Margaret CPA in OH

Not as slow as I thought it might be given the last minute rush. I can't believe how many of my clients, given 3 extra months, still have had trouble getting their act together. It's truly annoying, I have to say.

My newsfeed is just a copy from IRS about the deadline and extension info. Nothing as detailed as the above and not personalized from CCH or WK. At least Lion graciously shared.

Thanks and wondering why I didn't get this message. It may be addressed to CCH clients but it is from WK Tax software of which ATX is one. I do still have 3 really last minute folks so maybe can 'encourage' them to get with the program NOW!

Darlene, I echo everything Donna/Possi has said. If there is the smallest chance that she is still there when you arrive, go. Don't be circling the airport as I was. Work? Family is always, always first. You have just one mother. She needs you - you need her. Grace and peace, Margaret

I've always liked the tax summary as it simplifies and condenses the return for folks. Honestly I've never carefully reviewed or confirmed the calculations, just skimmed over AGI and a couple of other numbers. But today a client called freaking out on looking at her return because the right side column had Total Income equaling the Deductions. She actually had negative AGI and standard deduction of $12,200 but the summary shows total income of $12,200. I looked at the master form to check the calculation but there is no access. Guess I have to let ATX super programmers know that there might be an error. I'm embarrassed it took this for me to find it. On the other hand, virtually none of my clients have negative income and with any positive income, it does work. It's always something.... and I am really tired of this season with still 9 footdraggers.

From Church & Clergy Tax Guide 2020: General rule-housing allowance precludes a home office deduction. But check the audit guidelines for ministers. Confirm the four requirements for a deduction - exclusive use, regular use, convenience of the employer and principal place of business. The first and second may be fine but check on the employer convenience issue especially if the church has an office available and the last item may be an issue. From the guidelines: In order for a home to qualify as a principal place of business...the functions performed and the time spent at each location where the trade or business is conducted are the primary considerations and must be compared to determine the relative importance of each. and The church often provides an office on the premises for the minister, so the necessity of an office in the home should be questioned closely. Furthermore, since the total cost to provide the home is used in computing the exempt housing allowance, home office deductions for taxes, insurance, mortgage interest, etc. would be duplications. While this doesn't specifically address an offset against SE tax and at least one exception was listed, I would be very hesitant to do that. The exception listed showed that the minister used the home office to meet with members and it was the focal point of the ministry. However, the housing allowance did not cover all housing expenses. By the way, if the entire housing allowance is more than used up for housing and Sch. C is nearly a loss, how does this person live? Asking for a friend.

So welcome, Glynn Willett! So happy you found this diaspora of ATX users, many of us for decades. Like Abby, I also am a big fan of ATX since 1998. And will use it until retirement hoping it lasts that long. Many of us have very fond memories of the great group in Maine years ago and several of us contributed to a picnic for them in appreciation. We were loyal because they deserved it! Keep in touch!

Guess I will skip it and use my time differently Intuit not being my favorite business any way. And if Catherine wasn't chosen, I don't have a chance!

I just received an email about this. The study takes an hour with $100 Visa Rewards Card for compensation (if selected for the study). Anyone else get this? Just thinking about how busy I am and maybe $100 is decent pay for sitting on my chair.

I did, first time because it's virtual. At $8/hour cpe, it seemed a good price. Besides, with no travel this summer, and only 2 hours per day, coffee in the morning, adult beverage in the afternoon, could be worse!

It seems that you are more fully grasping the correct handling of clergy tax reporting. It appears as though the earlier returns reducing the HA are wrong. It seems that Form 2106 reduced the income that was taxable and again reduced the amount subject to SE (assuming the total exceeded the standard deduction). As mentioned in an previous reply, the salary and HA are fully taxable for SE as would be any net Sch. C income. When Form 2106 was discontinued, it was a bit detrimental to some clergy without Sch. C income to possibly offset that. As Rita B pointed out, there is now a mechanism on Sch. SE to deduct unreimbursed expenses there. The instructions state to attach an explanation. I have not had this issue so am a bit washy about this. Read the instructions yourself. It could be the bottom line would still be the same but determined in an unusual way. I believe the ATX clergy worksheets and your Taxbook reference will go a long way with you now.

i looked at the client vouchers for my client as well as the letters for both federal and state. I had to print them to provide to the client as they like to mail in payments. All the dates are correct, July 15 for both first and second payments.

orioncarrier, I directed you there because your original post, in paragraph two, stated that you were accustomed to hand entering a reduction amount and referenced the numerator and denominator which would adjust the final figures. I've never had to do anything like that but was assuming that you knew what the outcome should be but not quite how to get there. If those adjusting fields cannot provide what you believe is correct, I honestly have no clue how else to get there. Perhaps try some figures and see what happens. You are correct that the average support person doesn't understand much at all. Sometimes, alas, even the the higher levels and programmers don't either so the burden is on us to know what the outcome should be and not rely 100% on the software - much as we would like to. Perhaps the most expensive software will jump through all the hoops for us but I doubt it. I think annually or so, some organizations presents a set of data for various tax firms and software to determine the correct result and rarely do they all agree. Do your best, sorry I couldn't be of more help.

