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Key filing season dates There are several important dates taxpayers should keep in mind for this year's filing season: January 13: IRS Free File opens January 17: Due date for tax year 2022 fourth quarter estimated tax payment. January 23: IRS begins 2023 tax season and starts accepting and processing individual 2022 tax returns. January 27: Earned Income Tax Credit Awareness Day to raise awareness of valuable tax credits available to many people – including the option to use prior-year income to qualify. April 18: National due date to file a 2022 tax return or request an extension and pay tax owed due to the Emancipation Day holiday in Washington, D.C. October 16: Due date to file for those requesting an extension on their 2022 tax returns.

As we have chatted about before, it can be freeing, and many will say necessary, to fire a few clients each year/season. In my case, I don't really have to prepare, I can just issue a refund, and send a "thank you for past usage, make sure to print needed records" type of message. Happened again today. Someone asked a relatively simple question, with the proper answer being no. The now former customer did not like the answer (the item was something it is not proper to do), so the refund was initiated. For me, most fire themselves, such as making the "threat" along the lines of do what I want or I will find other software/post negative reviews, etc. These are becoming sadly routine as attempted blackmail seems to be some sort of way people think they can get what they want. The other usual is someone asking me (interestingly, the person who wrote the software) for help, then claiming my suggestion is wrong, unable to be done, etc. Today's example was a customer who believed their "IT" person (or was just being dishonest about having an "IT" person), sent a nasty reply, then sent another rely that the software was not the issue as proved by installing in a different location (it was a firewall issue on their end, not broken software on my part). As I get ready to try to train my eventual replacement, I have been making notes of things to help them deal with customers. One of them is to never assume the customer is telling the truth. This is a huge change from 30 years ago when I started... It simply is not wise to take all information at face value. I actually often ask for "proof", such as a screen capture, and a fair amount of the time the customer was wrong, mistaken, or just untruthful. So for here, I wonder if you are ready to fire at all times, meaning ready to give working papers or copies on short notice, and send them to the next person/firm? I ask, because I know we chatted here, years ago, about even terrible customers having money to "get" (meaning to get/earn for services), and sometimes, they have more to spend than easy customers. In my case, I have one price, so I cannot charge more for tough customers... Plus, as I get older, and relatively stable financially, I have little need to deal with certain things. (Maybe I am getting to be more Mr. Wilson than Dennis!)

And, that is an age reference that I can identify with.

From the IRS' site; guidance for this year.

Yes - and as a result, I have rarely had to fire on the spot. As time goes on I am refusing potential problem clients upon their first inquiry. With existing clients, if I start to see signs of trouble creeping in, I recommend that they seek other help because it seems they need more assistance than I have time properly to provide. The last client I fired I finished his return (and got paid, not nearly what it was worth) and then sent a letter stating I would not be able to help him going forward. Thought for sure with him I was going to have to tell him to leave, but knowing I was ready to say it came through enough in our interactions that we were able to finish that one last year. He got a lot more slack than others, since doing his return was a favor to his late mother. Thanks for the reminder, as well as for confirming the impression that people are not telling the truth as much any more. On the tax end, I don't know if they're just incompetent financially, confused by confusing rules, overwhelmed with general busy-ness, or just lying. But I definitely see it more and more.

Pacun, I looked on the IRS website, clicked on the news tab and yes, the IRS has set the date to begin filing on 1/23/2023. Here is a link IRS sets January 23 as official start to 2023 tax filing season; more help available for taxpayers this year | Internal Revenue Service

January is my busiest month due to 4th Quarter and Year End Payroll Reports, so I don't have any more time to spend on this area. The objective of my posts was to point out that this is an area which is more complicated than it first appears, which is why I keep referring to the client's Plan Document and to the client's Fiduciary who has expert advice available.

All I had mailed out were the employee copies. The online service deals with e-filing with the SSA and IRS. My particular problem with login solved for $4 - far less than the cost of the time I'd already wasted.

I think the employer contribution is still limited to the 25% but the employee elective deferral can be up to 100% of the plan doc's comp as long as the total combined contribution max doesn't exceed the $61,000. https://www.irs.gov/retirement-plans/one-participant-401k-plans

Employer contributing more than 25% of the defined compensation per plan document would result in a nondeductible excess contribution, and the employer would be subject to the excise tax if not remedied.

I mail black/white laser printed copies and/or efile as well.

It is supposed to, however for years I just printed and mailed black & white laser printed copies with no problems. Now I efile thru a third party.

