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  1. 6 points
    Maybe that's the answer. Stop all withholding, and have people make quarterly payments. They may be much more leery about who they send to be their local and federal legis-vermin if they get a quarterly reminder of how much it's all costing them! And WE wouldn't get the questions and complaints about the bleeping W-4 forms and owing and lower refunds and heaven only knows what else. That part would be a win for us!
  2. 4 points
    Copied from Tax Pro Today: Expired tax breaks Approximately 30 tax breaks that had been given short-term extensions over a number of years expired at the end of 2017. There had been some debate as to whether those tax breaks would continue after the Tax Cuts and Jobs Act, but Congress extended them through 2017 in early 2018, resulting in some need to revise software systems and tax forms for the 2017 tax return filing season. Congress is again considering what to do with those expired provisions well after their expiration. The initial proposal had been to extend them retroactively for 2018 and preserve them for 2019. As time passes without enactment, however, the chances increase that many of those expired provisions will not be extended. Another issue that may push some of the tax breaks to the sidelines is that Democrats would prefer that any extension be paid for, but offsetting revenue-raisers appear to be in short supply. Besides a few individual tax breaks, most of the expired provisions relate to energy or to specific industries. Democrats have been working on a more simplified structure for energy tax breaks, focused on renewable energy, and that initiative might replace many of the energy-related expired tax breaks. Lobbying activity continues in an effort to restore a number of these tax breaks, including credits for biodiesel and railroad track maintenance, but, as time passes without action, the number of expired provisions likely to receive retroactive extension, or any extension at all, continues to diminish.
  3. 4 points
    My Dads impression............
  4. 4 points
    Paying with the amended return is the quickest way to stop interest from accruing, so that alone is enough for me to choose that option. Also, I think Murphy's Law will be in full force on the other option, and it won't be as easy as it sounds. That said, I have no experience with trying to get IRS to shift a payment to a prior year, just a strong feeling that it won't go as smoothly as it should, and you'll be wasting time on it in the future.
  5. 3 points
    Guess who just called today when her self prepared return was sent back? Looks like she wants to file MFJ now that we explained why she could not file single, why she would have to pay back the PTC, and why she needed to file a CA return for the wages she earned in CA. She really did not understand that she was getting the PTC, and she really thought that if she moved to another state by the end of the year she would not have to file in CA. How she came to those conclusions I don't know. I think now that she has all the correct information, we can make this right by both of them and then they can go their separate ways after we get the return filed correctly. Tom Modesto, CA
  6. 3 points
    I have several clients who have SMLLCs for their rental real estate holdings. Since the SMLLCS are disregarded entities for tax purposes, everything is reported on Schedule E. Your client's situation is really no different except that the transactions will be reported on Schedule B, D and Form 8949.
  7. 2 points
    https://www.irs.gov/pub/irs-dft/p15t--dft.pdf
  8. 2 points
  9. 2 points
    I also compute the percentage of tax to taxable income, but I have a lot of investors and others that have income without withholding. So, I calculate what percentage their withholding must be from employment to cover ALL their income vs. what percentage they now are having withheld. Sometimes, that gets their attention. Sometimes, they make changes. (Working out their W-4 to make the changes is a real pain, though.)
  10. 2 points
    I stress the actual percentage of total income (not taxable income like ATX does).
  11. 2 points
    Created the code to calculate using the new options, using the 2019 calculations per draft Pub 15-T. Using annual figures, all with 75k taxable, no extra income, credits, or deductions. Single 2 Jobs (2020 W4 option) 13623 FWH Head of Household 2 Jobs (2020 W4 option) 12175 FWH Single 0 Allow (old W4) 11522 FWH Single 1 Allow (old W4) 10598 FWH Single 2 Allow (old W4 or 2020 W4 form with implied allowances) 9674 FWH Married Jointly 2 Jobs (2020 W4 option) 9674 FWH Married Jointly 0 Allow (old W4) 7196 FWH Head of Household 2 Allow (2020 W4 option) 6901 FWH Married Jointly 2 Allow (old W4) 6188 FWH Married Jointly 3 Allow (old W4 or 2020 W4 form, implied allowances) 5684 FWH --- Note the two in bold. Shows insight as to how the Married 2 jobs was "built". Using the new W4, Married with the two job box checked is the same WH as Single (which has 2 implied allowances) The Single 2 jobs is the "new" calculation, as well as federal Head of household WH status. Using my test figures, the possible under withholding (new form) for those with less than the implied allowances, is significant. For those preparing the new form, knowing the implied allowance numbers will be needed, if comparing to knowledge of what was on the old form, or using "experience" with the old form. This can be handled relatively easy. Whatever the allowance value is (currently 4200), if you want to claim less than the implied number of allowances, add the allowance amount (currently 4200) per each allowance less you want to claim, other income (4a). To equal what the old Single 0, use Single, with 8400 (using current allowance figure) as other income. With the new Single 2 jobs being radically more WH than the current Single zero, and with many set on the idea of using the current Single zero as a "fail safe", the new "fail safe" would be Single, 8400 (adjust for the new allowance figure for 2020 and beyond) other income. --- Of course, until the final revisions are released, it is only speculation... With no impetus to negate the existing forms, the calculations and W4 seem reasonable, even with the ugliness of implied allowances in the new calculation.
