Possi

I don't use either one of them. 

A friend owed a friend $5000. 

He paid her through PayPal. 

This was a personal transaction. Will the IRS question anything if this 1099K is not on the tax return? 

I know there's a lot of this in the world. How are you addressing it?

I've met most of my clients. A lot of the military referrals I have never met. The important thing is that I LIKE most of my clients... now. 

He did, no doubt. Thanks. 

New clients live together and have one child. 

One can itemize, one can take the standard deduction. 

Either one can claim the child...... BUT..... only the highest income can claim the HOH filing status, CORRECT? 

So, if higher income itemizes, lower income can file as "single" with child, correct? Lower income cannot file as HOH and get the bumped up standard deduction, right? 

I'm burnt out. 

https://revenuefiles.delaware.gov/2020/TY20_200-02I.pdf

Read the first part of page 10. You might choose the standard deduction in this case. 

I hope that resource helps. 

I wonder if you could file a MFS return to get it in, then would that buy you some time to change the filing status to MFJ? 

Just throwing that out there. 

I have one in the hole, too. I'll file an extension. Dad went into a memory care facility, sold his home and gifted his 2 children the balance he received from the sale. 

I agree with you, Terry. Just a few miles south, I believe SC still recognizes common law marriage. 

My (very simple, country born and bread) Daddy, John, lived with Myrtle... for a little too long, and she declared them married... Bought herself a very lovely wedding ring set,  and so it was. It passed every Common Law rule. She was thrilled.... Daddy cried for a while... then she fried some more chicken, slapped some biscuits together, and he felt better about it. 

Truth. 

State Tax Day - Current,S.3,Georgia—Personal Income Tax: Federally Excluded Unemployment Must be Added Back,(Apr. 7, 2021)

Georgia released updated income tax guidance stating that unemployment income remains taxable at the state level and must be included in a taxpayer’s income on their Georgia return.

Federal Law

Georgia updated its IRC conformity date before the adoption of the American Rescue Plan Act (ARPA). The ARPA included temporary changes to the taxability of unemployment income at the federal level in addition to other measures.

State Addition

Because the provisions of ARPA have not been adopted in Georgia, unemployment income remains taxable at the state level and must be included in a taxpayer’s income on their Georgia return. Any unemployment income that was excluded on the taxpayer’s federal return should be added back on Georgia Form 500, Schedule 1, line 5.

He DID use it for 2 of the last 5 years, so he can get a reduced exclusion on the gain, recapture not withstanding. 

https://www.journalofaccountancy.com/issues/2002/oct/thehomesalegainexclusion.html

...

EXECUTIVE SUMMARY

 TO EXCLUDE GAIN ON THE DISPOSITION OF A HOME from income under IRC section 121, a taxpayer must own and occupy the property as a principal residence for two of the five years immediately before the sale. However, the ownership and occupancy need not be concurrent. The law permits a maximum gain exclusion of $250,000 ($500,000 for certain married taxpayers). The IRS has issued proposed regulations to clarify how these rules work in certain situations....

2 minutes ago, michaelmars said:

I am filing a separate extension 4/15.  I have many clients that used up their 11mil exemption before it gets changed.  Never had more than 1 0r 2 gift returns before, this year its 9.

Holy Cow, I'm up for adoption! 

I only do one every couple of years, so I have to re-learn it every time. 

I just had to look it up and only found 4/15 so that's what I'm using.

https://taxnews.ey.com/news/2021-0586-irs-delays-deadline-for-individuals-filing-and-paying-income-tax-to-may-17-2021

Implications

The IRS announcement simply extends the due date of the 2020 Form 1040 and related tax payments from April 15 to May 17. The announcement does not extend the due date for:

Estimated tax payments due on April 15 for any type of taxpayer

Fiduciary income tax returns due on April 15, including those filed on Forms 1041, 1041-A, 5227 or 3520-A

Calendar-year corporation returns due on April 15

Fiscal-year exempt organization information returns (Form 990 series) due on April 15

Gift tax returns (Form 709 series) due on April 15, which will require an extension separate from the Form 1040 extension

Estate tax returns (Form 706)

3 minutes ago, Lion EA said:

If they'd been a payroll deduction for his 2019 W-2 and ended up being excess payments (highly compensated or whatever) then they are taxable on his 2019 tax return.

No, the financial planner had it all set up and I had to call him and let him know it was a NO GO. 

