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Just an announcement, I have passed all three parts and the EA exam and have submitted my application for Enrollment. For those who are considering becoming an EA, I will tell you the three parts are not a cake walk but are not as difficult as when there were four parts. I tried becoming an EA way back when it was a paper-pencil test. Didn't do well so I put it on the back burner until I retired from my teaching job. Fast forward 26 years and here we are. For those who are new or seasoned EA's did you join the NAEA? They are offering a good discount for new EA's just wondering if it is worth the investment. Opinions please.

If your taxpayer is charitable, and uses the standard deduction, have the RMD go to charity as a QCD. Tom Longview, TX

I'm in that situation too. I plan to contribute. My understanding is that the tax rules changed for contributions when they raised the age to 72for RMDs. If you are working and have earnings, you are now eligible to continue to contribute and get the IRA deduction.

If the IRS is really trying to stop identity theft, then why wait 8 months to query my client? The IRS is hurting the people they say they're trying to help, those earning less in 2020 and 2021 due to Covid, by making them wait a year for their refunds which include all those credits they advertise so heavily.

Maybe part of why you think I’m so young is that I still have the same photo up as when the site was started! we didn’t have a big TV until I went to college, but we did have several 13” black & white TVs by the time I left. I don’t remember the Beatles on Ed Sullivan, but do remember Guilda Radner on SNL.

When a taxpayer who hasn't had any changes for years receives an identity verification notice, it shows the system is working! Most likely another return was received for the same client but this one showed changes so IRS flagged it as suspicious. The agency has no idea who the real taxpayer is, so they query both of them. This is a much better process than just a few years ago when the first return filed got the refund and the real taxpayer had to file affidavits and wait forever for the money (and the thief is long gone with our tax dollars). I did have two clients who got odd requests from IRS this year to provide copies of all their tax docs. In both cases all the docs were ones the IRS would already have like W2s and 1099s. My hunch is that suspicious returns were filed and IRS was trying to identify the real taxpayer without calling it identity verification.

Depending on overall situation, have you considered Roth IRA contributions? That should not affect the RMD for future years and should qualify for the same investment opportunities. The difference would be the destructibility of the contribution, which might or might not be significant.

Taxman, when I turn age 72 I too plan to take my RMD as well as continue to contribute to my IRA. IMO it’s a good plan tax-wise, should one meet the contribution qualifications.

Why would an Irrevocable trust be reported on the client’s own return? Irrevocable trusts have to file a 1041. With income & expenses.

Just reading up on the 1120S instructions updates. Found this summary which quotes the 1120S instructions. To Read the Entire Article, Click Here The words in red were written under column (d) instructions for the 1120S so I'm not understanding how this corrects the reporting on M-2 column (a) being understated. Are we suppose to add the PPP forgiveness to line 3 of column (a)?

I used the 1st year NAEA discount to join and have remained with them ever since. I used to attend the CtSEA education events for both the education and the networking. Now, my main group is the NY/CT-ATP for education and networking, because its location is closer and I can network with both NY and CT preparers (I have NY commuters and NY residents in my CT practice, not just CT residents). However, I've benefited from the NAEA publications and e-newsletters so remained a member. During Covid, I made use of my NAEA member price to take webinars from the NYSSEA and VASEA and elsewhere at the lower member price. NAEA membership also offers you 25% off CCH CPELink education and CCH publications, UPS discounts, other benefits, and a couple FREE classes.

I used Gleim which is much harder than the actual tests. However, with Gleim you will definitely learn which makes it better in my opinion. I wanted to advance my knowledge as well pass the tests.

I see an ethical issue with you withholding knowledge of the tax code from your client that would be to his advantage. I believe there is a professional standard to advise your clients on the best options available to them under the code. If you have an ethical problem in filing a return with a legitimate deduction or credit, you should decline the engagement. So how did you answer question 9(c) of form 8867 in this situation in carrying out your obligation of due diligence?

Good job, Terry! A lot of effort went into that feat. I am a member of NAEA. It's pricey. Their quarterly journal is very informative and their courses are good. Our state chapter offered Ethics at no cost this year, and if you're missing credits you can take exams from the journal for a modest fee. They email a weekly newsletter that keeps you informed of the latest tax developments. They have a lobbying arm in congress (always asking for contributions for it), and their coverage of it does let you know what legislators are thinking and doing. Try it at the discounted price and see if it's worth it to you.

Congratulations, Terry!

