jklcpa

Moved and merged the 2 topics

I am a C corp, so no CA returns for me. I guess that doesn't apply if I prep a CA NR though since it is "delivered" elsewhere?

Thank you. I thought sure that there was something about if I prepared CA returns, that I'd be considered as doing business within the state and would have to pay that fee. Did I have a bad dream about all of that? Anything's possible at this point.

Wasn't there a discussion recently about non-CA preparers being considered as doing business in CA if preparing CA returns and needing to pay some exorbitant fee, somewhere around $600?

Reviving this as I have the same issue with a new client, so thank you for the post and answers that followed. Very helpful right now as I also have this with a new client. The former preparer missed including income for an entire brokerage account that created a false overpayment on 2021 that was applied to 2022. Those '21 earnings and tax effect will certainly not be insignificant amount if the '21 earnings are like that of the '22 TY, it should be somewhere in the $35-37,000 range.

Single, no dependents, no credits, nothing. The return was really just the W-2 wages about $40K, standard deduction, fed and state withholding. Nothing else. Very simple and straightforward. As for the age, I doubt that it was a programming error when that 2021 return was prepared on 4/14/22. The preparer either had a typo or made up a date because the taxpayer did not get the benefit of an age-related deductions. How else would you explain that?

I had a former client return to me after leaving for one year. She went to HRB with one W2 and one 1098. She could not itemize for either federal or state. HRB charged $275, and I have already amended the state because HRB preparer didn't ask her DOB and so missed the extra deductions and credits for older filers. Also, I'm not charging enough....

I don't use ATX anymore, but one thing I can think of, if this isn't a programming error, is that the K-1 should be marked "final" and that the input should as well.

True, BUT the poster said that there are teen children, but no children are from this marriage, so the last bullet point in my post above more matches the OP's fact pattern, doesn't it? I'm guessing, but that should be true unless there are some children from the current marriage at death that don't qualify to inherit under WV law so that the preceding applies and not the last bullet point. Maybe we don't have all the relevant facts as is sometimes the case with posts on the forum, that all the facts aren't known without a lot of discussion and questions being asked.

Not sure why the fact pattern doesn't exactly match the above regarding WV law and why the spouse got 60% instead of 50%.

The step up resets the basis for the heirs, and they will not have to worry about recapture, that is, unless the property is still rented after the husband's passing and depreciation had started over once title passed to the beneficiaries. If still rented after husband's death, depreciation for the heirs would start over using the stepped up basis.

Not on the IRS list of vehicles eligible. https://www.irs.gov/credits-deductions/manufacturers-and-models-for-new-qualified-clean-vehicles-purchased-in-2022-and-before

So do you agree that if the spouse is not required to file a return, therefore spouse has no income or not? Or are you thinking the taxable social security benefit may be between $1 and $4? That would be the only possibility of the spouse living apart all year in OP's case where the spouse has only SS benefits being collected, wouldn't be required to file, and yet still have some "gross income."

I have an MFS return each year with taxpayers having lived completely apart for years now. The 2022 info isn't in yet, but I went into 2021 using the planner for 2022, checked those 2 boxes, and Drake did allow the higher standard deduction. Planner shows status as MFS and TWO exemptions. Within the program, the wife's full name, SSN, and DOB are entered. Just playing with this planner because the wife of my client does have income so this scenario isn't a possibility for my client, but interesting nonetheless. I also looked for a link to any tax research, but there isn't one within the Drake program.

True, but it says to not include "ANY IF".... In the OP's case as presented, the spouse lived apart the entire year, has only SS benes, and we are told that the spouse isn't required to file. That tells me that 1/2 of spouse's SS benefits does not exceed the $25K threshold, none of the SS benes are taxable, and spouse doesn't have the minimum other income of $5 that requires filing a return.

What's also interesting is the "gross income" test in the 1040 instructions under who must file where it says to not include social security here:

I would agree, it is most likely. Believe it or not, and this was years ago, but I have seen cases where revocable grantor trusts with all powers retained by the grantor that did have EIN assigned, and that is why I asked for the type of trust without further elaboration.

No one can begin to answer your questions without knowing the type of trust.

I'm putting this on hold until after the filing season. I'll need to set up an individual SSA account and go through the id.me or the other .gov verification process and don't have time to fool with that now.

If the bookkeeping entries are recording(accruing) the payable each year or pay period, then the expense on the 2022 P&L should be the 2022 expense for the year based on the 2022 payroll deferral amount or percentage. Then, in the balance sheet accounts, when cash is expended in payment of that liability, the cash account and the payable are both decreased. The liability balance on the balance sheet at 12/31/22 should be the amount of 2022 deferral that has not yet been funded that will be paid in 2023. The 2022 1120S should be deducting the 2022 deferral.

Don't hold your breath. The company overhauled the entire program using the Raven database in 2013 for the 2012 tax year, so the company has had 10 years to fix this.

This is a privately owned forum not officially affiliated with ATX or Wolters Kluwer. It was started after a former buy out of ATX by CCH where CCH tried to overcontrol its official forum.

So to be clear, Randall's client may be able to do this. Randall, you are correct that the income limit doesn't apply for contributing the maximum allowed for his/her age AND IF is designated as nondeductible as long as the person actually does have compensation that would qualify him/her to contribute in the first place. The income limitation comes into play when they want to deduct the traditional IRA.

Correct. Mine have -0- balance in the trad iras because their financial advisors started from the beginning with these higher income individuals that didn't have IRAs at all, and then have always immediately converted to the Roths.

As far as I know, "Backdoor Roths" are still allowed for 2022 and so far for 2023 too. It was tried to be shut down with legislation last year but did not pass in the Senate iirc. Taxpayer must obey the rules for contribution limits (age-related limit, him/her/spouse covered by retirement plan, and must have compensation to allow the contribution) but should be able to contribute and designate as nondeductible. The nondeductible contribution is then immediately converted to a Roth before any earnings in the Trad IRA, which utilizes a loophole in the tax law that allows the higher income taxpayer to circumvent the income limits for contributing directly to a Roth. I have clients that have been doing this for years. Does anyone have a cite to the contrary that says this has been shut down?