I'm thinking browser, too. I have not had success with Firefox which is my default browser so have link on my desktop to E-services connecting through IE. That is the only time I use IE and I never use Edge or Chrome - well, almost never unless forced to do so.

I just checked a client's vouchers and both 1 and 2 show July 15, 2020. Maybe delete and reload the form?

So glad you found this helpful. I see you are from/in NY. I may call upon you for assistance should my one NY client return. This a such a great group.

All interesting discussion here. I wonder if OP will respond with more facts or any additional information. We are quite good at offering possible solutions to a sparsely described situation. I will be very interested in the whole story and correct tax treatment, if any. Always ready to learn more!

The Ohio school district return. SD100, is part of the Ohio state return, if applicable. If the state return is e-filed, the SD-100 goes with it. RITA is a pain. ATX charges extra to e-file, I think you have to purchase Ohio cities package to do that. I have 3-4 clients who have to file RITA returns. I print them out to mail. One client has hers prepared at the local office in her town for free - I encourage that. I am quite surprised that your federal letter says the SD-100 and the local returns are e-filed. I've never seen that in a federal letter for, lo, these many years. I wonder how that came about. Are you using ATX?

Have you entered this on the Input sheet for 1116? It looks as if there is a place to make the adjustment you need. (t) and (u) have lines for General Limitation adjustment to numerator and denominator. With the input sheet it appears that you have the ability to customize both for each item that you are listing. IF I understand the issue....

Christian, the housing allowance is excluded from income tax only (unless the documented expenses are less than that amount). The allowance is included in the SE calculation unless the minister is retired. IRS 1402(a)(8); Treas. Reg. 1.1402(a)-11(a); Flowers v. Commissioner, T.C. Memo. 1991-542. As mentioned in my earlier response, "Actual expenses can be supplies, maintenance, telephone, cable, etc." That would be on line 4d. So 4a would be the allowance, say, $5000. Probably 4b is blank but you have to ask. 4d. would be as mentioned and could add up to a fair amount. 4e is pretty clear but know what all the utilities are. It's quite likely that 4f then could be $6000+. Sometimes the utilities alone could be as much as the allowance. And often the FRV of the home is much higher than either the HA or the expenses. As Lion said then see that the lowest amount is the HA making none of it taxable for INCOME purposes. If the amount is higher than the others, the excess must be included on line 1 with wages. Click on that link and you will see Non W-2 Wages, Salaries, Tips, etc. line 16 Clergy excess allowance. This has happened to my clergy clients just once. It's hard for me to imagine an NOL without a Sch. C and I don't think any unreimburse employee expenses could ever by offset by the housing allowance which is just that - for housing. It may be that the prior preparer was trying to save the unreimbursed expense deduction when 2106 went away.

Church & Clergy Tax Guide is by Richard R. Hammar, J.D., LL.M., CPA with Church Law & Tax.

ATX does, indeed, have a proper worksheet to use for clergy called 1040 Clergy. It is pretty good, I think, and puts the right numbers in the right places. Schedule C is used when the clergy person has additional income from being a guest minister, is paid separately for officiating at weddings or funerals or other income sources not part of the salary from the church. Only those expenses related to that income are typically used to offset the income (mileage, other transportation, etc.). Typically mileage directly related to the performance of regular duties is reimbursed by the church as are other professional expenses - books, conferences approved by the governing body, etc. As ministers usually exempt themselves from SS and MC, they are subject to SE tax on the salary, any Sch. C net income, and the housing allowance. Only the housing allowance is not subject to income tax - unless there is excess. That is the minister must provide proof that the housing allowance was used in total for housing. In the case of your client, FRV means Fair Rental Value. A local realtor should be able to provide that by comparing a house of the comparable size and amenities to the market. Your client should also provide the total of the actual expenses and utilities. Actual expenses can be supplies, maintenance, telephone, cable, etc. This should exceed the housing allowance. If not, and the fair rental value does not, the excess is taxable income. I'm a long time subscriber to Church & Clergy Tax Guide, have had several clergy clients, and was church treasurer for many years. I won't say I know it all but do have resources available should you have questions. There are also a few others on this forum with a wealth of experience in this area.

Thanks, Lloyd Hudson, for clarification. I just know that I used Parsons for 1996 and moved on to Saber/ATX after that. At least I think so. In my old QB files I see Parsons Productivity software in 1999 and ATX 5 PPR in 2000 then Saber in July 2000. At $353 I'm guessing it was a renewal but in January 2001 I upgraded to MAX for $277. My descriptions of 'software' were less than complete back then - well, still are.

I use Backblaze.

Yes, my Personal Tax Edge software for tax year 1996 is from Parsons Technology. That was the first year on my own and affordable. Yes, it was bought by ATX which is why I switched and have been with ATX since through the succession chain of owners. It's the program I know best and with just a couple more years to go, the one I will stick with.