Patrick Michael

McDonald's recently announced that they were scrapping their test of using AI to take orders. Although they did not give a reason, insiders say the system was getting orders wrong. If AI can't handle my order for a Happy Meal, how will work with much more technical issues?

I had the opposite problem with a practice I purchased several years ago. She was charging less than the going rate. I figured I would raise those rates by 15% every year until they aligned with what I charged. I lost some clients in the first and second years but it didn't matter since I only paid her for returning clients. The third year came around and many of the clients that had left returned when they didn't like the cheaper preparers.

All zeros if you use bulk extensions. Most of my clients don't make any payments with their extensions. I always inform them of the penalties and interest if they do end up owing. For the handful the do make payments, you have to file manually.

Thanks for input. It sounded too good to be true.

Owner of a rental property wants to sell and will have a hefty tax bill. The son wants to gift the property to his father (there doesn't appear to be any gift tax issues other than filing the return). The father has a terminal illness and is not expected to live for more than 6 months. The father gets the son's cost basis and reports the rental income/expenses on his tax return. The property is then willed back to the son when the father passes, and the son gets the stepped up basis. Son then sells property, possibly at a loss when the selling expenses are factored in. There is no other purpose of this transaction other than avoiding the tax. This doesn't pass the smell test to me. Can the IRS disallow the step up in basis? Any other issues with this scenario?

Been with Drake for over 20 years and am very happy with it. There is a little bit of a learning curve as it is not always intuitive. Customer support, although not as good as used to be, is still very good. Usually answer in a couple of rings. A lot of new people answering now and don't always have the answer right away but are very good at calling back within a day. I really like the macros that you can write to automate the routine data entry that has to be entered on every return, saves a lot of time. I don't believe Drake low balls you for the first year. I have always paid the same with small increases over the years. It integrates well with Grunt Works and their portal, although not perfect, is good and works well with the tax program. The portal has gone up in price quite a bit over the past few years and I will be looking for a replacement for next year. I do mainly 1040's with a couple of simple 1120's and a 990. I have heard that Drake does not handle multi state business returns as well as the higher priced programs. PM me if you have any specific questions.

I believe the IRS does require ID verification (see below from IRS Website). Does Verifyle include identity verification and do they charge extra for it? I know Drake uses a soft credit inquiry to generate questions used to verify identity. What are the ERO’s responsibilities with regard to e-signature? If the taxpayer uses the e-signature option, the ERO must use software that includes identity verification. The software must record the following data: Digital image of the signed form; Date and time of the signature; Taxpayer’s computer IP address (remote transaction only); Taxpayer’s login identification — user name (remote transaction only); Results of the identity verification check validating that the taxpayer’s ID verification was successful; and The e-signature method used to sign the record. The ERO is also responsible for maintaining a tamper-proof record in a secure, access-controlled storage system for 3 years from the due date of the return or 3 years from the IRS return receipt date, whichever is later. ERO's must be able to retrieve and reproduce legible hard-copies of the signed form.

You are so right! I had about a dozen that I out right fired, about 10 more that I doubled the price and they went elsewhere and a couple more that paid the PIA fee. The stress these clients caused was not worth the money.

Thanks everyone! It's almost over!!!

Wondering why a 3115 would be necessary since the returns can be amended. There is no change in accounting method. The original basis and other improvements have been depreciated. Just forgot this remodel.

Client sold a rental home in 2023 and lo and behold, found about $40,000 in capital improvements from 2021 that she forgot to tell me about. She does have receipts and is a scatter brain, so I believe it is legate. Because of her income all the losses have been disallowed and the added depreciation will added to the unallowed losses. Since her taxable income doesn't change do I have to amend the 2021 and 2022 years returns or can I just add the additional deprecation to 2023's 8582?

Like Catherine, I always use the Transaction Summary from Drake and have the client sign. One time client yelled and screamed at me when there direct deposit was rejected. When I told them they would have to wait for a check in the mail they demanded that I give them the money because they needed it for a down payment on a car. I pointed out that they had signed the transaction summary verifying the bank info was correct and t hey told me they didn't read it first and it was all my fault. Needless to say they became ex-clients at that point.

I have a feeling I know the answer but am hoping I'm missing something. Clients had a timeshare and wanted out. The timeshare was in the husband's name and his wife could no longer travel due to health reasons. They spoke with a representative of the time share company and he recommended that the husband "convert" his time share into the name of the wife, using the "equity" in his time share to purchase the new time share. The wife could then get out of the new time share by providing a doctor's note. Sounded good to them until they received a 1099 S for $75,000. They did not receive any cash in the deal. To the best of the husband's memory, he paid about $35,000 for the time share over 20 years ago (he is going to see if he can dig up the paperwork). Are any of the yearly fees and other expenses they had to pay able to be added to the basis? They have no idea how the company came up with the $75,000 value on the 1099 S. Can the value of the time share be challenged and if so, how would it be presented on the 1040?

I am starting to get millennials in the 16 to 18 year old range, mostly kids of my clients, who are filing their first tax returns. I have to make a conscious effort not to laugh when I watch them try to sign their names in cursive. They get a pained expression on their faces and it takes forever. Many just give up and print or make an illegible mark. I'm afraid that within a another generation cursive writing will be lost art.

My favorite is "Why is my 401(K) distribution included on my return? I already paid the tax (pointing to the withholding box). It shouldn't be on my return." Some people are convinced they are "paying" the tax twice and can't grasp the concept that the withholding is just a prepayment of the tax that is going to be due, not the tax itself.

Forgot to add that supplemental information is showing ordinary income reported of 125.44 So the adjusted basis should be 2,683.58 (2,558.14 plus the 125.44).

First time I have one of these and looking for a sanity check. Client sold 13 shares, proceeds $7,827.40 in 2023. Option was granted and exercised in 2018 with a FMV on grant date of 192.98 (box 3 form 3922), FMV on exercise date 207.14 (box 4) and Exercise Price 196.78 (box 5). From my reading this is a qualified disposition and the basis should be 2,558.14 (13 shares times 196.78 from box 5). Is my understanding correct? TIA.

This client ( I have done their taxes for the last 3 years) is in their late 20's. Went to community college for 4 years and never earned enough credits to get a degree. Was a dependent on his parents returns for those four years and parents don't have copies of the old returns and have no interest in getting transcripts. I hate to have him lose out if he is still eligible.

How do handle it when you get new clients with dependents (or themselves) who have been going to college for more than 4 years and have no idea if they have taken the AOC (or Hope) in past years? Will the return reject if you take the AOC and it has been taken for the 4 years?

Just received one supposedly from Drake.

Received two emails this morning that looked legitimate (not the usual grammar and spelling errors) asking if I was taking on new clients and offering to email me last years returns. Give away was the "Reply" email address did not match the "From" address and was really weird,( .jp instead of the usual .com or .org). I know most of you are very careful with these type of emails and just wanted to let everyone know that the bad guys are getting much better at making the emails look legit.

The kittens mother is feral and had a litter of 5 kittens under our deck. We were able to catch the kittens and then lure the mother into the garage to feed them until we were able to wean them. Mother went off to a non profit that spayed her and then released her (she was too feral to adopt out). We kept these two and were able to adopt out the other three.

I asked my two new assistants to throw out the paper box cover and this is what happened! IMG_1048.mp4

If you have Adobe DC it can convert a jpeg to PDF. Use it all the time.

I have had many parents pay for their kids amount due and never heard of a problem. Had kids refunds directly deposited into parents accounts when the kids did not have a bank account and never had a problem with that either.