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Showing content with the highest reputation on 01/24/2019 in all areas

  1. 2 points
    It is an either or situation. The deduction is the smaller of 20% of QBI or 20% of taxable income as adjusted (in the simplest! form - assuming under the phaseout range.) That's why I am not telling anyone they will get 20% of their business income as a deduction. Like everything else in tax law, IT DEPENDS!
  2. 1 point
    It is actually correct From the Form 8863 instructions: "Tax-free educational assistance. For tax-free educational assistance received in 2018, reduce the qualified educational expenses for each academic period by the amount of tax-free educational assistance allocable to that academic period. See Academic period, earlier. Tax-free educational assistance includes: 1. The tax-free part of any scholarship or fellowship grant (including Pell grants); 2. The tax-free part of any employer-provided educational assistance; 3. Veterans' educational assistance; and 4. Any other educational assistance that is excludable from gross income (tax free), other than as a gift, bequest, devise, or inheritance. TIP: You may be able to increase the combined value of an education credit if the student includes some or all of a scholarship or fellowship grant in income in the year it is received. [emphasis added] Generally, any scholarship or fellowship grant is treated as tax-free educational assistance. However, a scholarship or fellowship grant isn't treated as tax-free educational assistance to the extent the student includes it in gross income (the student may or may not be required to file a tax return) for the year the scholarship or fellowship grant is received and either: • The scholarship or fellowship grant (or any part of it) must be applied (by its terms) to expenses (such as room and board) other than qualified education expenses, or • The scholarship or fellowship grant (or any part of it) may be applied (by its terms) to expenses (such as room and board) other than qualified education expenses. [emphasis added]"
  3. 1 point
    Yes, I'm sure that's true. And both sides either far right and far left irritate me. I've got both in my family and friends and I'm ready to look for a big rock to get under.
  4. 1 point
    Hey DTA, You need to hire a tax professional to help you. Just by the nature of your question, you are in way over your head. And the fact that you are asking on a web board looking for free advice is even more concerning. What you get for free on the internet is worth exactly what you pay for it. In a few minutes, the moderator is going to read back to you the terms of this site, which you agreed to when signed up and tell you that this site does not give advice to non-professionals. We only work with professionals in the tax industry. Then she is going to lock this post. Get a tax advisor, someone who is reputable, and pay them to answer your questions. Tom Modesto, CA
  5. 1 point
    I've been using this form for several years and include it with the electronic return (or printed for those few) so folks can more readily see how changes in their income and deductions from last year resulted in the current year's higher or lower taxes. I wish there was a comparable form for the state but those fluctuations aren't as obvious any way. It tends to forestall some questions from clients.
  6. 1 point
    I cannot imagine anyone considering IRS regs as a mess. By the way Gail I called the local Commissioner's office to see if they might provide any info on the opening of state efile. Their usual answer was DUH !
  7. 1 point
    Gail subtracted the standard deduction because she assumed no other income. The QBI deduction is the lesser of 20% of the QBI or 20% of taxable income. Under Gail's assumption, taxable income is less than the QBI.
  8. 1 point
    Unfortunately, Tax Reform seems to knock this deduction out because it is a miscellaneous deduction subject to 2% of AGI per IRS Publication 529, and all such deductions are disallowed on Schedule A. The IRS is planning to issue regulations on this matter, and they asked for comments from the public in Notice 2018-61. Part of that Notice is excerpted here: The section 642(h)(2) excess deduction may include expenses described in section 67(e). As previously discussed, prior to enactment of section 67(g), miscellaneous itemized deductions were allowed subject to the restrictions contained in 8 section 67(a). For the years in which section 67(g) is effective, miscellaneous itemized deductions are not permitted, and that appears to include the section 642(h)(2) excess deduction. The Treasury Department and the IRS are studying whether section 67(e) deductions, as well as other deductions that would not be subject to the limitations imposed by sections 67(a) and (g) in the hands of the trust or estate, should continue to be treated as miscellaneous itemized deductions when they are included as a section 642(h)(2) excess deduction. Taxpayers should note that section 67(e) provides that appropriate adjustments shall be made in the application of part I of subchapter J of chapter 1 of the Code to take into account the provisions of section 67. The Treasury Department and the IRS intend to issue regulations in this area and request comments regarding the effect of section 67(g) on the ability of the beneficiary to deduct amounts comprising the section 642(h)(2) excess deduction upon the termination of a trust or estate in light of sections 642(h) and 1.642(h)-2(a). In particular, the Treasury Department and the IRS request comments concerning whether the separate amounts comprising the section 642(h)(2) excess deduction, such as any amounts that are section 67(e) deductions, should be separately analyzed when applying section 67. (Emphasis underlined.)
  9. 1 point
    No, just amend whoever you want to be first on the return and add the other taxpayer. IRS knows how to handle this.