though I hate going back and forth between S-corporations and partnerships which are more different than they should be. So, I open a partnership and find on their P&L $31,614.14 in Reconciliation Discrepancies and $19,153 in Ask My Accountant and handwritten on the bottom is $1,700 Form 1099 !! Time for wine and laundry! I think I'll put all my entities on extension, including the S-corporation that this thread is about and who will certainly fire me because he always wants to file by 1 February! Rant over until tomorrow. Thanks for talking me through this.

Issue Number: 2021-02 Inside This Issue New law provides additional flexibility for health FSAs and dependent care assistance programs Updated FAQs and new IRS form available for sick and family leave credits Employers can withhold, make payments of deferred Social Security taxes from 2020 New option available to electronically sign and submit Forms 2848 and 8821 Technical guidance: Correction of Form 1099-MISC for certain CARES Act subsidized loan payments A Closer Look: Protecting taxpayers from tax-related identity theft; Delivering the 2021 filing season New forms, publications and instructions on IRS.gov

From Pub 721: If your annuity starting date is before 1987, you can continue to take your monthly exclusion figured under the General Rule or Simplified Method for as long as you receive your annuity. If you chose a joint and survivor annuity, your survivor can continue to take that same exclusion. The total exclusion may be more than your cost. Peggy Sioux

For OPM retirement, the date of retirement is critical in determining the method for the exclusion. It has changed several times over the years. Box 5 reports the insurance payment. Sometimes this will include the Medicare payment. IF they don't receive Social Security, some pay the medicare through the OPM retirement Box 9b is the employee contribution Pub 721 shows the various time frames 3-Year Rule If your annuity starting date was before July 2, 1986, you probably had to report your annuity using the 3-Year Rule. Under this rule, you excluded all the annuity payments from income until you fully recovered your cost. After your cost was recovered, all payments became fully taxable. You can't use another rule to again exclude amounts from income. The 3-Year Rule was repealed for retirees whose annuity starting date is after July 1, 1986. There is a time frame that one can continue to take the exclusion even after all of the contribution has been recovered

Claim $600 for child EIP #2.

I will do that if I can't get a decisive response from OPM, the issuer. I have emailed them.

Well, you have some decisions to make and I don't envy you. No wonder the clients are adamant about this. Maybe getting the truth of the matter from the issuer would not be a bad idea. Wise deciding, not good luck.

In my opinion, and only in my opinion, the reason to NOT reduce the taxable portion is the cite you provided and lack of absolute knowledge as to the source of Box 5 amount. I suppose YOU could contact the issuer, with client permission of course, to clarify. I would not just take their word for it. What is this client vs your conscience and professional opinion worth? As I wrote, YMMV. We each have to make some of these gray and not so gray area decisions from time to time. What is the actual tax difference, bottom line? Do the inclusion bump them into a different bracket or affect other items?

For 2017, these should be the instructions: https://helpx.adobe.com/acrobat/using/edit-text-pdfs.html We used to have Adobe Pro where I worked and one of the "updates" took away all ability to edit the text. It could be the company went cheap, I couldn't find edit text anywhere. But, there's a work around. Save the doc as PDF. Then import the PDF into MS Word (I think most word processors do this now). It won't be perfect, but you should be able to add text, get it more or less lined up, and then save it as PDF again. Be warned, you will curse a lot.

It's fixed now!

That's the winning response! She said it was "insurance" and the do not get social security, so you are exactly right. They have ALL ALONG excluded this from their taxable income and have never been questioned. That's what gets my goat. Oh well, step into a new world where we comply. Thanks, Hahn1040

UPDATE!! She must have checked on it. Called my assistant and said I could stop researching.... it's insurance. But, I will still follow up with OPM and ask about it. Not theirs specifically, but generally. ugh. Such a time sucker. Thanks, y'all. I really love y'all.

