Gail in Virginia

I guess because they had to have a tax liability in 2021 to receive this payment, and the card from the state will show that it is a refund of 2021 taxes.

Any state refund is taxes you previously paid coming back into your pocket. The state is just treating this as an increase in your refund, and is sending out the usual statement for refunds including this amount. What is interesting is that the people who had a balance due in 2022, and paid it before this "refund" was issued are getting a card saying they got this amount as a refund for 2022. So I guess we put the entire balance they paid in as taxes paid in 2022, and then put this amount in as a refund on page 1 of the return rather than netting the amounts? To top it off, instead of the usual post card VA sends, they have printed the postcard form, perforations and all, on 8.5 x 11 paper, and are mailing it in an envelope so i am getting calls asking what this is like i needed something to do this time of year.

I guess I am not sure how that works with unclaimed property. Did they not sell whatever it was until after the decedent's death so that effectively the estate sold it? Or was it sold 10 years ago when the state received the property and they are just issuing the 1099B because they finally found out who the property belonged to so that they know who to issue the 1099B in the name of? It doesn't seem like you could move income to another year that way. This has been an interesting discussion.

I don't think so. I think it used to be allowed many, many years ago but I believe you need an EIN now. Although the fact that there are absolutely no taxes being reported makes me wonder....

Actually, I think as long as daughter did not provide more than half of her own support, she could possibly be a qualifying child. Sometimes I think filing status and dependency are among the most complicated questions we have to resolve to prepare a return. It is not just putting the numbers into the computer and letting it do all the work.

Not for head of household. You are reading correctly.

I have now learned that I will never prepare a CA tax return for anybody, unless they are willing to pay me an extra $1,000 or more just to cover the extra taxes and fees I may have to pay. Wow.

The payroll software can transmit the 1099 file just like a tax return, but there is a fee for e-filing though the software instead of being included in the price of the software. If I remember correctly - I have not transmitted any 1099s this year so far.

In my experience, which thankfully is limited, if the funeral home arranges for the minister/musicians, then they pay them. If the family/deceased has a relationship with the church as members or regular attendees, then the pastor and musicians may perform the services as part of their regular duties. The family may choose to gift the minister or other staff for their service. But around here, that typically does not run through either the funeral home or the church in those circumstances but is given directly to the people performing those services.

I stopped in the middle of reading this thread to send an email to a client telling them that I would not be able to do their return this year. Thank you for the timely reminder that some people are just not a good fit and the sooner we part ways the better for both of us!

Box 7 could be used if the fiduciary issued two separate 1099Rs, just like they issued separate checks. And if the check is payable to the charity, and clears the bank, I would think that is pretty indicative that it reached the charity. Banks have gotten pretty cautious about cashing checks for people that are not made out to people. At least they have around here.

My first ever accounting related job was hand addressing envelopes to the Commissioner of Revenue for Franklin County VA. When I graduated to putting the corrections in the CCH books, it was a relief!

Unfortunately, I can't quite work up an entire year ahead just in case. As an EA, IRS requires that I have at least 16 hours each year, and 72 in the three year cycle. But working some hours ahead is a great plan to be prepared.

I, too, really appreciate the information that I can get from the people on this board. Bur even more i appreciate the camaraderie I find here. I hope that everyone has a Merry Christmas, a Joyous New Year, and that this tax season will be smooth sailing for all of us!

The best part of the QCD for some of my clients is that it may result in less social security income being taxable.

I am thinking 15%. I did not raise prices for several years so I feel like I am behind. Besides, I really want to work less hard.

Sara, I don't know enough about this to have a real opinion. But funeral costs are never deductible, regardless of whether they are paid directly by the estate, reimbursed to a beneficiary, or reimbursed to a total stranger. Whereas business expenses may be deductible so I don't see why the fact that she is a beneficiary as well as executor would come in to play. However, if they are not deductible expenses to begin with, then if the estate cannot deduct them and the executor receives a fee, can she deduct them as an expense of earning that fee and get the benefit of the deduction that way?

I agree with both answers. If the client inherited an installment agreement, no step up in basis. If client inherited a business, they get the step up in basis before the installment agreement goes into effect.

Plus, with the perception that everyone else is doing such schemes and getting away with it, most taxpayers feel like they are just leveling the playing field and that it is only fair.

Congratulations, Joel! I am so jealous!

If I understand the question correctly, the FSA is irrelevant. The employer has been deducting an amount from the employee's wages for the partial cost of the health insurance. There is no written plan for the health insurance deduction, and yet they have been treating this as a deferral of income not subject to FICA, FWT, Medicare, etc. A section 125 plan should be in place for this to be tax deferred. Are the employees actually signing an election for the amount withdrawn for health insurance? That is a written document, although I don't believe it is what is typically meant by a plan document. I am wondering if the election the employees' have signed can be formalized as a plan document and if a determination letter could be requested from the IRS that would clarify this and perhaps eliminate the need to change 15 years worth of W2s and other employment tax documents. If the only benefit under this 125 plan is health insurance, no 5500 is required if I remember correctly. i do agree that this forum might not be the best place to seek a definitive answer. And perhaps I have misunderstood some nuance of the question.

It has been a while since I have had one of these. Does the NOL he is carrying forward contain any preference items? I think that it may have to be adjusted for any preference items but then is entered on the 6251 as a deduction and can be used to reduce his income.

If all of the sales are reported under his social security number on the same consolidated 1099B, then I would report them all on his final tax return. HOWEVER, i would report as nominee on all of the sales after his date of death so that the return shows no gain or loss on those sales and instead they are carried to the estate's 1041. Yes, the basis would be the value on the date of death but the holding period for inherited assets is assumed to be long term even if it sold as soon as it is transferred. At least, this is how i would handle it.

My opinion would be that you sign as the successor trustee. You are not her POA any longer because of her death, she can't currently sign for the same reason so even if you were still POA you can't do something that she would not be able to do, and you can't back date them to a date when she was still alive and you were still her POA. But that is just my opinion and I am not a lawyer.

I am just wondering if he has any extra business licenses or taxes that need to be addressed as a contractor working in New York, even if it is only one job for two months.