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Hello all, We've had some (very few, but more than zero) issues where database tables have crashed during times of heavy load on the server. These load spikes are usually related to other sites that I'm responsible for that happen to share resources with the ATX Community. These haven't been significant issues, and in fact have been very easy to resolve when they arise, but it does cause brief downtime on the Forum. So, in the interest of constant improvement, I would like to move the ATX Community to its own server (VPS) with its own dedicated resources. There are other server configuration changes/challenges that I'll tackle at the same time. Because this is the only forum I maintain, I am less experienced with performance tuning for this software than, say, more standard website content management systems. All that to say, I am expecting it to be a slightly bumpy transition but with improved speed and stability in the long term. There might be as much as one or two days of downtime followed by intermittent hiccups until everything is smoothed out. I'm aiming for mid-May to get this work done, but there is no hurry on my end. If there are business reasons to put it off longer, please speak up! Thanks!

yesterday Catherine White EA was the presenter for Tax Practice Pro, a c.e. provider. Her presentation was a case study of what happens when a client changes tax professional, and issues with prior years are discovered by the new tax pro. Kudos to Catherine on a well developed and perfectly presented class.

That is the 64 thousand dollar question. I am amazed that the IRS spends so much energy on not talking to the very force multiplier that they need, US! We can talk to them and get them what they need to close their cases, but they have treated us like the problem and not the solution for the last decade. Congress and the tax code are the IRS problems, not reputable tax pros. The IRS knows who I am. They gave me my EA license. They hear from me every three years when I renew. They gave me my PTIN. They collect a check every year for that number as well. They gave me my EIN for my company. They gave me my EFIN number. They gave me my CAF number. They know my SSN. They require my software provider to know my information before I can use a software that they approve every year. They can look up how many returns I prepare and how many POAs I have on file and how many times I call in and the number of returns that are selected from my client list for audit and the resolution on those audits. The Commissioner knows me better than anyone except my spouse. And they treat me like I am the problem instead of the TurdoTax software they allow on the market. I am just so fed up with the incompetence of the IRS leadership, especially the Commissioner. I wish he would realize I can get his backlog on my clients through the system faster than his staff can without me. Just staff the PPL line and let us work with the quality revenue officials, like we used to do when I first got my license. Stepping down from my soap box now. I feel better. Tom Longview, TX

I don't like the practice of criticizing other professionals because it's not, well, very professional. When a client brings me a return prepared by someone else, I never say "that person messed up," but maybe something like "s/he did this differently than I do" or the code changed that year or whatever. We never know if the prior person had all the docs the client brings us, or if the client answered questions the same way. I respect letters after names, like EA and CPA, because I know how hard it is to earn them. And all of us, letters or not, make mistakes. Think of McDonald's commercials. They never even mention competitors (unlike their competitors) but just highlights how wonderful their own offerings are. I disagree and have only been there maybe once in five years because it was the only quick place around, but that doesn't mean they don't know how to cook.

Any time is ok with me for the conversion business-wise, but I may have withdrawal during the downtime. As always, thank you for taking care of us so well, Eric.

Hi folks, The server move I mentioned last month will begin soon: You'll know it's in progress when the forum is replaced with a static message, and you'll know it's back up when the message is gone and there's an update on this post. I've done a trial run of the migration and although it went smoothly, I expect a few bumps over the coming weeks as it starts getting real traffic. Thank you for your patience!

Thanks, everyone. I was in the laundry room for a while. No damage that I know of... I'm sure some trees were probably uprooted in the fence row, but all is well!

I had an elderly client, gone these many years now. He had interest from a dozen or more different banks every year, chasing interest on 1-year CDs. His great joy and glee in life was calculating (by hand on paper!), and paying, his estimated taxes such that he owed less than $25 in April, each to the state and the IRS. But always he wanted to owe and never overpay into refund. I got a real kick out of him and he (and his wife) were lovely to work with.

And the recording still qualifies for CPE credits.

I have to decided to limit my involvement to informing my clients of their obligation to report I am not giving any advice or answering any questions. BOI has nothing to do with providing accounting. payroll or tax services.

