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About SaraEA

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    ATXaholics Anonymous

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  1. Gifts of intangible property (e.g., cash) from foreigners are not usually subject to gift tax reporting unless they exceed something like $100k. There are treaties that exempt gifts between countries. Sounds like the father has constructive ownership, and it seems like he has US income too. There's a lot going on here that is beyond the reach of our expertise. Definitely refer them to an international attorney.
  2. gmail is hosted and sponsored by Google. Don't they read your emails so they can target ads? I'd be suspicious of using a "free" service because you're paying with access to your content.
  3. Surviving spouses do not need to file a 1310 but it's a good thing you sent it anyway. I had a client who received an IRS notice demanding the 1310, which I replied to by sending them their own form instructions stating surviving spouses don't need to file (and there is no where on the 1310 to check an appropriate box). I've had not one but two clients who had the checks issued to the deceased spouse. Both times the IRS apologized, but it mad me angry that these poor people who recently lost their spouses had to go through the hassle.
  4. UT has a worksheet named "1040 reconciliation." It is the old 1040! It was a godsend. I'd skip over the "postcard" and go over their return from here, where you can tell what the numbers are and where they came from. We have used ATX for payroll and 1099s and had planned to switch to it for tax this year. We decided against it because the learning curves for the new tax laws and for a new program would have overwhelmed us. Ever notice how the new schedules have lines that correspond to the old 1040? Like lines 1-9 are "reserved" and line 10 is exactly what the 1040 had. It makes me think (hope) that even the IRS doesn't believe the new postcard has a future and won't have to change all the form instructions if it gets revised back. If only the same could be said for the new W4. I agree that this was a horrible tax season. We had so many clients who owed and were not prepared for it. My heart goes out to Tracy Lee. There certainly is an emotional side to tax prep, and that plus the strain on our brains figuring out this new code made for a lot of stress. Yesterday I accomplished nothing. I did not have the energy to look at another tax return or read another email. I cleaned out old emails (probably deleting many unread that I didn't have the desire to read), did some filing of scanned documents, straightened up the office, and did not even feel guilty collecting a paycheck while accomplishing nothing substantive. I so appreciate this forum for the tax knowledge shared. Every question asked received thoughtful answers, and many of the topics were so relevant to what we were all going through. We have over 150 on extension and I picked up a bunch of estates, so it will be a busy off-season but without the long hours and pressure of deadlines. If only I can get my @ss in gear.
  5. This may clear up the above confusion. From the treasury direct site: " Unlike EE bonds, HH bonds are current-income securities. You paid face value and receive interest payments by direct deposit to your checking or savings account every six months until maturity or redemption. ... Do I have to pay taxes on my interest earnings? Yes, you must report your interest payments on HH bonds as interest income on your federal income tax return each year. This interest isn't subject to state or local income taxes. The U.S. Treasury issues an interest income statement (1099-INT) by January 31 of each year showing the interest you earned the previous year." However, if you purchased the HH bonds with matured E or EE bonds and deferred the interest on those, that interest is reported in the year of redemption: Is there any tax liability when I cash HH bonds? If you (or the original bond owner) deferred paying federal income tax on interest earned on EE or E bonds you exchanged for the HH bonds you're redeeming, you will need to report this deferred interest for the year in which the bonds reach final maturity or are redeemed, whichever occurs first. You will receive an IRS Form 1099-INT showing the deferred interest, which is reported to the IRS. That appears to be the case with your client, since the 1099 showed deferred interest. The cleanest way to do this is to file an estate return and pass it through to the beneficiaries. At least you can deduct the cost of the tax prep (which is allowed, even if not paid in the fiscal year), which may save the Bs some taxes on the interest. There may be some other expenses too, like probate or attorney fees.
  6. Series HH bonds pay interest semiannually, and it is reported on the tax return every year. There is no accrual. When they are redeemed (unlike EE bonds), it is just a return of principal. The only interest that should be taxable is that paid in 2017 (should have been on the father's return) and any paid in 2018. Is there a 1099B?
  7. SaraEA


    We were talking in the office today about how we would prepare unnecessary Sch As for clients who came in earlier just to show them how the new tax laws changed their situation. This past week or two that extra step is no longer taken. Those early clients also got our time and empathy when they owed unexpected amounts. Today we are thinking of putting another number on the phone menu, "If you owe, press 8," where they can hear a recording of the same explanation we have given to hundreds of clients this year (why keep repeating ourselves?). We will have at least 200 on extension, many of whom will call this weekend. (Why bother, we should just copy last year's extension list.) I had a few drop-offs TODAY, one of whom left a note that all her docs weren't there but she'd get them to me soon. Like I have nothing to do but work on her incomplete return. I feel especially bad for our poor receptionist who is handling a million calls a day and an endless stream of clients picking up and dropping off that last (maybe) document. It won't be long before we can all have some food and sleep.
  8. If the estate started in 2017, it got stepped up basis and would start depreciation from that amount. Since it only filed one return you can amend 2017.
  9. The couple has to take those contributions out right now. If they do so before the filing deadline it will be treated as if they never contributed. I don't know what the software is doing, but sometimes software is quirky when trying to handle something that is not possible (like contributing to an IRA with no earned income).
  10. We rarely take new clients and the ones we do are referrals from good clients or others we don't want to disappoint. However, when a potential new client asks how much it will cost in the initial phone call, we typically say we aren't taking new clients. If price is the first thing on their mind, we suspect that will not appreciate the service we provide and the relationship will not be a good one. This week I have had to tell a number of clients that they owe big time, that I tried this and that but nothing helped. Every one thanked me for the effort I put in. Those are the clients we want. I had a client today who wasted so much of my time that I kept silently going into his bill and raising it. By the time he left it was up almost $100. He offered to pay even though his return is not yet completed. I suspect he fears losing me more than I fear losing him. I have heard many practitioners say that they purged their client lists of problem clients and enjoyed their jobs more while their income didn't suffer.
  11. You can't transfer withholding. It can only go to the person, but you can't file a return for the deceased now because the SS# has likely been locked. The bank has to handle this. And the estate will not pay taxes if the income was distributed, as it apparently was.
  12. No gift tax returns required. If the parents apply for Title 19 within five years, the lawyer who handles the application will have to deal with the transfer of funds, not you.
  13. Medlin, the problem is that many people don't read but just click and click. I once had a colleague who wiped out Office because he was in a place in the computer he shouldn't have been in and didn't read, just clicked.
  14. All you needed was hyphens and you'd look like you had made a common-sense-making report. I know this stuff because I was an English major.
  15. Yesterday I entered Box 12 codes for 401k and Roth 401k. Both ended in .50 so I rounded them up. I got a diagnostic in UT that the taxpayer contributed too much. I rounded one down so the total was $18,500 instead of $18,501 and the diagnostic went away. Something is reading those codes.
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