Christian

A client has a twenty year old daughter who entered the local community college upon graduating from high school. She lives with mom and works as a waitress at a local restaurant. She did not get her associates degree from the college in June. Her mother tells me she is now enrolled in the six year degree program whatever that is. My question going forward is at what age can she no longer be shown as a student on her mother's return as a six year degree will carry her well beyond what appears as the cutoff age for carrying her as a student.

You are in an affluent area likely. Average fee of $218.00 would terminate my business although I have myself raised fees.

After discussing their options they decided to go ahead and file MFS even though he will pay a larger tax. Most likely they will take my advice and file jointly next year. Her retaining her former name was not the issue so things worked out ok. Better than some outcomes I have run into over the years.

Thanks for the input. I'll discuss this possibility with them to see if they want to do that. Many thanks.

Now that they have filed separately can they file a 1040-X and change this down the road ?

Rarely ever do I file one of these. An older client remarried last year. She advised she wanted to file separately and retained her prior name electing not to use her new husband's last name. Her income was limited and as a result no tax was due and no payments refunded. She later called and requested I prepare her new husband's return which I am giving him today. To my surprise there is a distinction between a couple who live together using this filing status and those couples who at no time during the tax year live together. Both of these folks draw social security. As a result of the above noted distinction he will owe tax on 85% of his benefit which was not the case when he filed as a single man. I find this really surprising and have advised them to file jointly next year.

A former client died about two weeks after her return was efiled. The family closed her bank account on the return before the Service deposited her refund. The Service sent her administrator two forms 1310 to send in but no address as to where to send their copy. I am assuming that would be the mailing address for Virginia taxpayers. Is this correct ? Oddly enough the administrator received only the forms with no letter or instructions as where to send.

I am myself am amazed her bookkeeper did not advise mom about adding these expenses to the son's 1099-NEC. I rather suspect she is deducting those expenses as a corporate expense. I advised the son that she may very well be checked on the reporting of his employment status but that is all I am going to do other than add the expenses to his reported 1099-NEC figure.

Thanks for the input. In my admittedly limited experience I have never known the Department of Taxation to question a 1099-Misc or now 1099-NEC. I will contact this guy and request mom to add up and furnish all of the truck's expenses paid by her and add those to the 1099-NEC amount and deduct them as costs to him. I may simply send this guy to the local CPA as basically I am backing away from work which could potentially involve IRS scrutiny. His parents are divorced and dad may very well have paid for the truck as I feel the parents are trying to get him going in life since he left college before finishing.

A Happy 4th of July to all of you. A young guy who evidently left college went to work for his mother's company as an independent truck driver. He lives with mom and delivers what ever goods she ships. He acquired a 2013 Mack tractor trailer and drives overnight to make these. I need to set up his return for 2022 and in collecting his info received a 1099-NEC for some $60,000 plus. All well and good. He yesterday advised that her company pays all fuel and insurance expenses for operation of the vehicle. This was not included as income on the 1099-NEC. I can only imagine what the Service will make of a truck driver with no fuel or expense deductions on his return. Any input on this is appreciated as I am of he opinion these amounts should be shown on his 1099-NEC and added to any amount paid to him personally.

I got another reminder from Microsoft on upgrading to Windows 11. I decided to download it and it downloaded seamlessly and later upgraded itself. I don't know how long they will support Windows 11 but it will likely exceed my remaining time as a tax guy. And I now have no need to buy another computer hopefully.

So essentially you are advising to buy a new machine after Windows stops supporting Windows 10 for those of us who are not computer techies. I usually do this and keep the old machine using it for other purposes protected by PC Matic. My old one runs Windows 7 and has had no problems and will get canned by the current one I guess.

I am just about ready to go ahead and install Windows 11. Insofar as I know ATX users can now update their systems and ATX supposedly will run just fine using it. If any of you experienced problems using Windows 11 with ATX please note it in our blog although to date I don't recall seeing any. Many thanks.

I thank all who replied which confirm my understanding of the law.