  12. 2 points
    I've always felt that there should be no withholding, and taxpayers should write one (plus one more for each state they're connected to) big tax check with their tax return. Actually write the checks. Then they would know how much their government is costing them and could weigh the costs/benefits and vote accordingly. Until then, I highlight the Tax Liability lines on summaries to point out their taxes, not refunds or balances due.
  13. 2 points
    I guess I'm in the minority not minding the questions. If we're going to have a complicated tax system then someone needs to help people navigate it. The only way to really simplify W-4s would be to eliminate all deductions and all credits and all tax brackets and all filing statuses. Everyone would just pay a flat tax on their wages and couldn't write off anything against it. Maybe the government could even start running its welfare programs through the Department of Health and Human Services instead of through the IRS. Yeah, I know...
  14. 2 points
    So they can take the money when they correct the return but they can't take the money when the taxpayer amends the return? That sounds like an amazingly well thought out system essentially designed to generate interest for the government.
  15. 2 points
    There would be questions 4x per year instead of once per year, at least for tax preparers... As much as I do not like how employees try to blame employers for incorrect WH (which trickles to me, for which I have to say the employer, via our software, withheld exactly what the employee directed via their W4) - if the process was easy enough to remove most questions, there would be nothing for me (us?) to process at all. Kind of like how modern consumer vehicles have become reliable enough there is much less need for skilled mechanics (just people who can replace what a computer tells them to replace). While I do not spend time digging into the issue, I have to wonder if those who were opposed to a very similar change for 2019 were worried about how the new form will actually be easier, versus claiming it will be harder. From my personal perspective (payroll) it is absolutely little effort to program, and the form itself reads easier than the old form, for those who traditionally have had issues getting close to even at the end of year. Of course, change is good for me/us, and when eventually there is a new administration in charge, there will be change again since net pay and appearing to give more has been an issue for every administration going back for quite some time.
  16. 2 points
    We just had a similar situation, with original return refund applied to 2019. The amended return was sent in without payment, and with a request to lower the 2019 carry-forward. The client immediately got a bill. My partner called the IRS and was told that they cannot change the carry-forward amount. That sounds bone-stupid to me (they HAVE the money already, after all), so it may be worth another call for us to see if we can get someone with a better clue to answer the call. My partner now has a far-better understanding of why I detest applying refunds to the next year. One mess up (in this case, our elderly client misplaced a consolidated 1099 and since she was new - and newly widowed - we had no prior history to question her on), and now you have two years involved in the mess. I'd just have the client pay it - and watch like a hawk, next year, to be certain the IRS doesn't lower the carry-forward anyway.
  17. 2 points
    I've taken my cordless phone into the bathroom more than once.
  18. 2 points
    On the other hand, I have met other accountants who previously could not get any health insurance due to pre-existing conditions. For people like them, the ACA has been a lifesaver! So, yes it's a PITA, but it's saved the lives of many of our fellow citizens.
  19. 1 point
    Copied from Tax Pro Today: Technical corrections While a number of errors have been identified in the TCJA, Democrats have been reluctant to help the Republicans correct errors in legislation that passed without Democratic input without getting something in return. That issue continues to be the impediment to passage of technical corrections. A “grain glitch” in the TCJA was corrected in budget legislation early in 2018 by giving something to the Democrats on low-income housing. A so-called “retail glitch” involving the depreciation of leasehold improvements, retail improvements and restaurant property (referred to as qualified improvement property under the TCJA) and an error in the dates applicable to changes to net operating losses are the two most substantive errors for which corrections are being sought. The repeal of the Kiddie Tax changes made by the TCJA, as proposed in the current retirement legislation in Congress, could also be viewed as a TCJA correction. Ways and Means Committee Chair Richard Neal, D.-Mass., may seek an expansion of the Earned Income Tax Credit and the Child Tax Credit as part of any bargain. Some Republicans and Democrats from high-tax states are also pushing for repeal of the TCJA limit on the state and local tax deduction. However, this is viewed as a fix that would largely benefit higher-income taxpayers, and Democrats may not want to focus on that with the theme of the 2020 election campaigns being help for the middle class. There is also a bipartisan bill to restore a deduction for performing artists that was removed by TCJA. In spite of the clear unintended consequences in the TCJA for qualified improvement property and net operating losses, movement on technical corrections does not seem to be a top priority in the House and might not get enacted in 2019.