Thank you and good luck with the move!

Just saw the Weather Channel and there is a big storm just north of Rita. Too close for comfort. Stay safe out there. Tom Longview, TX

I'm sure many of you have heard the same story. Some clients ALWAYS have to pay...never get a refund. Client speaks up with an air of genius: "I don't want to let the gubbermint use my money interest free for a whole year, so I keep the money for myself." As if we should admire him for his financial prowess. Funny, I've never had a single one of these "genius" clients have any interest income to report. I believe the threshold for a bank to issue a 1099-INT is only $10. Go figure...

Reimbursements of actual expenses are not taxable. You'll get a 1099-LTC with Box 3 indicating that the amounts were reimbursed expenses. You'll file Form 8853 showing nothing is taxable. But if they are paid on a per diem basis, Box 3 will indicate per diem and any amounts in excess of the actual expenses OR an excluded minimum are taxable. The excluded amount changes each year and can go up or down ($390 for 2022, $420 for 2023, $410 for 2024). So if the actual expenses amounted to $300/day for 2023, they would only have to pay taxes on payments in excess of $420/day. If actual expenses amounted to $500/day, the excluded amount is irrelevant and they pay taxes on payments in excess of $500/day. (You look at the totals, not the actual per day expenses) Accelerated death benefits from life insurance are reported in Box 2, but are not taxable if terminally ill (otherwise, they are treated as Box 1 amounts and are only taxable to the extent they exceed expenses or the excluded amount).

I have a client who purposely has no Federal taxes withheld so that he can use the money all year. What part of "penalty" don't these people understand?

I feel better just from saying "YEAH!" to everything you wrote.

I'm currently on the phone with PPL for a reduction in a 2023 refund for a 2019 additional assessment. My client never got the CP letter since his wife is in the army and they move quite frequently. His address on record was/is his dads and apparently his dad didn't take notice of any IRS letters. I'm not sure if I will be able to do anything for him. Learned a lesson though - I'm getting 2848 for all my clients in the military so I can get the correspondence.

After reading all that, for one of my biz clients similar to my example, from what I've seen of them in action, I'd say the H&W are but the kids are not. In another one of my biz clients, I'd say all four are. In both cases, I think the one with the ownership interest would disagree with me (for different reasons in each case). So, I really don't want to be involved in these filings. Less and less the more I read. I'm sticking to tax!

Thank you, @Eric, for everything you do for us. Do you need any donations at this time to fund the new server? If so, please let us know!

I've just set up rules to issue a captcha challenge for any visitor not from the US or Canada to help with the bots and spammers. I'm interested to know if anyone on the forums gets caught up in those--if not, I may block traffic from outside North America entirely. I wouldn't normally do something like that, but this is a very US-specific site. Can anyone think of a reason not to?

Alright, everything is moved and at first glance, things appear to be working normally. A lot has changed behind the scenes--more than I'd normally like to change all at once, so please report any issues or broken features you encounter.

^^ This! Your client's basis is now the basis she and former spouse had as a joint couple, and there is no step-up. She is now selling as sole owner so the exclusion is only the $250K, assuming she meets the requirements for the full exclusion she is allowed.

I buy the 1040 package for family and friends. It costs about 1,000 and you can do up to 75 1040 forms at no extra charge with up to 3 states. Entity returns are about 75 each extra. I charge for some of the returns I do and that ends up being more than the cost of the software.

When we do an amended in ATX, we open the original return and click "Returns" then scroll down to amend return. This creates a new return as originally filed. Close the original return. Make the changes in the Amended Return and all should flow correctly. By copying and adding the 1040x, the flow gets broken.

