Hahn1040

year's ago when my daughter was in middle school, she knew when she answered the phone (land line- no one had a cell phone back then) she had to listen for the fax sound and wait until it picked up. what she didn't know was that the person on the other end could hear her. one time, she was waiting for the fax sound and being silly, she screamed some gibberish in the phone. She was so embarrassed when my client responded to her.

If he did not use the income for his support, but rather put it in savings, them it would not be part of his calculation. If he did use it for his support and what he paid was more than half of his support, then he must claim himself and he gets all of the credits If he did not use it for support and he did not provide more than half of his support, then the parents can choose not to claim him. He cannot claim himself, but he can get the nonrefundable portion of the AOC. There is a box to check on the form that shows that he can be claimed by another but is not claimed.

my experience is that you create the federal efile but not transmit it. only transmit the state (after you have unlinked it as Abby instructed)

I have had a 6200 for about three years. It works great for me. My first Brother was in 1998 when I first went out on my own it was a HL1040. When I saw the model number, i knew that is the one for me. It didn't print duplicate, but I did not know at the time that i wanted/needed that/

Judy, Thank you for the input and the article. that is a great help!

yes they do receive Soc Sec. ... so if she used $5,000 of their own money, then that part would not be a gift. very good idea.

My client contributed $20,000 each to her two son's 529 plans. They are ages 12 and 17. Dad is deceased. I explained that we need to file a Gift Tax return and so i need the total of all gifts made during the year. I feel that it is a gray area of what is a gift vs. support for dependents. Certainly, if you give your 26 year old son a car, it is a gift. But when you give your 16 year old dependent a car is it support or a gift? Does anyone have a source that addresses this issue? Thank you for your help

That is very interesting to me to see. About two years ago, my brother realized that his record for 1992 was missing a W-2. He sent them a copy of the W-2 and it has been added to his record. This matters a lot to him because he was worked overseas most of his adult life and has not paid into Social Security so a W-2 for $20,000 in 1992 makes a significant difference in his record. I wonder what the difference is?

Thank you so much! I am also VA I transmitted and it is accepted. I'll tell her that she will get a letter from VA if IRS does not give her the exemption.

return rejected because some one had claimed dependent (probably non-custodial parent) she is the custodial parent, she will paper file with documentation to support her claim What do I do about the state? She owes... so can't just wait until the federal is resolved which we know will be many months. I have not tired to electronically file... not sure what to do?? any suggestions will be greatly appreciated!

when did she make the contribution? If made in 2022, she can apply the excess for 2021 to her 2022 contribution

I cannot get the Dependent care from federal 2441 to flow to line 21 of the DC form. I must be doing something wrong! Please help!!

the daughter cannot take any credits if she is a dependent. All credits go to the person claiming the student. If the tuition to the university is over $4,000, that maxes out the AO credit. Community college tuition does not need to be considered. Parent can take only one education credit per year for the same student.

If the contribution was made in 2022, then he can just apply the rest to the 2022 contribution.

I have not been able to access it for the past several days

If he converts the Traditional IRA to ROTH, it will be reported on the 2021 return because that is when it was done. The recharacterization is reported on the 2020 return: nondeductible contribution reported on form 8606 and the statement explaining the recharacterization on a worksheet for the 8606. It is for the 2020 contribution. After recharacterization, the contribution is considered to have been contributed to the traditional IRA . but a conversion would be reported in the year it was converted.

TCJA changed this: from Pub 526 State or local tax credit. If you make a payment or transfer property to or for the use of a qualified organization and receive or expect to receive a state or local tax credit in return, then the amount treated as a charitable contribution deduction is reduced by the amount of the state or local tax credit you receive or expect to receive in consideration for your payment or transfer, but an exception may apply. If an exception doesn’t apply, you must reduce your charitable contribution deduction even if you can’t claim the state tax credit in the year. the deduction on federal is reduced by the amount of the credit. There is no adjustment for state because it has been reduced on federal. perhaps your instance is different. I have a couple of people who get the Neighborhood Assistance Program credits and this applies to them.

