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Christian

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Everything posted by Christian

  1. Speaking of IRS notices. A client who filed late and owed the princely sum of $147 which he sent in shortly after efiling got a penalty notice which is so convoluted it will take a me full two hours to prepare a letter to address it ! His penalty will likely be a big $30. I myself received a request from the Service requesting a form for my return to report $27 (twenty seven dollars) of income from a small holding I own. TWENTY SEVEN DOLLARS ! I shudder to think what is coming down the road with all these new hires.
  2. I suspected this was going to be a one trick pony. What about all that age discrimination you once heard about ? It seems to me patently unfair that a 25 year old qualifies but a 65 year old does not.
  3. For 2021 the credit was enlarged to include workers over 65 years of age who previously had been excluded. I've not seen anything to indicate this provision was extended for 2022 or later years. Have any of you ? I have one or two clients who greatly benefited from this provision for 2021.
  4. I must be special. I just renewed.
  5. Thanks to all of you who replied. I too bookmarked cb's site. I have prepared the client a Form 843 and will give it to him tomorrow with the advice he mail immediately by certified mail with the return receipt. He has a clean record with no penalties of any kind for over three years. Hopefully this will address this problem.
  6. Many thanks Cathy. I will give it a shot.
  7. The first time abatement occurred to me as well. I guess it would do no harm to send in the Form 2210 with the understanding it may not work. In a word he got wrapped up (when have I not heard that remark ?) and after three and one half months simply could not get his act together. He usually gets refunded but this year his luck ran out.
  8. I cannot remember the time a client received a penalty for filing his return after April 15th. This year one did and also had to pay tax with his return. He got penalized not for any underpayment but for filing his return late and it is quite a lot of money. He has never had any tax problems until now and I am far from being knowledgeable on penalty waivers. Is there any available reason he can get this abated ? He had no health issues and was not out of country.
  9. With the 2023 tax season not so far off I am wondering has anyone read or heard whether ATX is going to require Windows 11 in 2023. My guess is they are still supporting Windows 10 but it never hurts to make certain of this sorta thing.
  10. I am just reading a notification from the Service regarding efile providers having to be fingerprinted. I am thinking this requirement is for new applicants only and that us long time providers are exempt. Right ?
  11. Christian

    RMD

    Well , of course, I did all of the above and then came up against the ATX statement advising to the pay the penalty which threw me off. I merely ran a line through that part.
  12. Christian

    RMD

    If you feel that you missed the deadline due to a reasonable cause, then you may ask the IRS to waive the 50% excise tax. The request for a waiver may be included in a letter of explanation, which you attach to your tax return (Form 1040) along with your Form 5329. When requesting a waiver, do not pay the excess accumulation penalty up front. Instead, follow the instructions for requesting a waiver in the Instructions for Form 5329. If the IRS does not honor your waiver request, then you will be notified. This looks to be my answer and I will simply ignore the ATX instruction.
  13. Christian

    RMD

    I have prepared my client's return and am going to mail it to him next week. ATX has a form to add to the Form 5329 detailing the client's reason for not taking the distribution in 2021. After completing it it shows no tax due BUT it states the penalty is to be paid with the filed return. Which is correct. He has provided a letter which is going to be attached to his return explaining his reason for not taking the distribution. I was under the distinct understanding the penalty was NOT to be sent with his return. He has now taken his 2021 and 2022 distributions and so has cured the delinquency.
  14. Christian

    Bitcoin

    I note some questions in the press about the IRS question about digital currencies which is now on the Form 1040. I have a client who purchased some Bitcoin in 2021 and is simply holding it as an investment. I answered no to the question as it's phrasing seemed odd and have since read pros and cons as to the correct response. If memory serves it asked if you received ( as in a gift or being paid in Bitcoin) and since he purchased it I thought no would be correct. What is your opinion? I see they are going to rephrase it again for the 2023 filing season.
  15. Well I now see what his problem is along with the five year rule. Like others he sorta wondered into this arrangement not fully checking it out completely. He now wants to modify his distribution method due to stock market losses transferring a part of the account into some form of annuity arrangement. It's all very interesting so I sent him a copy of the report I had and he and his broker can sort this out. Personally I suspect if they are not really careful they may run afoul of the regs. He began distributions last year so whatever rules apply were in effect then.
  16. A client retired last year having placed his company plan into a personal IRA. He put a 72-T plan in place until reaching age 591/2 in some three years. He has the expectation that on reaching 591/2 he can increase his distribution. My reading of the info I received from a member of our board from the Slott Report commits him to a payout for five years in the amount he set up irrespective of the fact he turns 591/2 in three years. The question is can he raise his distribution once reaching 591/2 or is he stuck with his fixed distribution until five years have elapsed ?
  17. Christian

