Christian

It's been a long season. The question of the EIP and rebate payments are resolved. My question is this. Their combined agi for 2020 is in excess of $150,000 which means on their mfj return his benefits of $5440 must be included. On using the mfs filing status both partners' income exceeds $75,00 excluding the unemployment benefit. One would think he would need to include the unemployment benefit in his income but I have gotten other info each marital partner may EXCLUDE the unemployment benefit as each one is afforded the $150,00 cliff. I find this surprising and am unable for now to find a confirmation of this myself.

In an entry I was involved in the question arose as to whether the unemployment benefits on a mfs return are included on a client return when both clients income exceeds $75,000. According to a response I got the cliff is $150,000 and applies to both clients so in this case the husband does not need to include the benefits in his mfs income. I have not had time to check this out but would appreciate any input on this.

For the first time in quite awhile I screwed up on a client return. I apologized and advised I would return their fee. They were gracious and refused only to find I had later saved them a bunch on an item they had overlooked. This has surely been the most screwed up tax season I personally have experienced in almost forty years of being a taxguy. Now the Congress is going to rehash preparer oversight. The last time around I drove in excess of 150 miles to take a test which embodied very little of what I see each tax season. The test center was located in a non-descript tiny strip mall buried in a large metro area which took ages to locate. I passed but to this day I am unsure how I did. At last I can now address the plant world overwhelming the yard.

I am assuming the IRS would have used their 2019 filing to determine their EIP payments.

Let's see their first two rebates had been received. Both exceed $75,000 using the mfs filing status. As the Service has advised to simply disregard amounts sent in error I see no problem. However, since his income will exceed $75,000 even excluding the unemployment insurance benefit my question is will it be included in his income and I think it would be. Their combined income remains in excess of the $150,000 cliff.

It does reduce the federal tax. The unemployment is his and leaves his income over $75,000. So is he required to include the unemployment since his income exceeds that amount ? I have no clue about the remaining $1400 rebate. A number of unanswered questions and this ole bird is plum worn out today.

Idea never occurred to me. Out of curiosity I'll check it but doubt there would be a saving as the capital gain would be assignable to one and the unemployment to the other.

I caught it. I checked the wrong box in the info section. It's been a long and frustrating season. I thought all unemployment insurance was subject to the $10,200 exclusion only to learn today that couples with income above $150,000 pay on any unemployment benefits. The couples' income normally runs $80,00 a year but thanks to an unexpected capital gain shot over the limit making me with mud on my face. OF COURSE, this is the ONLY time in almost 40 years this has occurred.

Well he relented.

A farm client has posted losses for quite a few years and as a result has an accumulated NOL. This year another loss except instead of the loss showing on line on line 34 as expected a notation to the left of line 34 shows PAL. I've not seen this before but suspect it means he no longer can deduct these losses. If someone can enlighten me I will appreciate it. Normally most of my farm clients post a profit at some point but not this one.

Interesting you bring this up. My fees are not unreasonable. I went up some $25 on a client who I had just given his return which will get the couple a refund in excess of $10,000. I simply told him that I considered investing $225 dollars to get a $10,00 return was a good deal. He mumbled he had not got back a like amount from last year they being victims of ID theft with the 2019 return still in process. I kept silent as I had read the letter sent to them by the IRS which pretty clearly indicated his new wife had herself filed the return with her social as the primary social. And this from a marriage his mother said was "A marriage made in heaven." When you wait to become 40 years of age to marry a dingbat with two like minded teenage daughters I should have expected little else.

I have completed my own federal tax return for 2020. Surprised to find I am due a small refund. The Service in the last few years has been assessing a penalty the first of which was excused by the Practitioner Priority Service for the 2018 return. The tax law changes that year excused it. The IRS rep said at the time my first time waiver which had never been used was still available for future use. Last year I got another one but just let it slide as it was not all that bad. This year I suspect they will likely find some deficiency or other so I plan on using my first time waiver which I surely qualify for. My question is do I wait for the notice to come or send in the Form 2210 with the return requesting it ? Formally I never had this problem but with increasing good fortune I now see I need to track my income quarterly and make needed adjustments which I will do for 2021.

Good to have a simple home based business unless you get one of those "Did you receive your first and second EIP payments?" As a blank expression fills their face you sigh knowing you've got another throwback.

P. S. As it turned out he did not need the installment agreement. He had not received his second EIP which when added as a refund almost covered his liability.

I am efiling a client's return who will need to send in an instalment request with his first payment. I rarely if ever prepare one of these and am assuming he sends in the agreement with his Form 1040-V. Is this correct ?

This is ,of course, the VRS pension wherein the individual purchases his or her health insurance through VRS. I have seen the premiums shown on the VRS forms but never had this to come up most likely since the ones I dealt with were not connected to law enforcement.

Sad to say I need to scan down on these 1099-R forms. My client list is pretty static and little changes which puts me in a habit of being a tad bit complacent along with being an old coot. Thanks all. Possi that's a valid point I'll need to ask her about .

A new client came in today advising that her husband who is a retired deputy sheriff is entitled to a $3,000 reduction in his retirement pension for amounts he pays for medical insurance. Not having any retired public servants I was not aware of this benefit. On prior returns the benefit is denoted as PSO to the right of his stated pension benefit which is shown on line 5a with line 5b being reduced by $3,000. Does anyone have a clue where this is dealt with in the ATX software ?

For my part ATX works just fine. As for growls the tax system provides me with plenty of those gastric and otherwise.

Has anyone here have any clients who have yet to receive their refund for 2019. A client who filed in October on paper is still waiting for his anxiously.

I found this on a North Carolina site which can be accessed by typing the word DSIRE. It lists energy incentives by state. Program Overview Implementing Sector: State Category: Financial Incentive State: Virginia Incentive Type: Personal Tax Deduction Administrator: Virginia Department of Taxation Start Date: 03/23/2007 Eligible Renewable/Other Technologies: Fuel Cells using Non-Renewable Fuels Eligible Efficiency Technologies: Clothes Washers, Dishwasher, Refrigerators/Freezers, Water Heaters, Furnaces, Boilers, Heat pumps, Air conditioners, Programmable Thermostats, Other EE Applicable Sectors: Residential Incentive Amount: 20% of the sales tax paid by an individual Maximum Incentive: Not to exceed $500 Equipment Requirements: Must meet federal Energy Star efficiency requirements

The following is allowed a 20% deduction on sales tax paid for qualifying equipment or appliances in Virginia. "Sales Tax Paid on Certain Energy Efficient Equipment or Appliances - Allows an income tax deduction for 20% of the sales tax paid on certain energy efficient equipment or appliances, up to $500 per year. If filing a joint return, you may deduct up to $1,000". Are solar panels and the connecting battery pack considered energy efficient equipment in Virginia ?

Like all I have been busy helping folks. Has ATX installed a patch or fix for the changed federal tax status of unemployment benefits?

Well thar she blows just like she was supposed too. Now i and can eat a sandwich and hit the sack.

Thanks Pacun I just knew I missed a toggle somewhere and did not scroll down and see the check box you speak of. No excuse just getting a bit tired it's been a trying tax season. I had my second Covid shot awhile back and awoke with a 102 degree fever idling me for almost three days.