Lee B

A third in depth step by step analysis with a flowchart and worksheet examples from The CPA Journal: https://www.cpajournal.com/2019/01/28/proposed-regulations-clarify-the-irc-section-199a-deduction/

Haven't really thought about it, but has to be well in excess of $ 100. I really wonder how many Turbo Tax returns will be filed with off the wall QBI deductions.

Yeah, my bank is pushing Tax Act.

The IRS Taxpayer Advocate told Congress several days ago that it will take 12 to 18 months for the IRS to deal with all the consequences of the shutdown.

Yes as long as your 1040 taxable income does not push you up into threshhold phase out range.

I am preparing several 1099 DIV forms for 2 clients. The 2018 form has a new box 5 entitled "Section 199A dividends" . Neither the instructions or a search of the IRS website shed any light on what belongs in this box. My best guess is these are dividends that qualify for the 20 % PTE deduction. I would really appreciate some help with this. Thanks in advance

An even longer more in depth analysis with multiple examples from The Tax Advisor: https://www.thetaxadviser.com/issues/2018/apr/understanding-sec-199A-business-income-deduction.html

Of the 26,000 IRS employees recalled to work, without pay, earlier this month in order to ensure refunds go out on time , only 12,300 actually reported to work. The other 13,700 applied for and received hardship exemptions for things like having no money to put gas in the car or to pay for child care, etc. Senior IRS officials told Congress yesterday, that the effects of the shutdown will last well into this summer. This promises to be a tax season that we will not remember fondly.

See IRS Pub 926

SMLLC, a disregarded entity, engaged in a combination of real property investment and commercial rentals, who regularly borrows unsecured funds from 2 individuals for both operating and investment purposes. His main source of income is employment/part owner of a Structural Engineering Firm. Since his real estate activity doesn't rise to a trade or business level, my tentative conclusion is that he is not required to issue 1099 INTs ?

Just got off the phone with a honest person with Drake Accounting Support. The speed of the software is a real problem throughout the program for both users and Drake staff. Drake Accounting 2019 has the same speed issues. Drake Accounting is very aware of the the problem, but there is no fix that will happen right away. As long as you stick with smaller clients, it will be OK but slow. Do not attempt to use with clients that are bigger, it will be an exercise in significant frustration! At least they stepped up and owned the problem !

At this rate in a few years Form 8867 and the supporting worksheets will take more time and consume more paper than the actual tax return -:( Also the potential penalty for a single return is up to $ 2,080 ! I am going refuse to do several returns this year ! Copied from the Journal of Accountancy: "The IRS expanded Form 8867, Paid Preparer’s Due Diligence Checklist, for 2018 individual income tax returns to include questions for both head-of-household filing status and the credit for other dependents. For 2017 tax returns this form needed to be included by the preparer on any Form 1040, U.S. Individual Income Tax Return, that claimed the earned income tax credit, the American opportunity tax credit, and/or the child tax credit. Form 8867 consists of a series of questions verifying the paid preparer’s due diligence in requesting information from clients regarding a series of credits and deductions that have been subject to substantial tax fraud. This form transfers the burden of responsibility from the taxpayer to the paid preparer. The new question for head-of-household status is, “Have you determined that the taxpayer was unmarried or considered unmarried on the last day of the tax year and provided more than half of the cost of keeping up a home for the year for a qualifying person?” The other dependent credit is new for 2018. It provides a credit of up to $500 for dependents who are not qualifying children for purposes of the child tax credit. The due-diligence questions for the other tax credit are the same as for the child tax credit or the American opportunity tax credit. The law known as the Tax Cuts and Jobs Act (TCJA), P.L. 115-97, expands the penalties for failure to prepare the due-diligence checklist. Under prior law the penalty was imposed on each failure and could expose a practitioner to a potential $1,560 penalty on each return (see Rev. Proc. 2017-58). Under the TCJA, the penalty is increased to a maximum of $2,080 on a single tax return for returns and refund claims filed in 2018 ($2,120 for 2019). Section VI of Form 8867 provides preparer requirements for attestation needed to sign the form. These include: Interviewing the taxpayer, asking adequate questions, and documenting the taxpayer’s responses on the return or in their notes; Completing Form 8867 truthfully and accurately; Submitting Form 8867; and Keeping the following five records for three years after the due date of the form: Copy of Form 8867; Worksheets used in completing the form; Copies of any documents provided by the taxpayer used to prepare the form; Records of how this information and the worksheets were obtained; and Records of additional questions the preparer may have asked to determine eligibility to claim the credits and/or head-of-household filing status. The retained records must be kept for three years from the latest of the following dates: The due date of the tax return (not including extensions); The date the return was filed (if the signing tax return preparer electronically filed the return); The date the return was presented to the taxpayer for signature (if the signing tax return preparer did not electronically file the return); The date the practitioner submitted to the signing tax return preparer the part of the return for which the practitioner was responsible (if the practitioner is a nonsigning tax return preparer). Careful consideration and due diligence for these new requirements is essential, as the burden of responsibility is again shifted from the taxpayer to the paid prepare

1099s are not on the MeF system. They are still on the older FIRE system, so you can expect to wait from 7 to 10 days or longer, due to the shutdown ?

Your scenario is still a bit vague. How exactly is the ownership of the property titled ?

As I have added some larger clients, certain functions like saving, backing up, loading print files etc. have become painfully slow. Called Drake Accounting support, several times. They had me exclude all Drake Accounting files from the scrutiny of my security programs. No improvement. I checked my task manager and the Drake Accounting Program is using huge amounts of RAM during these functions. Really disappointing, I was tentatively planning to move some of my write up/payroll processing clients over to Drake Accounting during 2019. Drake Accounting support had no solutions for my problems. Never thought I would say that.

I saw a different article about this subject several weeks ago.

Why do you think wages or depreciable assets do not apply to your scenario ?

The proposed regs have knocked out all of my rental clients except one whose qualification is questionable since he is always juggling multiple business issues and the probability of him maintaining a contemporaneous activity log is pretty low. For those of you with clients who might qualify, here is a step by step in depth analysis : https://www.forbes.com/sites/anthonynitti/2019/01/19/irs-publishes-final-guidance-on-the-20-pass-through-deduction-putting-it-all-together/?ss=taxes#55344e92d9f0

As a famous person once said about opinions, "Everyone has one"

You have an interesting attitude ? After all they are people too, no different than you and me.

Here is a link to the actual notice: https://www.irs.gov/pub/irs-drop/n-19-07.pdf One section says that residential and commercial rentals cannot be commingled in the same entity and qualify. If true, this will knock out one my larger clients out because while I am reasonably confident that they could meet the 250 hours for all rentals combined, its doubtful that they will be able to meet 250 hours if commercial and residential rentals have to segregated.

Supposedly, it was released 2 hours ago. If you want to sign up www.360law.com has a copy available. I will wait a few more hours until it's publicly available.

I remember watching the press conference at the capitol several weeks before Christmas 2017, listening to the congressional representatives talking about tax simplification, saying that most people would be able to file on a postcard, which they were waving around in front of the TV cameras. What you see is not always what you get. Situation Normal !

"The IRS issued Notice 2019-11 on Wednesday, providing a waiver of the addition to tax under section 6654 of the tax code for the underpayment of estimated income tax for certain individuals who would otherwise be required to make tax year 2018 estimated income tax payments on or before Jan. 15, 2019. The waiver, though, is limited to individuals whose total withholding and estimated tax payments equal or exceed 85 percent of the tax shown on the return for the 2018 taxable year."

It turns out only 809 of the recalled employees will be paid, those whose duties are being funded by user fees.