Edsel

One of my clients has elected not to pay the Obamacare penalty. It is my understanding that the IRS cannot enforce this. Nonetheless, he was notified yesterday (CP 503H) that he owes this amount, plus interest. What is the likely result of this if he doesn't pay?

Contact, recommended by the faculty at Clemson: Margaret Gaillard [email protected] Greyrock Accounting; 135 S Main St: Suite 701 Greenville, SC 29601 Office: 864.552.1785 | Cell: 864.915.5584 Catherine, hope this isn't too late, and I hope Margaret works out. Best regards, Edsel

I've heard from a CPA friend on the staff at Clemson. He wants to confirm release of personal information before sending it to me. I should have something by Wednesday if you can wait that long. Sorry it has taken several days.

Good responses. Drake allows you to "bail out" but I didn't know whether this was in cases of revocation or other situations. From your responses, the states are still driving the issue and not the Feds. Thanks, Edsel

Drake is asking for Drivers' License or other identification before accepting electronic filing. Is this mandated or is this just Drake? Makes sense to cut down on identity theft - so long as the states are not issuing fake DL numbers.

No, but Greenville is incredibly close to Clemson - I have contacts there. Also will ask on another forum - I know a guy from Rock Hill, too far but well-connected. Give me another day or two.

I know a few. What town in South Carolina?

At least that's what I was told at a tax seminar in December. More involved in debt relief than anything else, but still claims skilled tax reduction on her website. Sacramento is apparently still her home town. We have at least one member from Sacramento. Know anything about this??

We've come a long way from finding a Missouri member who knows something about withholding.

Sorry, I never mastered any differential equation. I have nightmares about that dangling spring bouncing back and forth (like a giant slinky toy) and professor asking how how many seconds it would take to stop bouncing. This discussion from 3-4 of you bring back memories of lots of things I couldn't do.

Catherine that would be myself. But Differential Equations were my Achilles Heel. It required an integral mind (making something out of nothing) instead of a differential mind (looking at something and dividing it into interactive pieces and parts).

Thank you Abby. My problem is not the calculation but the definition of what goes in to the calculation. Best regards, Edsel.

Any help from someone familiar with Missouri withholding is appreciated. We're having fits getting people's net pay to agree with last year, taking over for another payroll service. The old payroll service claimed to have expertise in all states. 1. Line 1 of the Missouri W-4: When someone claims "1" does this mean they are claiming one ADDITIONAL exemption or does it mean only themselves? 2. Single vs. Married. From what I can read, if a spouse works, the effective withholding status is exactly the same as single for all calculations. This appears to be true regardless of which line is filled out. Is this correct? Thank you for your help.

At one point during the legislative process they were going to trash the AMT, but with the revival of $10K in taxes I suppose they felt like they had to get some of this money back. Another thing is the elimination of 2% itemized deductions, which was a big item in the AMT with no credit in the forthcoming year. I don't look for as many people having to deal with the AMT after 2017, but to answer your question is yes it will trigger the AMT if sufficiently large. And if it happens in just one year remember to explore the credit in the succeeding year (if it is still around).

It has long been advantageous taxwise for companies to institute an accountable plan instead of just plopping a stipend onto the taxable income of their employees. The only mechanics available to employees was the 2106 and the loss of 2% on itemized deductions. Additional loss of deductions could occur via the threshold to itemize. Employers, especially small employers don't want the administrative bungling involved with an accountable plan. Most of them don't even know what it is. But now, suddenly, there has never been more importance than to institute an accountable plan, and it may be as much as a year or two before they even know anything has happened. I have 7-8 salesmen who legitimately (I think) drive their vehicles up to 50,000 miles annually to sell for their employer, and receive a stipend rather than having an accountable plan. Now they get absolutely no deduction whatsoever.