He is not a qualifying child as he was not under age 19 or a full time student 5 months of the year. He is also not an other dependent as his income is above the 4,700 income limit for 2023.

don't know if anyone else has experienced this, but I had a number of clients in the past two years whose wage withholding dropped and they told me they didn't change anything at work. Not knowing what their payroll department is up to, I usually advise an additional $ amount based on how often they are paid, rather than try to rework a W-4. for retirees who owe, I usually print out a W-4V for them to file with Social Security. Although not ideal (often 12% is too little and 22% is overkill), it is an easy method of getting more withheld. The State of Florida used to have a surprisingly simple W-4P form but that went by the wayside. But sometimes all we can do is point out how much they are paying in interest and that it is currently at 8%. You can lead a horse to water...

I had a self-employed client who owed in the five digits every year. The first time I prepared his return I dreaded telling him he owed something like $20k. He didn't even flinch. He said he makes better use of that money in his business during the year and the profits more than make up for the interest and penalty. He had figured out what was best for him. I like Dennis's idea of having all the withholding in December. For clients who take their IRA distributions in December, they could have their year's taxes withheld and not bother with estimates. Now that banks actually pay decent interest, putting the estimate money into a savings account could yield some profit. I usually pay all of my estimates at once in April since I make most of my income in the first quarter and have the cash. I might rethink that strategy.

I make all my tax payments/withholding in Dec. I am within 500 either way. I have interest income. But, a significant % of my income is on Dec. AND I understand the rules, such as withheld on or before Dec. counts for the entire year. Just part of the game we all make money playing. Use/cost of the money has a value even if there is no interest collected as described in the OP. Many fail to account for that.

I filed my father's returns years ago when he was in LTC. If the LTC totally pays for medical expenses or LTC, I do not believe it is taxable, but you have to subtract it from any medical expenses you've paid as itemized deductions.

It's my understanding that basis gets full step up in value as if the life estate never existed.

Because I have a vendetta against Intuit, I will never willingly purchase one of their products. I have never forgiven them for what they did to Parsons Tech; the program that I started with in 1992. Also, I see some of my clients struggling with and being limited to use of Quickbooks; which, IMO, is overkill and over priced. So says the person who knows that she should never hold a grudge. I have committed to Max for one more year and am moving on. And, yes, it does do the calculations for the WI OS form.

I like to say, "I have easier ways to hurt myself!" and Eric has (or had?) a GIF for us on that exact topic.

My E&O (NAEA group policy via Calsurance) said they are NOT covering preparers for this -- at this time. They did say that IF reporting BOI becomes a core service for tax preparers in the course of their biz, that they would consider covering in the future. From Megan Killian/NAEA: "As of right now, Calsurance will not cover this under their E&O policy, and the consensus has been that most other providers will not be either. However, I suspect that this will change over time once it is more established and it is also demonstrated that this will be a core service offered by many tax and accounting professionals." I do NOT want to report BOI for my clients. My biggest worry is that clients will forget to notify me of changes in ownership until next tax season, missing the short deadline for reporting changes. And, create new businesses without telling me until next tax season. I don't think I could charge enough for this. Wresting true ownership info from clients will take time. Penalties are high. I can make money by preparing taxes all year long. Why break my stride to jump out of my tax software over to FinCEN and also spend the year making sure no client has made any ownership changes?! I will make sure all my biz clients know about it this summer. I hope to steal a 1-pager from someone who creates a thorough how-to flyer.

I just did this for MD. Check the box on the state EF info form to unlink from MeF. Then just create the state efile. Easy peasy.

I'm at a loss why someone would want to track this manually rather than on a spreadsheet, but some options: In Amazon search for trading log book for numerous options. If you use comb binding for tax returns, make your own. Google custom book binding for any number of companies that offer that service.

I am having withdrawal ever since the 15th. I would like to see these extensions disappear. I am so totally disappointed in the IRS for various reasons; many of you can relate. I am disappointed in ATX for pouncing on us before tax season was even (over?). I have since been bombarded with emails and calls and snail mail from them. They choose to attack when our resistance is at its lowest. I only want to sleep. I am fine with whatever Eric does for us. It can surely only make our lives better and easier. Thanks again to Eric and all of you for what you do for me.

So it will be $11 until the third party contract is renegotiated in 2026 at which time the PTIN fee will probably be revised again. https://www.thetaxadviser.com/news/2024/may/regulations-finalize-ptin-fees-for-tax-return-preparers.html#:~:text=The IRS arrived at the,training%2C supplies%2C and overhead.

