Patrick Michael

Make sure to see if your state still allows employee expenses as an itemized deduction. NY decoupled from the TCJA rules and does allow the deduction.

Can't wait for all those "How come I'm getting back less than last year" discussions!

Make sure you track your business/personal usage so you only deduct the business use!!!

I don't use any words. First letters of a phrase with other letters, numbers, and special characters that change depending on the web site name. For instance, (not the actual core or scheme): core is Wttartif. Then the second letter of web site name, then a ? if the first letter of web site name is vowel, * if not, followed by the number of letters in the website name. This way if someone gets one of my passwords, they can't use it to access other sites, but I can still remember numerous passwords. According to password strength tester it would take 2 thousand years for password guesser to get it right.

I have talked with many of my fellow tax professionals and I keep hearing that if the mess at the IRS does not get cleaned up they will be leaving the field. They are tired of spending hours replying to IRS letters on simple matters and then getting no reply to the letters for months and months. Clients waiting over a year for amended returns to be processed. Clients continually call to see what is going on and then are upset when you tell you don't know, waiting on the IRS to respond. And you can not get through to anyone on the phone, and when you do, the person can not (or will not), help to fix the matter. Clients are frustrated, tax professionals are frustrated, and the IRS just doesn't seem to care.

Every April I say this is going to be my last year, I'm getting too old for this. By time December rolls around I say it wasn't that bad, and do it all over again. I do have a friend who is just starting on his own who is interested in purchasing my book of business and keeping me on to help out. I still enjoy the actual prep of the returns, just getting tired with dealing with the IRS, NY state, and clients, so I'm seriously thinking of taking him up on his offer.

I used to work for a company that was self insured for workers comp. Every quarter they would take a look and if it was a good quarter they would over accrue for WC claims and if it was a bad quarter they would under accrue. I questioned the CFO about this and he said it was to smooth out the earnings. He got real made when I asked which GAAP pronouncement allowed the smoothing of earnings. The auditors finally put their foot down and demanded an actuarial study and found they were over accrued by almost 100% and made them bring it back in over the next year. And the real kicker was our bonus was based on net profit, so when they over accrued our bonus suffered but when they were forced to bring it back in, they excluded that amount from the bonus calculation.

Schedule C house painter. He has estimated his business mileage, but does not keep a log, would take him too long to reconstruct, and said to just forget it. But wait, there's more...by forgoing the mileage expense, it increases his EITC. So do I include the mileage, because it was an expense, even though he does not written evidence as required? Or leave it off and increase his EITC. Not talking big money, less than $500.

Client and spouse are 50/50 owners of an LLC taxed as a S Corp. They both take a reasonable salary of about $15K and have each have ordinary income of about $10K on their K-1's. They want to start collecting social security early, so they have to keep their income under $19,560. Any reason they couldn't gift 25% of the LLC to each of their 2 children to reduce the K-1 income and get them close to the magic number? The children don't participate in the LLC so no need to pay them a reasonable salary. They understand that any distributions have to be made have to be made in same proportion as ownership and the kids would have to include the income on their returns. Is there anything else I have missed?

As a retired police officer I can confirm your belief. We recently had an out of state felon, just a couple of months out of jail, come to Rochester and ambush two police officers who were sitting in a car, killing a 29 year veteran of the RPD. The officers I speak to are burned out and afraid to do their jobs, not just because of the physical danger, but afraid of losing their livelihood and pensions if someone makes a complaint to the Police Accountability Board, whose members consist of a convicted felon and the rest are very vocal about hating the police. Not one person on the board has any law enforcement experience and understands what it is like on the streets.

I have had a couple of cases with the NY sales tax people. One, the agent was very helpful, listened to us and even waived the penalty. The other two, the agents were real jerks and impossible to deal with. Didn't want to hear anything except when they could expect payment. It seemed like they were working on commission, getting a cut of every case they closed. If your client was on file as a "responsible person" it's hard to argue that he didn't know what was going on.

Payments from the state are not considered as support from the child, so they do not enter into the calculation for the support test. As long as the child does not provide over half their support, the foster parents can claim them as a dependent, as long as all the other criteria are met. From IRS Pub 501 Example 2. You provided $3,000 toward your 10-year-old foster child's support for the year. The state government provided $4,000, which is considered support provided by the state, not by the child. See Support provided by the state (welfare, food benefits, housing, etc.), later. Your foster child didn't provide more than half of her own support for the year.

