Margaret CPA in OH

Jasdim, I cannot find a worksheet in Pub. 970. I did see an example on page 53 which I followed and substituted client numbers. It appears as though $1167 of the earnings is taxable which makes some sense using $4000 of the expenses for the AOC credit. However, I cannot understand why, in ATX, of Form 8863 Part III it says No for the student receiving the 1098-T. How could the software figure the credit without the data entered on the 1098-T worksheet? Also, if $1167 of the earnings are taxable, where is that entered? Hahn1040, I haven't asked yet about additional expenses but will. Just in case there aren't any, how and where is the taxable amount entered?

Okay, I am in this group, too. In comparing last year's personal return for married partners, checking basis, I noticed that I correctly entered the "-" for the loss on one K-1 entry but not on the second. So, my error, amendment free. The only good thing is that they will be getting a substantial refund as the number was a good size so now doubled in their favor. Unfortunately they had to fork over bucks last year. Nope, not perfect either, so you have much company, Possi!

Thanks, Possi. That's pretty much what I have found, just wondering if there is any way to input the Q data to offset the T data. If I put in the full 1098T amount but it was paid with $9k from 529 plan, his ed credit is overstated so do I reduce and put in the amount $1754 instead of $10754? If so, the 1098T won't match.

Client has first year college student and 529 plan. Withdrew $9000, 1098T shows qualified payments of $10,754. I understood that if using 529 withdrawals, the full amount paid to the university would not be considered for the ed credit. If so, how does one indicate the offset? Or am I incorrect (wouldn't be the first time!) and full credit is permitted. It's clear that the withdrawal is less than the amount paid so no income to report.

Thanks, Possi and Rita. 'Marked for life with terror' is what I don't want but guess I'm already there hence my original post. And I have been apologizing even though it isn't my fault. I just feel it's rude to my clients and resent that IRS trusts me so little. I used to answer the questions honestly on the form but not to excess and didn't really keep documents. Then we had to submit the 8867 instead of just having it in our files. So, documents. I just am so uncertain as to what are 'adequate' questions to ask. As most of my clients are never seen, I was hoping to attach a questionnaire for them to answer and would keep that in my files. That's why I asked if anyone had something like that already. I will do something soon although I think there are only 2-3 more folks with children. Most clients are older than that by now.

I found a simple one at silvercreekteam.com. I like that the client has to sign and date it although I rarely see most of my clients. I suppose selecting one or two of the suggested documents for the file would then suffice. It just feels weird to me.

Thanks but I don't have any EITC clients. I do have a few with children so was asking what sort of questions does one ask when one has known these folks since forever? I didn't find a tidy checklist like this one on IRS website but will still look.

Does anyone already have and be willing to share a prepared list of questions to ask and document answers (Form 8867 Part 1 #3 Interview the taxpayer, ask questions and document the taxpayer's responses...) for 8867? The clients that I have with children have been known to me since before children were born and I feel weird asking whether the kids live with them, for example. Maybe if I had a standard page of questions it wouldn't be so awkward. I really hate this part...

https://www.irs.gov/tax-professionals/ptin-top-faq-5 It's the first question so must be common.

Thanks, all. I think I've got this now. Parents mfj claim both, 11 yr old gets them $2k child credit, 21 yr old gets them $500 credit. No ed credit as they make in excess of $200k. 21 yr old is dependent, wouldn't get credit any way, doesn't even need to file. I now understand the 'other dependents' credit which can be a child 17 or over who is otherwise a dependent.

See above - parents make too much money to qualify for ed credits. That's why I was so confused as to the benefit of even claiming him as my initial reading was that, being over 17, he didn't qualify for 'child' tax credit and the $500 was for 'other' dependents.

Okay, then, NECPA! I just kept going round and round with this. Just dizzy by now. The parents may not be at the phase out level just yet, so all is good. Thanks again!

Yes. Apparently they are very friendly there but probably normal business hours.

Deb, I thought that $500 was for other dependents, not dependent children. The 21 yr old is a qualifying child as he is a full-time student under age 24 and meets all the other requirements, support, etc.

