Abby Normal

People who died in 2019 are not entitled to the stimulus payment but those who died or will die in 2020, should be entitled to it. There is no "final" checkbox on 1040's, but the IRS learns quickly that you are dead from the Social Security Administration. When I see an obit for one of my clients, and I have a POA for them, I quickly download the latest transcripts because if I wait 30 days, I can no longer download transcripts.

Home ACQUISITION debt is deductible when use to purchase or improve a home. It doesn't matter whether the bank calls it a mortgage or a HELOC. This means we have to track the original mortgage balance through refi's because the interest on refi costs that are part of the new loan are not home acquisition debt.

Yes, you pay tax where you earn income, unless there's a reciprocity agreement between the states. And reciprocity is almost always just for W2 wages.

I see it as an error, plain and simple, not an accounting change. I bet the preparer changed software and didn't enter the states correctly, because only federal matters, right? Right?!

S corp late filing penalties are hefty. Hopefully you qualify for relief under first time penalty removal. Why didn't the preparer either file it on time or prepare an extension? I'm confused by this arrangement. Was this a paper filing? Was it done before 3/15?

The IRS and the law said that no one should return stimulus payments. The IRS has set up procedures for decedents to return stimulus payments (which I disagree with) but has not said anything about dependents, as far as I know. My policy is for everyone to keep it and deal with it on the 2020 tax return.

It's probably not there because 1040 SR is just for paper filing?

Maybe I'm not doing 100% correctly, but in ATX I mark the asset 'converted to personal use', then use the 8949 worksheet for sale of a principal residence, and just enter the accumulated depreciation on the appropriate line. Same for home office.

Next time support calls in, take notes or record the screen so you can learn how to fix it. Then share, please!

3115 is a federal form. CA must have their own rules for this situation, which, unfortunately, might just be amending returns, so you'll lose out on that earliest year.

It's not your decision, though. The client has to make that decision. I'd probably let sleeping dogs lie and start payroll in 2020.

Agree with cbslee. Track all the money in and out in the capital accounts.

Have the employee fill out a W4 and state equivalent that will result in zero withholding of income taxes.

These mostly arise when the shareholder has zero basis and the preparer doesn't want the shareholder to pay capital gains tax on distributions. It's a ruse the would not pass IRS scrutiny, especially if there are no loan documents, interest rate or regular repayments, and they likely totally ignored imputed interest rules. You'll have to move those to distributions if the shareholder can't/won't repay the money.

Here's a good summary of some of these issues: https://www.thetaxadviser.com/issues/2014/jan/nitti-jan2014.html

My clients are not that way. They come in the same time every year, regardless. I just hate having to do extensions for days on end, and the constant worry that I missed extending someone. I'd rather just be finishing tax returns. And doing 50% of my work in essentially two months is my least favorite thing about public accounting. I'd much rather spread the work out over the year, and work more normal hours most of the year.

Exactly. Spreading out the workload and lessening the stress were always goals of mine. I love my clients who always go on extension. There's no way I could do them all by 4/15.

First, I would move the shareholder loans to additional paid in capital. S corp debt basis is an unnecessary complication. Too many preparers plug the balance sheet, which I hate! If the balance sheet is wrong, the tax return is probably wrong too. Ideally, you should recreate all the returns from inception and reconstruct basis too. You didn't mention stock basis so I'm guessing the prior preparer didn't track that? Are there actual balanced books for these companies?

Just go with the way ATX does it. The IRS doesn't compare years and bottom line is the same anyway. Besides, I think the prior CPA was wrong.

We have cable phone at home and VOIP at work and we were getting tons of '800 Service' calls awhile back and half the calls at work were robocalls with just city & state showing on the caller ID. It's settle down at home quite a bit. Not sure about work because I haven't been in the office for over 3 months.

Yeah, extensions are a huge waste of time and money. The extension ought to be truly automatic, where if you don't file by 4/15, it's automatically extended to 10/15 without any effort for taxpayers or the IRS. Essentially this would make the due date 10/15 with payments still due 4/15. At least with efiled extensions, the IRS doesn't have to manually enter 10's of millions of paper extensions.

Usually, killing the ATX Server in Task Manager, then running ATX Admin Console will fix the 'connect to server' issue. But it sounds like your database has errors. ATX does have batch files you can download and run to repair the database, but I'd let support do that since your error is not usual.

None of states I deal with have late filing penalties, only late paying penalties. And refund returns don't need extensions anyway. For science, try to efile the federal extension now and report back to us.

I used to mail paper extensions in a box. It was a lot easier for me to put 300 sheets of paper in a box and it seems like it would be easier for the IRS too. #ExtensionsAreStupid

I think it is. There are a lot of little things that just work better both on the federal and state levels. Of course, I don't have Max to compare it to, so I'm not sure if these upgrades are in Max or not. But the last year I had Max, I had to change a multistate return and forgot to fix the credit for taxes paid to another state and it went out wrong. That would never happen in Advantage. Oh, and when I called support last year, one time a person answered and the other two times, my wait was less than a minute. They call it Concierge Support and there's a separate number.