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One time many years ago when I first started practicing, a client owed $1 to the State. The State had a rule then that they wouldn't refund less than $5 but if you owed $1, you had to pay. I had the client tape 4 quarters to the return and paper file. I look back on it now, and it was really silly of me (and probably stupid), but at the time, I remember thinking it was hilarious. Ah ... our younger selves ...

Reminds me of the old tale of the farmer who won $1M in the lottery. Asked what he was going to do now, his reply was "Keep farming until it's all gone." God bless them all, because without them we would not eat.

I don't think #1 will work though. Are dad and son's names similar? Are you handling both returns? Since a return was filed under dad's SSN, I would file a superseded federal return for dad (or dad + spouse, if that is the case) with all of the correct information. That will correct his record and the return will still be under that SSN, and the superseded return can be e-filed. Then you will also be able to e-file the son too.

Whippersnapper.

Reading that all of a sudden I feel like a youngster at 66.

At least you are confused at a Higher Level, and about More Important Items!

Found this at irs.gov, so maybe I've just not noticed a "superceding" box on ATX. And I learned to spell superseding. Thanks, again! "Additionally, a new, electronic checkbox has been added for Forms 1040/1040-SR, 1040-NR and 1040-SS/1040-PR to indicate that a superseding return is being filed electronically. A superseded return is one that is filed after the originally filed return but submitted before the due date, including extensions."

Yes, the superseded return is similar to an 1040x but it replaces the original instead of changing it. The reason the parent's return was rejected is obviously because a return was already filed using that SSN. That's why I said to replace that kid's return by making it belong to the parents since the dad's SSN was used to file it. The IRS system actually thinks that is the dad's income on that return. Superseding that return with all of the parent info will correct that record filed under dad's SSN and will change the filing status from single to MFJ and whatever dependency was claimed, because if the kid should have checked that box for being claimed as a dependent, the IRS system thinks the dad is being claimed by someone.

Update - Client #2 has contacted me and set up an appointment for next Saturday to pay and finalize. We'll see if it actually happens.

I had a client who kept receiving letters asking for $0. Undoubtedly due to rounding a few cents registered in the IRS computer, but the letters asked for $0. I told him to not worry about it, that the IRS would figure it out and leave him alone. After 1 more letter asking for $0, I told him to mail them a check for $0 with the payment page from the letter. He did. No more letters!

1. Tell them to check prior year returns, and count how many years the credit was claimed. You're not mommy or daddy, you owe them nothing. Especially how to circumvent paying you for a service while still getting service answers! 2. You can't force them to pay, nor withhold their documents - you can only withhold your work. I'd demand payment in full before I spend five minutes talking to them, unless they have a good reason for going dark. Like, away on vacation, illness in family, or similar. 2a. This year for the first time I'm demanding pre-payment at last year's rate plus 5% from all clients, with adjustments for new complications or easier returns at completion. Spent way too long chasing just a handful of people last year (one lady stalled for seven months). At my billing rate it meant I did some of those returns for free (billable time lost chasing). Figured I'd have tons of pushback, and there has been none whatsoever. New clients must pay in full before they get any e-file signature form put in front of them. Cash, check, credit card, PayPal, I don't care - as long I I don't have to chase them later.

I think I would vote for option 1. If you use option 2, then dad has still filed a tax return as far as the IRS is concerned and unless he had no income it is an incorrect return.

It's a shame this stuff happens and probably has happened to all of us at least once. I agree and my businesses do pay me monthly as well and tax return clients pay when the return is picked up. Any resolution work, if I take any, requires a retainer upfront.

Wow. What a world.

Judy, worked like a charm. Don't know why no one at Drake could answer this. They should pay you for their own Customer service.

I'm confused because your original post said it was a SMLLC.

Get the bursar's statement to see what can be done for 2024. And, qualifying expenses, such as books. If the parents made too much money to benefit from the AOTC in prior years, for those years they can choose to NOT claim the college student dependent. The college student still checks that he is able to be claimed by another/does NOT claim his own dependency, but then he CAN claim the nonrefundable part of the AOTC. See if filing some amendments can get some monies back for this family.

