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If this isn't a vacation home that the person isn't using after converting to rental, then you probably have the wrong code entered into ATX. Is this a home that the owner converted fully to rental beginning in May that has no personal use after that date of conversion? Or is this a second (vacation) home that they decided to rent and still also use themselves?

ATX used to have a "Detail" tab right next to the one that is labeled " Detail - Items". That's the one I always used. Maybe it's still there?

I don't know why the U.S. News & Report didn't show the AP's whole article. Here is the AP's entire article that says the government is still investigating the root of the problem, it appears to be with a "benchmark" figure, and that the 50,000 that have already filed will receive special instructions on what to do from here. I'd assume that the "benchmark" referred to is the SLCSP. I want to know how and when the government will be notifying those with incorrect forms.

Code T indicates that the preparer of the 1099R was not sure if the 5-year holding period was met. Agree about the 8606, but read the instructions for line 19 to see if the distribution should be included there. There is an exception for death and if there were contributions made to the Roth between 1998 and 2009.

...file Form 1040X within 3 years (including extensions) after the date you filed your original return or within 2 years after the date you paid the tax, whichever is later. If you filed your original return early (for example, March 1 for a calendar year return), your return is considered filed on the due date (generally April 15). However, if you had an extension to file (for example, until October 15) but you filed earlier and we received it July 1, your return is considered filed on July 1.

That's not always true. It can be taxable if there is a negative capital account. Even if no money changes hands, the fact that the partner is relieved of that negative capital account is a deemed distribution that is taxed as ordinary income.

Hmm, the way I understood the law and this new one easing the penalties is that the reimbursements weren't allowed starting in 2014 but there wasn't total clarity in the law, and so if employers did do that and are still doing that, then the IRS has given companies through 6/30/15 to remedy these errors, and the $100/day/employee won't be assessed on small employers that did it wrong prior to that date. If the error continues after 6/30 of this year, then the IRS can assess the penalties. That's all I thought this new rule meant. Am I totally wrong too?

Instructions for 5329, line 2 - for the exception # 05 : Qualified retirement plan distributions up to the amount you paid for unreimbursed medical expenses during the year minus 10% (or 7.5% if you or your spouse were born before January 2, 1950) of your adjusted gross income (AGI) for the year. Yes, $16,000 you entered on line 2 was after this limitation. Yes, the part that is subject to the penalty is $9,000. Correct. If the loan from a 401(k) exceeds 50% of the nonforfeitable balance in the retirement account, the loan can create taxable income under §1.72(p)-1. You can see some of that discussion in my post #10 from >this topic. See this page at IRS re: statutory maximums of loans and here is a whole Q&A section from Cornell Univ Law School online library on the topic of loans treated as distributions.

The ex-spouses may agree to any allocation between the two of them, and must apply that same % split to all of the figures on the 1095-A. If they can't agree on a split, then all the figures are divided 50% to each. It doesn't matter who worked or paid the premium if they can't agree, then it's a 50-50 split.

Yes, really, I wasn't joking. It's not available yet anywhere that I've found, not even in draft form.

If clothing is adaptable to street wear for everyday use, then it isn't deductible. If it can't be, then it would be deducted like a uniform would be. Either way, I wouldn't consider it a depreciable item. I found an interesting article that appears to be written by an organization for a professional musician forum, and deals with this and cites some cases and has specific examples. It's obviously nothing official but is interesting because of how the clothing is to be considered: http://www.polyphonic.org/article/is-concert-clothing-tax-deductible/

This is what I received earlier today from IRS through their Guidewire email: Notice 2015-17 provides transition relief from the assessment of excise tax under section 4980D for small employers (in particular, employers who are not applicable large employers) who reimburse or pay a premium for an individual health insurance policy for an employee. Notice 2015-17 also addresses the treatment for federal tax and for market reform purposes of arrangements reimbursing premiums of 2%-shareholder employees of S corporations. Finally, Notice 2015-17 addresses application of the market reforms to certain employer arrangements to fund Medicare premium payments or to provide a TRICARE-related health reimbursement arrangement (HRA). Notice 2015-17 will be in IRB 2015-10, dated March 9, 2015.

I saw that earlier and wondered the same thing. I haven't had a chance to look into it further yet. Anyone else?

Catherine, I had a return where I was having trouble removing an input screen and was coming back after I'd delete it. It turned out that the problem was a linked form that that main form was connected to, so when I'd delete it, the program would see the other form and add it back in. It might have been an asset on the depreciation screen that was linked to a schedule C or something like that. It can also be a state code up at the top where if a state form is linked to it, the same thing will happen. Look around in that input for something along those lines and I bet you'll find the source of your trouble.

I don't think we know enough about July to say it was 2 or 3 month gap. OP said: If taxpayer had coverage for even 1 day in July then the gap would be 2 months, but if coverage was only through 6/30 and not reinstated until the month of Oct, then the gap is 3 months and doesn't meet that exception to the penalty for those months. The OP implies that there was no coverage for the 3 months of July through Sept, so I'm going with a count of 3 months.

The IRS hasn't finished it yet.

When you have clients with situations like you've presented here, you have to ask them if they notified the exchange with each change of "coverage family". This 1095-A appears to be correct since the amounts shown for SLCSP effectively doubled beginning in July indicating that the exchange was notified since the wife's coverage came through the exchange also. I think where this could have been a problem is if when the infant was born, if the parents contacted the insurance company directly to add the baby and didn't notify the exchange. In that case, the coverage family would have increased by one person but the 1095-A reporting of the SLCSP would still have been based on only two people. This was NOT the case with your client because both children are covered by medicaid, and they were not part of the coverage family for this purpose. Another good example would be a married couple where one of the parties went on Medicare during the year and didn't notifying the exchange. The 1095-A would have reported the cost of the SLCSP for 2 people but should have decreased to one person starting with the month that Medicare coverage started. Third example is if someone moved and didn't notify the exchange and the cost of the SLCSP was different in the new location. In each of these scenarios, we would have to look up the cost of that SLCSP for the proper number of people for that locale.

