ETax847

Client took his RMD in 2020 and then deposited it back before the deadline.  However, the 1099R shows the full amount as taxable with code 7 (normal distribution).  Is anyone familiar with how this should be reported in the tax software so the RMD is not taxable to the client?

2 hours ago, Abby Normal said:

Mine does, so maybe it's time to reset your letters to default. You do that in an open return by editing the format and going to Tools, Restore. Then save it for all future returns.

My state letter defaults to saying 'will be direct deposited' too but I still have to go into both fed and state and choose that on the payment/refund tab of efile Info form.

Abby, that did the trick! I had no idea that function existed. Thanks for the tip!

I'm having some issues with the Client letter as well. If a client has a Federal refund the language is "Your return shows a federal tax refund of $xxx.

However if the client has a state refund it reads as follows: As requested, your Illinois 1040 tax refund of $xxx will be deposited directly into your checking account. 

Why doesnt the Federal Client letter pick up on the fact of the refund being deposited directly in the checking account.  I have selected that refund option on the 1040EF?

The program update did the trick. I usually wait on the updates in case there are bugs, but that did the trick! Thanks!

I'm preparing my first tax return of the season and the charitable contributions for someone who takes the std deduction does not appear on the 1040.  Is there something I am missing?

Thanks Lion! I had no clue that form even existed!

Many people tapped 401(k) and IRA balances to access emergency cash amid the Covid pandemic, as allowed under the federal CARES Act.

I know there is no 10% penalty, but is there any feature in ATX that allows you recognize the income over a 3-year period?  

Also, if someone pays it back down the road, on what form do you recoup the taxes previously paid?

I tried again today, and it was transmitted.  I'm not sure what the bug was, but it seems to be gone.  Thanks for all the responses!

I use ATX.  I'm wondering if it has to do with the fact that the client lives in Michigan.  Do any states preclude one from E-filing a 1099 NEC?

Today I tried to E-File my first 1099-NEC and received the following error message, "Some marked E-files cannot be transmitted and have been unmarked." 

Does anyone know why the 1099-NEC cannot be E-filed at this time?

I just discovered we can now add our logo to the Billing Invoice.  Go to Customizer Master forms to do this.  Definitely makes the invoices look way more professional.

My apologies for the confusion, I was referring to when entering the 1099 forms on a tax return.  Do you enter the address when doing that?  

When doing the data entry for a 1099 MISC / NEC form, do you enter the address or omit it?  It seems that the software only required Payer Name and TIN for e-filing.

ABW, thanks for the time saving tip! That was a tremendous help!

Still has yet to be announced

Since we are still in the middle of the pandemic, do you think the payment deadline will be extended again?

When are you guys planning on sending out your Tax Organizers?  I put mine in the mail today. 

Good to know and thanks again for all of your help!

Joe, ATX includes the Grantor Letter, so I should be all set! Thanks to everyone for all their help in clearing up my confusion! This forum has been a tremendous help over the years.

Joe, I opened up the 2019 software and see what you mean when the Grantor Type Trust is selected.  Is the grantor letter a form in ATX or something that is created outside of ATX and attached to the filing?

Hi Abby,

Thanks for the link.  Farther down in the article it states: 

An irrevocable trust can be treated as a grantor trust for tax purposes when the grantor meets Internal Revenue Code requirements to become the owner of the assets. The irrevocable trust can be disregarded as a separate tax entity in this case, and the grantor will be taxed for all its income.

Irrevocable trusts are referred to as "intentionally defective grantor trusts" (IDGTs) when they treat the grantor as the owner for income tax purposes, but not for estate tax purposes.

The grantor reports trust income on their personal return in this case and pays any taxes due just as if the trust were revocable, but the trust assets aren't included in the grantor's estate for estate tax purposes when they die. This is a major advantage not shared with revocable trusts.

The client set this up to remove the assets from his estate.  That being said:

1) If no distribution is made, is it just a 1041, with a k1 issued to the client for the dividends, cap gains etc or does not trust return need to be filed?

2) when the daughter decides to take money out of the trust, how is that distribution treated in terms of reporting?

Thanks for all your help!

New Client is creating an Irrevocable Gift Trust for his daughter that will be a grantor trust (client will be paying the taxable income during his lifetime).

My questions are:

1) If no distribution is made, is it just a 1041, with a k1 issued to the client for the dividends, cap gains etc

2) when the daughter decides to take money out of the trust, how is that distribution treated in terms of reporting?

This is going to make for one fun tax season, not!

I side with Tom on this one.

All of the e-filed amended returns were processed timely.  I'm going to wait until the efile window reopens in january and resubmit it electronically.