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The tax code has always changed frequently, so nothing new there. (Remember the year the ACA was introduced, the same year the expense/capitalization requirements were changed? For experienced tax pros, that was almost like starting over again.) Preparer requirements have bounced around a lot too. I think what has kept me engaged is that I have always worked for a firm, never self-employed. No worries about E&O insurance, ordering supplies, IT security, etc. Of course I pitched in with some of the tasks of running a business, but for the most part I was able to focus on tax research and preparation, planning--you know, the skills we acquired to enter this business in the first place. I like taking courses (an academic at heart), so required CEs were never a burden. The biggest complaint I can think of is the long hours during tax season, which repeat as Oct 15 comes around. That said, I have finally retired! Time to have some fun and read more books. I will eventually volunteer for VITA or AARP, but first I want to get organized around the house and do some things I always wanted to do. I will depend on this board to keep me in the loop so my tax knowledge doesn't fall by the wayside.

Actually it wasn't until the TRA of 97 that the tax code started to change frequently. Prior to that the big major change was 86.

We have had clients who brought some situation to us and we advised them to see their attorney. They admitted they didn't want to pay an attorney, which is why they called us!

It is best practice to write down the "secret code" (and save it in a secure place) even if use use the QR code to set up the authenticator. You will need the code if you lose your phone or it breaks, and you need to set it up on a new phone.

I was just thinking about this today for when I eventually retire. If Drake is still offering PPR that includes some individual returns in the base price, that will be sufficient to prepare my return, siblings, and one or two friends.

Congratulations, Sara! I have to decide by year end whether to renew my license for another 3 years. Most of my clients will not be happy when that time comes and, like you, I am an academic and love learning so do not begrudge the continuing education and refreshers. And I think I would be a bit rudderless without this routine. I am beginning hammer dulcimer lessons soon and am a CASA volunteer with one case at present and am church treasurer so not totally without things to do. One thing that occurred to me is that I'm not sure how I would do my own tax return without my software! I've been using it since 1996 tax year in all its iterations.

Judy just an additional bit. This shop owner is so meticulous, all invoices, receipts, payroll records are alphabetized in a file each month and put in a box at the end of the year and stored. There isn't an expense or item of income that cannot be accounted for. I've worked with this guy since 2007 without any issues.

Thanks for all the replies so lets see if I can clear this up. The employee gets paid an hourly rate for whatever hours he/she works each day regardless of what the task is. If the employee performs an initial repair or a warranty repair, they are still paid for x number of hours per day. That gross pay is deductible regardless of what it was used for. So, for the warranty repair, there is no additional deduction for the shop owner simply because he did not pay anyone an additional wage to perform the warranty repairs. Therefore the shop owner cannot claim any lost time for the warranty repair. Correct? This has been my thinking all along but somewhere along the line I managed to confuse the crap out of myself. I think I may have misunderstood the client and now that I see the repair orders and what took place it made a difference.

So, the labor charge submitted to the vendor was denied. That leaves the business owner with the actual cost of the labor as an expense, not the "book rate." Or maybe I missed the whole point.

What does that even mean? I don't think you're making it easier. You had a sale of $2k. The part was replaced under warranty. The part manufacture replaced the part for free. Thus there was no additional cogs for the part. You paid your employees. As Judy said, whatever dollar amount you actually paid your employees is a deductible expense. Whatever the employee hourly rate and shop hourly rate are (and whatever you mean by those terms) is irrelevant. What you actually paid gets deducted. When they're paid to do the original job, the actual amounts paid are deducted. When they're paid to replace the part under warranty, the actual amounts paid are deducted. When they're paid to sit around twiddling their thumbs because there are no jobs in the shop, the actual amounts paid are deducted.

Margaret, I do maintain an exclusive OIH in my "Home away from Home". I do take the expenses for OIH because I work on tax returns when I am there. However, those are the only expenses that I take, and those are subject to quite a small square footage. I might get slapped for that some day, but I do feel justified. I have an exclusive laptop for that location as well. It stays there when I leave unless I bring it home for IT to update. (No expense for him).

Oh, Sara, we are going to miss you. I am torn as well and have piles of books I want to read, but there is something addictive about this work and I feel so strongly about helping others. Because my husband and son are a Partnership, I will have to continue with, at least, PPR if I do decide to sell my practise.

I have discussed this with the client and she has decided it just isn't worth all the tracking and rationalization. She clarified to me that in the past she and partner stayed with partner's mother renting space in the basement to sleep or with friends and occasionally an AirBnB and not just with a friend every time, as I thought. They decided that wasn't working reliably or well as they are both over 60. She also stated that the primary reason she continues to come to OH so often is work to maintain those in person clients. She sees them on the first and third Friday and Saturday of the month. The 4 1/2 drive from TN does not work with commuting especially when seeing clients on both Friday and Saturday. When both come to OH, only one drives and it could be either so determining mileage isn't easy nor is meals away as they were a combination of dining with family or friends or cooking or eating out, etc. I just wonder what other folks in similar situations might do. I think it not at all unlikely that a sole proprietor in a variety of fields may have work locations in more than one state or at a distance too far to commute but still have ordinary and necessary business expenses. I trust there is no disagreement that the office space she rents in OH for the in person counseling is not in dispute even though she does not do her billing there and does most of her counseling via telehealth from TN but not in a rented office space. Thanks again to all for the thoughtful discussion. Always more to learn...