I suppose they blow it off as immaterial when their balance sheet doesn't add up by $2045. But when I try to use it it kinda messes up my spreadsheet. Does my little heart good to show my client that they were way over-paying for inaccurate financials.

I have been having the same issues with a non-profit. Someone dropped the ball in 2022 and I am not qualified to fix it. I filed it in 23, but they came back with "that was the wrong form". This was just a small Horseshoe club. I sent them on their way. I don't have the time or the desire to figure this out.

It's in the 1040 instructions, pub 501, the interactive tax assistant on the IRS site, tax research books such as The Tax Book, Master Tax Guide, should easily be found using a search engine such as google, etc ....

Double "YEAH!" to everything you both wrote.

Look at Drake single-user full license. Not worth any small price "saving" to me if I'm going to spend dozens of hours learning a new software, converting returns, checking every single bleeping depreciation item (those are most likely to get mucked up in conversions), every single carry-forward amount, etc. I have easier ways to hurt myself, and easier ways to save a couple hundred bucks. YMMV.

IMO, changing software should only be done as a necessity (i.e. the program being discontinued) unless you are prepared to put in a large amount of work. Drake just looked around and saw what others were charging for what they offered. A robust program is going to be fairly pricey but you'll need it for recreating returns and when you get into the weeds. Less expensive (like OLT) will work great for 85-90% of your clients but...the other 10-15% are probably your best paying clients. I also found when I tried them that they don't reproduce returns from other programs, just creates a basic framework with name, social, etc.

Amen; I hated cleaning up Turbotax returns with a passion. And I inherited one client who only wanted me to review his work in Turbotax for a nominal fee--I did it once (the 1116 was a total mess) and when he came back next year I doubled the price. Thankfully that was the last I saw of him. But funny how proud he was of his work, I think he just wanted me to congratulate him.

In the case of a Life Estate, the basis is stepped up to the value on date of death. Besides which, being an inheritance as well as a (gift), there are no tax repercussions unless there was a profit on value on date of death. The gift tax return was unnecessary at the time that the Life Estate was drawn up. In the case of a Life Estate, the property is not (gifted) until the date of death.

Because a life estate changes the gift into an incomplete gift. https://www.stoufferlegal.com/blog/navigating-life-estate-remainderman-tax But the death of the "previous owner" essentially wipes out the life estate and the beneficiaries get a full step up in basis. Basis is more complicated if the house is sold before the life estate owner dies.

It was tax year 2012. I remember it well and not fondly!

I'm not Lynn EA but can answer. I upload the client copy of the returns, pdf. I then upload what I call the signature pages, beginning with 8879. The signer(s) are part of the portal with their email address originally entered as a client. The software prompts me to determine if I want to add signatures. For the client copies, no, but I click Yes for the signature pages. All is then uploaded for client access and I am prompted to indicate which signer is to sign first, i.e., taxpayer. I scroll to the signature line and highlight it. Then highlight the date line. I also highlight for initials the bank information and selection for payment or refund. At the end, I am prompted for the next signer, if there is another. Repeat the process, review if desired, send. The clients receive an email (each one) and are directed to the highlighted spaces to accept/enter. When the first signer is finished, an email is sent to the next one. I am notified at every step. A few of the folks were reluctant until I or someone explained it's similar to the now ubiquitous signing pads everywhere. I think you can try it out.

First it's too complicated to cover in 1 page, given all of the exceptions and etc. IMHO, creating a "How To Flyer" is offering advice.

An office support place like Staples or Kinkos, or a local stationer, can make those for you in whatever format you want. Talk to a local shop to see what format they want you to provide, and about options. Hubby needed some specific type of scorebooks that were commercially available 30+ years ago but not for a long time. He took an old one to a local place, asked "can you make me more of these?" and they could not only make them, they gave him the choice of glue-bound or spiral-bound, paper color, page count per book, quantity, etc - all for what he considered to be a VERY reasonable price.