Abby Normal

That's how I handle it. If audited, I would offer to prepare a W2c and a 1040X but point out that the tax will not change, and hopefully the auditor will agree to let it go, because there's zero money in it for the IRS.

I would assume the prior preparer did it wrong, and move on.

The comparison form is the main reason I set the preference not to print zeroes. I sometimes want to type notes on it in the PDF and the zeroes make that difficult.

If just the bank account was wrong, you just debit distributions and credit sales. But was she paying S corp expenses out of the S corp checking account? If so, where was the money coming from to pay expenses? Other sources of sales (cash, cc)? Was she transferring the square deposits to the S corp checking account? And why did she not correct as soon as it started happening? Sounds like she was nowhere near ready to go the S corp route.

You can override that line if you don't want to wait, but it may cause problems with the states.

Yep. Not sure why I'd ever worry about FICA withholding when it has no bearing on the tax return. I get W2's with no FICA withheld a few times every year. I just delete the FICA wages on the W2 and move on.

You get a deduction for having a sexually transmitted disease? Is that for the porn industry?

You can get rid of all those referral parts of the url: https://www.accountingtoday.com/news/lawmakers-ask-irs-to-extend-tax-season-until-july-15-due-to-covid

I did mine several years ago and had a similar experience.

Exactly. My clients come in when they've been coming in for years, early for the big refund people and late for those who owe, typically. An extended deadline just saves me preparing a bunch of extensions.

Basic bookkeeping: Prior year net income (loss) always closes to retained earnings. QuickBooks and other accounting software does this automatically. I close total prior year distributions as of 1/1 each year to retained earnings so the books match the tax return retained earnings, and I can see that the books match the tax return beginning balance sheet without entering both numbers into a calculator. This also makes distributions start at zero for the new year. I know some accountants who don't close S corp distributions each year and they do a comparative balance sheet to see current year distributions but I'd rather see that beginning RE is correct at a glance. For partnerships, I also close partner capital contributions the same way I close distributions, except to each partner's separate capital account.

Also, you have the issue of debt-financed distributions where the interest in the S corp may not be a deductible business expense. https://www.thetaxadviser.com/issues/2007/nov/interestdeductionondebtfinanceddistributions.html

You should hire an accountant or a really good bookkeeper. Your questions indicate that you're in over your head.

Who has an AAA account on their books? I've never heard of nor seen such a thing.

No.

Yes.

From a reply to an email I sent to MD tax pro help: Currently the form 502LU is being developed and will be completed within 2 to 3 weeks. At that time paper returns should be filed to include the 502LU deductions along with the 502LU form. If a return has already been submitted which included the unemployment as being taxable you should file an amended return. You will need the form 502LU which is still being developed. Taxpayers will be given credit for any withholding on line 40 of the form 502. So MD returns with unemployment will need to be paper filed. It sounds like MD doesn't expect to reprogram their computers for this new and temporary form.

MD just passed a law last week making unemployment not taxable for singles with federal AGI less than 75k (100k joint) and MD hasn't even released the new forms yet. Who knows how long ATX will take implementing the new forms.

Technically, we were never supposed to put refunds of prior year deductions on Sch A. They're supposed to be other income. But I always felt that if the deduction and the refund were in the same year (like a house sale), then netting was fine. Will it also reject if the negative is in an itemized list, but the list adds up to a positive number? I know it's more work and it's harder to review but it could be a work around.

Without seeing screenshots of the errors, I'll just say that there is a foreign section farther down on the K1 Input form where you have to enter additional info.

To avoid matching notices, on person whose SSN the interest and dividends are reported, report the full amount and nominee out half to the other person. I've never done that on 8949 but there is an adjustment field there as well.

Yes, if you're under the 85% taxable limit or just over, it matters and you'll have to override line 3 of the SS worksheet by subtracting 300 from whatever is there.

Besides, moving investment income to the spouse should result in lower tax than leaving it all on one.

Correct. It clears the print queue in addition to restarting the spooler service.

I think you'd have to split the investment income to be proper, but I've never had to research that. As an aside, this is one of the reasons I discourage joint investment accounts. The other is when one spouse dies, it's much easier to see the basis step up.