Christian

I have taken on a client who has a Foreign Tax Credit from 2021 which he had to carryover to this year. I looked to see if I might place it on Schedule B of the 1116 as a carryover but do not see an applicable line. I can count on one hand the number of Form 1116s I have prepared. The amount involved is some $347. His info indicates none of his funds had any Foreign Tax taken out in 2022. I am just wondering if I may put it on Schedule 3 of Form 1040 on line z identifying it as a carryover from 2021 ?

Just sent in my first efiles and this popped up after they were federally accepted. On transmitting the state efiles a blurb popped basically explaining the efile setup. Is this what the Accepted With Messages is referencing ?

It's not as worrisome as it may seem. He has a seasonal lawn service business. He totals his Form 1099s he receives from the business customers he serves. He adds a figure in on any other income. His expenses are basically receipts for gas, oil, materials used, and depreciation on his equipment. His problem if one should arise will be claiming his son which I have repeatedly advised him of. The Service does not specifically rule out a notarized affidavit but whether it would satisfy them is open to question. He's one of our southern good ole boys whom I will miss but age curtails everything.

Keeping up with client's social lives is not something I get into. A relative of his came in and sorta updated me I guess one might say. I have had extensive conversations with his wife as well over time. I have pretty much decided since I am gradually leaving the business this 2019 return will be my final work for him. Essentially I am keeping the ones I want and doing what most of us do at this point in my practice and make tax time much easier. Your input is as always is appreciated.

I accidentally sent this off before finishing it and editing. As noted she provides a notarized statement attesting to the son living with him. I this go around again reviewed this with him and he advised " I ain't worried my wife will swear to him living with me". I note on his return on line 5 of Form 8867 Notarized affidavit from wife and the Service has yet to raise any questions. And now he is off living with his latest femme fatal on a local lake. Some guys have all the fun.

I hate to be the skinflint in this discussion. Yes his Social Security tax was paid. By folks like you and me my friends and when he draws those soooooo sweet benefits his out of pocket contributions will for the most part been 0. There is not the shadow of doubt in my mind judging by his lifestyle he has unreported cash income from his business. He and wife are separarted for years but have a now 13 year old son who likely lives with Mama who has her mother living with her and so can claim HOH without the son. Every year she provides a signed nnotorized document attesting that son lives at dad's home even though I have repeatedly requested a better form of proof of residence.

His Earned Income came in at some $12,000 or so dollars. His status is HOH which eliminated any income tax. His EIC and Refundable Child Credit was greater than his SE tax.

I have his 2019 return prepared and he is coming to collect and file. He never owes and in point of fact has paid no Social Security tax for as long as I have been doing his returns. The Earned Income and Child Credit has caused him to owe nada so any benefit he will get will largely be one he has largely never funded. As Jackie Gleason famously said "How sweet it is" !

A client age 61 is considering applying for his Social security benefits at age 62. He is currently three years in arrears on filing his federal and Virginia tax returns having yet to file for 2019, 2020, and 2021. I told him he needed to check with the Social Security Administration as my thought would be they likely would not compute his benefit lacking any unfiled tax returns due for prior years. Does anyone know if this is correct ? He was of the opinion they would compute his benefit with the available filed returns and then adjust his benefit after he caught the arrears up.

My expectation is the daughter has made over $25,000 at her job and likely is taking a single class at the local community college which will sort the issue. Parents being parents really hate giving up their dependency exemptions but all good things must eventually end.

I am going to call in mom and have an extended chat. The daughter prepared her own return last year but did not claim the dependent exemption. Now she and mom are not getting along very well so it clearly is time to get a firm reading on this one. Thanks.

A divorced mother has a daughter now twenty years old in 2022 who I have shown as a student and allowed the mother to claim as a dependent. She was studying through a local community college and in discussing this with her mother my understanding was she was taking courses which would obtain a degree. Now two years in and no associates degree from the college. The mother cannot advise if or when she will get a degree only that she is still taking a course. The daughter is now fully employed over twelve hours a day at a local restaurant. Income from this job will clearly exceed the limits on the dependency exemption. I have asked about tuition expenses over time only to be told they were fully covered as the daughter was studying from home due to covid-19. I am going to ask to see the daughter's W-2 as I feel her income will be greater than any support provided by mom. My thinking is she no longer qualifies as a dependent on her mother's 2022 return but any input is appreciated.

Aye there's the rub. The mother has no income or so I am told. I was hoping to save some of the standard deduction she and her husband both of whom are over 65 had by using the HOH status. Well with single she will at least retain the credits.

A couple I have assisted for many years has contributed over half the support for two grandchildren who live with their mother at another location. She signs over the dependency status to them each year and they get the $500 per child credit for other dependents. The husband died in August 2021 and the filing in 2022 was their final mfj return. I planned on filing her as hoh this year only to read that the grandchildren must reside in her home for over six months to claim this status. Noting that if the dependent was one of her parents not living with her for which she supplied over half the support she would qualify as hoh. Am I reading this correctly or is their an available exception for grandchildren for which a grandmother provides over half their support ?

Sure am glad I asked the question. Margaret can you access the QCD screen from the 1009-R entry form ? That will solve the problem I am sure.

A client has chosen to donate a portion of his annual MRD from his IRA account to charity. Will the fiduciary indicate this on his 1099-R form for the year ?

The Earned Income Credit for older single workers available for 2021 returns did turn out to be a one trip pony. So now older workers who likely could use the extra help will be assigned back to the scrap heap.

I have looked to see if this provision is included in the recently passed bill but I do not see it. The increased Child Tax Credit failed to make it so this one may have fallen through the cracks as well.

Pretty obvious. I recently got a client whose taxman left our community some 30 or so years ago relocating into the Richmond area. He came down with covid-19 and she needed help likely for 2022 only. She advised he did not efile which occurred to me as quite odd. That is until I saw the prior year return with no signature or any indication it had been professionally prepared only the two word notation in the preparer field denoting it was prepared by the taxpayer. He has likely been getting away with this for years with no none ever turning him in.

Since his deduction would be $10,000 are you saying to prorate this amount? I would assume they would accept a proration of the percentage of his AGI that is applicable to his investment income. I wondered about that but he will not be able to use Schedule A hence my thinking the taxes would be excluded from deduction. This is one of these rarely encountered items I infrequently run into and luckily I don't.

In reviewing the rules for this form I come to an allowable deduction "State, local, and foreign income taxes if properly deducted on your return when calculating your U.S. regular income tax". Since state and local taxes are now limited to a $10,000 ceiling the client simply cannot use Schedule A. In my reading of this he will not be able to use any of the taxes as a deduction on this Form 8960. Any input is appreciated.

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.

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.

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.

I must be special. I just renewed.