Margaret CPA in OH

My clients really like that, too, and wish the states would do likewise.

First time to have MFS better than MFJ with energy credit. I've read the instructions but cannot find that MFS will reduce the allowed credit in half ($250 each in this case). Before splitting, should it be on just one return or split? The receipt is in only one spouse name, they reside together, joint checking account. Thanks

Many, if not most, 529 plans also allow for those other expenses.

Clients had solar panels installed on the small barn next to the house with wires for electricity connected to supply the house. The original house is quite old with a funky roof, apparently. The instructions require that they be for your 'main home' but also that the costs are 'for property that uses solar energy to generate electricity for use in your home.' So the fact that the panels are on a building adjacent to the main living space should not be a problem, right?

Here you go. 529Worksheet529Exp.xls

I'm not sure why you would have a SD return. It is a separate return. My school district has no tax and I've never filed an SD return in 35 years for myself.

Here is a worksheet that I use for this purpose. 529Worksheet529Exp.xlsx

That would be tech support 800.638.8291 and follow the prompts. A few years ago I encountered an error in programming and reported it. The issue was corrected rather quickly. It was moved up the chain when the first tech didn't quite get it but resolved.

Yes, cover letter, engagement letter and questionnaire as a reminder of things to think about and maybe mark y/n. That's enough.

Thanks for this information. They have been here since 2021 at least. I asked for only the last 2 years of returns so will have to confirm actual date/year of arrival. They did file single, correctly, for 2021 so likely only 2022 is an issue. I think I will advise again to amend 2022 and be done with it. Update: For some reason I didn't post this reply when I wrote it a couple of days ago. I discussed with the clients and they decided they wanted all 2022 returns amended. Pacun, the federal return was NOT filed correctly. They filed all returns as single although married in mid-year 2022. I have now amended the federal and state returns with no change in taxes although the joint MD return would have saved about $100. They chose to correct to MFS for all. I gave them the options. It's done, filed, accepted. Clients are satisfied and I am, too, knowing that they are all now correct. Thanks again!

Clients (green cards, Argentinian, from earlier post) filed single in CT (she lived there) and MD (he lived there and each for federal despite having married in July 2022. I would like to amend their returns all around but there is no tax difference anywhere except for MD and the savings might be about $130. Of course they can choose to not amend or, say, do it themselves. I think paying me more than any possible savings will be a turn off. Amending will be challenging anyway as which would be the 'home' state when they kept separate residences until early 2023? For filing jointly, I don't see how to have a separate residence for each in 2022 although they now have a joint residence. They currently have ample funds and probably want to do the right thing. Am I missing something? Anything bad waiting in the wings if they choose not to amend? When applying for citizenship (their goal and they are research scientists), could that come back to bite them? Boy, I do get them, right?

Well, if the standard deduction isn't enough, I imagine so. As we know, there are many special benefits for churches and clergy and many things 'religious' as for so many other special cases - mortgage interest and property tax among them. Right or wrong, this is the current law.

Lion, from Church and Clergy Tax Guide, "The tax code specifies that self-employment tax does not apply to 'the rental value of any parsonage or any parsonage allowance (whether or not excludable under section 107) provided after the individual retires, or any other retirement benefit received by such individual from a church plan... after the individual retires' IRC 1402 (a)(8)." Also see Pub. 517.

You know, I didn't look into that but imagine that it must be 403(b) as set up by a nonprofit. In the cases I've had (current and one prior retired couple, both ministers), the plans were denominational. I think so long as the plan is a qualified plan, it doesn't have to be a 403(b) or annuity. I don't have time for further research but lists SEPs, IRAs, nonqualified deferred compensation plans, tax-sheltered annuities (403(b) plans), church retirement income accounts, qualified pension plans, 401(k) plan, and "rabbi trust."

