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Patrick Michael EA

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About Patrick Michael EA

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    Woodworking, DIY Projects

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  1. Thanks Max. Paper file it is!
  2. Client passed away in 2017 and received 1099 -C in 2018. I am preparing the 1041. The estate is insolvent. I spoke with support who said there is no 982 screen to indicate the debt is not taxable due to insolvency. Any suggestions on how to report so that the IRS knows that income was reported but is not taxable? Thanks.
  3. Patrick Michael EA


    Installed the 2018 software and started testing my macros and thought we could help each other by sharing our favorite macros. I run this macro at the start of every return: NY>MISC>>>>>N~STAX[FJ:2]X[FJ:5]4[FJ:8]X~B3>N[FF:27]N~HC>X>~IDS>1>>NY>>>1>>NY[FB:6]. This macro answers "N" to NY bribery question, makes sure the default sales tax tables are used and sets local sales tax rate to 4% (Monroe County, NY), marks "No" to Schedule B foreign income questions (never had a client with foreign income that met reporting threshold), checks that everybody had health care (90% + of my clients receive health care through their employers), then fills in 1 (driver's license) and state (NY) for both TP and spouse and moves courser back to number field. This is where I start my returns. After I have reviewed the return and am ready to print I run this macro: PRNT>[FJ:32][D]~PIN>[D]>#####~PIN2>[D]>[D]>>>>X~ADMN>[FJ:56][D]~. This macro enters the current date to print on the returns on prnt screen, goes into the PIN screen and puts in my PIN and the date (which creates the client PINs) and then goes to the PIN2 screen, adds the current date and checks the NY certification question. I have also set up macros for the most used banks in my area to fill in the bank name, routing number and check the checking box. (Y>NY>[FF:2]ESL>222371863>>X>>222371863>>X)
  4. I recently participated in a free online CPE course on crypto currency taxation which turned out to be more a infomercial for Crypto Tax Academy than a CPE course. They claim that crypto currency taxation is the next big thing and offer a course to become certified by the academy as a crypto tax prep pro. The academy claims there is growing demand for tax professional that specialize in this area and you can grow your practice by at least 400%. I have never had a client that dealt in crypto and was wondering if there is much demand for such a service? Has anyone else taken the course or something similar? Any other thoughts?
  5. It's a large employer, I would guess around 500 employees. Not sure if it makes a difference but she is covered by a union contract. It is taxable. It is available to everyone who opts out of the insurance plan. The only requirement is she has to submit proof she is covered by another insurance plan.
  6. My wife gets and an "Insurance Opt-Out" payment twice an year for not using her employer's health insurance. Employer saves about $9,000 a year and my wife is happy to get the extra money. A win-win.
  7. Is this really a problem? Has anyone heard of someone submitting a POA without the taxpayers knowledge? Most representatives are professionals (CPA, EA or attorney) so are they really going to risk losing their license by submitting a false POA. They would better serve taxpayers by coming up with a better way to verify refundable credits before issuing the refunds without placing additional burdens on tax professionals.
  8. Make sure you check ALL your carry-overs (including state). I had a couple of clients with charitable donation carry forwards that did not convert and NY LTC insurance carry forwards that I had to manually input. Make sure you take the time to learn how to write macros. They are a huge time saver for repeated entries. If you search on macros in the software discussion page in the Drake forum you will find many useful macros.
  9. NY is looking at creating a new employer payroll tax to replace income tax on wages. The business would be able to deduct the tax (as they do other payroll taxes) but I doubt many employers would (or could afford to) just eat the difference between added tax liability and the tax benefit they would receive by deducting the additional expense. The only way I can see this working is if the employer reduced wages to make up for the added net expense. NY is not very business friendly as it it is and I can see this as the final straw for many businesses. They would have to shut down or reduce their staffing levels, specially businesses that rely on minimum wage employees, as these businesses would not be able to reduce wages to make up the difference. As an example of how this would disproportionately effect low wage earners is the local McDonald's. NY is ramping up the minimum wage to $15 an hour and as a result, by the end of 2019, all the local McDonald's will have installed ordering kiosks and automate many of the cooking tasks in order to reduce payroll. And local pizza franchiser closed all five of his locations recently citing the minimum wage increases as one of the reasons he could no longer afford to stay in business.
  10. IR-2018-172, Aug. 23, 2018 WASHINGTON — Today the U.S. Department of the Treasury and the Internal Revenue Service issued proposed regulations providing rules on the availability of charitable contribution deductions when the taxpayer receives or expects to receive a corresponding state or local tax credit. The proposed regulations issued today are designed to clarify the relationship between state and local tax credits and the federal tax rules for charitable contribution deductions. The proposed regulations are available in the Federal Register. Under the proposed regulations, a taxpayer who makes payments or transfers property to an entity eligible to receive tax deductible contributions must reduce their charitable deduction by the amount of any state or local tax credit the taxpayer receives or expects to receive. For example, if a state grants a 70 percent state tax credit and the taxpayer pays $1,000 to an eligible entity, the taxpayer receives a $700 state tax credit. The taxpayer must reduce the $1,000 contribution by the $700 state tax credit, leaving an allowable contribution deduction of $300 on the taxpayer’s federal income tax return. The proposed regulations also apply to payments made by trusts or decedents’ estates in determining the amount of their contribution deduction. The proposed regulations provide exceptions for dollar-for-dollar state tax deductions and for tax credits of no more than 15 percent of the payment amount or of the fair market value of the property transferred. A taxpayer who makes a $1,000 contribution to an eligible entity is not required to reduce the $1,000 deduction on the taxpayer’s federal income tax return if the state or local tax credit received or expected to be received is no more than $150. Treasury and IRS welcome public comments on these proposed regulations. For details on submitting comments, see the proposed regulations. Updates on the implementation of the TCJA can be found on the Tax Reform page of IRS.gov. People in high tax states will not be happy about this. When I first heard about this attempt to get around SALT I figured the IRS would do something like this. I'm sure there will be a new round law suits challenging the new regulations. I live in NY and wish the politicians would but as much effort into finding ways to reduce taxes as they do trying to create a loop hole to get around SALT.
  11. I'm sure many of us will be getting calls from clients asking for projections to see if they're having enough withheld after they see this (already saw the article posted on social media). Just wondering on how you are planning on handling these requests. Will you be charging for the projection and if so, how much?
  12. A classic telemarketer prank! https://www.youtube.com/watch?annotation_id=annotation_420523&feature=iv&src_vid=mkdoogjic4I&v=-7OgWcwgB50
  13. I disagree that "Basically, only miles driven while a customer is in the car is the deductible portion." I believe the mileage from the time they drop off their last fare to where they pick up their next fare would be deductible as long as they were "working" (signed onto the app and not going home between fares). I have a couple of Uber drivers and they also told me that the mileage reported by Uber does not include the mileage when driving from one fare to pick up another so I have them using one the phone tracking apps to make sure they capture all their miles..
  14. Client has a special needs child and has to travel from NY to Minnesota every year to see a specialist. She submits her travel bills to a charity which then reimburses he for the travel expenses. All is good until the charity issues her a 1099 Misc with the reimbursement amount in box 7. The charity insists they have to issue the 1099 and will not issue a corrected 1099. She does not have enough medical expenses to clear the 7.5% hurdle for schedule A. I don't believe this should be taxable and not sure how to handle this. Leave it off and wait for the CP2000 notice, put it on line 21 with an offset to zero it out, or a schedule c with an offsetting expense to zero it out? Any thoughts?
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