Pacun

Well, my client told the auditor that he took his vans to a friend mechanic that didn't give him a receipt. When the auditor left, I told him "you should at least use Jiffy Lube because they write down the mileage when doing oil changes". He said, the vans don't fit in their installations, which I didn't know. But I have seen his van and they are tall and all of them have 2-4 ladders on top.

Another interesting thing that I noticed in this audit, is that the auditor has access to all years. I thought they only had access to the year in question and then they requested access for the adjacent year but I was wrong.

I believe that the IRS will have to accept actual expenses in a review. This client was audited in 2008 but during that visit, the auditor said that he was within the industry's mileage allowance or something like that. 

Thank you to all of you who have replied to this post.

client made a million dollars home repairing and has 4 vans. Auto deductions using miles is $34K.  For some reason the officer sought it was only one van and thought it was excessive. She was always asking about personal usage and I explained to her that it was a van full of materials, tools and you name it. The front seat of those vans barely have space for the passenger. She wants logs but she said that she would take amounts from the bank statements. Actual expenses are $25K in gas and maintenance plus 5K in car insurance. I told her that without depreciation, we are almost to the amount claimed but she wants to see the charges, which we are highlighting for her.

Reporting a million dollars, I wonder what the industry average for auto expenses is.  I told her that auto expenses for construction people was ordinary and necessary but she didn't entertain that thought. Any suggestions will be appreciated.

If your client owes 10K then each will list $2,500

There is no way to super cede a return using efile, as the second 1040 will be immediately rejected by the IRS efile "acceptance department". The only way to be efile-accepted is with a regular 1040X.

wrong post

I would add, create the new efile file and then transmit it. 

Don't forget to explain that you are adding 1099-int that were left out and as a result lines, 1, 3 and 5 are changing as well as the tax liability and other lines.

"Jan 1, 2023 the volume restriction went away"

So, if someone purchased a car Dec 31, 2022, no credit but if someone purchased it a day later, s/he will be the credit?

So based on that link... the sales people know that Chevrolet/General Motors doesn't qualify for the credit since a couple of years ago and yet they tell people that their tax preparer will get them a credit. Am I reading it right?

I have not done any research... does any one know if a 2022 Chevrolet Volt gets any "electric" credit on 1040/W2 filing?

Yes, DC gets the income amount when you input box 1 of the W2. I have my program to calculate automatically, so I enter box 1, box 2, box 15, and box 17, besides entering the name of the company and FEI number. 

When you efile, you don't have to do anything special for DC and the 1040 is automatically attached when the efile file is created.

If you are filing married, DC has special category "married filing separate on the same return" and it is helpful when both spouses work. Let's say that each earn 100K, you split the income and taxes is higher when paying on $200K and cheaper when paying taxes on $100K and 100K. 

Another helpful refundable credit is rental paid for apt or house on Sch H. Income limit is about 60K I think but you have to have lived in DC the whole tax year.

Regular years, DC give you 40% of Federal EIC, but this year was increased to 70% but the extra 30% is sent evenly every month for 11 months. 

If you are filing 1099-NEC with Schedule C, you might need to eliminate form D-30 because ATX automatically adds it and send 1099-NEC income to that form but most of the time is not needed. 

Thank you for the link. I need to correct one 1099-NEC.

9 minutes ago, joanmcq said:

 How weird is that?

very.

Keep in mind that if one spouse itemized, the other one doesn't have to itemize but must take a 0 standard deduction.

Which one is your client? As you can see, you might have a conflict form the get go.

So, you have to have the appraiser with you each time you want to donate crypto? He is the one that will give faith to the price.

How about the passage that reads that you can deduct the amount that the "church" received when property was sold?

I assume the appraiser will use this link below to know the FMV when the coin was donated. Let's say that you donated some solana SOL on April 15, 2022. You will enter SOL on the search bar, then you will click "all" and expand the chart and move the cursor to the date you are looking for.  In this case the FMV of each SOL was $101.3

https://coinmarketcap.com/gainers-losers/

while you have the old server running, print to PDF every client for every year that you are not going to install on the new server. 

I would install only two or three years on the new server. Since you give copies to your clients, you should be OK.

If you are going to trash the old server and if you are required by law to have records for the last 7 years, that would make sense. Other than that, you only need a couple of years plus the current year and you should be 99% OK.

Is Jan 23rd the date to start efiling 1040s with the IRS?

The service provider could report the income in 2022 or 2023 depending of the accounting method, but your client can only issue the 1099 for the year in which the money was paid, as Bulldog Tom said.

1 hour ago, mcb39 said:

I have been told that you cannot update 10 Pro to 11 Pro due to the fact that the 11 Pro system requires an entirely different chip and you need an entirely new computer.  What is the real deal here?

That's not true... unless when you purchased your old computer 4 years ago, you asked the technician to buy a 3 year old computer because you were afraid of windows 10 at the time.

"Curious, if your client hasn't done a good job of keeping track of their transactions and they don't have the reports you need then what?"

They can log on to their exchange and get an Excel Report. It is tricky to find the information but it is there. Binance.us has a pdf version also which is a lot of pages, but it is easier to find what you need. To give you an idea, if you purchase $10K in a coin, you would think that you will have an entry in excel showing the 10K and the amount of coins. Most of the time yes, but sometimes 100 people have $20 to sell and the computer has to buy from them. So you end up with hundreds of purchases with different prices. 

Most people will tell you, I started with 20K and ended up the year with only 14K... that means nothing. A person with that information could perfectly need to report $25K in short term gains even though he is loosing money. 

Luckily you will get a client that started last year, that's easy to find cost and proceeds but if they have been cryptoing for 4 years, you will have 4 years to dig in to find the cost of the sales.  I am keeping a log for 2023... last year I only logged sales and went to look for cost on line. That's becoming hard, so this month, I am entering a line with cost for every coin I have so that when I sell in 10 years (I wish) it is easy to enter the date, proceeds and amount of coins/token sold. 

Bottom line, ask your people to purchase a crypto trading journal an enter every transaction as they occur.  If not, you will spend a lot of time trying to make sense from excel files. 

Please don't downgrade your computer just because...

As soon as Windows 11 came on board, I upgraded and I have never had any issues.

In your case, I would install ATX 2021 with its data on the new computer and then install ATX 2022. I always keep my old computer handy the next tax season. After the next tax season, I disconnect it from the LAN and turn it on when needed. I keep it for another year or two and then there is no need to go back to it. 

I just want to say that mining bit coin with a personal computer is like running Daytona 500 on a bicycle. With the bit coin hash rate difficulty, you will never mine any bitcoin. 

I agree crypto is new but in about 5 years more than half of our clients will have crypto transactions and we might have to reconsider if we want to turn them away. Fidelity, paypal and some banks are now offering crypto to their clients and soon other institutions will follow suit. So the sooner we help our clients the better.

It only matters on the year that your license ends.  Two days ago, while renewing my PTIN, I saw that I have to renew my license in March 2023, which I completely forgot. I panicked because this year I had only 18 credits. In my head, I said... "I am short if every year I have don't the minimum requirement". Luckily, on that website they have my CPE credits and I had a lot in one year so I had exactly 72 credits.  

I am happy you noticed it now because 48 hours later, it would be too late. 

Everybody, please double check if your license expires in March, so you still have time to pass the CPE exams.