Leaderboard

Just finished a client who worked in the UK all year and all earned income was excluded on 2555. (He did have a few k US investment income.) He got the first but not the second EIP, and the program was calculating a recovery for the second. Based on his foreign income, he made too much to get either. I looked it up and believe it or not, his reduced US income made him eligible. My point is that every credit has its own quirks, and in our job we learn something new every day (or hour).

Always easier when it isn't my client and being pressured to complete the return.

As the form specifically addressed this situation and had a space for the code, it was easy enough to type it in. All good.

Ummm, I'm now with Judy on this having seen the way to go through Line 2 on SE. I tried it on a return and it flows just right. 7.65% is the reduction for the SE tax calculation so comes off Sch. 1 Line 14. It works and thanks again to Judy for ferreting this out. If this ever arises in my practice, I would not use Sch. C. I would follow exactly what works on Sch. SE. Good exercise!

Sounds like the best procedure this year is to send the first "installment" payment with the return, and have the client make monthly "installment" payments online via Direct Pay. Then get the real agreement going online once they get the assessment. A new twist on "fake it till you make it!"

That's funny right there... and too true.

and duct tape and staples. While Slippery Pencil may never have had an issue, I prefer to give whoever at the IRS sees the paperwork first absolutely no reason or excuse on God's green earth to take any action other than the one I want them to take. And I always assume that the person opening the envelope is the newest hire with a forged GED, and word everything so that s/he cannot help but understand exactly what I want done.

I have averaged 24 returns per week this season. (Beginning last week of January.) I've worked six days a week, but missed two Saturdays and a Monday. Wow, it puts you so far behind. I have a lot of chatterboxes, and I may or may not be one myself, and a few bookkeeping/payroll clients that I see every week. No support staff, except the Lord. He's good, though. Y'all are correct; the ones in the stack right now are stinky and/or the "Oh, that [W-2] should be there..." Uh, huh, and do you think I didn't look five times before I asked you for it?

Maybe the real "art" is in their valuation method...

My oddest current situation is a client who ignores my questions about virtual currency transactions, even though I've sent multiple emails. Makes me strongly suspect the answer is "yes". So he goes on extension until he replies.

Fifteen returns in a day! You are superhuman! The only times I can do that is when they were all done and checked and finally that last bit of missing info came in. Even then, I don't think I'd make 15. Missing info is the worst. Email a client with three questions, and you get two answered. Heck, tonight I emailed a client with two questions and got an answer to one. Really? Most of my returns are fairly complex--even the "easy" ones turn into hours of work when they leave a note that they sold some land or hunting cabin they've had for years and the stock their grandfather gave them when they were born. Tonight I picked up a normally straightforward return and found that she had her daughter's and boyfriend's in there too. Will it ever end???

"I ’m so glad for your sake that your deadline isn’t as tight as usual this year." I so wish this were true. Trying to muster the strength for 17 more days (16.5 but who's counting). I have to finish 10 returns/day to make it, and the returns I have left are stinky :(. They're actually mostly all stinky; why don't I get clients with 2 W2s and a 1098? Pity Party, right here at my desk. I'm drinking a latte and a soda at the same time!!!

Copied from Accounting Today: "You hear from taxpayers and congressional offices all the time, but my understanding is that there have been days where if you calculated by looking at the number of calls that were answered and divide it by the number of calls that came in, the level of service was 2 to 3 percent,” said Nina Olson, executive director of the Center for Taxpayer Rights and the former National Taxpayer Advocate, during a webinar last week hosted by the Urban-Brookings Tax Policy Center. “Even by the IRS’s own calculation, where it does the number of calls that are answered, divided by the number of calls that aren’t routed automatically, it’s at 15 percent. With all the attention on enforcement, you can’t have that level of customer service and think that in any way, you’re having a successful filing season."

Yes; gets you 1/2% off.

You do get a lower interest rate with an installment agreement, or maybe it has to include direct debit to get the lower rate.

I had one recently where I couldn't find a number to call. That might have been for form 3520 though... which they don't have a unit or competent agent to address correspondence on. I saw where the IRS is trying to hire appraisers to help audit conservation easements... I also saw where they are trying to hire cryptocurrency specialists since they've been contracting that work out. To say they are failing at "customer service" would be an understatement! I'm not really sure what the point of the phone lines are other than the EA and CPA lines, since they can't offer tax advice anyway. Just have a collections line if that's the case. Government

Well I haven't seen one in awhile (yay!), so either I'm misremembering or they've changed. But in either case, an IRS notice without a number to call is absurd... unless they're trying to reduce the number of calls they receive, and who can blame them.

We have a few newer preparers and I was supposed to do review, but ended up getting all the complex returns, so it varies from two days per return to one return in 3 hours. I do NOT want to know my actual average. We did the PPP loans in our office so we don't have an end in sight on the return front.

The half-of-SE deduction is because that part "isn't supposed to be" income but rather the employer contribution that the employer, in this case, can/need not pay. So excluding that portion from taxation of income is appropriate and proper.

The metric isn't "truthfully" but rather "proper presentation of taxable income and taxes" and it's not less-than-truthful when there is no proper provision for these infrequent cases on a one-size-fits-most form.

