G2R

Every time I get an email from this client, I cringe knowing it's another new item to add to a multiple-times-completed return. 

Client is Married.  She has a place of abode in Virginia. She spent 44 days in VA.  The remainder, she was in RI with her husband.  Her driver's license is still Virginia and I'd wager she didn't update her voter's registration either.  She's bounced around various states and hasn't actually met the 183 days in VA since 2013.

I assume because she hasn't taken the necessary steps to separate herself from VA residency I have to file VA tax return, MFS correct?  

Need to file an amended Rhode Island tax return.  Clients originally filed MFS, now want to amend and file, MFJ.  I called RI and they do accept amended returns electronically, but ATX says, "RI DOR does not currently accept electronically filed amended returns" in the Check Return feature.  Is this only because the portal is currently not accepting them till the 2/12 date, or does ATX just not offer this service?
 

On 7/31/2020 at 1:40 AM, DANRVAN said:

For a grantor irrevocable trust, I believe it depends on the language of the trust.

As far as depreciation goes, it is a separately stated item on the K-1 and off the top of head don't recall how it flows with ATX.

For some grantor trust there are options for filing a less than complete 1041, not on top of my head either. 

HI Dan, 

Thanks for the reply.  Given there's no K-1 for this kind of trust (the Grantor is given the 1041 Grantor Information form), I was able to find an old forum discussion about 1041s and JKLCPA mention this area of the Fixed Assets data entry that corrected the depreciation not flowing in my 1041 return.  I'm adding it to this discussion so hopefully it helps someone else in the future.  Thanks DANRVAN & JKLCPA for your assistance. 

New Client.  Needs me to file her Irrevocable Trust return which has rental property.  After reading the trust documents, I reached out to the lawyer and confirmed it's a GRANTOR, IRREVOCABLE trust.  A unique setup done for Medicaid purposes I'm told.  Fine.  

I have to file a 1041, but for informational purposes only.  Then, the grantor is given a 1041 Grantor Trust information form to include the rental income & expenses on her personal return.  

When I complete the return in ATX, it's not flowing the deprecation through to the information form.  I've research this and do see where Sec 179 is not allowable on trust returns, but I don't see where SL depreciation is disallowed.

Because the return is really just an information return, am I to exclude the 4562 from the 1041 return, and only include it on the 1040 personal return of the grantor?  Or perhaps include a copy of the 4562 with the 1041 Grantor Trust Info form?  Or perhaps the deprecation somehow disallowed?  

On 5/13/2020 at 11:56 AM, Abby Normal said:

Not a Drake user, but whenever I need a number like that. I do a with and without on the return to calc the difference.

That was my only logically solution too so thanks for the reassurance.  I just always wonder, before computers were doing all these calculations for us, how in the world did accountants figure this stuff out?  

Anyone have experience with the 8582-CR form?  I have a new client.  She gets a credit each year from a partnership for Employer SS/MED taxes on the K-1, and she many years of disallowed credits that she's carried forward.  I think the previous accountant was using Drake, so I'm hoping some of the Drake users here might know.  When I'm calculating the 8582-CR, line 6 amount on page 1, ATX does NOT auto-calculate this for you, it wants me to calculate it.  I've manually calculated it, but when I go back and use my methodology to check myself on the previous returns filed, I don't get the number that's on that return so I'm second guessing my methods.  

Does Drake calculate this number for you?  And if is, do they show you somewhere HOW they calculated the number? 

My method of calculating follows the IRS instructions for 8582-CR.  Tax on Taxable Income with Net Passive Income MINUS Tax on Taxable Income without Net Passive Income.  Seems simple enough but perhaps there's a step I'm missing?  I'm using tax tables to calculate the tax for both. 

So I got tired of trying to remember all the steps to take doing this and finally took the time to document it all.  I hope this helps save someone else a lot of time and aggravation going forward.  If there's spelling, grammar issues, I apologize.  When I created this, I didn't intend to publish.  

Reconciliting Self-employed health insurance and premium tax credit.pdf

4 minutes ago, Abby Normal said:

Thanks, Gail, but I think you have to be a customer to subscribe to those emails, at least, I didn't find a way to subscribe. I could have unsubscribed you, though, so you might want to delete that link!

Thanks for the heads up on the link.  MODERATORS, help!  I can't edit the post anymore.  

