jklcpa

1 hour ago, JJStephens said:

I switched from ATX to Drake back in '14. I haven't found a way to have the software supply the signature. I need to check into that.

Click the "Setup" drop down menu on the top toolbar, then select "Preparer(s)".  From there, choose the preparer that shows your PTIN, not the administrator. When the dialog box comes up, look on the righthand side under Return Signature Options: make sure you have entered your 5-digit pin and check both boxes for "8879 PIN signature" and "Alternative Electronic Signature" .   That will place your typed signature on the Federal forms and 8879 and any states that allow it wtihout making a separate selection within Drake.  Read on -

Also, be sure to check your state options for any states that you prepare. Some within Drake will require that you make that same election for the electronic signature on a state-by-state basis.  For example, PA and NJ are two that I prepare that require another checkbox be marked, and isn't an available option for my home state of DE at all, so I still sign those manually.  Those state-by-state choices are found in the "Setup" drop down, then choose the first item "Options".  Then from the next dialog box that appears, choose the "state" tab and then use the drop down selection for each state that you prepare.  If the state requires you to check a box separate from the Federal option, you should see a checkbox that again says "Alternative Electronic Signature".  Example, that is what I see for PA and NJ. MD isn't necessary as it follows the federal option.

Hope that helps.

One other suggestion is to remind clients with IP PINs that if they move during the year they must file the address change form 8822 or the IP PIN the next January will be sent to the former address. 

I have a client with an IP PIN also. Once someone requests a PIN, they will need it for every year going forward thereafter.There is no way to cancel it or tell IRS they no longer want or need it.

My particular client lost hers this year too, and she was able to log in to her IRS account and retrieve it that same day.

Is there some other item on the return with passive income that allowed more of the rental losses?  Perhaps a partnership?

I, too, am curious about whether he used software or this was hand-prepared on paper.

22 hours ago, peggysioux5 said:

I see the March 16th thread, but unable to locate the March 1st thread.  Would you be able to provide the subject line of the March 1st thread?

 

 

https://www.atxcommunity.com/topic/30766-spitting-nails-any-help-appreciated-a-long-read-but-worth-it-especially-if-you-hate-diy-tax-software/

16 hours ago, BulldogTom said:

And if the corp uses the 2017 and 2018 NOLs in the same year, the example above is how to allocate the NOLs to the income?

The NOL of the earliest year is used first until exhausted, and then the next most recent year, and so on. 

For your client, it sounds like the NOL from only the 2015 tax year will be used.

It may not be in the name of the plan on the card and don't rule out the possibility if it isn't on the card.  To be sure, you must have the client check with the insurance company or look in the plan documents.

I purchased through the marketplace and have a Highmark Blue Cross plan that meets all the requirements and IS HSA eligible, but that is not on my card anywhere.  It WAS stated in the plan description when I purchased it though, and it IS stated in my member information when I log into the website.  Also, just like Kathy said, my deductibles are less than the figures she stated above.

Moved and merged the 2 topics

4 hours ago, BulldogTom said:

The Fee would depend if you were a Corp or LLC, then there is a minimum tax of $800.   If you are a SP, then no min. tax, just regular PIT from the tax rate schedules.

Tom
Longview, TX

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?

2 minutes ago, BulldogTom said:

Yes there was a thread, but different situation.   

The OP on this thread has a W2 for working in CA.   Just a simple NR tax return to CA for the wages earned on the employees part in CA.

The earlier thread would apply to the employer of the TP.  Employer would have to register their business in CA (which they did if they are reporting wages to CA and producing W2s with CA earnings for their employees) and file a tax return on the income generated in CA. 

Tom
Longview, TX

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?

On 3/10/2023 at 2:59 PM, Margaret CPA in OH said:

Client showed overpayment for 2021 and applied to 2022.  Amended return shows 2021 actually had small balance due.  For amended return does client actually owe and must pay money not received or have underpayment penalty for not paying estimated payments thought covered by (nonexistent) overpayment applied?  Never had one of these before so any help welcomed!

On 3/11/2023 at 3:13 AM, Slippery Pencil said:

I believe once the irs applies the overpayment, they won't change it.  You have to pay the balance on the amended return.

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. 

1 hour ago, Sara EA said:

jkl, HRB had to have a birthdate or wouldn't be able to efile.  HRB charges a lot for HOH filing status and refundable credits, if she had any of those, or maybe she got a refund advance? 