Funny in that I read where it said go ahead and file 2021 even if 2020 had not been processed. If I show credits coming from 2020 and it has not been processed then errors start flying.

I also told good clients who switched to QBO that their tax prep bills would double. #FiringByFee

We refuse any new clients who want QBO and do not support it; I detest it with a deep and sincere loathing. That said, I do pass along subscriptions at my cost for several clients who insisted (they have special circumstances, and in-house bookkeepers who know QBO).

I had two clients with the identity verification letter this tax year, and I have a very small practice. One in CO got through via phone fairly quickly. The other was hung up on, struggled on the online site, was texting me out of desperation, even though she knew I was in a tax class. By the second day, she switched to her tablet instead of her cell (she's in her 40s, but her social group does everything on their phones instead of any other device) to continue calling on her cell while navigating the website on her tablet. On her tablet, the website accepted her ID info that it would not accept on her cell. I would say she was ready to tear her hair out, but she's my hairdresser (and I'm her tax preparer -- we try to stay in our lanes) and would never tear out her beautiful long blonde hair (she probably has extensions, that's one of her skilled services). She did say she was ready to throw her cell, even with its custom case. The CO couple did move to CO last year. The CT gal has had everything the same for years, home, job, everything except a bit less income during Covid.

According to the Taxpayer Advocate the latest numbers are: 1. 8.6 Million unprocessed personal tax returns 2. 3 Million unprocessed business tax returns 3. 5 Million unanswered pieces of taxpayer correspondence One of my family members filed an amendment of their 2018 personal tax return back in the summer of 2020. They call the IRS and check every month. To date their amended return has been logged as "received" however as yet no one has been "assigned" to work on their return.

Nice going Terry, congratulations!

Well, I may have misspoke. I remember after SECURE act came out, there was talk of this. https://www.kiplinger.com/article/retirement/t054-c000-s004-secure-act-changes-squeeze-qcds.html However, when I test it in my software, it excludes the full 25K and then deducts 7K for IRA. Also, I'm not finding any mention of it in 590B. So, who knows!

Correct. However, the 7,000 taxable income will be offset by the 7,000 traditional deduction. Yes.

Roth's are awesome. Rarely does it make sense for someone in a 12% marginal bracket to contribute to a Traditional. Distributions will likely make more SS taxable, so a 12% marginal rate in retirement years will have an effective rate of 22.2% (12 x 1.85)

Thanks for all the wonderful responses. I too am in this situation.

That doesn't work too well for those still wanting to make contributions after 70 1/2. The QCD is limited to the excess of amount contributed after 70 1/2. If someone puts 7K in a traditional, only the QCD over 7K qualifies for exclusion.

CONGRATULATIONS, Terry!

Congratulations, Terry!

Congratulations!

I have GetNetSet for my website & use the ShareFile that comes with it too.

My sentiments as like Catherine. NOTHING changed. IRS to send code. That was last October. To date no code no letter no nothing. What are we to do? Strange that cell phone tp has had for 10+ years IRS says is not his. Boy they know more than the TP.

I now have 4 clients that have received the letter to prove their identity. So far we've done nothing but go around in circles with these things.

It took me much more than 30% longer in 2018 to figure out where things went on the stupid "postcard" return. Five years ago if asked when I would retire the answer was probably never. So much of what has happened, that is no longer true. It's just not fun anymore. Luckily for me I'm at an age and financial position that I don't have to put up with the problem clients. I feel I should keep doing returns for long term clients, friends and relatives as long as I can. It's sad, but when us old timers are gone, people will be in a bind. So much of what I see from the younger crowd is they rely 1000% on their tax software and can't seem to think beyond it. If you are only doing compliance, I guess that's okay. However, unless they understand how it all comes together they are at a loss of making recommendations.

I had a similar problem. I did not change my email address but I tried logging into support and it was taking a long time to receive the email with the authentication code. By the time I received the email, my time was stopped out. I called tech support. The rep asked if I had another email address. I happened to have a gmail account and email address (I don't use it much). The rep gave me a new temp password to log in and there was an option to change my email address. Using the new email address, I received my code immediately and was able to log in to the website. You might be able to change your email address with ATX this way. But you should be able to get into the ATX website in the future so you'll want to get this resolved.

Do you put your income by client into QB? I just put totals for tax work with the deposit. I use the return manager and print it out each year after I mark that they paid and amount. It doesn't keep all year just current and then I have a file for each year. It probably would have been handy to see all the years together but at this point I am not changing. Hoping to retire in 3 or 4 years.