No. If properly prepared the 2023 form would have a check mark in Box 7. It's just a timing issue not a taxable issue..

An article in today's WSJ about old people still doing tax returns. https://ereader.wsj.net?selDate=20250220&goTo=A001&artid=6&editionStart=The Wall Street Journal

The Fair Labor and Standards Act administered by the U S Dept of Labor Fact Sheet: "Employers, Including Managers and Supervisors, May Not “Keep” Tips: Regardless of whether an employer takes a tip credit, the FLSA prohibits employers from keeping any portion of employees’ tips for any purpose, whether directly or through a tip pool." "A manager, supervisor or owner may keep only those tips that they receive directly from a customer for the service they directly and solely provide. For example, a restaurant manager who serves their own tables may keep their own tips from customers they served but would not be able to receive other employees’ tips by participating in a tip pool."

If they have a $1 coming back, I go for it. The principle of the thing.

So we were at a dance last night and I got a new client....yeah...well they were asking me some questions and I was giving free advice on the sale of some land they have planned this year. I do it all the time. And then they tell me they want me to do their return because they are older and TT is getting harder to use. OK, more than happy to do so. Then they tell me they have a small cattle ranch. I have never done a cattle ranch and I would sure appreciate any suggestions you might have to point me in the right direction. I am embarrassed to say that I only know it goes on the Schedule F and I think the animals are inventory, but I have no idea how to value them. Thanks in advance. Tom Longview, TX

I am in the running for youngest on the board. I have not turned 60 yet (but I am knocking on the door - like days). Tom Longview, TX

Those look sweet. I think I have monitor envy.

For No. 1, I would have sent him a copy of the instructions for form 8863. If that doesn't help, there is HTB's online helpline. For the next time you have a No. 2 - get an upfront retainer and then have them pay as each return is finished. If I can reasonably estimate what all three returns would cost, I offer a package deal with a 10% discount for prepayment.

Yes, we were typing at the same time.

Working with this owner, they have agreed to not take any tips at all. They just started this year and getting all the kinks ironed out, plus being overwhelmed by me. i have found out the owner has not taken any tips. They have been giving me the tips each employee has earned and the remainder they have not touched so I informed them that was great they have done that and the excess is revenue. Part of this confusion was the owner explaining what they were doing so I think we're all good now.

This is one of the most stimulating and impressive things that I have ever seen. One of my clients did tell me just the other day that I had to stay actively preparing her tax returns for another 20 years. Maybe?????

The part I could see using "reader view" Some tax professionals keep crunching numbers into their 90s and beyond GRAND FORKS, N. D.—Else M. Rike will be 101 years old on March 24 but doesn’t expect to take a day off to celebrate. She will be too busy preparing tax returns. After more than 70 years as an independent tax preparer, Rike knows how to pace herself. She aims to finish at least three returns a day in the weeks before April 15. The photo from the article:

It's not a tax question. It's a legal question and I'm not stupid enough to practice law without a license.

@Corduroy Frog Thank you. I think it is 35 acres and 50-70 head right now. Tom Longview, TX

Especially Judy!

The owner should check his state's labor laws and discuss it with a labor attorney licensed in his state.

It depends. If the owner is a SMLLC as a disregarded entity reporting on Schedule C and working at the counter, then the owner can receive tips and report them as sales revenue. What the owner cannot do is pool all of the tips and take a share of them. All of the tips made to the employees have to go to the employees.

Thanks for all the responses. This company has just gotten started and I will strongly warn the owner against any involvement with any tips from any sources.