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. 

31 minutes ago, cbslee said:

If the person is survived by a spouse, descendants of that spouse, and the spouse has descendants from another relationship, the spouse will inherit 3/5 of the estate and the decedent's descendants will inherit 2/5 of the estate

2 hours ago, cpabsd said:

No children are from this marriage.  I'm not sure why wife got 60% but that is what WV law determined.  

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.

Quote

• If the person is survived by a spouse and descendants from someone other than the spouse, the spouse will inherit one-half of the estate and the descendants will inherit the other half

2 hours ago, cpabsd said:

No children are from this marriage.  I'm not sure why wife got 60% but that is what WV law determined.  

Quote

Who Inherits Property in WV When the Person Dies Leaving a Spouse and/or Children?

West Virginia intestate laws look first to whether the decedent had a spouse or children. If so, the following rules apply:

• If the person is survived by a spouse but no children, the spouse inherits all of the entire probate estate (the property that is not jointly owned with someone else)
• If the person is survived by children but no spouse, the children inherit the entire probate estate
• If the person is survived by a spouse and descendants and neither the spouse nor the deceased have other descendants, the spouse inherits the entire probate estate
• If the person is survived by a spouse, descendants of that spouse, and the spouse has descendants from another relationship, the spouse will inherit 3/5 of the estate and the decedent's descendants will inherit 2/5 of the estate
• If the person is survived by a spouse and descendants from someone other than the spouse, the spouse will inherit one-half of the estate and the descendants will inherit the other half

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

2 hours ago, cpabsd said:

Client's husband owned the rental property 100%.  He passed away without a will.  The wife gets 60% at sale and two teenagers get 20% each.  All parties get stepped up basis for value at time of death.  Does the depreciation taken during the husband's time of ownership die with him... meaning there is no recapture to deal with once asset is sold?  

Thanks in advance.  

Bonnie

 

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

1 hour ago, DANRVAN said:

 

Then it goes on to say " If (a) or (b) applies, see the instructions for lines 6a and 6b to figure the taxable part of social security benefits you must include in gross income."

From there lines 6a and 6b will determine the amount of SS included in gross income.  I  interpret that to say the non-taxable amount of Social Security is not included in gross income. 

That appears to agree with the definition of gross income per § 1.61-1 per my last post.

 

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."   

1 hour ago, cbslee said:

Drake has a small subsection titled, "MFS claiming spouse exemption"

Checkbox # 1  -  Spouse not filing return

Checkbox # 2  -  Spouse has no US 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.

47 minutes ago, DANRVAN said:

 

 I think that is actually referring to the non -taxable portion of Social Security income.

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:

Quote

Chart A—For Most People

*If you were born on January 1, 1958, you are considered to be age 65 at the end of 2022. (If yourspouse died in 2022 or if you are preparing a return for someone who died in 2022, see Pub. 501.)

**Gross income means all income you received in the form of money, goods, property, and services that isn't exempt from tax, including any income from sources outside the United States or from the sale of your main home (even if you can exclude part or all of it). Don’t include any social security benefits unless (a) you are married filing a separate return and you lived with your spouse at any time in 2022, or (b) one-half of your social security benefits plus your other gross income and any tax-exempt interest is more than $25,000 ($32,000 if married filing jointly). If (a) or (b) applies, see the instructions for lines 6a and 6b to figure the taxable part of social security benefits you must include in gross income. Gross income includes gains, but not losses, reported on Form 8949 or Schedule D. Gross income from a business means, for example, the amount on Schedule C, line 7, or Schedule F, line 9. But, in figuring gross income, don’t reduce your income by any losses, including any loss on Schedule C, line 7, or Schedule F, line 9.

***If you didn't live with your spouse at the end of 2022 (or on the date your spouse died) and your gross income was at least $5, you must file a return regardless of your age.
-

3 hours ago, DANRVAN said:

Most likely  the trust will need to file a separate tax return if the income is $600 or more.

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.

52 minutes ago, Bklyn1_241 said:

TP receives a few K-1 (1065) forms in the name of her trust that has it's own EIN.  How would you report this?  Does the trust need to file a tax return separately?  Would you include the income with the TP personal return?

Furthermore, there are CA state K-1s attached but the TP resides in another state.  Is there a CA state tax filing obligation?

 

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