Christian

As it turned out the girl filed her return and claimed herself which meant the couple had to drop her as a dependent. I did advise her mother the credit was available to the daughter.

Normally I efile them but this year made an exception. Fortunately for me most if not all of them get refunded.

A client and his third wife have a 19 year old daughter who they claim as a dependent who lives in their home. As she graduated from high school last year I called to inquire if he did not have tuition expenses which they might be able to obtain a credit for. He did not know and advised that the daughter wanted to file her own return for 2021. This being so she may have claimed the education credit for herself. If so is that legal? I have not reviewed the rules of late but a dependent cannot claim an education credit for expenses paid by her parent right ? The daughter is by a previous marriage so the step father who is my client actually did not know what her expenses were.

In speaking with him yesterday it was decided he would instruct his broker to distribute his 2021 distribution immediately and later his 2022. He was a little confused having gotten an IRS message in regard to his extension thinking this was from his broker. He will get a letter or note from his VA doctor which along with a brief letter from him will be attached to his Form 5329 on his 2021 return. This will likely get him the waiver. Oddly I mailed a number of extensions for clients all in a single envelope PRIOR to the April deadline only to have some getting rejection notices advising the extension was received too late. Thanks for those who advised me.

For clarification. I take it BOTH the distribution for 2021 and 2022 are indicated as income in 2022 on a Form 1099-R ? Since his filing for 2021 will show the 2021 distribution for purposes of the penalty waiver it occurs to me this could pose a problem. If they issue a form which shows both the 2021 and 2022 distribution I can see where the IRS will understand what occurred. I am assuming he needs to attach his letter of explanation to the Form 5329 giving his reason for a waiver and stating he will pay tax on BOTH distributions in his 2022 income tax. He is a retired veteran who has some cognitive issues. I would think a simple note from a VA doctor would cover the waiver issue.

I will surely do that. What you advise is taking the full distribution before October 15th. I have not had time to read the 5329 but assume it is included with the explanation. He has received a letter from his broker and seems confused about what they can do about this. It looks to me that all they need to do is make the full distribution and he must handle the rest.

After reviewing the applicable rules he may qualify for a waiver. Assuming he has a plausible reason is the Form 5329 included with the return showing the penalty but not paying it with the return ?

A client called today and stated he had failed to take the required MRD from his IRA account for 2021. I have not seen this before and am aware there is what ? a 50% penalty imposed for this. He is meeting with his broker to see what can be done but says they have indicated they will not waive the penalty. Does the brokerage access this and forward to the IRS ? No client I have ever had failed to take an MRD so this is new to me. If they assess the penalty what type of IRS form will they send him ? He is extended until October 15th so no worries there.

Yes I did in fact do the A1 although I have my concerns as to whether it was correct. It will not hurt to try a 1040-X but I doubt I will recoup a dime. I never know until December what my income will be so I plan on continue paying through withholding on my MRD which as you know are considered paid over the year. It is truly irritating to pay all these taxes and then see some young couple get thousands back for Child Credits, Earned Income Credits, Child Care Credits etc. and the wife drawing a Social Security disability payment and healthy as a horse !

This was a penalty for under payment of estimated tax for 2020 ! I sent this in in October 2020 and here in July 2022 I get the notice. I think I included a Form 2210 explaining that my income is usually increased in December in some years due to unexpected capital gains. My payments in 2020 were more than my tax bill in 2019 but all to no avail. So I will likely be filing a 1040-X down the road. In 2021 I paid much of my tax through withholding on an annual IRA MRD since these payments are regarded as paid evenly over the year. I doubt I will recover any of the penalty and as noted in attempting to discuss the matter with an IRS rep was politely informed she did not have access to the specific forms on my return. I have rarely ever paid any kind of penalty and have discovered their efforts on behalf of the taxpayer begin with something on the order of "Do you wish to make arrangements to pay your penalty? " and go downhill from there.

Well after being interviewed I finally got to review my info. I printed the transcript and brotherrr is it jockablock with info. I rarely have reason to obtain one of these and have in fact not reviewed one in more years than I can recall. I swear if a taxpayer passes gas I believe they would have a record of it. But needless to say they could not show me the actual forms I sent with my return. I could send in the original I thought I filed but IRS mail correspondence is so slow and likely they would simply inform me that I had computed it incorrectly. By the time resolved I would accrue additional penalties so I just sent them the cash and cussed profusely. As a curiosity I am wondering if I can send in a 1040-X with the Form 2210 and get the money back. What say you ?