Wrap your arms around a list of depreciable assets. Farm equipment is expensive and depreciable. Also breeding cattle are depreciable if they were paid for. A bull is nearly always paid for because a calf raised to be a bull will have cross-breeding problems and can sire out very sickly calves. Farmers have some advantages with respect to treatment as a "hobby" that other businesses don't have. To begin with, IRS will be deliriously delighted when farmland is ultimately sold. as the gains can easily eclipse the total of all previous losses. Also a landowner must do something productive on his land or else it will grow up in ruins and barns will dilapidate. (Timer would be an exception). And there is also the profit motive. A "farm" with 8 acres and one cow is a hobby. Make sure all income is reported. Payments of $7000 for feed and only $1500 in calves sold is a warning sign, unless the calves are being held over the winter for sale in the spring. This practice is not very common since it is horribly uneconomic to keep livestock in winter months. I do around 25 farms in Tennessee every year. Most of them do have losses that i feel are legitimate, and some have profit. Some of them have small losses and occasional profits. Many of them move from losses to profits when their expensive equipment becomes depreciated.

Thanks @DANRVAN That is helpful. If I understand them correctly, they purchase and raise for sale. He said something about how he stopped working with heifers because it was too much work. What I am most interested in is how you value for inventory. I have been reading about the farm price method and the unit price livestock method. I need to get a handle on those methods and how to value using either. Wife mentioned something about how the prices being high made her have to increase the inventory, so I need to figure that out. Family has been in the cattle business for generations, trimmed their herd a couple years ago like many other ranchers when feed cost went through the roof. I am not concerned with hobby, but thanks for pointing that out. I am reading, but I don't feel like I am getting smarter. Tom Longview, TX

If the LLC elected S corp status, the owner could be on payroll but if it's a Sch C, @Lee B is correct.

No, the tips received by the owner should be added to the LLC's sales revenue.

That depends on if they are held for market or breeding. Raised livestock do not have any basis whether held for breeding or market. LIvestock purchased for breeding are depreciated. Livestock purchased for resale are inventory. Sales of raised breeding stock go on part one of 4797 and are capital gains. Sale of purchased breeding stock go on part three of 4797 and subject to depr recap. Those two statements lead to the possibility of a hobby versus business. Proceed with caution!

I renewed on 11/12 and got my card on 2/14 (when I was about to call). I remembered my couple last renewals took about 45 days.

Thank you. I will definitely do so as soon as I see their documents Tom Longview, TX

Good luck with that. I have a client who just recently received his 2022 Federal tax refund. We played every card that we could, but they move at their own pace. Due to recent news, that pace may slow down considerably.

The Center for Agricultural Law and Taxation is a good resource: https://www.calt.iastate.edu/

I certainly need to add....."What would we all do without Eric?"..........and Judy!!!!!

Drake rep is partially correct, as far as it went, but there is more to it and another choice to consider. Concerning the repayment of the sick pay: if the taxpayer believed he had the right to the funds when paid and it exceeds $3,000, then in the year of repayment, then he can take the better of these 2 choices: either take the repayment as a deduction on Sch A line 16 "Other itemized deductions (not the medical section) OR calculate a credit The credit is calc'd by going back to the year(s) he received the sick pay and recalculating the tax liability on that return without the portion that was ultimately repaid for that year, using the rates that were in effect at that time. Compare the original tax liability (with the sick pay) to the tax you are now calculating that excludes the portion repaid for that year. The difference between the two amounts is the credit. This is covered in Pub 525 on page 37. It is in the section about repayments over $3K of income under a claim of right. IRC Sec 1341.

I did it. Half from you and half from me. What would we all do without Eric?

These are the monitors I got on sale for 139.99. https://www.lg.com/us/monitors/lg-32mr50cs-b-fhd-monitor

I was able to stop using my big magnifying glass when I had cataract surgery and had them put in fancy lenses right before Covid. I turn 78 this year, so I'm still a youngster!

1. Not if her husband took it out for that year. 2. Yes, all missed RMDs must be taken out ASAP. The penalties are always forgiven by the IRS. The form provides a place to request the penalties be forgiven. And no you don't amend prior years. It all happens in the current year.