G2R

Does the W-2 at the bottom state the full wages as NYC wages? If so, ATX will automatically populate as fully earned in NYC. To correct this (which the employer should have listed only the wages they earned while working in NYC, and then started withholding IL wages going forward), you'll have to determine how much they earned during the time in NYC vs IL. Then on the NY IT203 worksheet, separate out what was the amount for the first months in NYC vs IL. Same is true for the other items listed on the worksheet. I usually have clients sum up the paychecks for the NYC months and the rest go to IL. If they didn't withhold IL taxes, he'll probably have a hefty bill for IL, but his NYS & NYC refund will likely cover this.

I believe so. Just remember to exclude 1/2 of the SE tax and any SE Health Insurance and SEP or Simple IRA contributions in your total. also, you might wait a couple days for the ATX update supposedly coming that might automatically flow this information for you so you have a double check on your numbers.

Just got done with ATX support. They said the latest ATX update will happen in 2 days and it will include the program automatically flowing the QBI info from the K-1 schedule into the 199A worksheet. Fingers crossed this is true.

I believe you have to reduce the QBI income only for simple IRAs because these retirement plans are put in place in direct connection with a small business. Same goes for SEP & Solo 401ks. Traditional and ROTH IRA contributions can be made by anyone, regardless of self employment status so that's why I don't believe these are part of the QBI equation. Many of the regulations use the term "effectively connected income" or "in relation to QBI" so the way I'm applying this is if it's related, connected or stemming from the qualified business income in some capacity, it's probably a factor in determining the QBI amount.

Assuming the SE Health Insurance & IRA contributions are NOT already included the $10k profit mentioned above, then you'd deduct them from the $10k profit, and you'd deduct 1/2 SE Tax which is calculated (10,000 x .9235) x .0765 = $706.48 So assuming SE Health Insurance was 2k, and IRA contributions were 1k. Then QBI would be as follows: QBI Calculation: Schedule C Profit $10,000, less $706.48 1/2 SE Tax less $2,000 SEHI less $1,000 IRA = $6.293.52 QBI So you get 20% of $6,293.52 assuming thresholds and/or SSTB isn't involved.

Just curious what everyone's client identity protection method is for remote clients. I'd say 95% of my clients I never see in person. They send all their tax backup, questionnaires, etc via email. I request all SS# be blacked out before sending. Then when I email them the tax return, e-file authorizations and bill, I use a OneDrive link with a 7-day expiration. But I'd love to hear other's methods and see if there's even more security I should do. Thoughts?

I agree with gfizer. Just file the amended. At least you caught it and can rectify relatively quickly.

Thank you Terry. ATX and I got to the same investment income number, but I had a slightly different "state, local & foreign income tax expense" number. (We're only off by $33 bucks so this isn't of real importance.) But I'm a ridiculous and just want to know how they got their amount. And all the "JUMP TO" links to give any insight into their calculation.

I hate ALL the new schedules. It's just a a waste of more paper!

Hello, Client gets hit with the Net Investment Income Tax -- Double checking the 8960 form and ATX has a calculation for Part II, Line 9b. I'm trying to see how ATX came up with this number. The instructions say it's obtained by "any reasonable method." Ha! Thanks for being so specific Mr. IRS. I'm not questioning ATX's calculation, I'd just like to know how it was reached for my own knowledge. Any idea how to find out how ATX calculated this number?

Thank you! This is what I did with the DPAD in previous years so it made sense to follow the same method. Thanks again EricF.

Nope, all crops lost during a hurricane.

Logically, I'd agree. In theory, the crop insurance proceeds were awarded based on lost revenue. Revenue that would have been QBI qualified, so I don't see why the insurance proceeds wouldn't. But it's such a large number, if it were denied, it'd be a huge change to the return. And no where can I find a publication on this specifically. So if any farmer CPA out there how more insight, I'm all ears.

I'm going crazy trying to find an exact publication that I can reference down the road if need be. I have a clients that does construction both domestically and internationally and everything I'm reading says wage in connection with QBI income. I assume the property basis is the same but cannot find this specifically written anywhere. We used to file the DPAD so I feel the answer is somewhat similar and I can just use my same methods from previous years, but I'm just spinning in place trying to double-triple-quanta-quasi-check myself. Here are simple details: Total income is 2 million. Wages were $800k. Unadjusted Property is 100k. 35% was domestic income. So K-1 inputs would be: Code V: (2 mil x 35% domestic) 700k Code W: (800k x 35%) 280k Code X: (100k x 35%) 35k Sounds reasonable?

I reached out to ATX about this and their exact reply was "okay The amounts must be entered manually on the Activities tab of the worksheet. Automatic calculations are planned for the end of the month"

Got a client who's a farmer, and he received $1.5 million in hurricane crop damage insurance proceeds last year. Is the 1.5 million qualified for the QBI deduction or do we have to remove the insurance proceeds from the QBI income total?

I agree, I believe I followed everything EricF said to do about and the information in not flowing from the K-1 to the 199A wkst. Has a solution to this been found?

Hello, I cannot find where ATX is reducing the 1120S QBI on my client's 1040 by the section 179 on the corresponding K-1 schedule. Is this something we have to do manually? Speaking of entering manually, any reason ATX doesn't automatically enter the numbers for the K-1 schedule directly to the 199A wksht?

BulldogTom, Thank you for your valuable insight. I really do appreciate it! My client has already contacted their employer and has been told they are refiling the payroll returns and California taxes are no longer being withheld or reported. Crossing my fingers that this is true and crossing my other set of fingers that come tax time, California still doesn't link my client to their arrears

Thank you JKLcpa -- that article is EXTREMELY clear as to how this situation works. I've added it to my files as well. Big time thank you for the additional information.

Just got off the phone with the Employment Development Department (recommendation by the Franchise Tax Board as they did NOT know the answer to this question.) Luckily the EDD did! They referred me to this publication de231d: https://www.edd.ca.gov/pdf_pub_ctr/de231d.pdf Then she explained that since the services were not performed IN California, nor was the employee a resident of California, the employee was not liable for California state taxes and should NOT have W/H being taken out. Hope this helps someone else down the line!

Have a client that lives and works from home in Georgia. Never steps foot in California. The company he's working for is based out of California and is currently withholding California state taxes for him. From what I'm reading on their website (which is HORRIBLY insufficient), the source and taxation of the income is dependent on the client's presence in California, not he employer presence and thus they should NOT be withholding these California state taxes. Can some please confirm this for me?

I know this a very specific niche market, but I hoped there might be a few on here that have corporate clients in NYC. Two opinion questions really. 1. Obviously being taxed as an S-Corp is usually more advantageous than LLC Single or C-Corp because of SS/Med and double taxation. However, with NYC not recognizing the S-Corp status and charging the corporation tax on all NYC profits, that's nearly 9% due for those profits. I was wondering if anyone had any experience with Single member LLC's actually being MORE tax advantageous than the S-Corp simply because of the NYC taxation of S-Corps. 2. S-Corp client (lawyer) has a few clients that have offices in NYC, however the lawyer never travels to NYC. All his work is done from the office which is outside NYC. Since he doesn't have nexus in NYC, is he still required to pay NYC corporate tax on the revenue earned from NYC clients?