Randall

A client came in with a 1099-INT she wasn't expecting. We amended. She owed Fed $6 and Ky $1. Ordinarily I would have told her to forget it but she was an IRS employee so I told her she better amend and pay to play it by the book. She told me she had to keep everything good with the state filing too. So we amended both and she paid the extra.

Are you saying that the child who doesn't provide 50% of her support can claim the non-refundable portion of the education credit? When I input this in ATX, I have to uncheck the box that says someone else can claim her. Her total tax is $863 which she then gets a credit for. But then I have to show the child on the parents' return as NOT claiming the child. Then their refund is reduced by the $500 for the child credit. Net savings is $363. Is this correct?

Check the EF form for the state. There should be a tab to show which forms are included with the efiling. You have to create the efile before this shows up. This is for ATX.

Another question. I think I can at least allocate the amounts between principal and income. So at least a portion should be allowed as a charitable deduction. My question is can the trustee allocate all of the income portion going to the charities and take a bigger charitable deduction and allocate the principal going to the individuals? I'll have to look back at the document but I was just wondering. After all, in the end, the recipients still get the same amount of money, whether from the principal or income. The income is now part of the principal.

Thanks. I think the document specifies how much each will get but it is a percentage and not a dollar amount. I still need to get with the trustee (and attorney) on how much the final amount will be. Of course, the trust paying the tax upfront may affect the final amount these charities receive. I'll have to review this with the trustee. The document says the trustee has authority but does not direct the trustee to yay or nay. I don't think the amount will be large enough for these charities to have their lawyers involved. We're talking maybe $15k or so each, not millions.

I just received a notice for 22H2. But it says it is for Windows 10. Am I ok on this?

The organizations are listed as beneficiaries with their percentage due. All assets (principal and income) are to be distributed ending the trust. So I assume I can at least allocate the income and principal and take some of it as a charitable deduction.

Interesting clarification. I'll have to look into it further.

If child earns about $20k, but still lives with parents, can the child claim herself as not a dependent? Is it a matter of choosing or will I (or they) have to determine the support allocation (50% or more supporting herself)? My situation is that parents took some money out of a 401 and this amount puts their income over the limit to claim the education credit. But the child may be able to do so if she is not a dependent. Still seems like a dependent to me.

A little different question: Does a trust have to give the trustee a 1099 for the fee the trustee receives? I still have to find out if any fee was paid in 2024 or will be paid in 2025.

If the trust document list some beneficiaries that are organizations and would be charitable, are these distributions considered charitable deductions in calculation of the income tax of the trust. Other beneficiaries listed are individuals and the trust wants to pay the tax upfront. Yes I know the tax will be higher at the trust level.

Where is this? I don't see it. And wouldn't this nullify the reason for having authentication in the first place?

I wonder if ATX price will go down without Payroll.

I haven't got the letter yet. I have payroll for 2024. I guess the letter means next year, 2025.

Thanks for the warning. Any word on Windows 12? I'll probably have to get a new computer later this year anyway, whether Win12 or Win11.

If an aging parent transfers home to child while living, but the document specifies parent can live there until death, does the house not really transfer until death? Inherited stepped up basis? I keep hearing this but I don't know where to look for reference.

This is what I've found too. When it comes to RMDs or inherited accounts, it seems they run Roth with the traditional IRAs. And it's sometimes confusing to distinguish if what they're saying is the same for both or different for each type of account.

Yes, in a way. But I'm an old man now. I like easy and boring. And I like taking more time off.

I'm a little confused on these rules. As I understand it, RMDs for Roths are required for a non-spouse beneficiary. Beneficiaries are excepted from the five year rule. But the ten year rule? Does the beneficiary have to to begin taking the distributions over the ten years or can the beneficiary wait and take the entire amount during the 10th year?

I know what you mean but they take more time and I want easy these days. So I'm not taking new business clients and have thinned them out the past few years. Only taking new personal returns if they are very basic.

It's January 2. The year is going by fast.

I have two monitors for myself. They are 20 inches and suit me well. I have them set up as number 2 being an extension on number 1. I can show the client docs on my no. 2 and work on the tax return on no. 1. I do have a third monitor sitting farther away. I have this no. 3 set up to mirror my no. 2. I only use it if I need to show a client something. I can move the doc to my no. 2 and turn on the no. 3 and the client can see what I see without standing over my shoulder.

Thanks for the comments. I was looking at the instructions for 1128. I saw there was no fee for the automatic approval. But I think my client will not be eligible and will have to request a ruling approval. There was mention of a fee but I couldn't find the fee amount and there was mention of the fee varying.

I went with the MS app. I always just stick to MS.

But if it was a deposit, wasn't it returned, or applied to a future year tax? Or was this the fee required? And what was the amount and how determined?