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I'm a sole practitioner with no employees. I am not a SMLLC. I do have an EIN though. I did not want to use my SSN on the tax returns I prepare. I also give it out if anyone needing to 1099 me. I put the EIN on my Sch C. I don't know why IRS would care one way or the other on 1099s using SSN or EIN. But I haven't heard anything from them on that. I have a separate business checking account. It was opened long ago probably before I got the EIN. I used my SSN. I think a bank would take a person's SSN if they were opeating the business as a sole proprietorship.

My situation is now resolved. Client was in the process of dividing the marital assets when the CP2000 arrived. He fessed up to taking the distribution and agreed that the tax liability was his and agreed to take less money in the marital asset split in exchange for my client paying the tax bills. It works out a whole lot better this way in my opinion. The returns are now corrected, the IRS and CA are paid and my client does not have to worry if he actually paid the tax bill. We don't have to involve the government in their divorce. Tom Longview, TX

This is so often the case with single member LLCs. They want to open a separate bank account for their business and the bank requires an EIN. I have had clients who purchase merchandise used in their business and the seller requires an EIN. In reference to the original post, See "Do You Need a New EIN?" at irs.gov/businesses/small businesses-self-employed/do-you-need-a-new-EIN. This is what I read in the book; however, there are examples of cases when you do NOT need a new EIN.

Hi Judy, and welcome back for however long. There are a number of us that hearken back to those days and, like you, soooo close to retirement. Some already have. I've got about 2 years on my license but actually still enjoy - for now - the season with about 50 clients. They, of course, tell me I am not allowed to retire. My Google search showed Nov. 30, 8:59pm.

Not all banks will accept a SSN to open a business account.

This is the way that I do it as well. I do have one client that has driver for both Lyft and Uber for a number of years. Make sure you get the end of year print out from Uber. Uber always takes a portion of the ride and deducts it from the final payout. If the issue a 1099K which in the past they have, the 1099K shows the gross amount before Uber deducts their portion so be careful there. Yes, this client has made over 20K generating the 1099K. Remember no cash everyone pays with debit or credit . I make sure I keep all documentation together. My client is actually making a living doing this. Sits at airports and other locations to pickup rides. It seems if one is aggressive enough it can be profitable.

As others pointed out, the IRS does not want single member LLC's (taxed as a sole proprietorship) to be paid under an EIN. That doesn't mean an LLC shouldn't have an EIN, only that if you are to receive a 1099-NEC, it should be under your Social Security #. I had to have an EIN to open a business checking account, I wanted an EIN to use on 1099's that I issued.

per ATX: In order to allow the states ample time for processing these returns, the Wolters Kluwer E-File Center (EFC) will stop accepting individual returns (both federal and state) for the current processing year on Saturday, November 30th at 10:00 pm Eastern Time. 1040 E-file submissions for Tax Years 2021, 2022 and 2023 are included in this change. Because not all state agencies process returns in “real-time”, this schedule should allow sufficient time for agencies to post their acknowledgements for the WK EFC to pick up. After the shutdown occurs, the WK EFC will not accept individual returns (federal and/or state) until IRS comes back online in early January 2025. However, preparers can continue picking up acknowledgements through mid-December.

Wouldn't it be nice if everyone had that problem?

Unless those years have a balance due, there won't be penalties.

I think it makes more sense to look at what the effective tax rate may be during retirement. Like I previously stated, although in the 12% marginal rate, the effective rate if often 22.2% as it make more SS benefits taxable. Then if it pushes them to the actual 22% marginal rate, they lose the 0% LTGC rate. Add IRMAA surcharge and it becomes higher. If someone is already at 22% marginal and 85% SS taxed, there's not a lot that can be done. Unless someone has a true pension which is pretty rare other than gov't workers, it's rare that I see clients in that situation. I've never catered to high income clients, so I may look at this differently than those that do. I'd say 95% of my clients are in 22% or lower brackets.

Tom, I had this very situation with my oldest daughter. Both lived in CA at the time. Ex received a bonus that he deliberating left off of the joint return. He also, filed the return electronically without her knowledge or signature. Needless to say, we had a fight on our hands and CA didn't make it any easier. This happened over 10 years ago so my memory is a bit foggy. We started with innocent spousal relief and didn't get anywhere and if my memory serves me correctly, the last attempt was equitable relief. Anyway, two years later the IRS nailed the ex-husband with the entire bill, plus penalties, plus interest and was fortunate they didn't go after him for fraud. This was also after the divorce decree stated it was a community expense. Only difference is the ex-husband was not my client. As was said, the IRS doesn't care what the courts say in the divorce proceedings. This has been quite a few years ago ten or more and I am pretty sure CA followed suit.

Sometimes I think I need to consider it a medical expense due to the therapeutic benefits provided by this group.

This forum is far more useful to me than some of my professional subscriptions; I log the expense there. It's listed as a "Donation" here, but in my mind it's 1005 subscription. If I (we) don't pay, it goes poof. It's far too valuable to let that happen, as long as Eric is willing to keep it up for us!

The IRS does not care what the divorce decree says, they have Joint & Several Liability for the tax due and a divorce document does not change that from the IRS point of view. Kathyc2 is correct, the spouse needs to go to her lawyer and get the decree terms enforce, it is not an IRS issue. Tom Longview, TX

Why would there need to be an amendment? If IRS corrected for the 1099R they need to pay the tax but there is no need for a federal amendment.

In that case, I'd say it's up to her or her lawyer to receive reimbursement from him. I'm not seeing how this has anything to do with IRS. In the future she may want to adjust withholding/payments so there is not a refund.

It would not be injured spouse as the liability was joint when it occurred. Doubtful innocent would apply either: https://www.irs.gov/individuals/innocent-spouse-relief#:~:text=Innocent spouse relief can relieve,from employment or self-employment. Does the divorce settlement address how the tax debt is to paid?

thanks for posting. Scenario 1 is a situation I had with a client who cuts hair--she will have no pension, just an IRA (most likely less than $50k) and Social Security. A financial advisor had told her to contribute to a Roth (probably someone who thought it was always better) and I had to explain that with only a small IRA and Social Security, she probably would not be paying taxes when she retires; and even though it didn't save her much, optimally that savings could go into the IRA. There is no one size fits all.