    MFS

    This is wife number three. They both have wages of about $75,000 each and contribute big chunks of their incomes to 401-K plans. There is no joint income. They likely thought this would offset any additional tax but he also has a great income stream from dividend income which he recently got from his deceased mother along with money from a rental. It's a simple case of no tax planning and might prove a lesson for him. His Bitcoin remember that of the $100,000 dollar value? It is now at about $21,000 a coin not $100,000. He is not exactly doing an Irish jig over that either.
  18. Christian

    MFS

    The husband here decided to make a huge bet on Bitcoin "My source advises me it will hit $100,000 by the end of the year". With such a huge amount of money dropped into the couple's income stream he failed to remember that our system is progressive and he went into a higher bracket. He never bothered to call me to discuss what might happen by taking this action but in truth people rarely do so now he is going to pay a not inconsiderable tax bill.
  19. I have had time to review the info provided. I see precisely what you are saying. He is of the impression he can change his distributive amount at 59 1/2 which clearly is not the case as he will need to wait the full five years. He set this arrangement up with his selected fiduciary and I do not know which method they picked for his distributions. Worse when his first 1099-R form came in January the code in box 7 was 1. I called his broker to request it be changed to 2 and to my astonishment was told they did not provide tax advice. I attached the necessary form indicating the correct code. I recently received a call from the broker indicating his client wanted to make a change which he felt sure was ok but wanted to discuss it with me. I am going to photocopy the info from the Slott Report and provide it to my client and he and his broker can decide what is to be done. I thank both of you for clarification on this matter. Every other client I have served in the past who used this method for early IRA withdrawals have come to me with properly coded 1099-R forms but there always comes someone with his own set of ideas.
  20. He took his first withdrawal last year. He was retired for 11 months. Are you saying he can modify (increase) his annual distribution once and not incur any penalty ? Of course, I am assuming he will have to use this increased amount each year having made this change. Knowing him he likely will want another change next year ! I am astonished the fiduciary on this account does not handle this type of detail.
  21. Christian

    MFS

    Well Margaret it did not work. Although his tax dropped hers increased by a greater amount and their federal tax was more under MFS. He will just have to pony up. Interestingly the wife's W-2 income when taxed as a single person or as married filing separate shows a significant federal under withholding and is her only income in their situation. They have a farm loss which evidently mitigates this I guess.
  22. A client retired early at age 55 and transferred his retirement account formerly provided and held by his employer to a personal IRA. Since he is not yet 59 1/2 he established a uniform withdrawal plan which is in place until he reaches 59 1/2 which exempts him from paying the 10% early withdrawal penalty. He now wants to take out more than he set up to withdraw annually. Will he pay a penalty on the amount above what he established to withdraw annually or the entire amount taken ? Will this negate his agreement going forward or are there exemptions to any penalty under a uniform withdrawal arrangement.
  23. Christian

    MFS

    No social security as both are too young. After I complete the two separate returns I will do my DUE DILIGENCE that moniker the IRS so dearly loves and simply see if the combined tax due on both returns is less than the amount due on the already completed married filing joint return which I had ready to return to the couple. Hubby is delighted that wifey will have to pay her share as he usually gets stuck with any balance due. What was that old song "She got the gold mine I got the shaft".
  24. Christian

    MFS

    Thanks Margaret this will greatly facilitate my work. Much appreciated and lucky me the spouse has only her W-2 the rest is his.
  25. Christian

    MFS

    I rarely check the MFS return status primarily because I hardly if ever found it benefited a couple. One of my clients thought that because he reinvested the proceeds of amounts he withdrew from some qualified accounts (IRA & 401-K) into Bitcoins he owed no tax on them. He did not bother to call me to ascertain if his understanding was correct and plumped down some $90,000 plus into his Bitcoin account. The fiduciaries of the accounts evidently got him to withhold some tax but he fell short of the mark. I ran the MFS ATX checker and it does indeed show a tax saving. My question is do I need to reconstruct two separate returns from scratch or is there a toggle in ATX that will transpose the respective information onto two separate returns ?
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