Max W

Thanks Judy.  That is exactly what I had told the client.  The issue came up because the client was a referral from another tax person who had given the client false information.  I just needed confirmation that I wasn't missing something, because there is substantial amount involved.

A new client is being audited and one of the expenses are dinner meals.    Client installs office cubicle, partitions, etc.

He works most of the time around 10 to 12 hours a day.  He takes a dinner break after 8 hours, rests up a bit an goes back at it.

Can he write off those dinners and what support would he need other than a log with date, time, cost and site location?   

I there a lot of wash sales, the best way to go is with Tradelog, or Gainskeeper.   They will produce the 8949's.   

Well done, Judy.  Life is too short for have this kind of people in your hair.  Best wishes for your husband's speedy recovery.

It is not a sale, it is a gift and FMV will only come into play if the church sells the property at a loss over the donor's basis.

I came across this article which seems to say that the 2019 NOL waiver to carry back has to be made by the due date of the return with

2019 only has accumulated losses carried forward from 2017 and 2018, there were none in 2019, but most of the loss is being carried forward to 2020 and on.  The way I see it, those losses are treated as if they occurred in 2019, because the exemption has to be made in each year that losses are carried forward.

It seems that they can still apply the applicable losses to 2019, but that the remaining losses can not be carried forward.  However, they could be carried back.

Yes, indeed.  It is a jigsaw puzzle.

https://www.wilsonelser.com/writable/files/Attorney_Articles_PDFs/168tnf2379-hosny_9.28.2020.pdf

New client had NOL's from Sch C business in prior years.  The election was to carry forward.

The last loss was in 2018 and they came to me just recently to file 2019 and 2020.

Since they are late filing 2019, can they still take the loss?

I have been able to move payments, using the practitioner line.  Of course you will need a 2848, or 8821.

5 hours ago, Pacun said:

I think we will have to amend those who now qualify for EIC, especially if they didn't qualify before.  I have a couple that will now qualify and a few that their refund will be increased by a couple of thousand dollars or more.

Yes, amend, but only after the IRS has amended the unemployment, first, and the client has received a letter stating so.

There is no need to amend those returns with unemployment income that were filed prior to the exclusion update. The IRS will amend those returns and send any refund directly to the taxpayer.

(Announced by Drake this AM) 

Drake announced 38 mins ago that it was ONLY being extended to MAY 17.  

It does not include an extension for estimated tax payments - still Apr 15.

Drake announced that its software for the UI exemption will be ready tomorrow morning.

A W-2G is only issued for payouts that exceed $1200.   There are going to be quite a few into the several hundreds.

Imagine how much time it will take to enter all of those.  If it were my client I would put them on extension and when the transcripts come out in late May, paper file the return.   If you get the Summary transcript, you won't even have to add them up.

I found a shortcut to entering the W-2G's.  The only items that need to be entered are the Winnings, Date, and Type of bet (slots, poker, etc).  and back up withholding, if there is any.  (it is 24% for slots, bingo, keno for payouts of $5000+; for anything else, the withholding starts at $600)

You can bet  this one gets audited.

Tax Dome is somewhat similar to Canopy, but is less expensive.

For $600/yr upfront, they provide unlimited E-signing  a portal, a website, CRM, etc.   It also integrates with Drake, Lacerte, Pro Series and a few others, but not ATX.

What experience if any has anyone had with Tax Dome?

On 3/1/2021 at 12:34 PM, Pacun said:

I was able to get the EIN by trying during "business hours".  It is interesting that they have a schedule since it is a computer generated number without any human intervention. 

They need to save on the light bill to pay for the triilions of $'s in debt being racked up.

I got a good laugh out of it.

I keep a 4 inch, lighted magnifier on my desk for such things.  

4 hours ago, BulldogTom said:

Years ago I had an IRS RO tell me that the best way to get an audit letter is to do the 50/50 split of income on MFS returns in a community property state.   He said that since none of the documents would match up with the taxpayer (W2, 1099, etc.) it almost always ended up in a letter to both spouses.  He said that if each spouse took their income onto their own returns, there would almost never be an audit.   Not sure if this was true, but I thought it was interesting.  

Tom
Modesto, CA

From my experience, I think it was true.  But now, there is form 8958 to allocate the income and with Drake the returns can not be Efiled unless you use a workaround.        I have a few MFS clients who do not live together.  In some cases they do not even talk to each other, so how are you going to get the information.   

I don't know why it is not 24/7, but apparently someone has to intervene, or maybe they just shut the computer off to save electricity.  

Did you try during 7 AM and 10 PM EST?

1 hour ago, Slippery Pencil said:

Aren't counties exempt from FICA?

Only if the employee is enrolled in a pension plan, such as 403b, 457, TSP, etc.  Not likely for an election worker.

Only form 982 is needed if all the debt is excluded.   Ten or 12 years ago when the housing market crashed, we filed a lot of COD's in the several hundred thousand $ range and there was never any issue with the IRS.   I think the highest amount was over $800K.

On 2/16/2021 at 12:17 PM, BulldogTom said:

This is one thing I wish the IRS would change.   It seems very inconsistent that you can take money from 1 retirement account penalty free for a first home purchase and not from another.   Rant over.

Tom
Modesto, CA

Isn't that what the "I" in IRS stand for  - Inconsistent.

All kidding aside, it is congress, not the IRS, that creates retirement plans and their requirements.  What is inexplicable is why there are 9 different plans.

When the mileage is low, and there is no depreciation, I have always put it under Other Expenses.  Same goes for rentals.  It saves a lot of time and hassle.

1 hour ago, Abby Normal said:

But it sounds like SSA doesn't forward the bank info to IRS.

Perhaps not for the stimulus payments, but what about the monthly SS checks?

Client owns a multi unit rental property and he occupies about 40% of it as his residence and wants to install solar panels this year.

I just want to be sure I am not overlooking something here with all the recent tax changes. so is this correct?

He would get a 26% credit on his portion of the building, and the remainder of the investment would be depreciated over 5 yrs./MACRS, with the credit being taken by the installer.

The credit on the residential part reduces the basis on that part of the building.

TIA