It might depend on who the charity sells it to. There is a different handling if the charity sells it to a needy person at an amount greatly below its value. Here's the IRS pub specific to donors of vehicles that explains each of the limitation regarding donated vehicles: http://www.irs.gov/pub/irs-pdf/p4303.pdf

I don't know if Covered CA changed their formulas, but I played with the site and filled out some of the basics: $54K of income, 2 persons enrolling both age 35, two children ages 5 & 1 not enrolling That calculated a monthly subsidy of $170. When I used the same demographics and reduced the income to $40K, I got a monthly subsidy of $335. With that reduced income at $40K, if I remove one adult so that it's like what this couple had where only the husband applied for coverage in May & June, it calcs a monthly subsidy of $87 per month. Those figures based on around $40K are pretty close to what this couple received each month as advanced subsidy. Based on this, I still think it is a problem with how the application was filled out or entered. Deb, what is the income of husband only? Is it around that $40K level?

It's not our responsibility to determine whether a policy has MEC, but we have to ask the question of the client so that we can complete the tax forms and return properly. The client will either know and be able to tell us, or they will have to make the inquiries.

Deb, it actually might be an issue with the CA calculations. As I said, the income would have had to be much, much smaller for them to arrive at the monthly subsidy they received starting in July, or perhaps there's some problem with the CA exchange where it is only picking up the one person's income if only one person in the household is applying for coverage like this family did for May and June. That may be where this particular family's problem started, and then they went back to the exchange and added the wife for July through year-end. We can see how the premium and the SLCSP both increased in those later months. I'd still like to see that application. Obviously, if the income is the same with similar persons covered and premium amounts, this couple should reduce the monthly subsidy somewhat for 2015. If they don't do that and this pattern continues on for the remainder of the year, this couple will have to repay more next year, capped at $1,500. One big thing to watch for with these 8962s and 1095-As is that the 1095-A SLCSP amounts can be wrong IF the "tax family" or "coverage family" changes and the taxpayer does NOT notify the exchange. If that is the case, we have to enter a different amount for the SLCSP on the 8962 than is shown on the 1095-A. The definitions for "tax family" and "coverage family" are on page 2 of the instructions for the 8962. It appears that Deb's client's 1095-A is correct since the wife was added starting in July and the amount doubled.

I come up with the same $1132 payback that you did. According to the calcs this family was able to contribute $331 per month to their insurance coverage. Then in part 2 of the form 8962 in the months of May and June, the cost of their plan and the SLCSP were both lower than their $331. That is why they shouldn't have had a subsidy for that month yet they received $68 in each of those months. Then for July - Dec the premium for their plan and the SLCSP were the same at $573. After their contribution of $331 they should have received $242 in subsidy yet they got $408 in help each month, so each month this family received $166 to much from July - Dec plus the $68 for the 2 earlier months. What the above is concluding is that if the $408 of subsidy was accurate and based on the SLCSP of $573, this couple's monthly contribution would have had to be only $165 per month (the SLCSP - subsidy, $573 - $408), and in order to get to that low a number, the income would have had to be something like 1/2 of the actual household income. I can see why you are asking for input from other CA preparers. In this case, I'd be very curious to see how the application was filled out and what income was used on the application. Is it possible that when the application was done that only that of the primary applicant was included or considered?

From the facts you provided, this client is not eligible for the PTC in either year, and if she did receive any subsidy, she will have to pay it back for any months that employer coverage was offered and was "afforable" as long as that employer plan meets the requirements of minimum essential coverage. You can't automatically assume that the 1095-A is correct because the applicant can fill out a false insurance application on the exchange and receive the subsidy, just like this person did. Because you have knowledge of this, you must prepare the return that is complete and accurate, and keep appropriate documents and answers received from the client in your files to support your preparation. What I want to know is how the exchange would ever determine if a person is a smoker or not.

Friends, I need some ideas for a thank you gift basket. Due to a few people being sick including me, I'm submitting my peer review documents closer to the deadline than I'd like, and it will be an inconvenience to this other CPA and his firm to work on this for me now during the busy season. Of course, I'm paying his firm for the work, but I'm also thinking of sending something else for the inconvenience but I don't know what would be nice or where to order. Fruit seems too messy, and since we all sit at our desks too long and breaks seem nonexistent, I was thinking something more like higher end snacks or goodies that aren't messy, are quick and easy, and not something they'd have in a breakroom. Have any of you received something that you thought was nice and that would be appropriate, or have you sent something that the recipient really enjoyed? A client sent me a 6 lb box of Honey Bells from Harry and David that were heavenly, and I could send those, but they are incredibly juicy and messy. I don't know this CPA personally, and he is not local to me. Anyone have any ideas?

Do we even know if Terry's client was smoking at the time? I've had drinker/smoker clients that reeked and brought a lingering cloud in with them on their person and clothing, and my office had a strong odor of stale bar and grease, sweat, and smoke even though the person didn't not smoke while here. I also have one business client whose wife has similar heavy bad habits and smokes those skinny black cigar-ettes. They have a stronger and more stinky odor, the biz papers themselves reek of it and make the whole room stink while they are in my possession, and the smell gets on my hands while working on the records. When I have to visit their site, I freshen up in the morning and shower when I get back so that I don't have to smell like that all day, and I always leave my jackets or coats in the car. *gag*