Margaret CPA in OH

Sounds very, very tempting, especially with all the gyrations we've had to endure recently.

No, IRS doesn't really care but many banks do. My AU client's bank will not accept a direct deposit in the name of someone not on the account.

An AU client's son is independent in 2020 and qualified for the money but a check will be mailed as he does not have a US bank account and he is not listed on his parent's account. Parents are planning to have it mailed back to US relative to deposit into parents account. He is looking into having an international account but I can't recall the bank-it's an internet bank. I would imagine that receiving SS it would be advisable to have a US or appropriate bank account for direct deposit. I don't believe he can't have dd into an account on which he is not listed. If getting an international bank account, be sure that it works with Philippines as not all banks work with AU.

As Expats, wouldn't you be filing Form 2555 for Foreign Earned Income and the exclusion? With the likely full amount of income excluded (I don't know the exchange rate), I don't quite see how they would qualify for any tax credits when there is no taxable income. I have not looked at a treaty, just extrapolating from my AU clients. If all earned income (until this year when they exceeded the maximum exclusion) is excluded from tax, how could there be any credit? I have not had any clients qualify for the ACTC, though.

And I thought I had interesting clients! My handy, dandy Quickfinder seems to say okay as the child is a stepchild and meets other qualifiers but wonder about those tie-breaker rules. I couldn't easily see an example like this one, though. Then I wonder if the other parent has any say by releasing exemption to the noncustodial parent but only to that parent, not that parent's new spouse. My brain hurts thinking about this. I'll go back to interest tracing.

Yes, I do have several interesting clients among many more 'normal' ones. I don't recall how I got the German folks many years ago but, through their university teaching positions, I seem to have become THE person to contact and, in fact, received another referral just yesterday. The AU folks were originally here so they don't count but are getting more interesting now that both children have graduated and are on their own. The daughter is a successful freelance illustrator working virtually. She was quite dismayed learning about self employment tax and began asking her mother about renouncing her US citizenship to avoid it. We will see how that goes. No income tax due to the exclusion but SE tax just like her father's when he lectures or consults. Thanks Judy, I will pore over that to refresh my memory. I have had to do, um, interesting tracing for another client before when they mortgaged one property to pay to purchase and remodel another. I encouraged them to mortgage the second property as soon as possible. They also took out a LOC loan for their own home and a rental. Ah, the spreadsheets...

Rita, so sorry to hear this about your mother but glad that you can be with her. You know prayers and supporting thoughts are with you and your mother from this group and more. Do let us know if we can be of other assistance. We are here to help each other. Remember to care for yourself, too.

Clients borrowed money from family (appropriate interest terms but not deductible as personal loan not secured by property) in Germany. In 2020 they refinanced the property having made extensive improvements including a rental apartment. The much higher value permitted a refi sufficient to repay family loan with cash out as well as complete additional major improvements. Rental property is 39% of property value overall - it's been, um, interesting keeping track of what costs went where. Normally on a refi of rental, some items would be added to the basis, some would be amortized over the loan life, some would be deductible. Is it correct to allocate to the rental portion these refi charges at the percentage of property value? And what about that part where the funds taken out should be used to improve the property? I'm thinking, in a sense, the private loan payback does that as the original was used to improve the property and they couldn't even get any deduction for the market rate interest they were paying. Thoughts? (At least this isn't unemployment insurance or PPP loans, amiright?)

Bar Dog Cab is outstanding! I grocery shop tomorrow morning and wine is on the list. I will see if my local Kroger has this. Always looking for treats!

Can I have a zoom wine party with Possi tonight? Can I come, too?

Just to clarify - if Box 5 is insurance, is the Box 3 amount taxable as it says and not reduced as client said originally - or am I missing something here (not unlikely)?

Well, you have some decisions to make and I don't envy you. No wonder the clients are adamant about this. Maybe getting the truth of the matter from the issuer would not be a bad idea. Wise deciding, not good luck.

In my opinion, and only in my opinion, the reason to NOT reduce the taxable portion is the cite you provided and lack of absolute knowledge as to the source of Box 5 amount. I suppose YOU could contact the issuer, with client permission of course, to clarify. I would not just take their word for it. What is this client vs your conscience and professional opinion worth? As I wrote, YMMV. We each have to make some of these gray and not so gray area decisions from time to time. What is the actual tax difference, bottom line? Do the inclusion bump them into a different bracket or affect other items?

Maybe it's robotish, but I go with the numbers in the boxes. I should think if the clients have an issue with the taxable amount as reported to IRS, they should take it up with the issuer of the 1099R. YMMV

Yes! I found that and clicked on it and have no idea what to do next. There are other icons at the top of the sample document and I see I can play with those. Thanks so much for more breadcrumbs to follow. But this is why, old school that I am, I could really use a print manual. I don't do particularly well with training videos. I like to read things, look up in an index, try out with instructions in front of me... At least you seem to have put me on the right path but, honestly, it is not obvious to me what that means. Play time in April!

Again thanks, Judy. I tried that but my screen does not have the list on the right side. That's what I recall from a prior version. And then I ended up down a rabbit hole trying to log into my account, had to change my password and it came up that I was purchasing DC which I don't want. I will have to deal with this in a couple of months but genuinely appreciate the efforts of all to train this old dog a new trick!

Thanks, Judy, but all I see are lots of icons the meanings of which I haven't a clue and none of them look like a typewriter. An new client apparently is very familiar with Adobe and I've already told him I need a consult after tax season. 'User friendly' depends on the user and icons are just not all that obvious to me. I can't tell you how long it took me to understand what 3 dots or 3 parallel lines meant. I'm, well, over 30, 40, 50, 60, oh heck, 70.

Oh, how I wish I had not upgraded to Adobe Pro 2017. I can't figure out anything and I'm the kind of person that needs a user manual. It's all online and so frustrating. I recognize that screen shot but can't find anything like a typewriter function on what I have now.

No Words!

Bonnie, I am so very sorry to hear of this terrible loss. You do know that all of us here hold you in our hearts and prayers. Be sure to ask for any help we might give. Family is always first, period, so am grateful that you took the time you needed. It seems at least most of your clients understand. Those that don't are not really worth having. Take care of yourself, too. And lean on us.

I have 'dummied up' a prior year return with total numbers before and rolled over for this purpose then input the form providers and current numbers for the current year. If you have already completed a complicated return this may not be worth it but it worked for me and new client appreciated it.

Yes, we've been able to efile 2019 for several months. I did one in August and another earlier this month. I would imagine 2020 can be efiled now, too, but seems a bit early for an amended return to me.

Odd - I just completed a Sch C with mileage on the Line 9 Vehicle Exp with no issue. He doesn't have any other assets that he is claiming, though, so no 4562. Perhaps that's the difference. Is there even a jump to Line 9 from Sch C?

Good question. One client's spouse died in early April and she sent half of it back as it was posted in FAQ's at the time. I will have to ask her if that check was cashed. If so, I will input that she received just $1200 for first.

My AU clients sent me their info. Both children are now out of school (college and high school) and working, not dependents in 2020. It occurred to me that they might be eligible for EIP payments and it seems they are as they were dependents for 2019 but not 2020. Parents received both payments, $2400 and $1200. So I checked IRS FAQ https://www.irs.gov/newsroom/recovery-rebate-credit-topic-b-eligibility and it surely seems they qualify. Am I correct? Seems odd for these folks in AU but friends in Ireland (dual citizens) got theirs, also.