Well I bit the bullet and tried to set up my account after determining I won't be getting text messages from third party vendors. I did not quite succeed as I do not use my cell for email messages only texts and phone calls. I evidently will need to speak in video to a rep on my webcam to complete the process. In all probability this will be my one and only use of this account to determine if I did send in a needed form with my return.

Oh no she is not a dependent but an adult. I am going to give him the relevant page from Pub 550. The problem lies in when she cashes the bonds and how to identify what part of the interest he will have paid taxes on. I feel sure he can resolve it.

Yes I keep a copy but I mail in my return so ATX has no efile to reference and believe it or not it is not beyond credulity that I failed to include the 2210 in my mailing but I don't think so. Therein lies my concern CB to setting up an ID.me account. I find it beyond belief that the IRS shares (?) this info with private vendors. How secure can that possibly be? Do I really want to accumulate REWARD points in a federal tax account ? Give me a break !

Do any of you have an ID.me account? I am looking into opening one basically because I need to examine all the forms I submitted on my 2020 income tax return and it appears an easy way to get this info. After hours of waiting I finally got a Service rep on the phone and was told she had no access to the specific forms included on my return so no luck there. Most transcripts I've seen don't show this info either. I can submit a request by mailing a form and paying for a mailed copy which is time consuming. On looking into an ID.me account I was utterly astonished to find info evidently is shared with what (?) private vendors for goodness sake ! Any thoughts on this would be greatly appreciated.

Goooooooooooooooooooooood grief ! I will need to call him and let him decide. He will likely decide not to donate them.

A client called requesting the amount he can give to his daughter before having to file a gift tax return. I advised him it is $16,000 per person. He is going to give her that amount in savings bonds he has which are still accruing interest. I advised him to ascertain what the bonds current value is to avoid overshooting the $16,000 limit. After giving it more thought I believe I made a mistake. When she cashes those bonds she will pay taxes on the interest. I feel sure a bank or whoever cashes them for her will send a Form 1099-T to her at yearend. That being so the $16,000 gift should be calculated on what her did paid for the bonds back when he bought them. This would of course allow him to give her a significantly greater number of these bonds. Is this correct ? A $16,000 gift of cash would be tax free to the daughter.

Thanks. I've been under the weather for some two weeks with a pinched nerve but thought this was how I handled one some years back.

A client who prefers getting a check for her refunds moved and gave me a slightly incorrect address for her return. The result is the Post Office returned it to the Service. Can I efile this to them or does it need to be mailed ?

I have kept my fees fairly stable over a number of years but raised a bunch this year. I sorta regretted it but am still recovering from the season and now realize that going forward I am going to be forced by age to downsize anyway. I enjoy the work but have finally reached a physical limit and must make adjustments if I plan to go forward. I am long past the point of needing the money but I like being occupied.

I should have known ole eagle eye would notice that. efile cb efile.

I had to pull some credit card statements for 2021. Normally ATX charges for any email overages in a timely manner. It does appear they missed a couple. I never receive a bill from them as they are authorized to deduct the $5.00 or so which my card folks advise me of. I don't have any email charges for this year so the charge comes from 2021 for TY 2020. Hey ILLMAS can I get a loan ?

I have just received an email from ATX listing a charge which I don't owe. On checking my account it is listed as undefined. The only additional charge I ever owe is when I exceed the fixed efile limit and they were fully paid last year. A call to accounts receivable department advised they would get back in 48 hours or so. Has anyone else received anything like this. Normally I pay in full on reordering my software in May and if any additional fees are due for any efiles they are promptly paid. I surely hope this does not presage any problems in this regard.

Well I have egg on my face. On close examination of the invoice I see my price is 12% less than the list price. Even so it is 10.5 % more which is a significant increase over past years. I want be in the business but for so much longer as the steady grind of working three months each and every day has finally begun to tax this ole bird a bit too much. Going forward I will likely increase all clients a small fixed dollar amount which they likely will not gripe about.

That was my thought as well having seen no few of my older clients totally escape tax on long term gains. She will in all likelihood do just that.