A minister for whom I have worked for a time brought me her list of amounts given back to her church during the course of 2022 in tithes and other cash gifts. She asked if these were not expenses of her ministry deductible against her social security tax. These are personal expenses deductible on Schedule A and deductible if along with other Schedule A deductions exceed the standard deduction. I can find no change that alters this but if anyone knows if this is incorrect please advise.

I referenced box 20 and sure enough here is what I found in 20Z1 " Section 199A Publicly Traded Partnership (PTP) Income". This figure exactly matches the number in box 1 as ordinary business income which would appear now to be available for the deduction. The worst that could happen I guess is it would be disallowed.

A client has come in bringing two K-1 1065s for an oil and gas pipeline and a coal mining company. Most of the items on them fall neatly into their assigned forms on the 1040. I am not as familiar on the Qualified Business Income deduction as I would like so I have been rereading the rules. The rules state that income from a publicly traded partnership qualifies for the QBI. The amounts reported in box 1 of both K-1s as ordinary business income on which he is taxed look to me as qualifying for the deduction. He is actually paying tax on income he did not receive. On making the computations the QBI is indicated on Form 8995-A page 2, part iv, line 28 and the 20% is duly calculated and posted to line 13 on form 1040 where it is subtracted. But on reading the QBI flow chart I run into this ." Is the item income (loss) from a qualified PTP? If “Yes,” it’s not QBI, but it’s included in the REIT/PTP component of the QBI computation. Include this item as a qualified item of income, gain, deduction, or loss from a PTP". Which pretty much negates the deduction or so it appears ?

Microsoft has been sending me reminders to move to Windows 11 stating that my current HP is Ok for it's use. I thought I may go ahead and upgrade now that tax season is almost over but wanted to see if anyone has upgraded and experienced any problems.

When placing Interest on Treasury obligations in Box 3b it produces a line entry on the Schedule B but none of the codes in Adjustment to box 3b produce what I expect so I quit. If my client asks about it I will simply point it's federal interest which is deducted from his Virginia return.

A client has come in with a U S Treasury OID from one of his banks. Time was when you could denote OID next to the entry on Schedule B by a simple override but no more. ATX shows the OID as a negative figure. All I want to do is show it as an interest entry which reads Bank of America U S Treasury OID. It's how it is entered on his prior return from his now former taxman and I like to match what folks have. Does anyone know a way to accomplish this ?

I wish to express my sincere appreciation to all of you who took the time to respond to this post and particularly to Danrvan who provided what turned out to be the final piece of this puzzle. I have just finished working on this at 12:15 AM and the client will save over $2,000 in taxes as a result of my persistence but I would never have achieved this result for him without yauall's kind help to me. This is why I appreciate this forum so much as youall's far greater experience in tax matters is always so generously shared with us of lesser wisdom.

jklcpa has essentially answered my question. The sale of his old rental was the complete disposition of a passive activity and the loss produced by setting his inherited house in 2022 is also passive. So I will look at form 8582 to see if this helps my client. No the property was a house rental clearly 1250 property. I checked Form 8582 and see no way I can deduct the current 2022 passive loss from his new rental from the capital gain produced by the sale of his older rental in 2022.

He set up a house he inherited from his mother last year and posted a loss from that but his income prohibits taking this passive loss against regular income sources he has W-2, interest, dividends, tax exempt interest and a pension inherited from his father. Could this loss be applied to the capital gain or rather part of it realized on the sale of his older rental and if so how is that reported ?

The client's property was set up in 2011 and had a porch added a few years later. Both were set up using SL/GDS and were entered on the Form 4797. ATX used the Schedule D worksheet noted above noting the accumulated depreciation on line 19 of Schedule D. Essentially it adds back all the depreciation to his income for 2022 taxing it at his regular tax rate. Let me know if this is incorrect and if so what I can do to change it. I am holding the return to go over it more carefully there is a lot of tax involved. I cannot recall how long it's been since I last had one of these and am using extra caution to insure his return is correct. Both the house and porch were set up for 27.5 years.

I renew by May 31st each season although I note others have posted receiving the same discount in November I believe. I have used ATX and their prior Saber program for many years and although running into a rough patch in 2012 it works for me.