I know. They've been doing it all along and never questioned. Of course, they have zero accountability like we have. The instructions, as we know, are: Box 5. Generally, this shows the employee’s investment in the contract (after-tax contributions), if any, recovered tax free this year; the portion that’s your basis in a designated Roth account; the part of premiums paid on commercial annuities or insurance contracts recovered tax free; the nontaxable part of a charitable gift annuity; or the investment in a life insurance contract reportable under section 6050Y. This box doesn’t show any IRA contributions. If the amount shown is your basis in a designated Roth account, the year you first made contributions to that account may be entered in box 11. So, to me the operative words are GENERALLY and IF ANY.... Her question, too is "why do they even put a number in that box if it's not non-taxable?" Good question. But, it also could be any of those other items. Maybe part of the annuity is actually a roth account and has nothing to do with anything?

Yes! I found that and clicked on it and have no idea what to do next. There are other icons at the top of the sample document and I see I can play with those. Thanks so much for more breadcrumbs to follow. But this is why, old school that I am, I could really use a print manual. I don't do particularly well with training videos. I like to read things, look up in an index, try out with instructions in front of me... At least you seem to have put me on the right path but, honestly, it is not obvious to me what that means. Play time in April!

Actually it was here in a thread titled "EIN for Estate" Max posted: Did you try during 7 AM and 10 PM EST?

I don't know why it is not 24/7, but apparently someone has to intervene, or maybe they just shut the computer off to save electricity.

In a different practitioners' chat t I ran across the following fix: "When the omission of health insurance from a shareholder's W-2 is discovered, a (second) W-2 is prepared, showing the health insurance as wages in Box 1 and Box 14 (indicated as S Corp Med Ins). All other boxes are -0-. This way Notice 2008-1 is complied with." Works for me.

Jim & Gail, Thanks for your responses. Yes, adding Box 3 and 7, then multiply by 6.2% does equal the amount in Box 4. Thank you both very much. Jerry

Interesting Tax Court Case about lodging and location of "tax home". https://casetext.com/case/soboyede-v-commr

Yeah, if a colleague were the other preparer... I think I'll fess up earlier rather than later to client and as permission to speak with his 1040 preparer...

Current issue is not my son's partnership; so no payroll on his. In the case you site, you add $24K in wages and adjust $24K in SEHI. Seems a wash on your 1040. If I'd been preparing payroll for this client, his W-2 would've had the SEHI. But, another company did that, and his W-2 does not have SEHI included in Box 1. And, I'm having trouble wrapping my head around what to do/not do on the 1120-S. And, trying not to sound too stupid when I have to explain to the shareholder &/or to his 1040 CPA. All three of my grandkids were born early, including the two that were only six days apart.

Granddaughters are great !!

It took me several years to get to a good place on this issue. What I mean, is from the payroll perspective, accepting it is wages needing to be reported via constructive receipt. While not likely enforced, a freshly minted auditor could win an income shifting case if the amount is only added to the W2, and not handled via paychecks. The "subject to withholding" clause is also important, point out simply adding the amount to W2 is not enough (despite the arguments it will be a wash because of the deduction). I get questioned by all sorts of people claiming my interpretation is incorrect, because most argue based only on the 2008-1 direction to include on W2, ignoring the part about "wages" and "subject to withholding". Online searching will usually result in links for the tax prep perspective, and the proper handling through payroll aspect is usually never noticed, or is ignored. I always admit to being human, as there are no better options at present <smile>. I expect a new cycle of proving I am human begins today, as I await the birth of my first ipok tek (grand daughter) today.

Fortunately I live in a non-taxing SS state. What a mess. I've tried several returns - depending on income, sometimes the IRS and ATX worksheets give the same taxable result; sometimes more, sometimes less. Mostly nowadays, the churchers drawing SS are the ones who actually paid $300. The rest of the crowd - like me - put ten bucks in the Salvation Army pot and about the same (twice ) to the door-to-door church groups selling $5 worth of peanut brittle. Anyway, I'm stalling them (this is a tedious problem) until the fix. Called ATX on it this week - tech said she never heard of such. Nice lady, but offered directions to online ATX Support (you can imagine the help there on this sort of problem). Oh well; "Such is life," the old man used to say. Positive note: Customers seem suprisingly flush this year. One exception-T/P and his wife rack up just under six figures, but says he'll pick up next week when his check comes in - currently broke flatter than a duck's instep. Taxpayers today - what can you say?