Yes, retired ministers can and do have a designated housing allowance. See the Clergy Housing Allowance Clarification Act of 2002. There are some conditions, of course, but Rev. Ruling 72-249 allows a local church to designate a portion of the retirement distributions it paid to a a retired minister as a housing allowance. Rev. Ruling 75-22 allows a denominational pension fund (as is the case with my current retired minister) could designate a housing allowance because it was acting on behalf of local churches which have the authority to designate such if they maintain a retirement plan. IRS Letter Ruling 773408 reached the same result. This is also not subject to SE tax but one should still do the math (I have a great spreadsheet) to determine that it is not in excess of the FRV or actual expenses. If so, the excess is included in taxable income as usual.

Indeed, then another new one is a traveling nurse filing separately as spouse benefits from student loan repayments with lower income and in 2023 he inherited a taxable annuity. I convinced him to decline filing for tax refund from another state for $58 as he would get a $33 OH credit plus it would cost him $40 for another state plus my time. Then there is the caring big brother who moved a client with beginning dementia to OR to combine households for care giving. But he moved from WA (thankfully no part year as no tax) to OR, too, and had not gotten a new preparer yet so I'm doing both. And he just retired as a minister so pension is designated housing allowance and original client has OH tax free muni's now suddenly partially taxable in OR. I suggested a review of her portfolio. Keeps the little gray cells active but, oh, so tired now! And it's only mid-February! I'm pretty sure the Argentinians will just be MFS all the way.

New clients married 3 years finally living together mid-2023. They are scientists from Argentina, green cards, who lived and worked in CT at Yale and MD at NIH. For 2021 and 2022 they filed as single in their respective states not knowing differently. Their returns were self-prepared with Block software. I'm struggling with how to prepare separate part-year states for each and joint Ohio. Without preparing 9 returns (6 MFS each plus 3 MFJ) to see the outcomes, is there a quicker way to determine the best for them? They have no income other than wages so I'm thinking just MFS this year (and amended py) is the way to go. Sadly, I have now only 1040 program so each extra state is $40 (I already have my 3 selected and not CT or MD), then again, the 2023 income is rather substantial and they do understand this year will be a bit more costly before going back to normal. Suggestions? And thanks!

I am trying to e-file a client with a 1099MISC and 1099NEC. Only one 1096 pulled in but I thought okay. When I look at the 1096, only 1099MISC is marked as being included. Is a separate 1096 needed? If so, it seems that I cannot include in one client prep but need another. And I've already paid for both MISC and NEC. Grrrr.....

My understanding is that, at least in the past, it is separate and it charged separately. The two clients that I have had needing RITA returns, just went to their local office and had them completed for free on site.

I don't know the answer but hope you get it before I have to file and SD returns. I did note that they have to be filed separately now from the OH return.

I will have to get the date of marriage and location but it was in 2023. It's just that each filed single for 2022 in two different states (CT and MD) where they each resided until sometime in 2023 when married and had a single address. I don't know if they had a shared address before relocating to OH. I was just wondering as for Ohio, the prior address would be different for each and for the part year for each, it would be a different state and not married before joining households in 2023. I guess I will have 3 states for this return but just puzzling how to report currently married (yes, I know married as of Dec. 31) but each had a different state address before marriage. It will be interesting for me. Good to keep the little gray cells active, always learning!

This is a new one for me so I'm hoping it's obvious. Couple married in 2023, moved to OH, but each resided and filed in different states for 2022. So for MD and CT, I'm hoping the data entry is clear that each was single during the part-year in their respective states. Any 'watch out for' hints?

I mistyped an address so returned undeliverable after efiling accepted. I tried to login to ATX KB but after 10 minutes of waiting for a passcode, gave up. I looked at IRS Pub. 1220 but it isn't clear to me the steps for correcting and efiled return. Maybe just check corrected at the top of the one form, delete the others and efile again? Thanks!

Sorry I don't know the answer but I think their support is very good and responsive. At one time I even had a phone contact but have now lost it. I had a few bugs in initial set up and they really came through for me. But changing contacts? Weird!

Another resource is the Church and Clergy Tax Guide available through Church Law and Tax published by Christianity Today International. I have subscribed for many years and found it very useful both as a church treasurer and having several clergy as clients. To address your situation would require so many questions. Clearly there is a lack of communication between this church and the minister. My guess would be to begin with asking how the minister files her/his return and whether this person filed Form 4361. You can also check Pub. 517.