I'm not a customer of theirs, but somehow got on the email list anyway.  Hmm, I'm so tired, maybe I was researching in my sleep.  

This was a solid read regarding the various options for small business assistance from the U.S. Senate Committee on Small Business and Entrepreneurship.  It answered a lot of questions I keep seeing people ask.  Hope this helps others.  

The Small Business Owner’s Guide to the CARES Act

In addition, I subscribed to Live Oak Bank emails and they have been great about getting specific and changing information out really quickly.  Here's an example of what they sent out yesterday. 

Live Oak Bank Wed, April 1 Email  (link was removed, contents posted by JKL in a post below)

All the best ya'll. Last year's tax season was brutal with all the tax reform changes, and I thought this year would be much, much easier.  HA!  Enter, the Coronavirus & CARES Act. BAM!  I'm a hot mess again.  Be well!

Here's a good place to start with a ton of info.  (There are so much on the internet now, it can be quite overwhelming.  

https://www.sbc.senate.gov/public/_cache/files/2/9/29fc1ae7-879a-4de0-97d5-ab0a0cb558c8/1BC9E5AB74965E686FC6EBC019EC358F.the-small-business-owner-s-guide-to-the-cares-act-final-.pdf

The Covid-19 forum has a lot of great info already!

Just curious if anyone is ignoring NY State's nonacceptance about e-signatures given the current state of affairs.  

CamScanner is an app I recommend to all my clients.  it has different filters that makes the documents really easy to see, a fantastic cropping feature and will put multiple pages into a PDF.  

I've had a number of clients call me about this and I remind them, this is FEDERAL.  Until their STATE issues parallel timelines, they can't take the July 15th date as their own deadline. 

And then I reiterate, let's just it it FILED and if you want to delay paying till July 15th, so be it!

I think this thread might be useful. 

Just wanted to confirm.  My client works in NYC, lives in NJ.  Her W-2s only come with the NY state information.  No NJ portion allocated on the W-2s.  She has Roth 401k, 401k, Health Insurance and HSA as deductions in box 12.  

When I complete the New Jersey return, I have to manually adjust NJ wages to add back the HSA deduction correct?  I'm kind of surprised ATX doesn't automatically do this since the codes are there so it should be easy enough to link, but apparently, they don't.  

What your starting fee for an 1120S?  Do you based it off number of shareholders?  

What about starting fee for Federal, State and City Corporate returns?  (For many, I'm sure city is nonexistent, but I'm in the NYC area so I'm askiing.)

I think I'm GROSSLY undercharging.... 

1 hour ago, jklcpa said:

See table below. Fourth and fifth year percentages are the same, straight from the table and the reason Drake is calc'g 2019 as $1,349.  Your expense for that vehicle is below the luxury auto limitls for 2015, so that isn't the problem, and it's not a switch to SL at all either.  Still doesn't explain ATX and why the limitation. There must be some input or something limiting this particular auto and its expense.   

I agree, it's gotta be an input item, but I've poured though the details, and just can't find it!  Well, thanks for so much in depth analysis.  I really, really appreciate it.  This whole thing made me do an impromptu refresher course on DDB, HY/MQ Conventions, and the sorts. 

2 minutes ago, jklcpa said:

No, I really meant the 2018 expense that is the fourth year being depreciated.  I was showing the 2018 calculation using Macrs DDB-HY and that it is exact EQUAL to the SL calc for that fourth year.

Then for 2019, that would be the fifth year of expense, the SL rate is higher than the MACRS.

I was trying to prove out all the numbers used to date for that vehicle since that one's calculation is problematic.

I inserted the year end accum deprec each year in my post above, and I tried to clarify the fourth and fifth years' descriptions with bold formatting for clarity.

I see where you were going now!  Well thank you for clarifying.  Well, I'd now agree with Drake on it's methodology.  ATX though 

Logically it doesn't make sense to reduce the QBI income if it was already reduced at the entity level. 

Example:

S-Corp K-1 box 1: $30k, and SEHI is obviously already included in this as it's a deduction on the 1120S return.

Payroll $50k (with $10k being SEHI)

1040 would show $50k payroll + $30k Sch E,pg2, Less $10k SEHI.   (Payroll shows $10k more income from SEHI, then SEHI deduction nets it to zero because the deduction was already taken on the 1120S return,)

If you then take the $30k Sub-S profit and reduce it AGAIN with the SEHI, you're reducing the profits of the Sub-S twice.