I understand that HELOC interest is deductible under the new law only if used for acquisition or home improvement. The chances are overwhelming that a HELOC was not used for acquisition, but it could be used for home improvement or anything else. Since 1987, taxpayers have consistently been deducting HELOC interest for any usage imaginable, so long as the bank felt it safe enough to make the loan with the real estate as collateral. Most clients are going to continue to try this, not being knowledgeable about the change in the law. The preparer's due diligence is to determine what the proceeds were used for. Once they find out they can't deduct it for their trip to Monaco, they will fashion reasons to tell us it was used to finance the indoor swimming pool. How will we know the difference? The 1098 will not tell us.

Congress will likely not give IRS any increase in staff. They will claim they have "simplified" the law, thus IRS does not need any additional staff. Their view of "simplification" is really inane. One of the things they blatantly tout being "simpler" is to reduce tax brackets from 9 to 5. Yeah Boy, that one is really going to spare the IRS thousands of employees, right?

This is going to be interesting! What about the "contemporaneous receipt"? And the "voluntary" nature (I think it can be arranged that it will be "voluntary" at least on the surface) and especially that the taxpayer received nothing of value in return? The overwhelming activity between the Feds and States is to "tag team" against the taxpayer, and not to work against each other. This could get ugly. Fed finds a way to disallow the deduction, and CA quits corroborating taxable pensions from the state, etc... Bordering on the political, so I won't go further.

...this came from another forum. Appears some California politician has concluded legislation which allows California and their political subdivisions to accept contributions in lieu of taxes. For tax liabilities in excess of $10,000, the taxpayer may make a general donation (not earmarked) to the taxing authority, and the taxing authority will consider taxes paid. From the sound of it, it appears to be perfectly legal, as contributions have no such ceiling. (they actually do as a % of AGI but that would be extremely remote). I don't know why this wouldn't work, so long as the taxing authority accepts and doesn't pursue further collection. If there were no earmarking of funds by the taxpayer, I don't see why it wouldn't work. IRS may be digging in their bag of tricks to find a regulation which could disallow this, but I'm not aware of any.

Slick, no one has bought The Tax Book. They are small, family-owned organization, with an assortment of excellent writers with dozens of years of collective service. I am proud to know the owners and writers out of the Minneapolis area. Their writers are practicing tax preparers whereas the giant publication companies are afraid they would be sued if they allowed their writers to actually do any tax work. I buy their hard copy 1040 book and Business book every year plus their CD which gets updated online. Each book is at least 700 pages and contains concise and accurate conversation about thousands of topics. "Bigger is not necessarily better." As I have become older I think bigger is rarely better. I say that because of my prior history of dealing with and working for Fortune 500 companies and their out-of-touch and clumsy management structures.

Thank you Judy. I had seen this before but hadn't necessarily thought it came from IRS. Guess we leave alone until they create new tables appx February.

Can it be that the IRS still hasn't released the 2017 form 1040? The new law is passed and as far as I know does not affect 2017. Haven't heard from Drake either, I assume they are held up for the same reason.

Has been touched on by a number of discussions, but I will ask a defining question: After all is said and done, what does the IRS expect us to do effective January 1, 2018 regarding withholding? Leave 2017 withholding tables in place until February Update withholding tables to recognize pre-tax-law levels which would have occurred had the law not passed Optional - do whatever we want

Going back to the original post, I have to wonder if the one LLC filing as an S corp can be a legitimate shareholder in another S Corp. On the face of it, it cannot. However, I don't know if being an LLC changes anything. I thought if it chooses to file as an SCorp it has to take on all the characteristics of an S Corp, and that would include legitimacy.

What's their excuse this time? These giant insurance companies have known for five years they had to do this. Emphasized in BOTH my CPE seminars this year was that taxpayers MUST have their 1095s in hand before filing a return. Now Judy passes on the information that these huge insurance companies have been left off the hook again. We have historically known that large institutions (corporate, govt, educational, even religious) escape enforcement from the IRS, but this delay is ridiculous and without excuse.