"Sen. Elizabeth Warren, D-Massachusetts, and a group of nearly two dozen Senate colleagues introduced legislation to enable more taxpayers to file their taxes online for free directly via the Internal Revenue Service. The Tax Filing Simplification Act would direct the IRS to develop a free, online tax preparation and filing service that would allow all taxpayers to prepare and file their taxes directly with the federal government instead of being forced to share private information with third parties. It would actually prohibit the IRS from entering into agreements that restrict its ability to provide free online tax preparation or filing services. The bill also aims to improve taxpayer data access by allowing all taxpayers to download third-party-provided tax information that the IRS already has into a software program of their choice, saving time and decreasing the risk of math errors on W-2 income or Child Tax Credit payments that lead to significant processing delays."

From Accounting Today: IRS implements new fingerprinting process for e-file The Internal Revenue Service is planning to mandate a new electronic fingerprinting process for e-file applications for tax practitioners starting Sept. 25. In an email Wednesday to tax professionals, the IRS said individuals would be required to use an IRS-authorized vendor for fingerprinting. Each new principal and responsible official listed on a new e-file application or added to an existing application needing fingerprints will need to schedule an appointment with the IRS authorized vendor. The cutoff date to mail paper fingerprint cards (Form FD-258) to the IRS is Aug. 15, 2022. The fingerprints cards also need to be postmarked by August by that same date, and the application has to be submitted prior to mailing the fingerprint cards. The IRS won’t process fingerprint cards postmarked after Aug. 15, 2022, the agency warned. In addition, customers needing fingerprints will need to wait until Sept. 25 to schedule an electronic fingerprinting appointment. On Sept. 25, 2022, they can schedule an appointment by accessing the scheduling link located on the e-file application summary page. Instructions for scheduling an appointment will be provided upon submitting an e-file application and on IRS.gov. The IRS plans to provide additional information about the new fingerprinting process on Sept. 25. The Become an Authorized e-file Provider page on IRS.gov will offer the most up-to-date information.

What Bulldog Tom said!

Correct. I also used to update all clients at the start of the year but it became too confusing figuring out who has dropped off, finished, or somewhere in between. Drake has a report that can be run showing what clients have not returned so I can contact them in late March to see if they want to go on extension.

Thinking out loud here...if the business is a C or S Corp or partnership and the land is personally owned, could he "rent" the land to the business entity, at FMV? He would have to report the income and expenses on a Sch E, and could not take a loss, but at least he would be able deduct it on the business side.

I use Drake and the Client Manager does a great job of tracking returns. I accumulate the returns as they come in through out the day in a bin. First thing every morning I update files from last year in the software, scan all documents into Drake's file manager (this gives me the opportunity to see if any obvious documents are missing), and transfer the papers into a another bin. I then sort on the date the paperwork was received and/or the status to see which returns are today's priority. After the return is complete the return is printed, marked complete and it is hidden in the CMS.

No way to answer these questions without more information. Basically, it will come down to how the deed was worded (wording depends on the state) and if the home was sold before or after the parent(s) passed away.

Must be by 3/15/22 for YE 12/31/2022, 3/15/23 for YE 12/31/23, and so on. Not sure how it works for fiscal year ends.

NY is an annual election, that must be made by 3/15. The election, estimated payments, and return must be filed through the NY Tax website. Payments are prorated to each member/partner and their share of the payment is a refundable credit on their personal returns. Only other quirk in NY (not sure about other states) is that the PTET is added back into NY income on the personal returns.

A lot of hard work, but definitely worth it. Looks great!

I had a couple of clients that ran into this. You have to re-calculate the federal the amount of EITC the client would have received using the NY Recomputed FAGI, and then use that amount to calculate the amount of NY EITC. Had some clients that lost their entire NY EITC because the NY Recomputed FAGI was more than the NY Maximum Income limit for NY.

I just finished my 25th tax season. I got a late start, going back to school to get my BA in accounting after a 20 year career as a Deputy Sheriff. Last two years have been difficult with all the changes and challenges from COVID. Hopefully next year we can get back to "normal".

One situation I can think of where there were One way this could happen comes to mind. If there were substantial capital improvement(s) that did not add market value to the home. We had a home owner in our area that added a new addition to their home for an indoor pool. I doubt they could ever re-coup the cost of the addition and pool as this is middle class area of the city..