Hahn1040

Is it just me or what??? In the several days from the time I sent the completed forms to a client and he sent back his signed forms, the figure on line 11 had changed. This is the amount of state taxes that is subtracted from the total itemized deductions. "back in the day" it was (with some exceptions) the amount of state tax from the federal Schedule A. This year, with the $10,000 cap, Virginia is using a prorated calculation for the figure. It is not a calculation that I can see, so I don't know what has changed about it. The new figure is to the advantage of the taxpayer. so that is a good thing But my concern is: is this something ATX changed or did Virginia change the calculation? Am I safe to go with it or is it a mistake that they will adjust in another day or so. I experimented on my own return: marked it complete; opened the return the figure was $3,812. closed it ; unmarked complete; opened it again now it says $2,576 UGH!! Does this make all of the returns I already filed incorrect? Has anyone seen any info about this?

form 8606 part III will show the distribution. enter the basis on line 22 the taxable $2,000 will go on 5329 subject to 10% penalty

keep in mind that it is not reported on the 2018 return If you had included the non-deductible contribution on the 8606 for 2017, you want to remove it Guess you should amend the 2017 8606 to correct it and include the statement that the 2017 contribution was recharacterized . There is a page for the explanation. see tab at the bottom of the 8606. AND in response to the people who are complaining that the 8606 is not working... you just have to make sure you have the correct boxes checked on the 1099R and the top part of the 8606. IF it dosn't look correct, look for another box to check. My stumbling block was always when they have a traditional IRA with a basis and an inherited one- to keep the inherited one out of the calculation. Finally figured it out: for the inherited one: check inherited and do not check IRA.

if it a code R then it was a recharacterization- not a conversion Recharacterization is treated as if it were contributed to that IRA in the first place. Does not trigger a taxable event

1099R with code R in box 7 is a 2017 contribution recharacterized in 2018. It is not reported on the 2018 return. It should have been addressed on the 2017 return: attach a statement to your return explaining the recharacterization. If it was a ROTH to Traditional, then the nondeductible contribution would have been reported on the 8606 for 2017. See form 8606 instructions: IF it is a 2018 contribution recharacterized in 2018 then it would be code N. That would be reported on the 2018 return Form 1040 4a.

Possi, it is a subtraction to income on line 5 of the adjustments on the 1099R input use code 3 (it is 3 on your 1099R isn't it?) then there is a box on the 1099R input just under the box 7 that says "check if disability and the taxpayer is disabled" it will them put it on line 7 as wages and subtract out a max of $20,000 on line 5 of the adjustments

Last week Virginia finally sent a reaction to the new law: https://tax.virginia.gov/sites/default/files/inline-files/tb-19-2-military-spouse-veterans-benefits-transitions-act.pdf?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term= though last I looked, form 763-S has not been updated on both ATX and Taxwise Many states have not issued any response....or changed the forms

from form 2441 instructions To qualify for the credit, you must have one or more qualifying persons. You should show the expenses for each child in column (c) of line 2. However, it is possible a qualifying child could have no expenses and a second child could have expenses exceeding $3,000. You should list -0- for the one child and the actual amount for the second child. The $6,000 limit would still be used to compute your credit unless you have already excluded or deducted, in Part III, certain dependent care benefits paid to you (or on your behalf) by your employer.

Yes, Abby is correct. One child can have zero expenses, as long as she/he is qualifying: from 2441 instructions To qualify for the credit, you must have one or more qualifying persons. You should show the expenses for each child in column (c) of line 2. However, it is possible a qualifying child could have no expenses and a second child could have expenses exceeding $3,000. You should list -0- for the one child and the actual amount for the second child. The $6,000 limit would still be used to compute your credit unless you have already excluded or deducted, in Part III, certain dependent care benefits paid to you (or on your behalf) by your employer. AND above I meant wages on line 7

Be sure to complete the 2441. The box 10 amount goes on the second page and, as others have said, nets out of the eligible expenses. IF you don't show the expenses on the 2441, then the box 10 amount is added to wages on line 10. Sometimes people don't give you the daycare expenses saying. "I used dependent care benefit for that" Yes they did, but it needs to be reported on the return.

the distribution will be reported as code 7. This distributing company doesn't know what she did with the funds When it was deposited into the IRA at the new company, it should have been coded as a rollover and will be reported on for the form 5498 as a rollover If it is reported as a regular contribution, then that is a problem. She likely has NO earned income and even if she did, the amount is way over the annual contribution amount. The IRS will see both of the transactions on the forms 5498. IF she receives a CP2000, it is easily resolved with the documentation. Hopefully, when she receives the envelope from the IRS, she doesn't go into a panic!