You will not have to consider the BAH and BAS (housing and food allowances) for active duty. Both are not taxable and are not reported on the W-2. as for state... once he is active duty, he will remain a resident of his state of record. So if he was a CT resident when he joined, he remains a CT resident unless he takes the steps to change it. When stationed in VA, his active duty pay is not taxed to VA. If he were to have a side-job, then that would be taxed to VA as a non-resident (form 763) . For 2021, he will be taxed on all of his income as a resident. For 2022, he may qualify to be considered a non-resident if he is not in CT 30 days and maintains a permanent place of abode in another state. see: https://portal.ct.gov/-/media/DRS/Publications/pubsip/2019/IP-2019(5).pdf

Oh! I know how that is: your eyes see it but by the time it gets to the brain.... it does not register. It is definitely difficult to keep straight what are eligible expenses for tax-free scholarship vs. AOC vs LLC vs 529 expenses. ...you said he is leaving for the Marines. Did he have ROTC or Veterans benefit scholarships? Make sure that none of the allowances for housing are included in the scholarship amount. BAH is paid separately and not included in income. If he had those, look at the Veterans Administration section of Pub 970 and/or go to: https://benefits.va.gov/gibill/. Probably you are looking at the 1098-T. BAH would/should never be a part of the box 5 scholarship figure. So you do not have to consider it.

Qualified education expenses. For purposes of tax-free scholarships and fellowship grants, these are expenses for: • Tuition and fees required to enroll at or attend an eligible educational institution; and • Course-related expenses, such as fees, books, sup- plies, and equipment that are required for the courses at the eligible educational institution. These items must be required of all students in your course of instruction. Expenses that don't qualify. Qualified education expenses don't include the cost of: • Room and board, • Travel, • Research, • Clerical help, or • Equipment and other expenses that aren't required for enrollment in or attendance at an eligible educational institution.

One can recharacterize a current or previous year's contribution from ROTH to traditional or Trad to ROTH up to the due date of the return (plus extensions). You must transfer the contribution plus the earnings. It is treated as if contributed to that IRA in the first place. ROTH to traditional is common when AGI exceeds the income limits. When this is the case, then income is too high to deduct the contribution so it is reported on the form 8606 as a nondeductible contribution. A conversion can be done at any time. It is reported on the return for the year converted. When t/p recharacterizes to cure an excess ROTH contribution, t/p can then convert it back to ROTH. the recharacterization is reported on the return for the year the original contribution was made. The conversion is reported on the return for the year converted. Recharacterizing a conversion is no longer allowed. a "backdoor ROTH' is cleanest when done all at once: t/p contributes to traditional IRA and then immediately converts to ROTH. best when using a cash account. the traditional has no time to earn income. As long as t/p has no other traditional IRAs (or SEP), the conversion has no tax consequence. In the case of recharacterizing to cure the excess ROTH contribution, the earning are now part of the traditional account, so if they convert the contribution plus earnings, then the earnings are taxed. The contribution was not deductible so it is not taxed. IF the t/p already has traditional IRA accounts, then the conversion will result in taxable income and thus may not be attractive. If excess contribution is not cured by the due date of the return, then t/p pays the 6% excess penalty each year until it is cured. In the case that the high AGI was a one-time thing, then one can leave the excess in the ROTH, pay the 6% penalty and then apply that contribution to the next year's IRA. The advantage is that you don't have to pay tax on the earning (and a lot less paperwork) This disadvantage is you lose a year's IRA contribution.

I am going through a similar scenario with a client. Discovered about a month ago that they have been contributing to a ROTH since forever. Fortunately it is just the past couple of years that have been excess. He was active duty military ... so was never close to the max until 2019 when he retired and had military retirement and civilian job that put him over. Apparently he never felt the need to tell me about the ROTH or provide any statements or 5498s... even though my worksheets ask these very questions... He was able to recharacterize 2020 and 2021. He withdrew the 2019 contribution. I had thought that he would have to withdraw contributions plus earnings for 2019. With some research, I found that once it is past the due date of the return, they just have to withdraw the excess contributions but not the earnings to cure the excess. the 6% penalty applies until the excess is withdrawn. for your client, the $92k distribution would likely cure the excess, but they would owe the 6% for each year since the excess contribution was made. Indeed! why has the IRS never caught this!

Do any of you CA people have experience with taking the credit for state tax paid to VA? MY client is a dual resident. She works in VA, owns a home and spends more than 183 in VA. However, she still has close ties to CA: owns a home, files jointly with husband who lives in CA and receives a CA pension. She has spent well over 45 days there in the past two years so she does not qualify for the Safe Harbor. Both states tax all of her income because she is a resident of both states. VA instructions say that she takes the credit on the CA return for the tax on her income. CA instructions say that she can only take the credit for VA source income. therefore the pension is taxed to both states with no credit relief. Am i interpreting this correctly? Is there any way around it. I would appreciate any guidance anyone can offer. Thanks!

Yes! exactly! Thank you so much. I thought it was you who had posted it! So I can save posts I want to go back to as a bookmark?? that is so valuable for me to know! I can't thank you enough!

In ATX on the Home Office Expense input form, there are boxes to check to indicate Simplified method if home office was not the entire year then there are check boxes to indicate which months qualified: Check for 15 or more days qualified business use of the home. Then it prorates the deduction based on the number of months that the office qualified