Max W

$12K is not much for 4 commercial vehicles.  That's an average of $3K each.

I would just allocate 25% of the actual expense to each vehicle.   Only the total shows up on the return.  If it were $12K for each vehicle i would want a breakdown.

Tell your client to keep all his maintenance records and work orders for 3 years.

California and some other states have been issued automatic extensions, on a county by county basis, that were affected by winter storms, flooding, tornados, etc.

IRS says - "Following the disaster declaration issued by the Federal Emergency Management Agency, individuals and households affected by severe winter storms, flooding, landslides, and mudslides that reside or have a business in Alameda, Alpine, Amador, Butte, Calaveras ........ qualify for tax relief. The declaration permits the IRS to postpone certain tax-filing and tax-payment deadlines for taxpayers who reside or have a business in the disaster area. 

Question.  If you live in an affected county but were not personally affected, do you still get the extension?

I always file form 56 with the return, otherwise the signature may not be accepted.

If they are Real Estate professionals, the income is usually considered as non-passive.

I had a really wierd one last year.  The client mailed me a large envelope with tax docs that never arrived.  Eventually, it was returned to him.

He resent it to me in another envelope with the orginal after we had gove over the mailing address to be sure it was correct.

When I received it, my suspicion was correct - he had botched the address.   Now here's the really wierd part.  The original envelope went to JAPAN!!?? and it came back with a Japanese meter stamp.

Drake has instructions for MFS.

https://kb.drakesoftware.com/Site/Browse/10822

What I have done in cases like this is to indicate that the EIP pmts were NOT received.  The IRS will review the return and adjust it accordingly, if the EIP was paid, without penalty.  It does lengthen the processing of the return to about 10 weeks.

I don't understand what you mean "He leaves his refunds on file".    Are you saying that each year his returns have the refunds carried over to the next year?

On the Federal Sch A screen, the lower right side is dedicated to state deductions.  Everything should be clear from there.

The deductions will show up on the CA CA form and a copy of the Sch A is generated ith the other state forms.

I just want to be sure I'm doing this correctly.  RDP couple in CA - each files separate 1040 with form 8958 allocating income accordingly?

TIA

"Got behind during Covid" , may or may not be an acceptable reason.  If his business continued to run during covid or there was more than one quarter involved, it would be likely reasons for rejection..

I don't know what 2013 has to do with it.  The IRS only looks back 3yrs/12qtrs.

I'd be interested in looking into this.  But, would the client be interested.  I'm 400 miles from Santa Barbara, so everything would have to be by remote.

On 2/23/2023 at 12:49 PM, Abby Normal said:

Social Security payments dates vary with the day of the month you were born, and either get paid on the 2nd, 3rd or 4th Wednesday of the month.

 

People that began to receive thier payments before 1997 receive their payments on the 3rd of month.

I would wait until after the filing deadline to file a 1040X, because if it is filed before that it is a Superceded Return. The software has 2 check boxes on the *1040X input page for this.  One box is for Efiling, the other for paper filing where "Superceded return" is printed.  There is a major difference: for an amended return where you only need to add the interest on Sch B and send that.  For a Superceded return. it wipes out the original return and an entire new return has to be filed.

If the total Interest is lesss than $50, or the resulting tax is less then $14, no amended, or superceded return needs to be filed.

* I use Drake, but assume all tax software has something similar.

This is why TT hires EA's and CPA's to assist DIY clients in preparing their TR's.   Clients pay additional fees for phone line help.

If he doesn't want to play by your rules, send him back to TT.

Just enter the max amount below 1116 threshhold - $600.   If you were to use the 1116, wouldn't you charge something for that?  Maybe $50.

See part III of form 8606 for non-qualified Roth distributions.

Form 1099-S is for Real Estate sales.

Usually, in every case of a client rollover, a 1099-R is issued as a taxable Distribution.   Then the client has to show that the rollover occured on a timely basis.

This client should keep the relevant bank/brokerage statements to substantiate the timely rollover - just in case.....

Have you downloaded all the updates?  If that doesn't work, download the software again.  Back up your files before you do that.

This a huge, extremely serious situation.  I don't say this lightly, because the whole system could collapse at any time.

"The IRS does not have adequate information technology (IT) systems to do its job effectively and efficiently. The IRS’s core IT systems are among the oldest in the Federal government, limiting the agency’s capabilities in significant ways. Partly due to historic poor planning and execution and partly due to lack of funding, the IRS has been unable to replace its antiquated systems. Every year, instead, it layers more and more smaller systems and applications onto its core systems. By analogy, the IRS has erected a 50-story office building on top of a creaky, 60-year-old foundation, and it is adding a few more floors every year. There are inherent limitations on the functionality of a 60-year-old infrastructure, and at some point, the entire edifice is likely to collapse."

From - 

https://www.taxpayeradvocate.irs.gov/wp-content/uploads/2020/07/ARC18_Volume1_LR_01_IT.pdf

Please elaborate a little more on this. How were the use of funds lost?  Who issued the check?  Was it an insurancepayment?  Were the lost funds reported as a deduction?

If it is a recourse loan, then it is taxable; if non-recourse. not taxable.

3 hours ago, mcb39 said:

Married in October 2022; forced  to file MFJ and pay back all of ACA because income is too high.  We have tried every which way to resolve this, but instructions are sketchy.  MFJ puts them over the 400% and MFS is not allowed according to ACA.

This happened to a client of mine about 5 years ago.  They had closed out a small investment account they had and it put them about $300 over the 400% FPL. They ended up  with a $17,000 PTC penalty.    There has been no remedy for that up until this year when it goes into effect for TY's 2023-2025.

Those with incomes at 400% of the FPL and beyond will be able to obtain coverage for no more than 8.5% of their household income. 

Unless the spouse and child were included in the lawsuit, they expenses can't be deducted from the settlement, but they can still be taken on 

SCH A as long as the expenses were incurred by a licensed medical professional, and not paid by insurance.

17 hours ago, cbslee said:

After reading the instructions for Form 56, it's not clear to me which box you would check under "Section G Authority"

without waiting for the Court Appointment Documentation?   Just trying to reduce my level of confusion.

 

Line 1g.