You can attach the PDF of the form to the form so that it is e-filed with the return.

https://community.atxinc.com/forums/23/ShowForum.aspx

exactly! We all know that this college kid is seriously in the business of coaching: Head coach: do you want to coach these little kids... I'll give you 50 buck college kid: OK (do I have to get up before 11 am to do it?) and certainly it is a SSTB: endorsements, personal appearances all of that

Goodness! Ask about other expenses: Room and Board, books, computer (see page 52 Pub 970) before you go to the trouble of calculating the taxable portion. The designated beneficiary generally doesn't have to include in income any earnings distributed from a QTP if the total distribution is less than or equal to adjusted qualified education expenses. If there is a taxable portion, it is reported on line 21 Schedule 1. Some software have a worksheet to calculate and report.

Just in: https://tax.virginia.gov/sites/default/files/inline-files/tb-19-1-date-irc-conformity-advanced.pdf?utm_content=february_2018&utm_medium=email&utm_name=18_1_tax_bulletin&utm_source=govdelivery&utm_term=tax_preparer This year they are going with Federal with 7 1/2% for medical so we don't have to make that adjustment.

the point is that if the student has an additional $2,246 of qualified expenses, there is enough to have $4,000 for the AO credit and all of the 529 is tax free. $9,000 for the 529 + $4,000 for the AO credit= $13,000 the student already has $10,754 for tuition. an additional $2,246 in qualified expenses will free up the $4,000 for the AO credit. Possibly/probably/potentially the student has rrom and board, books, equipment, etc. BUT if the student lives at home and is not at least a half time student, then no room and board and no AO. Still the $9,000 is less than the tuition so none is taxable.

room and board are qualified expenses for 529 funds but not for the credits So if you use the 529 for room and board and some of the tuition, you can potentially have $4,000 out of pocket for tuition and books to use for the credit. Example: Tuition $10,764 Books $250 = $11,014 Room and Board $2,000 total expenses $13,014 paid with 529 Room and board $2,000 + tuition $,7000= $9,000 out of pocket for AO credit: $4,014 of course, the $4,000 has to be out of pocket, not paid with tuition or other tax advantage plan if they don't have enough room and board to "use up" the $2,000, they can choose to pay tax on some of the 529 funds.. Since only the earnings are taxed it would be a small amount. And if there are scholarships, they can choose to pay tax on the Scholarships to free up the funds for the AO credit. The Scholarships are taxed to the student not the parent. Yes, Pub 970 has good examples

has anyone come across this yet: college kid; has 1099MISC for $1,300 for coaching LAX; no expenses he does have taxable income I tried looking, but I don't see anything that addresses this. ...seems to me that with the number of deductions and credits that are not allowed for dependents, this would be one of them!

Along the lines of comparing itemized vs. standard for federal vs. state: also look at using Sales Tax vs. State tax. In the past, I sometimes found that with AMT the net for federal and state was that using sales tax resulted in overall lower tax. NOW With the $10,000 limit for the deduction for taxes, in some cases, it will save overall to use sales tax because the state does not subtract sales tax the way it subtracts state tax Of course, this is a case by case evaluation. AND certainly the states vary with this...

be sure to use "insert picture" do not "insert text" that does not work

the $6,500 is a return of excess contribution. It is not taxed because it was not deducted from income. the earnings should have also been returned. the earnings would be taxable and subject to the 10% penalty

I know this was a topic in the past, but i cannot find it to refer to: FIRST you have to have your picture saved on your computer. Mine is a scanned pdf go to customize master forms select 1040 (and then other forms you want to place your signature) select: edit then insert picture click in the signature box where you want the signature find your signature where you have saved it in your files it will now be on your page you will want to resize it so that it fits in the box. If you don't like the way it looks, you can go back and resize it later save master then close master not all forms will allow you to insert the picture so you will want to keep the box checked as described above. Your pic will be over the printed signature placed in the program.

thank you so very much!

Would like to clarify on this topic: MY client converted a rental to personal use a couple of years ago. At the time it had $65,000 plus suspended losses. He has three other rentals. In 2017, he sold one of the other rentals. ATX is giving him the $65,000 losses on the former rental because he has the gain on the property sold. This uses up all of the suspended losses on all four of the properties and he still has a gain. Based on my understanding and your info above, this is accurate. I just want to confirm this is correct. I surely don't want to give him a $65,000 loss in error!! Thank so much!