@Lion EAJust following up, these were overpayments that had to come out before the 2019 deadline. They were a loss, no gains. 

Whew!

Thanks for helping me! 

1 minute ago, Lion EA said:

Sorry, that's all I got. I used to get a lot of Code P for excess contributions to fully taxable retirement plans. But yours are Roths, right? Did the principal come from salary reduction? If so, then the full amount would've been part of wages in 2019: P—Excess contributions plus earnings/excess deferrals taxable in 2019.

Thanks. I got it. 

5 minutes ago, Lion EA said:

Code JM or JP? If P, then excess 2019 contribution removed in 2020; therefore taxable in 2019. See Table 1 plus all the explanations and examples.

https://www.irs.gov/pub/irs-prior/i1099r--2020.pdf

I'm sorry, it's JP. 

So, do I input zero taxable and amend 2019 for any growth that may have happened? It must be minimal, if any, because each one is so small. Am I overthinking this? I am purely exhausted.

This client has FOURTEEN 1099Rs listed on one statement. Seven for each spouse. Ranging from $17 to $574, totaling $2973 for each spouse in box 1 and zero in box 2 taxable. 

The box 7 code is JP.

I believe it is just the growth that is taxable. I'll find out exactly how much they put into the accounts and make the taxable amount equal the growth. 

Am I doing the right thing? I have never seen this before. 

Has anyone else had their VA tax refunds reduced after the update adding back the federal unemployment adjustment on Line 2? 

For taxpayers over 65, the worksheet for the age deduction  is adding back the 10,200 (or whatever your UCE was) and it is ultimately increasing the tax liability for these taxpayers.

This is NOT right, and needs a fix.

I uncovered this just this morning after my latest update. 

A call to Richmond has upgraded this issue. Look for another software update to fix it. 

Until then if you must file the VA state return for taxpayers OVER 65 AND had UCE, you can hope VA fixes this issue and refunds them their money. 

You would think this doesn't affect many clients, but in this little office alone, I have 2 on my desk right now and plenty more. 

41 minutes ago, DANRVAN said:

Correct, if it was a new job for an indefinite period.  Sounds like that was the source of confusion.

Thanks for that clarification, too~~ 

4 hours ago, DANRVAN said:

Your post does not tell how long the job in Milwaukee was expected to last, or did in fact last.  Also whether he expected to return to Chicago  for employment after the Milwaukee  job ended.

By the way, I was quoting the IRS. I didn't make up that scenario. Just clarifying. 

The same IRS site indicated that if it was a new job, the site of the source of income became his tax home. 

I was just interpreting it as I read it. That's all. 

This site:

https://www.irs.gov/taxtopics/tc511#:~:text=You can deduct travel expenses,one year is considered indefinite.

I've learned that I'm always learning, and you schooled me. It's good. 

Boom! There it is! 

Great discussion! Thanks! 

51 minutes ago, DANRVAN said:

It is temporary if expected to last less than one year and does in fact last than one year, per Revenue Ruling 93-86

Well, that is correct, and is not in question. 

The question is, where is his tax home? That is the first thing to be determined. As his only job, temp or not, that became his tax home. Isn't that right? His only job? His source of income? His tax home? That's the very top of the IRS discussion. 

11 minutes ago, DANRVAN said:

Your post does not tell how long the job in Milwaukee was expected to last, or did in fact last.  Also whether he expected to return to Chicago  for employment after the Milwaukee  job ended.

His tax home moves with his job, in this case. It's his new job, expected to last 4 months. So, it's not a temporary location for his present job. It is his new job. 

"Generally, your tax home is the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home." 

In this case, although temporary, it has become his main place of business since it is his choice to take a new job away from home, and it is his only job. 

Right??  

Since it's not a "temporary location" but a temporary job, that's not deductible. His new job location is his new tax home. 

"Generally, your tax home is the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home. For example, you live with your family in Chicago but work in Milwaukee where you stay in a hotel and eat in restaurants. You return to Chicago every weekend. You may not deduct any of your travel, meals or lodging in Milwaukee because that's your tax home. Your travel on weekends to your family home in Chicago isn't for your work, so these expenses are also not deductible. If you regularly work in more than one place, your tax home is the general area where your main place of business or work is located."

If OTOH, his regular job where he normally works, sends him to a temporary location, you might have a deduction, provided other criteria are met.