Patrick Michael

Congrats! Grandchildren bring so much joy into our lives!

Not sure about NC, but I'm assuming the 4.99% is an estimated tax that has to be paid. In NY, the estimated tax rate is a little higher than most taxpayers actual tax rate. When the NY return is prepared, the PTE is added back into taxable income and it is taxed at the TP rate. The estimated payment made by the S Corp is added to the total payments. For example, single member S Corp has $100,000 profit. Estimated PTE payment is 6% ($6,000). S Corp profit is reduced by the $6K and the TP saves their federal marginal tax rate. On the state return the TP adds back in the $6K PTE, bringing taxable income back up to $100K. Marginal rate is 5% so they have a tax liability of $5,000 (which is the same as they would have if they did not pay the PTE). They then apply the $6K estimated payment to their total payments, getting them a refund of $1,000 of the $6,000 they paid in.

Can find anything either way. For a $203 "donation", I would inclined to take let the client decide how much risk they want to take for a small reduction in tax. Just make sure they have everything in writing.

If the funds have been remitted to NY the POA must go to https://www.osc.state.ny.us/unclaimed-funds and search for the funds. After locating the funds they can file the claim on-line. It takes many months to process the claim.

The CPA firm I was working at has also contracted with a firm in India to handle staff accounting tasks because they could not find enough qualified people. I think the decline of young people getting into the profession started, at least in NY (not sure about requirements in other states), when they upped the number of accounting related course hours, which is close to getting a Master's degree. And, not sure this is still the case, but the profession has (or had) a reputation for abusing new staff accountants, who were trying to meet the experience requirements to obtain their CPA certificate, with long hours and tedious work.

I have included a completed Sch C ( including related forms , if necessary) and 1040X with "DO NOT PROCERSS. SUPPORTING INFORMATION ONLY" written in large letters on the top in the past with no issues. Have also done this when clients have forgotten to give 1099-B's.

We have a big problem here with thieves crawling under cars with a saws all and removing catalytic converters. They will hit apartment complexes, college campuses, and other large parking lots, stealing the convertors. Wonder how many stolen convertors they purchased!

It's not just CPA's, but the accounting profession over all. The CPA firm I left in December, where I was a senior staff accountant (CMA and EA), has called me twice asking what they can do to get me to come back. They are so short of help they are looking into contracting with a firm in India to handle the "backroom" tasks such as bookkeeping and tax prep that the staff accountants used to handle.

Finished up a couple of loose ends in the morning then took one of those naps where you sleep so deep that when you wake up you have no idea where you are, what time it is, or how long you slept. Turned out to be almost two hours.

New client found a 1099B with a $8,000 LT Capital Loss for 2021. He already has a ~900K capital loss carryforward (unsuccessful day trader) so the loss will not effect his tax liability. He also wants to add an additional expense to his 2021 Home Office Deduction carryforward , again no effect on 2021 tax liability . Is it necessary to file an amended return to add these amounts or can I can just add these amounts to his 2022 carryforwards? Does the IRS track the carryforward numbers from year to year?

WOW. Thanks for all info. I will take a look at the worksheets. Thanks so much!

Client moved to PA last year (MFJ, no dependents) and had local tax withheld with a locality code 400907. Does a local tax return have to be filed? Drake did not produce any local tax returns. I noticed that on two of the W-2's the state wage amount (box 16) was lower than the federal wage amount (box1), and one the state wages was higher than the federal wages. Any ideas why these amounts are different? The rest of the return seems pretty straight forward. Any other quirks with PA that I should look out for?

Thanks. I'll give it try.

After printing a return I always right click on the main forms and "verify all entries". Before I file, I go to view mode and make sure the green checkmark is still there to ensure nothing was inadvertently changed. Only issue is that the Paid Preparer Date always changes to today's date so I have to go in and verify it again. Date does not change after the return e-filed. Anybody know of a way to stop that date from changing?

I use Drake and had a couple of those moments too! It's all coming back to me. but the older I get the longer it takes.

Thanks for the confirmation!

Client sued a previous employer for unlawful termination and intentional infliction of emotional distress. After three years, case was settled and client received back pay and damages for emotional distress. From my research I found the entire settlement is taxable and he can deduct his medical expenses (prescriptions, co-pays, and counseling), incurred due to the stress, from the settlement amount. Client wants to include the medical expenses his wife and child incurred due to the stress they suffered as a result of his being fired. My gut tells me their expenses are not deductible since they were not a party on the lawsuit but I can't find any support either way. What say you? As always, thanks for sharing your collective wisdom.

I'd run from this clients as fast and far as I could!

Same here. Just finished an 1120 S with no issues.

I believe you are correct. If he was employed the SS tax would be accessed and credited to his SS account. He "paid" it by reducing his refund. A bigger question may be how is he providing for himself and child (or children) on $12,000 a year (that's about 4 bags of groceries these days ) . I would definitely ask some pointed questions and document the answers for due diligence.

How can he have received Earned Income Tax credit and not paid any social tax? Earned income required for EITC, and SS tax is always paid if there is earned income. Does he file MFJ?

Have a client that filed an amended return in April of 2021 (for 21 return). Checked on the status today at "Check on Status of my amended return" and it said client "Must take action" and call a number. No notification to client that they had to call. Wonder how long the IRS has been waiting for a call.

Thnaks.

Client received an invoice for plumbing services (vendor is a Sole Proprietor) in December 2022 but did not pay it until 2023. Preparing 1099's and was wondering if 1099 should be issued in 2022, when services were rendered, or for 2023 when invoice was paid. Client is cash basis.

If he has a W-2 job and devotes 2 to 4 hours a day I would be skeptical that he meets the requirements to be a professional gambler. Determining whether an individual is engaged in the trade or business of gambling is based on the facts and circumstances. In Comm’r v. Groetzinger, 480 U.S. 23 (1987), the Supreme Court concluded that “if one’s gambling activity is pursued full time, in good faith, and with regularity, to the production of income for a livelihood, and is not a mere hobby, it is a trade or business.” Courts have considered the following factors in assessing whether a taxpayer has the necessary profit motive (no single factor of which is controlling): Manner in which the taxpayer carries on the activity Expertise of the taxpayer or his advisors Time and effort expended by the taxpayer in carrying on the activity Expectation that assets used in the activity may appreciate in value Taxpayer’s success in carrying on similar activities Taxpayer’s history of income or losses with respect to the activity Amount of occasional profits, if any, that are earned Taxpayer’s financial status Elements of personal pleasure or recreation.