If doing it by hand, the W-2 would be reported as wages and Sch SE instructions actually address this and say to report it on Sch SE line 2.

about 10 years ago, I started filing Schedule C for a person that worked for the monetary fund. The person showed me all the letters from the employer and they showed that her salary was X and that she was getting X*1.13 or something like that because the employee was responsible for all taxes. (This situation is common in DC). One year, she attended a training and we took $3K deduction on Schedule C, the IRS sent her a letter and said "Any expenses need to be reported on 2106". So that's why I said schedule C with NO EXPENSES whatsoever. This extra money are given to US citizens and to legal permanent residents. I have a couple of clients that do not accept a "Green Card" from immigration because all the money they are getting is tax free but as soon as they become a green card holder they will have to pay taxes. Think about this: You have a nice position and making $150K a year and no kids. The embassy appreciates you and your non-inmmigrant visa is guaranteed. Also you get $150K, pay no taxes... why do you want a green card if it will cost you $30K every year? And by the way, it is legal for these organization to not hold taxes and it is also legal for this money paid to non-immigrant visa holders not to be taxable.

If you can't make it a late election effective 1/1/21, then yes the short year return is due May 15 (2.5 months after year end.). In ATX, you use the month/quarter tab to rollover the 2020 return to a short year 2021 return filed on 2020 forms.

Judy, thanks for the links but I didn't see specific ways to address compensation on a W-2. Which leads to Pacun's statement to report on Sch. C. However, unless the W-2 shows statutory employee and can be listed/input as such on Sch. C, I don't see this as a solution, at least using software that has restrictions. I'm glad this isn't my client and problem but always good to learn about different wrinkles in our tax and reporting system.

Helpful info in these links: https://www.irs.gov/individuals/international-taxpayers/employees-of-a-foreign-government-or-international-organization-fica-including-social-security-and-medicare-tax https://www.irs.gov/individuals/international-taxpayers/employees-of-a-foreign-government-or-international-organization-how-to-report-compensation

Ok....the 571L is the report from which the Business Property Tax bill is generated. The assets of the company, less vehicles and real property (taxed under their own scheme) are listed by year at COST. On each section of type of property (machinery, equipment, Computers, etc.) is an amount for each year's purchases of that type of property. If you have the prior year report, it will save you a lot of headaches because the only thing you will need to do is put in the current year purchases and dispositions. If you have to recreate from scratch, hope that your numbers match the prior years when you get done, because if the prior year amounts don't match the previous reports, and there are no dispositions on the disposition schedule to tie them out, you risk an audit. And don't forget to put something (any amount) in for supplies. That is easy pickings for an auditor. As an aside, when I have gone through audits in the past on Business property, the first thing they ask for is the book and tax depreciation schedules, in detail. Then they will ask for the detail expense GL accounts for the common places to hide assets (Misc expense, Supplies, Office equipment, small tools, materials, Janitorial, computer software, etc.) If you get through that clean, you are home free, but if they find some ****creative**** accounting, they will continue to look. They will also do three years at a time. These audits are no fun, so making sure the 571L is tied out is the first step to avoiding the audit all together. ATX Max has the 571L. I have not looked for all counties, but I have never had one not there when I needed it. You are most likely going to have to do the submission online. They should have given you a letter from the county telling you what the account number and online login are. It is actually a pretty simple process if you have a filled out return in front of you. Let me know if you have other questions. Tom Modesto, CA

Well, he isn't self employed but he is required to file Form SE and has to pay both halves of the SE tax so I would argue that it is correct to deduct half from his taxable income. In my opinion, the math works more fairly but it is your client and you and client sign the return. It's a weird one for sure.

I do have him paying estimated taxes. I don’t think I can deduct 1/2 SE tax as he’s not self employed. I guess foreign embassies are special employers. He’s not highly paid, he’s probably a translator. I know sometimes I have trouble understanding the accent. Tea and crumpets, a nice benefit. My wife once worked for an English law firm and tea and crumpets everyday at 3.

Yes

Letter explicitly says to use Sch SE, as a way to pay both ends of employment taxes. I wonder if the Queen knows about this.

Include the reject...

I put the info in myself. I found on 2 other forums of people having same problem. One of the responses was from an "IRS employee" that IRS is aware of the problem. I think it was the Intuit forum. That's good enough for me to tell clients to have patience, I have too much going on now to deal with this further. I hardly ever check WMR for clients and tell them to do it themselves, but clients saying there's an error just added more stress to an already stressful year.

I am winding down, but have about 10 returns in various stages of done-ness. Working on a couple right now in which they have HUGE noncash charitable. I have warned them for years about donations. Now you need to get an appraisal of any amounts over $5k of similar items to get it through e-file. Yay, a reason to winnow it down. (Although you could say that some of it is 'art' & some is 'household stuff' and some is clothing)

Three or four, assuming I have ALL the information. But there is almost always something missing! Then there is the long process of writing it up and chasing the client for all the answers NOT yet provided. Or the "wait, what about my second job?" when you think you're done and it turns out they never gave you the new W2. One year a client forgot to tell us about a new baby! Picked up the return, brought it home for signatures, called the next day "where's the baby?" when she never gave us any info at all. Between three of us, we do about 700 returns in a season (personal and corporations and entities). Except for *some* of the dependent kids with summer jobs, almost all are a long hard slog.

How many returns are people usually able to get through in a day? I can do maybe 15 on a Saturday or Sunday, but weekdays are much less productive. I think Jim on this board does 1000 per season by himself. Unreal! Curious to know how others pace.

I can't even imagine. I get anxious when I have 10 returns in my to do stack!