  20. 1 point
    That's what I do, but if they're retired and have to make estimates, I honestly prefer they have zero withholdings from pensions to remove that variable from the equation when calculating next year's estimates.
  21. 1 point
    NY decoupled from the TCJA similar to CA: https://www.tax.ny.gov/pdf/memos/income/m18-6i.pdf
  22. 1 point
    Have any of you had problems with client sending the payment with the amended return only to have it refunded later because they have nothing to pin it to? Then get a bill for the amount due when they finally get around to posting the amended return? These has happened several times for me, so much so that I don't have client send in the payment but rather have them wait till they get the bill. I have even had a couple where the amended return shows a refund and instead my client got a bill. Back when IRS would actually talk to you we were able to get it straightened out when the agent saw that a number had been dropped when they keyed in the amended information. They made the correction on the spot and client did receive his refund. Close to two years ago I did an amended were the client owed a little over 300. Because of my past problems I suggested not sending in a payment and a few weeks later he received a refund check of over 6,000. To this day we still have a descrepency, but I believe the client is going to pay just to get them off his back. What a mess! And the sad thing is the clients sometimes think it's on our end, but I rechecked everything and I was right, but again I believe a miss keyed figure was the blame.
  23. 1 point
    I see I am not the only cynic amongst the crowds here... lol. Who's that Jeopardy game show host? "Alex, I'll take the float for $8,000, please!"
  24. 1 point
    Thanks for the suggestions. These prices are a lot less than I thought I would have to pay, and mailing to recipients is a nice add-on.
  25. 1 point
    @Anthony I moved your question on preparing 1099s in Drake Accounting to a topic of its own that can be found in this subforum in case others chime in on their favorite 1099 prep software.
  26. 1 point
    Abby, I have a payer who started withholding CT's new mandatory 6.9% rate. I sent in a new W4P and requested 5% withholding (the 6.9% is for couples with $1m in taxable income--not quite there yet). So they stopped all CT AND federal withholding. Go figure.
  27. 1 point
    Yeah, I have a client with 4 employees who insists on manually calculating his paychecks. The WH calculations are all over the place, then I have to clean it up when I do the ATF recordkeeping.
  28. 1 point
    If you just have a few 1099s, use one of the many online programs that are available. If you search the board you will find a thread from earlier this year where posters recommend different online programs. I used a program called OnlineFileTaxes.com, which was reasonably priced and worked well. Drake Accounting requires you to obtain a TCC code from the IRS, so it's not as easy to use as ATX Payroll Compliance.
  29. 1 point
    Seems better than the current forms to me. For people in the simple situations I'll probably just tell them how to fill out steps 1, 3, 5, and possibly check the box in step 2. For people in more complex situations, especially if they don't like their overly large refund or balance due, I'll have to get a feel for it but I'd say it'll only take about 10 minutes of billable time to fill it out after I've completed their prior year return. It would be nice if the W-4s could be even simpler, but I'm not sure how much better they can do without completely overhauling the tax law. So long as we still have graduated tax rates it's not going to be easy to calculate withholding when the filer(s) have multiple jobs.
  30. 1 point
    In 20 years of practice, I have NOT been successful at getting clients to change the withholding at their employer.
  31. 1 point
    How has the SMLLC elected to be taxed?
  32. 1 point
    Can;t disagree. There will be some who will need to use the additional WH field. The form itself does not state the implied allowances, but those who are like your example likely have already made adjustments. Personally, the whole "allowance" deal is being left in place to lessen push back from the states who use the federal form for their own WH calculations... From a purely payroll perspective, all employees should be using separate W4 or equivalent forms for federal and state. This has been my advice for years (for several reasons, such as telecommuting and domicile changes), but has become more important in the last couple of years.
  33. 1 point
    You can still get a cordless handset to go with your office phone. Mine came with a desktop phone plus a cordless handset. Local 5.8GHz communication, so it's not wifi-signal-dependent.
