Patrick Michael

I found auditing very boring too so opted out from going the CPA route.  After a couple of staff accounting jobs at private business's I landed a position as an accounting manager with the 3rd largest vegetation management company in the country.  They also owned a Canadian company and I found the international component and consolidation work very interesting.  They even paid for me to get my CMA with a nice raise when I passed. 

I too have many long time clients, many retired, that I charge according to their income, with a $125 minimum .  Several of the smaller preparers in my area retired last year and two of the larger firms raised their minimum to $600.  I was getting many calls from prospective new clients and decided that the minimum for any new clients was going to be $195.  Many balked at the fee at first, but then called back when they discovered they couldn't find anyone to do them for less.  I don't really need new clients so I'm raising the minimum to $225 this year to make the extra work worth it

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.

2 hours ago, BrewOne said:

If you think a 1040-X may help clarify the situation, you can write on the top of it "DO NOT PROCESS--FOR COMPARISON PURPOSES ONLY"

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.

On 1/27/2023 at 1:12 PM, Max W said:

Unless the spouse and child were included in the lawsuit, they expenses can't be deducted from the settlement, but they can still be taken on 

SCH A as long as the expenses were incurred by a licensed medical professional, and not paid by insurance.

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.

6 hours ago, Terry D EA said:

Even at 12,000.00 there had to be some SS deducted, paid somewhere. if he was self-employed, It seems like the EITC and CTC would have eliminated any SE tax. With that said, the SE tax generated is the SS portion still credited to his SS account? Never thought about this before.

 

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.   

On 1/20/2023 at 9:38 PM, Christian said:

I have his 2019 return prepared and he is coming to collect and file. He never owes and in point of fact has paid no Social Security tax for as long as I have been doing his returns. The Earned Income and Child Credit has caused him to owe nada so any benefit he will get will largely be one he has largely never funded. As Jackie Gleason famously said "How sweet it is" ! 

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.