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My crystal ball almost always flashes “4868” when there are any questions or potential issues.

Payroll is in the work for 2021 for both.

Don’t worry. As soon as they read the news or talk to their friends they will be calling YOU.

The 2021 unemployment bill currently being considered by the Senate would exempt the first $10,200 of 2021 benefits paid from from Income Tax. It is unclear whether it will pass. If it does pass it will not exclude any benefits paid during 2020 from Income Tax. Mod edit for anyone reading this - as of today, 3/6/21, Senate passed the bill that now will exclude up to $10,200 of UI benefits for TY 2020.

Thanks.... or as soon as they get their hair done.

I am filing as laws have been written regardless of what will happen. It is not my fault that Congress will change them retroactively. I guess Congress gave me a chance to create demand for my services and file those with unemployment benefits as soon as they hit my desk. lol. For sure we will have to amend a lot of returns but I don't have a crystal ball to see what will happen and I am filing as clients are coming in.

Line 7 on 1120-S says "compensation of officers", not "wages of officers". Line 7 instructions state: Distributions and other payments by an S corporation to a corporate officer must be treated as wages to the extent the amounts are reasonable compensation for services rendered to the corporation. Enter on line 7 the total compensation of all officers paid or incurred in the trade or business activities of the corporation. The corporation determines who is an officer under the laws of the state where it is incorporated.

True, the retroactive changes aren't your fault, but I think at a minimum you now have a responsibility to inform clients of the potential change to their returns and give them the choice to file or wait. I only have a handful that came in recently and they chose to wait a week or so rather than amend and then have to wait for a refund that may take months to receive, or pay a balance due that will end up a refund once the change is signed into law and is incorporated into the program. After all, they do hire me to work on their behalf to achieve the best possible result.

That’s Switzerland, land of banking, watches, and your favorite, some of the best chocolates in the world. Netherlands happens to be the home office of ATX/CCH where they wear wooden shoes and have the most beautiful windmills.

I just tried and it comes up Oman, but I just realized if you type Var it does come up Various. Just V or Va is still Vanuatu. But when I have more than a few I've used Netherlands because it sounds like Far Away Lands.

One of the amendments agreed to was to make this $10,200 apply to 2020. Below is the link to the actual pdf containing H.R. 1319, and the amendment is Sec 9042(c) wtihin that document. https://fm.cnbc.com/applications/cnbc.com/resources/editorialfiles/2021/03/05/Amendment_UI.pdf

Per this article: https://www.cnbc.com/2021/03/05/unemployment-benefits-deal-to-waive-taxes-on-first-10200-dollars-of-ui.html As part of that compromise, Democrats added language to the bill that would provide a tax waiver on up to $10,200 of unemployment insurance benefits for 2020, staff for Sen. Ron Wyden, D-Ore., confirmed Friday to CNBC Make It.

Thanks for the post, Judy. And thanks also for attempting to scrub the information. Moderator Extraordinaire!!

It's not like this is totally out of the blue. The bill was introduced the first week of February and there's been discussion about it on all six tax bulletin boards I frequent. You've had a responsibility to inform your clients for the past month that there was a possibility of this happening.

I'm with you. I've used that line and the wages line to tie out to the various payroll reports. I've used distributions for non-payroll withdrawals. I can kinda see the point of using Sch C and SE to pay the tax if there was no payroll. But that should happen only once! I'd educate that client. If they continued taking money without payroll, they'd no longer be my client. Maybe that's what happened here. Why did they leave their last preparer? Do they seem able to be educated, motivated to change right now for 2021?

I agree but most of my clients are from the restaurant industry and most of them collected unemployment. Some of them are using last year EI for EIC and additional child tax credit. Those people need their refund. If I see that someone will owe, maybe I will ask them to wait. In the past our industry has dealt with numbers and facts. Now we need to get a crystal ball and have it next to our calculator.

How'd you get $9 on line 25c? That's most commonly for FIT from a 1099 of some type, such as withholding from gambling, and can be from a pass-through entity.

Amendments will have to happen after tax season. I've already done a ton.

For others who have not figured it out. Correct, enter the 1099-R and when finish, scroll down and check "check box ONLY for Cornoavirus (CARES Act)...." that will trigger form 8915-E. On form 8915-E, enter the date of the earliest 2020 distribution to the left of the amount from 1099-R. If it is not from IRA, you click the box on page 1, and pay all taxes now. If you don't click the box, then 1/3 will be taxable. If client has returned money to the plan before filing (including extension), you enter that amount on line 10 FOR OTHER THAN IRA. IRAS have section III with the same choices but as long as you enter the 1099-R correctly the amount will flow to the correct section. Remember that you have to attach form 8915-E after signed for efiling.

I edited your first post to update it to 2020.

Judy has it pinned for us at the top. All Pinned Topics, then scroll down to Links to: States' Info.

I give them their papers back and wish them well. It happens rarely, and I do not take the client back. No judging... It's just how I roll.

Households with income less than $150,000. I was just talking to a dependent/college student with over $12,300 in unemployment benefits; that's her entire income. (She usually earned $4,000 from Macy's in her local mall.) However, she's a dependent and lives with her parents while attending college. Her parents earn well over $150,000. Does the daughter's household include her parents when determining the taxability of her unemployment benefits?

If your invoice reflects what you feel is a fair and reasonable price for their return, let them walk. It's difficult to see clients leave but at this point in my tax "career" I'm not looking to give my services away. I think my rates are below market in some instances, but I'm okay with that. I'm not looking to decrease them more, if anything they will continue to go up in the future.

disregard...I found it at the bottom of the 1099-R Input screen

The schedules only print for me if there is data on them. Was also that way in past years.

When I tried Various I get Vanuatu, where I want to be

Yeah, I'm seeing a fair number of these, which is the best thing to come out of having to recreate efiles over 5 days old.

No, on the donor's return just handle this as removed from service and make sure that depreciation is correct for the year. You don't want to record a sale and trigger depreciation recapture or PALs to be allowed as if it is a sale. Reporting the gift on Form 709 is enough of a trail for the IRS to know that the property is no longer in the donor's hands. Son will have dual basis if FMV is less than donor's basis at the time of gift, for purposes of calculating gain/loss if son ever sells. If son is keeping it as a rental, for depreciation purposes his basis is the adjusted basis at the time of the gift, and the depreciation starts over with the appropriate method, convention, and life. If there are PALs, those are NOT passed through, but those PALs will be an increase to son's basis. Son will need details of basis so that if he ever sells the property, he will be able to calculate any gain that should be ordinary gain due to depreciation recapture that donor would have been subject to had the property been sold instead of gifted. TP will probably use unified credit instead of paying gift tax, but if any gift tax is actually paid on this transaction, then that would add to basis.

And, I have a client who didn't file 2017 due to COD (2) and is now getting threatening letters from the IRS. She called them and negotiated an extended 4 March deadline. I have partnerships and S-corporations to prepare! I'm hoping more than ever for a 15 July deadline.

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.