I believe you add [up to] 300 to Line 7 of the SS worksheet. Grace, I have overridden Line 7 on two or three (can’t remember) that have been accepted.

Yes, if you're under the 85% taxable limit or just over, it matters and you'll have to override line 3 of the SS worksheet by subtracting 300 from whatever is there.

I read somewhere and cannot find it again...the difference has to do with not letting the mortgage interest and property tax produce a loss for the sched C when taking the standard deduction.

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

The taxpayer should have additional info i.e. a letter from the Dept referring to the specific program under which the loan was cancelled

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

It's on the 1099-SA input, there's a field there to enter the amount.

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.

Nah, with mine there will be enough people that will want/need their refunds, will want to get it over with, or will be afraid of being penalized if they owe.

I've gotten spoofed calls from myself, too (landline, not cell, though). Finally got this resolved (thanks, Judy!) to some degree. All is well, but computers spit out the emails and the reps have NO way to stop them. But their records are correct (as are mine) so I can ignore them without concern.

We did end up going. We were thinking of staying in NY but when considering any risk of going anywhere, the only place that looked safe was the middle of the Atlantic ocean. Ate at the Harp and Fiddle Irish Pub on Penn Ave. People were all good - everyone we saw was wearing a mask. Restaurants had limited tables. People were respecting space. It was good. Went to Wholly Foods and got some fresh calamari and fresh flounder. Love going there. Sometimes they have fresh Octopus and the kids used to freak out. We got some awesome olive oil, spices, fresh bread, figs, and Brad got some cigars. Love Penn Ave.

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 daughter. Don't forget that the student can get the AOC WITHOUT CLAIMING HIS OWN DEPENDENCY if his parents do not claim him, even when qualified to claim him. He won't get the refundable part of the AOC, though. I have high-income parents who can't claim education benefits but have a college kid with a tax liability who can use the nonrefundable AOC. That is perfectly ethical and legal. We don't write the laws, but we do have to work within them.

I was thinking as I was donating that maybe I should increase my token amount. I had thought with 2,800+ members and 1,700+ online, that if we each paid a token that Eric would be good. But you're suggesting that only how many actually contribute financially to this board? Please let us know, because I have no problem with donating more, more often, more money.

I donate every year around this time, but it's probably not enough.

This board provides such a valuable service. Over the years I have learned so much and so many folks are so very generous with their time to answer questions and give counsel. Eric, thank you especially for helping make this forum so worthwhile. I wholeheartedly agree with the encouragement to support with a donation.

My question is: Is it ethical to not claim a child as a dependent so that they can get the stimulus in 2020, even though they were a full time student some part of five months of the year and under the age of 24? Perhaps a high school student, supported by parents, made $15,000 this past year because with virtual learning they could work more hours. The parents got the stimulus payment in 2019 for the child, but if he files and claims himself he would get the rebate recovery credit. Seems unethical to me because the parents could claim him and did provide over half of this support. Curious what others think. I have seen different opinions on another board.

I agree with Lion we need more information here. The mother can claim the son up to age 24 if he attends college full time. The original OP stated the son attended part time which I agree will knock her out of claiming him as a dependent which negates the HOH as well. By your figures of the son's income, it appears he should file on his own. I always do this both ways and compare it to the parents return both ways and determine the best scenario for everyone.

Went there to watch Sammy Sosa try and break the home run record back when, (he struck out 4 times). That food stand had about a hundred lines and there were 20 to 30 people in each line. There were more people at that stand than in the stadium. A couple of people said it was worth the wait, but alas, I would wait!