  34. 1 point
    Look, I know you're just trying to help and thanks for laying it all out for us (obviously you've done a lot of research), but I guess the problem is that many of us don't want to do calculations and become responsible for clients' withholdings. It's like doing the tax return twice; but they won't want to pay you very much for a W-4 form. Of course I'm beating a dead horse here because IRS will do what they want, which is probably to collect more money up front. Software (which I don't want to buy) can make it easier, but it won't absorb the blame when taxpayers give you understated or wrong estimates and owe money in April. We had a perfectly good, simple, and practical W-4 which was the taxpayer's problem - not ours. If short, all they needed to do was write in hold X dollars per week more next time. Now (along with the 1040) it has been blown all to hell - they've created a problem and handed it to us. Maybe the "estimates" will work out; maybe they won't, but clients will have a handy target when they don't. Okay; rant over, but Lion's right - this isn't simplification. It's more in the direction of the ever-expanding 8867 whereby we became IRS' "partners".
  35. 1 point
    I suggest you revisit FAQs 3 and 19. The Only item I did not see referenced is the fact that there is one, and only one class of non new hires who must use the new form (those claiming exempt), but since there is not likely to be a change in the exempt forms aging out each year, there is no reason to include the existing rule in a FAQ about change (if one were to apply logic to tax dealings...). FAQ 16 ONLY applies to hires after Dec 31 2019. "The new form is not required at all, other than for new hires, those filing exempt (by the normal deadline), and those wishing to use something other than their currently valid form. Jan 1 2020 does not make the existing valid in place forms invalid." My earlier statement is supported by the entirety of the FAQ.
  36. 1 point
    Hmmmm….I wonder if that will work with my client when they call me and say their account was swept by the IRS? Tom Modesto, CA
  37. 1 point
    Actually, I think it is horrible (the same as Abby did in his tiff with Medlin: "What? No percentages?") And since they killed off the number of dependents there's nothing left for the average employee to work with. It was hard to get them to fill out a W-4 before and even then they could only because they knew they were single/married and who lived with them. Now the boss gives them five pages of junk and says "Fill this out." I can imagine how that's going to go. People at small employers like a cafe will simply say "I can't do this" and hand it back to the boss who will then bring it to me. Large employers (factories) will require their people to fill it out or be replaced; they'll take it to the payroll clerk there who will say "I can't do this. Take it to your tax person." We'll also get those. As Medlin said, you can make some money out of this, but my God, at what cost? How many hundred people have I seen who are dissatisfied with their withholdings at tax time (and they'll remember who filled out that new form). There's not enough money to compensate us for the ill-will that will be generated amongst clientele when it doesn't work out. When those forms are issued I think I'll either take a vacation or, like the college kids, try to find a "safe space" where I can't be found for a good while.
  38. 1 point
    If I have to do returns for anybody and everybody, whether I feel like i can trust what they tell me or not, I quit. Some days I am ready to anyway, but that would definitely be the end of this for me.
  39. 1 point
    I am on everybody's side, and it was not my intention to get into what is good and what is not about the provisions of the law. I was strictly looking at the tax implications for my client based on a situation that he had no control over that is now going to put him into debt to the government for the foreseeable future . I just am flabbergasted at how the IRS and congress have put so much uncertainty into the pricing of the required insurance, and the way you can be punished for not being good at predicting the future. I wish they would put some certainty into the pricing (taxing) model they are using. That way, in November when you go to sign up for the next year, you can make an informed decision on the choice to buy or pay the penalty. If I knew at the beginning of the year that the penalty was 2.5K for not having the insurance, and the cost was 2.5K per month to insure my family, they I could make the choice based on certainty. Right now, there is no way to know what the cost of the insurance really is until you have prepared your tax return. And added up the income of the rest of the family. Can you imagine telling your 17 year old to not get a job after graduating high school because it will increase the cost of your insurance tax? Tom Modesto, CA
  40. 1 point
    You know me, Rita. I have had health insurance my entire life, mostly with the same company. My premiums were getting completely out of sight, and I am still 5 years away from Medicare (if nothing changes). When ACA came into effect, my cost was cut in half even though I am paying the entire premium and receiving no credit. It has been going back up every year (just like it did before the ACA) but it still has not reached the high point that it was at before. I agree that there are some problems with this particular piece of legislation. but instead of trying to fix it one side wants to eliminate it and the other side wants to get a pie in the sky impossible to pay for plan. Who is on my side?
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