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I'd smile like this if my Robbie Robot could prepare the one I just finished and meet with the client too.

Only until the notices come in!

Clients always think they're doing me a 'favor' by only giving me the 'important pages'. ***SIgh***

I can see that becoming the future. Younger people have grownup with computers and many are more comfortable with computers than people. I don't advertise or actively seek new clients. I don't think I have any clients under 35 that I don't also do the parents returns. Many of them I started by doing returns when they were in school and part time jobs. Majority of them want to converse remotely or via e-mail or text rather than in person or phone. I met with 2 of these "kids" yesterday. One was definitely uncomfortable. Another young lady was quite verbal and seemed very self-confident. We actually got talking about this very issue. She told me that she often has anxiety about making phone calls which was kind of surprising from the way she presents. I'm nearing the end of my career, so it doesn't effect me. Preparers that are wanting/needing to attract younger clients may need to rethink the way they offer services to meet them where they are.

NECPA, that is a heavy load that you are carrying. I hope that you have family or close friends that can help you.

I am curious is to how the estate made $200,000 in the first year given that any sale of assets should have been mostly offset by step up basis.

Isaac Asimov envisioned this in a sci-fi novel in 1957. From https://en.wikipedia.org/wiki/The_Naked_Sun

Just add a zero...

I've had a lot less of forgetting all the dividend pages since I've had my portal and more clients are getting their 1099s in PDF form. They just upload the PDF and voila! I've got it all.

I remember taking payments to the bank with the voucher. Then it was the call in to the IRS and we had a "cheat sheet" that told you what you were supposed to enter at each of the prompts. Ahhhhhh......the good ol' days Tom Longview, TX

BUT... standard mileage includes a depreciation component, and you must track this depreciation component in order to calculate the gain or loss on disposition of that vehicle. Basically, every vehicle needs to be set up in fixed assets with its correct basis. If you do this, ATX will keep track of any mileage depreciation for you. It's actually quite a nice feature. And if actual turns out to be better than mileage one year, you are all set to take that option.

Agreed. Between AI, form readers like Gruntworx and offshoring, watch out. Imagine for a second, Quickbooks has your online software - what if they just offer to produce the tax return for you from the file? People use Gruntworx, that's going to be quaint 10 years out. Things like Turbo Tax - you can download or upload into it your 1099s, W2s and even K-1s. What percentage of people is that good enough for a virtual automatic tax return prep? If you uploaded your Profit Loss / Balance Sheet / Cash Flow statements - a Schedule C is done in a few years.

It is there. I just had it last night, but they wouldn't let me use it because I had new depreciation. Go to the C or whichever form you are using and click on the car and auto expense block and it will jump you to the Vehicle Expense form.

Ours is the 1099-SA and 1099-INT's. With the 1099-SA being number one. Close third is the year end investment forms (1099-DIV, 1099B's). With those, clients seem to forget to bring us "ALL" pages of those statements. Always just the page showing showing interest and dividends. Always missing the 1099B part. And its always the same clients no matter how many times you remind them. But the 1099-SA and INT are our most.

Years ago, the IRS had an interactive phone system where I filed my 941s using the keypad on my desk phone

My approach on rental deposits has always been that the amounts received are income (because the IRS says it is for cash basis taxpayers) and the return of deposits to the tenant at the end of the lease is an expense. I put it on the other expense section of the Sch E as "refunded deposits". That looks like your second option. Tom Longview, TX

As far as I know, AI cannot filter and verify client documents uploaded. A 1099 or W-2 yes but business information? I use Grun Wrox and am not sure but I thought it was only an optical scanner that organized data and created a .csv file or other file that is needed to populate the software. I always choose the option of human review. Can AI but the IRS police and ask all the questions and get an honest answer?

If the estate actually did not own the real estate, then those expenses are just distributions to the beneficiaries.

I don't see how $10,000 is going to go very far in reducing $200,000 of income. Although if $10,000 was paid after the transfer to heirs, then it might be considered a distribution in lieu of cash since it was to their personal benefit.

This guy should have received way more than 33 months given all the aggravation he probably caused many elderly people. https://www.tigta.gov/articles/investigations/man-sentenced-his-role-nationwide-internal-revenue-service-impersonation

Here's an onpoint article: https://www.picpa.org/articles/cpa-now-blog/cpa-now/2019/12/27/pa-treatment-of-1099r-distributions

There are special notes notes section on the 1040 EF form called Preparer Notes. It's my understanding that those go with the efile. Not that the IRS or anyone will ever read them. Maybe someday the IRS will have AI to read those notes and look at all of our attachments. Won't that be be fun?

If it was anything but real property, I don't THINK the 1099S would have been issued. I was afraid of special rules for LKE, thinking an attorney had to make it happen, too. So, I'll get their original cost and they will have to realize the gain on the sale. Thanks for straightening me out.

Some timeshares are fractional ownership which can be considered real property. Other kinds of timeshares are not, so you need to make some inquiries and find out what kind of timeshare your client owns.

Whoa - not so fast.... You MAY have a LKE on your hands, but double check the rules were followed. Tom Longview, TX

the gain, if any, would only be deferred in a like-kind exchange. Otherwise, as personal use property--a gain would be reported on Schedule D ($35,174 minus cost), a loss would be a wash (but should be reported because of the 1099-S).

Jasdim, when this stuff happens I turn proactive and turn the tables by telling the client that I am here all year and why didn't s/he talk with me before taking such a huge distribution. If your client (ex-client?) is on Medicare, wait until he finds out his premiums go way up in a couple of years.

