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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.

Putting these on Schedule A used to give me so much satisfaction. "yes - you were able to itemize this year because your investment company scammed you for 9500 this year...." But those days are over.

See page D-12: https://www.irs.gov/pub/irs-pdf/i1040sd.pdf

And at the time, there were discussions that some federal agencies started doing this by default.

Just enter W-2 as it was issued. It's possible that the W-2 is correct if the employer elected to defer the employee's FICA withholding between 9/1/-12/31/20 as described in Notice 2020-65. Here's the IRS brief summary, and the notice is accessed by clicking the "guidance" link in the first sentence. https://www.irs.gov/newsroom/guidance-issued-to-implement-presidential-memorandum-deferring-certain-employee-social-security-tax-withholding

I haven’t had anyone die, and forgoed my RMD since I didn’t need it. Stock market is up. Have less expenses since I haven’t gone anywhere. I’m going stir-crazy, but financially I’m fine as are my clients as far as I can tell. maybe I’m just weird.

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.

I see it on every military W2.

This year everyone seems to have something new or different or a question for the future (thank goodness, they're asking in advance or at least planning for 2021 or telling me about it now so I can convince them to plan), and so many of the new things happened during the pandemic and as late as 27 December. Everyone seems to need me to explain why I need their January 2021 EIP payment, and has to go look for it. Everyone seems to have at least one income item that they don't usually have, whether a new side gig or unemployment or dipping into savings or retirement funds. Everyone wants to discuss what Congress is doing now and will do the rest of 2021. And, I have a few that telephone me every time they hear something on the news or read something somewhere (they can't remember where) to ask me about it. And, PPP forgiveness on entity returns is driving me nuts; I'm sitting here with a partnership that won't balance and S-corp owners calling me to ask why their returns aren't ready. And, hubby keeps wandering in, talking...

Darlene, I don't know how you cope with all the chaos going on around you. I couldn't do it. I feel truly fortunate that my client/ office situation is fairly stable and relatively calm. Darn, now I have probably jinxed myself.

I see form 502LU correctly filled out but the unemployment compensation is not deducted from 502. Any one having this issue? Tax payer collected from DC and lives in MD, which should not be an issue per instructions: "You received unemployment benefits from the unemployment insurance program of any of the following jurisdictions, with which Maryland has a reciprocal taxation agreement: Pennsylvania, Virginia, West Virginia, and Washington, D.C."

Never experienced that. I would suggest restarting ATX immediately before importing K1's and also only import 2 at a time. Then save the return before importing more.

I remember reading that form 502LU wouldn't be ready by MD Comptroller until sometime in March, then each of the software vendors will have to add that to their programming and test it. Does ATX have it? Drake doesn't.

You’re not. Every one of my clients who applied for PPP loans had MORE revenue in 2020. I had more revenue in 2020. I actually got Covid in November 2020. Never missed a day of work, just told people not to come in the office. No financial hardship for me, no applying for assistance that wasn’t intended for me. Kinda mad at the windfall some received. Happy to help those whose businesses and livelihoods were destroyed, and I feel so badly for them, but I don’t know any of them. It have felt sad and frustrated but I am thankful.

Assuming it was business asset, it's handled just like it was sold. Here in Oregon the daffodils should bloom any day now

If those expenses are related to the rental use only then I see no reason to allocate to personal use. BTW, welcome to the community here jb005.

Yes, it worked for me.

I've spent every free moment of the last few days researching this thread's info. I come from a family of accountants and we always maintain books on a tax basis. Our clients are small mom and pop businesses and reporting books that mirror the tax return just makes explaining things so much easier. Quite honestly, I never knew S-corp bookkeeping to be any other way. In fact, my father adamantly followed the rule, "1120S Sch L R/E MUST = Schedule M-2." I now know better thanks to the knowledgeable members of this forum and countless tax articles & publications I've read since. For anyone reading this thread in the future with similar questions to the ones I had, there's another great ATX thread that I found extremely helpful in better understanding this concept and hope it helps you too. Thanks again ATX forum. I'm humbled as usual. _________________________________ Testing my updated Sub-S books to tax understanding... Using only the above details and pretending the profit was all kept in the bank. Books Balance Sheet: Bank Asset: $1,000 Loan Liability: $56,000 R/E: -$55,000 Tax Return: Sch L R/E: -$55,000 M-2 AAA: 0 K-1: Box 1: $1,000 Box 16, Code $56,000 Basis monitoring is done at the shareholder level so it's the responsibility of the SH to report a $1k profit on the schedule E, page 2 and a $55k capital gain for overdrawing their basis on Sch D. SH current basis in the corp: $0 Going forward, there will now be a permanent difference between R/E & AAA. Correct? (fingers crossed)

After Possi posted that, I checked and if entered correctly on 1099-R, you don't even have to invoke 8915-E... it is brought automatically and it seems to be correct. will I be allowed to create the efile file simply by attaching 8915-E as pdf?

I use Taxwise, same CCH company but different software. I enter the 1099R completely. There's a worksheet on the 1099 input page that leads me to the 8915E. I have been able to create the 8915E as a pdf and attach, yes. I hope this helps, although it's different software. One sidenote, I am encouraging my clients who have refunds AND are taking the 3 yr option to apply a portion of the refund to soften the blow next year. The following year, they're on their own. LOL

^ what Abby said. All of it.

Basic bookkeeping: Prior year net income (loss) always closes to retained earnings. QuickBooks and other accounting software does this automatically. I close total prior year distributions as of 1/1 each year to retained earnings so the books match the tax return retained earnings, and I can see that the books match the tax return beginning balance sheet without entering both numbers into a calculator. This also makes distributions start at zero for the new year. I know some accountants who don't close S corp distributions each year and they do a comparative balance sheet to see current year distributions but I'd rather see that beginning RE is correct at a glance. For partnerships, I also close partner capital contributions the same way I close distributions, except to each partner's separate capital account.

Ah, Pacun, I have not been affected by Covid. Have not gotten Covid, I've always worked from home remotely. I see very few clients. I was never shut down, because-remote! My husband is my assistant. Lost one (major) client, but it's because he's gotten WAY too complicated and decided to go to a bigger firm. I agreed with him. I've gotten 3 new clients already.

On another post, I have argued that almost everybody has been affected by Covid. I put an example of my case. I got a call that someone needed me to prepare a W7 for which I charge $60. DC government had closed all businesses that were non-essential and tax preparers are not considered essential in DC. So I couldn't make those $60 because the client went to MD where tax preparers are essential workers. According to what I read, I could take out $100K from my 401k plan and pay no penalties. I could also put back 1/3 before filing my timely 2020 1040 return and pay no income taxes... provided I elected to pay taxes on the next three years. Let's say that I didn't have that event, my wife collected unemployment because her hours were reduced for a month. I also had a household member who didn't work because her restaurant was closed for three months. Any of these three situations alone would qualify me to take out $100K from my 401k and pay 0 penalty.

I have one client in particular that has 70+ K1's. importing 2 at a time is what I do. It takes me a about 4 hours.