I understand that parents can 'claim' him, he meets the requirements, but for what purpose? Without the exemption, the parents get no additional tax benefit now, right? I'm just trying to get through my increasingly thick head how claiming children 17 and over are tax beneficial unless there is EIC or education credits for which these folks don't qualify - way too much income. I suppose it doesn't really matter whether 'kid' claims himself or not. I do know he can file for tax refund as he is under the limit required for filing. Just trying to truly grasp the rules - it will be painful enough to get the required docs for 11 yr old CTC.

I do have a client in Milford who takes their documents, including for Sch. C from the 1040, to the tax office. The tax folks there prepare it for free. Work city for spouse withholds workplace tax (Cincinnati). No credit anywhere, alas.

It would seem to me that it may not be necessary to file the RITA return as taxpayer has no choice in employee tax withheld so no filing obligation to that RITA muni. I am assuming that you mean the return you did shows the residence muni tax owed and needed estimates since no workplace credit. I think it costs extra to efile the RITA from ATX.

Clients have children, 11 and 21. Older one is in college so still dependent but parents get no benefit by claiming him on their return, right? Mom is physician so EIC is not applicable. Older one earned $4800. It seems he could file for refund of tax withheld but does he file as single as there is no benefit to parents to claim? With no exemption at stake, what am I missing as to whether he would file as single and claim himself as opposed to still being a dependent (which he actually is) on his parent's return? I'm sure there is something obvious but this is just weird to me and my history.

Randall, that's why I really hate the RITA form. Well, and for a few other reasons, too. Perhaps the answer is to do as Jack suggests and file the generic return for his residence muni. If the residence muni does not give credit for other tax paid, I think he may be SOL. There are a number of small munis in the Cincinnati area and residents and employers with the same problem. Many allow credit for the workplace tax withheld, but not all. I guess one just has to understand the rules when choosing where to live and work. I doubt just filing a RITA return will give the result you seek. Work through the form but it probably recognizes who gives credit and who doesn't.

Now that's funny - triple posting the reassuring reply. Ah, the memory retrieval thing - it gets increasingly weak these days.

Nevermind - I just looked again at that 2017 return and actually did it correctly depreciating everything for just a half year but didn't dispose as waiting for the sale. Yay, me! Note to self - do a better job of reviewing situation before asking already answered questions.

Client had rental vacated in July 2017 so decided to leave vacant and renovate for sale. Sale took place in February 2018. In January 2018 I had the total for the renovations paid in 2017 and booked but did not depreciate. However I did not dispose (or take out of service) the earlier building costs for 2017 as they were going to rent again if it didn't sell. In ATX was there a better option to choose for 2017 with knowns/unknowns? Is an amended return required? What normally happens when a rental is removed from service for a period of time?

On Schedule 1, line 10, follow the arrow and choose the first option m 1040, Individual Income Tax Return and Schs 1-6 Ln 10, Sch 1 - Tax Refund. I think that is the worksheet you want.

Well, dang! I shall ignore instructions and go for this now. It will make my life easier, for sure. Guess I wasn't bold enough once Silverton did this: Questions regarding the new tax code should be directed to the Regional Income Tax Agency (RITA). and this: EFFECTIVE JULY 1, 2008 THE VILLAGE OF SILVERTON EARNINGS TAX IS ADMINISTERED BY THE REGIONAL INCOME TAX AGENCY (RITA). I did just reread the tax code effective January 1, 2016, and it does, indeed, state a generic return will be accepted. Many thanks, Jack! I hate the RITA return, did I say that already?

Right, but RITA isn't, as you know, a municipality. It is Regional Income Tax Agency collecting for many municipalities. Locally, for example, Silverton utilizes RITA and does not have the ability to collect its own taxes.I just dread the time when munis mandate electronic tax payments. I believe OSCPAs is really pushing for everything to be centralized, which admittedly has some appeal. It wasn't great when one contractor client I had was required to file 27, yes, 27 different local returns. I had General City Returns up the wazoo (technical term). Glad when I fired him.