Gail in Virginia

Young man whose taxes I have been doing for a long time got married this year. He has been living, and still lives, in TX with his wife. She has already filed MFS for 2020, with a very small amount of income. He has the larger income, although the loss on his horse ranch offsets a good bit of it. How can she file without knowing his income? Can I file without know hers? There is no state return to worry about, but is allocating the income optional even though it is a community property state? It is my understanding they are filing separate just to keep things separate, but is that even possible in a community property state? Am i over my head and need to refer him to a TX preparer? Can I have a zoom wine party with Possi tonight?

VA accepts stand alone e-files. I usually file them together but don't have to.

Virginia starts at FAGI, but if they choose not to conform, like they did with Special Depreciation allowance, then we should be making an addition or subtraction for the VA return to be correct. I have not worried a whole lot about the $300 charitable deduction (although maybe I should) but I do wonder about the tax treatment of PPP loans that are forgiven. And I am sure there are other issues that I haven't given much thought yet.

Is the person that is not your client local? If so, and you can find their number, you might call and see if you can get in touch with their preparer/representative and contact them to tell them you have this correspondence IF you want to go the extra mile. Otherwise, I think I would revoke the power of attorney and let them start over but at least get your name off the record so you are not receiving correspondence that you don't want and can't help with.

Why be sorry? Congratulations to your son!

As far as I know, Virginia conforms to 2019, but has not passed any legislation to conform to federal as of 2020. If they have, I have not seen anything about it and would like to.

Please keep up posted if you actually perform this experience. Inquiring minds, you know.

Bonnie, I am so sorry for your loss. I know this is going to be a tough and stressful tax season for you. If you need someone to listen, we are here for you.

I think what Jim is getting at is if you take the amount in box 3 (social security wages) and the amount in box 7 (social security tips) and add them together, then multiply by 6.2%, do you get the amount in box 4 for social security withheld? If you do, then you have no problem and that is usually the way that this works.

Election worker's in my area are considered contract labor and get a 1099 (if anything - this year was unusual in how much some of the election workers were paid because they worked much longer hours due to early voting.) That said, I have also had "interns" that worked for local government get W2's with no withholding of any kind. Box 3 and 5 usually have no amounts in that case. But I haven't seen that in several years, and don't remember how I handled it. I just remember that the local HR department insisted that they could do that and it was correct.

There is a bill in committee that would make the first $10,200 of unemployment for 2020 not taxable. It is not law. IMO, it should have been passed last year or fuhgeddaboutit. But that doesn't seem to be the way some congress-vermin roll.

If it is in joint name, I would think that each of them should get half of the income when you split the return. I doubt it would ever be caught, unless audited. I don't think the IRS matches to that extent. But is it right and ethical? I don't know.

My check was mailed Feb. 5, and that information did show on the Get My Payment information. Who knows?

Hard to say from information. Are you using the modified AGI when you tell us how much the client made? Or just wages? Did they have any non-taxable income? If they have earned income, would a small IRA contribution before April 15 get them below 400% of poverty and save them paying this back?

My question is: Is it ethical to not claim a child as a dependent so that they can get the stimulus in 2020, even though they were a full time student some part of five months of the year and under the age of 24? Perhaps a high school student, supported by parents, made $15,000 this past year because with virtual learning they could work more hours. The parents got the stimulus payment in 2019 for the child, but if he files and claims himself he would get the rebate recovery credit. Seems unethical to me because the parents could claim him and did provide over half of this support. Curious what others think. I have seen different opinions on another board.

Their customer service number is 855-700-6000 according to Google. I don't know why they sent you that letter.

Did you look at how they have your name listed? I have not received that message, although one of my customers did for their account and I assumed that Square had received a mis-match letter for the name/TIN based on the 1099K they sent out from the IRS.

However, I just looked at the instructions for Form 8615 and they say: For Form 8615, "unearned income" includes all taxable income other than earned income. Unearned income includes taxable interest, ordinary dividends, capital gains (including capital gain distributions), rents, royalties, etc. It also includes taxable social security benefits, pension and annuity income, taxable scholarship and fellowship grants not reported on Form W-2, unemployment compensation, alimony, and income (other than earned income) received as the beneficiary of a trust. So I think is is taxed at the parents' rate.

If a student drew unemployment this year, would that have to be included in the amounts of unearned income that are taxed at the parent's rate if that student is considered a dependent?

Facts and circuses, IMO. If they are using the same internet and cell phone they have always used, I would find it hard to justify deducting it this year, However, if because they have to stream video and do 'Zoom" type meetings with classes,and therefore they had to purchase more bandwidth, pay overages, or otherwise change their plan to accommodate a different type of teaching, I would. YMMV.

Yes, if you file a tax return and have marketplace insurance, you have to include the 1095-A information on the return even if the policy is shared by the whole family. However, you can allocate those costs any way that works our best for everyone. So even though you put the policy information on the kids return, you might allocate 0% of the premiums to the kids and all to the parents. Or the other way around - whatever results in the lowest tax bill for the family. Or any combination thereof. On my software there is a space at the bottom of the 1095A entry form for the shared policy allocation information. I assume ATX has something similar.

Good question. I don't know. My guess would be not because I don't think they are eligible for base housing or considered to have rank unless they carry it over from previous military service. But I cannot say definitively. Curious to see what others say.

I am wondering if you actually saw the letter, or he just told you what it said over the phone. My GUESS is that he did not get one or both of the stimulus payments from the IRS for last year because his account numbers was incorrect. If that is the case, the 2020 tax return is the place that is reconciled and he would file to get the recovery rebate credit now, which would result in a refund and the bank information being transmitted with the return when you electronically file. I would put in the correct amount of his social security, and any interest income he has because I don't think you can transmit a return that has NO income whatsoever. You may need to put a $1 entry in somewhere, I am not sure. I have not actually had to file one for the recovery rebate credit yet.

I did not think this was in Biden's proposed bill. I thought this was a separate proposal by Durbin and Axne. I feel sure that Biden will go along if the bill gets any traction but i think it is a separate issue - or did they propose it as an amendment to his bill?

The 1040 SR is a regular tax return only the print is larger. It is only available if you are over 65, I believe. I don't use ATX so I am not sure how it works in that program, but in my software there is a box on the info page to check if you want the return to print out in the 1040-SR format.