My daughter gave me a placard for my desk that reads, "I can explain it to you, but I cannot understand it for you."

I like when it's a 45 year old, they withhold 5% and you explain the penalty is 10% before you even get to the tax. Every year the same client thinks she can deduct all the clothes she buys for work entertainment events. I explain she can't deduct dresses but every year she sends me all her receipts. Seeing the prices of those outfits, I'm glad my wife is exceptionally cheap.

Patrick! That is one of my favorite's, also! Incredible!

Reminds me of an article I read many years ago about a pregnant woman who was ticketed for driving in the car pool lane and went to court. The judge dismissed the ticket because he did not want to rule on when a child in the womb reached the status of a person under the law. Pregnant women should be able to drive in carpool lanes now in Georgia. Tom Longview, TX

A lot of people are suddenly going to be pregnant, every year. When the IRS started requiring SSN for dependents, 10s of millions of dependents just disappeared.

geez. no social security number necessary? really. and I love "this deduction would not trigger an audit on its own"

My favorite is "Why is my 401(K) distribution included on my return? I already paid the tax (pointing to the withholding box). It shouldn't be on my return." Some people are convinced they are "paying" the tax twice and can't grasp the concept that the withholding is just a prepayment of the tax that is going to be due, not the tax itself.

A good primal scream out in the backyard works too.

I do tax returns for a lot of states, but thank goodness I have NO and never had any and will NOT accept any Georgia clients.

Someone told him about the 72(t) rule that can avoid the 10% early withdrawal penalty if the distributions are determined as a series of substantially equal periodic payments, and he heard it as "avoid tax" and never made it all the way to how the payments must be determined !! You can bang your head against the wall or give him a Rita hug, but he knows he will "avoid tax."

I used to teach taxes (first for Tax-Aide, then for HRB and local chapter of FSEA) but somewhere along the way I apparently lost the ability to explain taxes to anyone.

I'd love to hear their arguments / thought process. Have a client who inherited about $5m from her brother and had NO CLUE it was coming (he was much younger, they didn't really talk, died unexpectedly and had no one else in his life). Every time I talk with her she's royally ticked off that she owes taxes on the income. Um, you retired expecting to live on $40k, now live on $200k per year and you are upset?

Thank you all. Appreciate you. My clients think I am a hero... We are paper filing with the 14039 attached. Proof of dependency is also being attached to paper return (Birth Certs, Passports, College enrollment docs). It required a phone call to AXT support to find out which SS# was compromised. Taxpayers are taking steps to freeze credit, call banks, etc. Tom Longview, TX

https://www.identitytheft.gov/#/Steps https://www.irs.gov/newsroom/taxpayer-guide-to-identity-theft https://www.irs.gov/individuals/how-irs-id-theft-victim-assistance-works You can give them the checklist and answer questions but they are going to do a lot of the work.

While the PIN isn't overly common, 90% of people who got the protection pin lose the letter from the IRS and we have to paper file.

I wouldn't post the links, just the text.

I'd go with 1099-SA, but also yes, those dividend pages. Amazes me that the same people who will upload both sides of W2s and every other form that jst has garbage on the back, but don't upload the rest of the 1099-DIV pages. Everything with numbers please! And of course, that "proof" that the kids live with them.

I'm such a dunder brain. Client withdrew $250,000 from an IRA and had no withholding, but there is no way he can possibly owe taxes because he withdrew it over several months and not all at one time. Absolutely no way. After a 30 minute conversation (30 minutes that I'll never get back) and haranguing my staff for another 30 minutes, unfortunately, we still do not understand. I wish I were better at my job. Do you think if I recommend one of the big box preparers they might have someone who could understand more easily? I would say Rita hugs all the way around, but I'm in no mood to be that close to him or his offspring, who came to join the 'this has to be wrong' chorus. Happy Wednesday.

When there is a breach, they will tag everyone involved with a tax pin forevermore, whether their identity was stolen or not.

TP sold home he bought 11-2021 specifically for girlfriends son to enable to have a home of his own for $325,000.00 (nice guy!) Then sold it to him 5-2023 for $376,000.00 and gifted him $45,120.00 in equity to help with the 20% down (the son had saved the rest of the down payment). After proceeds, cost, improvements and sellers fees.... he has a gain of $44,886.00 even though he never actually got any money from the buyer other than the amount he purchased it for. He wants to be able to add the $45,120.00 to his sellers expenses, which I know he can't but sadly he is going to owe IRS $12,000+ and Oregon $5000. + in taxes because it made most of his social security income taxable. This is a phone call I am dreading! He does not see this coming! He should have consulted me (or another CPA) before he sold, perhaps we could have advised him to sell the house at a loss to offset the gain of the gift. Any advise or thoughts or even a work around on this gain I am unaware of?

I'm glad that I'm heading out. One of my elderly clients wanted me to show her how to prepare hers online because she used to prepare hers by hand 40 years ago. She now has tons of investments and retirement income. I should have taken some of your advice and bowed out earlier, but the new medical bills are piling up. Hubby is back in the hospital again and can't come home until they can get home oxygen here. Now we have to take our puppy down to K State, for a possible liver shunt.

Follow up, my clients informed me that there was a known data breach at the college. No proof that was how the child SS# was obtained by the perp, but it seems reasonable to suggest that is what may have happened. Tom Longview, TX