Lee B

16 minutes ago, DANRVAN said:

I would never give out advice on MC rules, but  I "think" a family member is allowed to be caregiver if through an "arms-length" transaction.

Yes the Medicaid 5 year look back rules vary from state to state.

My reading now that I have more time says, that,  according to SECURE 1.0 an eligible designated beneficiary who is less than ten years younger than the account holder of the 401 k who dies before the required beginning date of their RMD is exempt from the so called "ten year rule" and can use their own life expectancy to calculate their RMDs.

You have until 12/31 of the year following the year of their death to begin taking you distributions.

Frankly it took me quite a bit of reading to arrive at that conclusion. It shouldn't have to be that complicated !

Why don't you call the fiduciary for your 401 K.

They have the experts on hand to answer your questions.

Actually the answer is fairly complicated and can differ depending on state law.

Please see the article in The Tax Advisor:   https://www.thetaxadviser.com/issues/2022/nov/federal-implications-passthrough-entity-tax-elections.html

I would file MFS using their residences in the 2 different states if that's possible.

Why is it a scam?

Discharge of nonbusiness credit card debt is generally taxable income,

except when the taxpayer was insolvent immediately prior to the discharge or filed bankruptcy.

See Pub 4681

 Because they intend to become citizens, this probably needs to be handled correctly.

Consulting a knowledgeable immigration attorney may be desirable.

11 hours ago, Lion EA said:

 The S Corp still can open and fund a SEP, which is an employer only plan.

Yes, but since he already has a SIMPLE Plan established, he doesn't qualify for automatic approval using form 5305 - SEP.

From Pub 560  -  "When not to use Form 5305-SEP. You can't use Form 5305-SEP if any of the following apply

. 1. You currently maintain any other qualified retirement plan other than another SEP. "

5 minutes ago, Tracy Lee said:

I also read those rules, so am I correct in my understanding that 'that ship has sailed' and he can NOT fund his Simple IRA at this point?

Well he can't make an employee contribution which would reduce his box 1 -  W 2 income.

However as Abby points out he could make the 2% non elective contribution assuming that had been elected prior to the end of the year.

13 minutes ago, Abby Normal said:

 

You must make matching and nonelective contributions to the financial institution maintaining the SIMPLE IRA no later than the due date for filing your business's income tax return, including extensions

Well that would allow him to make a 2 % non elective contribution.

"You must deposit employees' salary reduction contributions to their SIMPLE IRAs within 30 days after the end of the month in which the amounts would otherwise have been payable to the employees in cash, according to IRS rules (IRC section 408(p)(5)(A)(i)). For self-employed persons with no common-law employees, the latest date for depositing salary reduction contributions for a calendar year is 30 days after the end of the year, or January 30th"

Due to this rule, amending his payroll won't work either.

The way to reconstruct her income would require finding a list of her repeat customers, how much she usually charged them and how often she did

housekeeping and when she stopped working.

24 minutes ago, DANRVAN said:

Is son personal rep?  Maybe he would at least authorize bank to release statements to you.  PR is responsible for filing final tax return.

That would only be helpful if she deposited all of the cash in her bank account before she spent anything.

What would you do as far as expenses?

Who would authorize you to prepare the return?

Unless the son will help you, there's nothing you can do. 

Box 5 already has the amount in box 4 subtracted

I think we have beaten this topic o death. Let's put it to sleep.

My client just started this activity the beginning of last month so this will be for 2024.

I am trying to get on top of this so they don't have any big surprises when I do next year's return.

They went through the required DHS training and Certification last year so as far as I know it is foster care.

I did go to the Oregon DHS website and read about the specific program they are working under.

They found out about this program from their brother in law who works for DHS.

I have a client who is providing respite foster care (weekends only ) and receives $ 200 a day from the state of Oregon.

To out it into perspective, our state has a big shortage of foster parents and is currently paying third party agencies

$400 a day to house these kids in motels and hotels.

As I understand it these payments are not reportable or taxable.

TIA

Lee

It's ironic since W 4V allows you to choose 7%, 10%, 12%. or 22% to be withheld from your monthly social security check.

If you want taxes to be withheld from your RMD you get to choose a pecentage for both federal and state tax to be withheld.

1 hour ago, Abby Normal said:

The IRS has a page to calculate the W4. I personally like the new W4.

What I tell my clients is the percentage that they need to have withheld to breakeven. Then they can look at their pay stub and see if they are having about that percentage withheld.

How does that help, there is no W 4 provision to have a% withheld?

I do live payroll processing, so I do have access. The difficulty lies with 2 wage earner situations and situations with significant bonuses.

Unless the client is willing to pay me a fee for a next year's tax projection,which very few will do, I just hand them the W 4s  and point them to the instructions.

I used to give clients some guesstimated advice, but ever since the TCJA went into effect that doesn't work very well and has backfired on me a few times.

It would seem to me that it's the taxpayer's responsibility to go online and verify that his contact and bank account information is correct.

1 hour ago, Corduroy Frog said:

Thank you.  I did query the Tax Book, but could not find where Guaranteed Payments were addressed with respect to QBI.

II have tried The Tax Book's Web Library and wasn't impressed with their search Function, so I use their Print Edition.

According to the Tax Book, Guaranteed Payments are not included in QBI.

Margaret, I must say that you certainly come up with some unique tax scenarios

Form 1096 is only used when you paper file at least with the software I have used.