jklcpa

You should make sure that the s/t transaction is for the shares that were exercised and included on the 2019 W-2. Unless the s/t transaction occurred on the last day of the year, there is still a chance that the "purchase" via exercise could have occurred (within the 12 months, obviously) but be from an exercise in 2018. Did this person's 2018 W-2 also include code v? In other words, the shares sold may or may not come from the same lot as the current year's exercise of the option to acquire because the transactions aren't always simultaneous. I hope that makes sense.

^ that's correct and Gail already has that info in her post for 2020. With the premiums based on a 2-year lookback and her asking about her client's 2019 income level being slightly over the threshold in that chart, I think she is asking what the premiums might be for 2021.

Found this article published in Nov 2019: https://www.investmentnews.com/medicare-premium-increase-and-irmaa-surcharges-announced-for-2020-170646 Some excerpts include these quotes: "High-income surcharges will be adjusted for inflation for the first time in a decade." "For the first time in a decade, the income brackets used to determine those surcharges will be indexed to inflation starting Jan. 1. As a result, some high-income retirees may experience a reduction in their Medicare costs in 2020 compared to this year. Medicare premium surcharges for 2020 will be based on income reported on 2018 federal tax returns." "Currently, there are six income tiers that determine high-income surcharges for both Part B and Medicare D prescription drugs plans. The income thresholds that determine who pays the Medicare surcharges have been fixed at their current levels since 2011." "Income thresholds will be indexed to inflation in future years starting in 2021, except for the top-level income thresholds of $500,000 for individuals and $750,000 for married couples filing jointly, which were added in 2019. Those top tiers will be indexed to inflation starting in 2028." ETA - Was posting at same time. It seems I found a similar article from that same publication as cbslee with some information less specific, some more specific as to when indexing will occur but with no figures as to the actual effect on 2021 except to know that it will be indexed for all but those in the highest tier.

"Placed in service" means available for rent which includes the period it is advertised for rent but before actually collecting rental income.

That is what usually happens, that the spread in option's increase in value from award to exercise is considered additional compensation taxed at ordinary rates, and that is reflected in the W-2 wages and reported with code "V". The basis and proceeds are usually virtually the same, possibly with a small loss on 8949/Sch D for the transaction costs/fees or possibly one day's change in price if exercised one day and the sale not finalized until the following day. It is usually simultaneous. I do have one client that works for SAP, Inc that has had two years where he swore no 1099B would be issued, and I made him call the broker to make absolutely sure of this. I was sure that he was wrong, and I still don't know why there was no 1099B, but there wasn't. Still can't explain it!

Yes, changing brokerage firms for the SEP is allowed. The employer would be adopting the SEP plan of that new broker by filling out a new 5305-SEP as part of the setup, provide the employees with the required documentation, and must set up an IRA for each eligible employee. You weren't asking about having 2 running at the same time, right? Or changing mid-year? SEP-IRAs are considered defined contribution plans, so make sure that the employer stays under the contribution limit allowed for all defined contribution plans in aggregate.

Like cbslee, I would treat this as property that's been idle and put back into service, meaning to put it back into active status and use the same basis and accumulated depreciation. To do otherwise would risk losing track of the depreciation already taken that will be subject to recapture when the property is disposed of.

I actually had someone utilize a portion of the AMT credit last year, and that was a first for me in all the years of its existence.

This topic was from 2015 and the original poster had moved on to another software provider since then.

Did you realize this topic is almost 5 years old?

What Sara is saying is that the estate threshold is high at $11.58 million before the estate itself becomes taxable, so for most people there may be no need to file Form 706 even with the value of the life insurance included.

^ Yes, what Abby said. With multiple accounts, I have individual line items on the 8949 for each short or long grouping that ties back to each account, and I use a simple description something like "S/T - basis reported". The description is redundant since it shows in that section of the 8949 already.

Yes, as long as basis is reported to IRS, and there are no codes and dollar amounts for adjustments, then totals can be used. I've had some with all basis reported and with tiny amounts for wash sales that I still reported using only totals and never heard from IRS. If they ever ask, I'll send that page of the broker summary. Gain was correctly reported.

There are a few more restrictions, mostly related to depreciation, beyond using the mileage method the first year that may disallow using mileage in future years. Tax Topic 510 gives an overview: https://www.irs.gov/taxtopics/tc510

It's not you. See the topic in General Chat called "Efile Error Notice" talking about the same error.

A male duck is a drake...Drake software.

That field would be to enter the code section under which the asset is being amortized. Example - sec 197 for amortization of goodwill, sec 248 for organizational costs, etc.

Right, and you also wouldn't have the credit affecting PA that my clients have because MD and PA have reciprocal agreements. With PA having a flat tax of 3.07% and DE's top rate being higher and the fact that that rate is reached relatively quickly, it is entirely possible to help my clients lessen the overall state tax burden by filing MFS in DE and still getting the full credit that is allowed in PA.

The name on the W-2 isn't just an "in care of" is it? How about the EIN, is that also not your client? I looked at the Paymaster website and appears that it acts like other outside payroll services plus HR. I didn't see anything to indicate an arrangement like you describe or for something like leased or outsourced employees.

at ILLMAS' youtube!

I was thinking more of PA gross income that may differ significantly. PA does not have any deductions and does not allow losses. PA taxable wages are always different for anyone that has pre-tax contributions to a retirement plan. PA doesn't allow the reduction for deferral to plans like 401k and taxes that as earnings and then generally doesn't tax it at retirement unless it is an early withdrawal.

Lion gave you great advice on how to process. Keep in mind though that with all but the most basic of PA returns, PA income rules do not follow the federal and so the two states may not exactly add up to the federal income. Just make sure that you've accounted for all the items of income and that they are properly flowing to their respective state returns.

Abby Normal's post above shows why no program is a "one size fits all" for our practices. As well as checking for federal purposes, I check MFJ vs MFS for state purposes because I have PA residents working in DE and filing nonresident DE returns that allow the choice of joint or separate. With DE's graduated rate, the interplay with the credit back to other states, and splitting Sch A and other deductions, credits, exemptions, it's been extremely helpful to have the function built into the program that will efficiently and accurately create the split separate returns, and with my town being located right on the state line, I have a fair number of clients that are multistate where this may be of benefit.

Quack, quack. The program I use does the comparison and will split the returns. It doesn't cost a million and is less expensive than all but the most basic ATX version.

No, he can't do that even though they would have been eligible and able had it been done in 2019 prior to the wife's death. Any contributions after death would be considered excess contribution, subject to the excess contribution penalty each year until removed from the account.