Some of Mrs. Kravitz' habits have leaked in as well... Not so much being a busy body, but watching what goes on, or more specifically, having visible working cameras so the baddies move along. We get asked, from time to time, if we caught something. One of our cams records every thing entering our cul-de-sac. Helped catch someone who as checking for unlocked vehicles and homes. The person who was caught skipped by our place and vehicles, looking straight at the cameras... but did not realize how wide the field of view is. Just got four new ones today, to replace some outdated ones. They not only are clear enough to get a real face image and license plate image night or day, they are supposed to pan with the moving subject.

I too use the Fujitsu for scanning. I choose to use File Center for my storage capabilities. It has some great integrations with my portal that make it even more efficient. I could use Windows to save, but found File Center worth the money for the time saving features.

Just finances/taxation. One cannot call it sensible in any manner <smile>. If puzzling, consider refraining from offering the client any advice until it becomes more clear. With a plan, the plan manager can answer their contribution questions, and you can just do what the client wants (unless it is objectionable to you). Keeps you from being liable for giving the advice or numbers to go on.

Yes, e-file will be open for all current e-file years

Catherine, I think your issue was with the BSO. I uploaded files today and the only hiccup was changing the password. Just thought you might like to know.

It was probably a boilerplate. Client is talking to the Fiduciary and they will have the plan. Ha.

Bingo! Given a one person entity, the odds are good there is no formal plan.

He has to have a formal plan even if it's just boilerplate. Why don't you do a conference call with your client and his Fiduciary.

To further clarify, Employer Nonelective Contributions are voluntary, the Employer has no obligation to make these contributions. In the right circumstances with the cash available, they would be a good tax planning tool. With enough time to read, it's amazing what you can learn.

You are correct with respect to the limit on Employer Matching Contributions, however many plans also allow "Nonelective Employer Contributions" for which the 25% of compensation does not apply: https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-401k-and-profit-sharing-plan-contribution-limits "Overall limit on contributions Total annual contributions (annual additions) to all of your accounts in plans maintained by one employer (and any related employer) are limited. The limit applies to the total of: elective deferrals (but not catch-up contributions) employer matching contributions employer nonelective contributions allocations of forfeitures"

Again it depends on the plan document. I believe plans can be written so that the employer contribution can exceed 25 % of compensation as long as the combined employee/employer contributions doesn't exceed the designated max of $61,000 for 2022 or 100% of compensation whichever is lower.

If true (I have no idea at all) makes what some old timers told me seem real. The IRS has some, in decision power, who know they are leaving for private, and realize keeping things complicated benefits them. I am still a bit surprised the paper 1099's are now multi year, but it may have been done in tie in with the supposed upcoming easy efile portal, despite what forms suppliers and paid portals likely lobbied against.

Amusing discussion, since the IRS still hasn't implemented optical scanning and all paper filed 1099s have to be entered by an employee.

In 30 years I only have personal knowledge of the IRS visiting a client unannounced once, about ten years ago. My client kept making their federal payroll tax deposits very late. It was kind of surprising since they only had 3 or 4 part time employees. According to my client, the IRS Agent didn't actually do much except to ask some payroll related questions which as I remember they didn't answer truthfully. This was a client who I fired.

YES. There are many who say/claim/have proof the IRS accepts self printed copy A, the "specifications" do not permit it, and thus, the IRS can elect to charge a fairly hefty fine per form (not page, but for each item reported). This is different than the SSA, which embraced self printed Copy A forms starting with TY 2021. If the PR is correct, and the IRS does come up with an easier/free efile for 1099's, I suspect I (in my software) will not even try to fill in the red dropout ink 1099 forms any longer, even though it appears the IRS has settled on non year specific forms...

An S Corp shareholder/employee IS considered an employee and a self employed person, depending on who is asking... I am no expert on this, but taking the OP at face, if the amount beyond the allowed amount is given, it would itself become taxable wages.

I had no trouble just before EOY. I have not heard any complaints from my customers, other than those who wonder why they have to sign up with SSA (such as ask me what an SSA ID is). If you do mail, I always suggest using something which offers proof of delivery. Personally, I would mail, first class, but I need to do what my customers might do, so I efile. Mailing is less time consuming (I know many will argue, but print, stuff, and mail takes what, a few minutes, versus sign up, login, password reset, etc.), so less costly, assuming you keep copies, have proof of delivery, and monitor for receipt (as mentioned in a different thread).

Boot reduces basis, recognized gain increases basis.

See, it's better! No, don't look under that tablecloth; nothing to see there!

I Agree the 30% Backup withholding applies if recipient refuses to submit a W-9. However, hard to collect the Backup Withholding from a recipient when it was a one-off service and payment was already issued prior to having the mess of providing the 1099NEC etc that is dumped in your lap on January 28th... Just Sayin..