I've been doing taxes a long time. Makes me wonder if I started all over again as a green person, would I choose to become a tax preparer knowing what I now know? Will there be a supply of new preparers to replace us when we quit or retire? Getting into the business now is worse than several years ago. In addition to tax law which changes more rapidly (thanks to Congress and politics), there are now requirements which drag us into a modicum of IT. And EA requirements because the laws change so frequently. And dealing with the IRS is no great pleasure of life either.

There is a time and place for Roths in a financial plan. There is a time and a place to do conversions (very low income years). Conversions are not the solution to all financial and tax plans. Tom Longview, TX

In Alabama, and abandoned spouse can file for a divorce. Client should see a family law attorney.

Yep, I know all about comebacks and warranty work. Husband is a now-retired mechanic, worked commission for most and then flat rate, and then worked as service manager too. On my end I've done the accounting and tax work for more than a few repair shops, quite a few gas stations, a couple of parts stores too, and a car dealer.

No, this is an S-Corp that I maintain the books each month. I don't normally see the repair orders themselves just the income. I have the QB file setup properly. I enter all the bills and payments each month from the vendor invoices; etc. BTW, I also process the payroll. This business owner is and has always been very good at record keeping probably one the best that I have. For an auto shop of any kind, everyone loses on the dreaded comeback except the hourly employee.

Just out of curiosity, are you trying to prepare a business return or Sch C using just the receipts, customer invoices, vendor invoices, and payroll records without having a complete set of books posted using double entry bookkeeping?

That is all correct.

If the space is used exclusively for business then there is no problem (assuming this is outside of the rented apartment). You need to use it on a regular basis (rather than occasional or incidental) and also prove it was your principal place of business. The IRS has never set forth any criteria for "regular" use. In the case of Green, it was established that he met the regular use requirement by using his home office about 2 hours an evening, five nights a week. However, he was denied a deduction because he failed to prove it was his principal place of business per sec 280(A)(c)(1)(A). The IRS and case law have allowed OIH deductions for both a main home and 2nd home. In Moller taxpayers had an office in both their summer and winter homes; and established both were used on a regular basis; in their case over 40 hours per week regardless of which residence they were at for the season. So it boils down to facts and circumstances.

You deduct whatever gross pay you pay the employees, no matter what job they are working on. It doesn't matter if it's warranty work or a first time repair.

Yes. Why do you think employee wages may not be deductible?

Have you checked to see how much would be saved by divorcing and filing as Single? The tax brackets are the same up to $365k ($292k for capital gains). If there are no credits involved, the difference may not be that much. The big difference is between MFS/S and MFJ.

I have been using ATX for just short of 20 yrs. I just switched to OLTPRO and find it a bit confusing at first, but after 2 yrs, I find it quite easy to use, besides being much less expensive. With regard to running ATX on win 11, I too have much concern. I happen to have spoken with a "Systems Tech" at ATX who told me that tax years after 2018 will run OK on Win11. Tax years 2016 and 2017 are iffy at best and everything before 2017, you take your life into your ow hands. If it wasn't for a new client who has not filed his corporation taxes for at least 10 yrs, I would convert my computer to win11, but instead I have to go out and spend close to $1000 to upgrade all my other software to win11 and keep my old computer just for ATX's older tax years.

Agree with that. Disagree with that. The OP implies that cost were minimal or maybe never taken into consideration. But at any rate each tax year stands on its own regardless of how it was handled in the past.

While my backup "game" was likely more detailed than 99.99% of the world, I stepped it up again this week. I added a NAS to my gadgets. As I discover and prove I am comfortable with what the NAS can do, I will be able to rid/repurpose a few gadgets. With proper encryption, you can leave your data on your front porch or even hand out USB sticks to your local hacker, and it will remain safe (maybe not against a group with national type resources and time, but those are not my concern at all). I doubt the IRS investigates or would want to take on an entity like Google by making a statement prohibiting using gDrive for storage. Few, if any, hacking groups are after the data you or I have, since what you have, even if it was 5000 clients, is worth their time. For me, I keep no card information, so hacking me would be a waste of time too. My concern is being able to get back to work in as short of time possible.

Thanks to all respondents. Sounds like most of you agree with me --- MFS. If he wants relief he needs to get a divorce.

Your client has made his choice and will pay for it. Really, other than needing to know the spouse is not present to sign and is never coming back, it is not something I would be concerned with. Your client has made his choice, any cost is not your concern.

Does the client even want to declare as single or are you presuming? Is his wife a US citizen and filing returns in the USA? My wife's ex-mother in law (they still talk all the time) has been legally separated from her husband for about 30 years. They talk 2x per day, see each other several times per week and she takes him to doctor appointments but they can't stand living together.

surrender penalty is up to client to decide on. I just want to make sure it is tax & penalty free because it is in the IRA. Thanks for confirming my thought. Tom Longview, TX

I have also done them, but never received an email only paper requests with website and log in information to submit online.

I fill out a number of different BLS Surveys for my business clients. Some of them are simple and some of them are a very long PITA!

Just received a large paper packet in the mail from USDA re Tenure, Ownership, and Transition of Agricultural Land for some farmland I inherited in IL. Very detailed and intrusive. But I inherited the land which for a while was owned together with my cousins who live in IL and farmed the land, so I knew little except to receive my K-1. It was divided at some point, but I continue to rely on the counsel of my cousins, plus we're all old now and use sharecroppers so I get a check as well as corn and soybeans which I sell where they suggest. This "mandatory" 12-page packet with at least 3 pages of instructions will be a time suck. Worse than the short-form biz census forms, maybe about as bad as the long-form biz census which I worked on for a client a couple years ago. I wish the government would concentrate on raising income and spending less instead of making us citizens give intrusive details about our lives.