Now let's take that same example above except pretend the the profit of the company is ZERO. 

S-Corp K-1 box 1: $0k, and SEHI is obviously already included in this as it's a deduction on the 1120S return.

Payroll $50k (with $10k being SEHI)

1040 would show $50k payroll + $0k Sch E,pg2, Less $10k SEHI.   (Payroll shows $10k more income from SEHI, then SEHI deduction nets it to zero because the deduction was already taken on the 1120S return,).

Does this mean the QBI is Negative $10k?  So if you have other business that are profitable you lose $10k of them for QBI purposes?  That just doesn't even make sense.

It totally makes sense for the Sch C filers to reduce QBI for self-employee health insurance since it's not included on the Schedule C, but not the S-corp.  

1 minute ago, jklcpa said:

That is the accum deprec through 2017 that is used to calc the adjusted basis at 12/31/17 because the adjusted basis at that date is used to calc the 2018 expense.

Did you mean 2018 accum depre to calculate 2019 expense?

Hmm .. If so, then isn't the 2018 accum depre is $17,688 as shown in the column labeled Prior Depreciation?

And for the record, ATX doesn't seem to have that same rate column. 

43 minutes ago, jklcpa said:

Edit post to include this part (in blue):  The 2018 expense of $1,349 is calc'd as (19712 - a/d 16339) / 5 * 2 = 1,349. 

Thanks for taking the time to figure this all out.  The mid-quarter gets me closer, but I never considered the switch to SL!  Thanks for that tip!.  Gotta question, in the pic, it looks like prior year depreciation is $17688, so where are you getting the a/d of $16,339 from?

1 minute ago, jklcpa said:

Even though your depreciation schedule shows 100% business use, are there entries elsewhere in the input for mileage or usage that may be affecting the final calculation for the 2015 vehicle?

No, not that I've found.

And the picture of the Drake printout was a big help, THANK YOU.  Seeing the RATE column let's me see that DRAKE is using the HY DDB convention for 5-year property table.  Now, I gotta see if ATX will give me that same column information on mine and see if I can backtrack to which table it might be using.  Wish me luck! 

I have not, however, just wanted to remind you, if you e-file the return, you need to add the signed Form 2553 as a PDF to the return for it to be filed.  

On 2/29/2020 at 9:23 PM, Terry D said:

Did you do this as a listed vehicle with limitations under 6K lbs? Just a thought. I tried that in Drake and it returned a different value than ATX. Take a break and come back later and double check your entries. If they are correct, I would be calling ATX and overriding if you can. 

 

I figured out it has something to do with the midquarter convention, but I still can't get the number to be exact.  When I use the MQ DDB tables, I get closest to what ATX is calculating.  Still not exact though.  

The other two I referenced earlier as being off as well, were spot on when I used the tables, so it's gotta be something with special about that Ford Focus.  Anyways, thanks for your input Terry D!  I'm close enough to keep trudging along. 

I don't know if I'm really that tired, or dumb, but for the life of me, I cannot figure out how ATX is calculating their depreciation for my client's vehicles.  Help!

In the below detail, the 2015 Ford Focus.  My calculation is:

$19,712-17,688= $2,024/5 = 404.80 * 2 = $809.60  ... They get $1,206.  What am I missing?

My calculation works for the 2016 Ford Focus, but the other two I'm off again.  

1 hour ago, Yrags said:

Hi, new to ATX. Client had paid Federal and NYS/NYC estimated taxes. I can jump to estimated tax worksheet from Line 65 on 1040 no prob. But when I jump to the NYS worksheet from line 75 on the IT-201 the state amounts are entered in a different 1040 worksheet and the city amounts are just written in separately. Problem is the 1040 worksheet is used to calculate the deductible amount on Schedule A, so I want to be able to enter the State and City amounts, but then back on the state worksheet it shows both amounts as the state amount. If this question is not too convoluted can anyone tell me how to enter the city amount separately from state so they both appear on Sch A AND on pg 4 of the IT-201 properly?

Thanks. Just FYI I am doing a 2017 return so the state taxes are not limited.

TIA.

Hi!  I've always entered the total of NYS & NYC together in the NYS taxes paid.  So far, I've never found a reason the NYC tax estimates need be separately reported since they are totaled on the return on line 75 anyway.  Truthfully I have no idea why they have that NY City taxes entry there in the detail section of Line 75.