cl2019

Thanks for the comment!

OK, it seem the 1040-es instruction explains it better. 

Can anyone help with this? 

Take 2019 tax year as an example, if I want to figure out 2019 tax year minimum estimated tax amount to avoid penalty, line 8 (Maximum required annual payment based on prior year’s tax) amount should be the amount from line 15 (Total tax) of 2018 1040? 

2210 instructions is a bit confusing. 

Thank you, Catherine!

I tested drake tax software. It seems that it can not handle foreign capital gain adjustments automatically as ATX does.
Does anyone have the experience and would like to comment on this?
Is Drake a good option for preparers handling 1116, 5471, 8621 and other foreign related returns?
Thank you!

Thank you for the info. 

taxpayer has some foreign long term capital gain from sale of private equity investment. He also has US long term capital gain. That all he has for capital gain/loss worldwide.
I understand that he needs to adjust the foreign capital gain before inputting it into line 1a of form 1116 but can anyone help check if my following understanding is correct?
1. the foreign capital gain is passive income category
2. the taxpayer's taxable income on 1040 is over $700k, so, the foreign capital gain is supposed to be taxed at 20% rate supposing no special 25%, 28% tax rates apply. Therefore, the foreign capital gain needs to be multiplied by 0.5405 to be input on line 1a of form 1116.

If all these are correct, the foreign tax credit calculated is only about 1/4 of the US tax this foreign capital gain generates.

Am I missing anything here?

Thank you so much!

3 hours ago, cbslee said:

Again, please check the earlier discussion threads.

Thank you. I will search earlier threads!

3 hours ago, Catherine said:

I'll chime in, too.  The conversion program is pretty darn good, and will take your 2019 returns and put them into Drake 2019, ready to roll forward.  Depreciation is always the hard one, no matter WHAT software you are switching to or from.  Convert all your completed returns now, and spend the post-Oct 15th deadline time fixing depreciation errors. 

Also view your completed returns IN Drake and make sure they match what they showed in ATX.  Most of them will (or, have taxable income and total tax within a buck or two - close enough!).  The few that don't will have some issue or other - track 'em down this year.

Play with some of the test returns to get a feel for Drake.  The most annoying thing for me when I switched (mid-Feb 2013, during the 2012 season database debacle) was having to "view" the return when I wanted to see the form (instead of the data entry screens).  However, Drake calculates and views the return faster than ATX changes screens, so it was more a problem in my head than an actual issue.  YMMV.

Thank you, Catherine for the detailed guidance. 

Can anyone comment on what options are there for payroll return filing if convert from atx to drake? Atx payroll software is pretty handy I have to say. Does drake have similar soft ware? Or other online services? Thanks

Thank you all for the help!

not sure if this is a relevant topic for this forum. Does anyone have experience changing from ATX Max to Drake. Can I import ATX backup file directly to Drake or is there any guidance on how to convert backup files from ATX to be able to upload/import to Drake? 

Thank you!

Is there option in ATX software to automatically send emails to clients when efiles are done? Thank you!

2 hours ago, Lion EA said:

CCH Software News - Individual, Partnership, Corporation, S Corporation, Fiduciary, Exempt Organizations (1040/1065/1120/1120S/1041/990) Deadline Information

Dear CCH Customer:

Please read the following carefully as it contains helpful information regarding the upcoming filing deadline.

Customers who plan to submit returns or extensions for electronic filing should be aware of the deadlines below to ensure timely filing.

CCH must process your returns or extensions before midnight (CDT) on Wednesday, July 15, 2020. However, due to the time involved in transmitting to the IRS during times of higher volume, we recommend that you release your returns for transmission no later than 9:00 PM CDT on Wednesday, July 15, 2020.

Important: Linked state returns are not transmitted until the IRS acknowledgement is returned for the federal return. Because certain states no longer honor the vendor timestamp as the state transmission time, we further recommend that you release your state returns for transmission separately from the federal return, particularly if you are not going to be able to get the full return filed by 9:00 PM CDT. This allows the state return to transmit without the return of the federal acknowledgement. The easiest way to submit the state return separately from the federal return is to uncheck the federal return on the export window.

Rejected Returns/Extensions

If the IRS rejects any of your returns or extensions, you are given an additional amount of time to correct and resubmit as follows:

Individual - A corrected return or extension must be resubmitted no later than midnight (CDT) on Monday, July 20, 2020, to be considered timely filed.

Fiduciary, Corporation, and Exempt Organizations - A corrected extension must be submitted no later than midnight (CDT), five calendar days from the date of the original rejection. A corrected return must be retransmitted no later than midnight (CDT), 10 calendar days from the date of the original rejection to be considered timely filed.

For Partnership returns, the following states do not conform to the IRS 10-day perfection period based on information received:

Connecticut and Massachusetts rejected returns and extensions - These states allow five business days to resubmit rejected returns and extensions and obtain approval.

Maryland and North Carolina rejected returns - These states allow five calendar days to resubmit rejected returns and obtain approval.

New York rejected returns and extensions - New York allows seven calendar days to resubmit rejected returns and extensions and obtain approval.

Pennsylvania Form PA-20S/65 and Virginia rejected returns - These states have no defined perfection period. They must be filed and approved by the due date to be considered timely.

Tennessee rejected returns and extensions - Tennessee does not have a defined perfection period. They must be filed and approved by the due date to be considered timely.

For Corporation and S Corporation returns, the following states do not conform to the IRS 10-day perfection period based on information received:

Alaska and Alaska Consolidated rejected returns - Alaska does not have a defined perfection period for rejected returns. They must be filed and approved by the due date to be considered timely.

Connecticut and Massachusetts Composite rejected returns and extensions - These states allow five business days to resubmit rejected returns and extensions and obtain approval.

Virginia and West Virginia rejected returns - These states do not have a defined perfection period for rejected returns. They must be filed and approved by the due date to be considered timely.

Maryland, North Carolina, and Vermont rejected returns - These states allow five calendar days to resubmit rejected returns and obtain approval.

New York rejected returns and extensions - New York allows seven calendar days to resubmit rejected returns and extensions and obtain approval.

Pennsylvania rejected returns - Pennsylvania Corporation Form RCT-101 and S Corporation Form PA-20S/65 have no perfection period for rejected returns. Returns must be filed and approved by the due date to be considered timely filed.

Tennessee rejected returns and extensions - Tennessee does not have a defined perfection period. Returns must be filed and approved by the due date to be considered timely.

For Exempt Organization returns, the following states do not conform to the IRS 10-day perfection period based on information received:

New York rejected returns and extensions - New York allows seven calendar days to resubmit rejected returns and extensions and obtain approval.

Virginia rejected returns - Virginia does not have a defined perfection period for rejected returns. They must be filed and approved by the due date to be considered timely.

Paper Returns

If the IRS rejects any of your returns or extensions, the return does not fall into an e-file mandate, and you choose to file a paper return or extension, then the deadlines are as follows:

Individual and Fiduciary - A paper return or extension must be filed by the latter of the following: the due date of the return or 10 calendar days after the date the electronic portion was rejected. For example, a return rejected on Wednesday, July 15, 2020, would be due Saturday, July 25, 2020, if filing by paper.

Corporation - The paper return must be postmarked by the latter of the following: the due date of the return (including extensions) or 10 calendar days after the date the IRS last gave notification that the return was rejected.

Sincerely,

Wolters Kluwer Tax & Accounting, North America

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Thank you so much for this information!

Thank you for all your responses! very helpful!

If a return is efiled before due date but accepted after due date, will it consider a late filing?

Also, if the efile is initiated before due date but ends up being rejected after due date, is there any remedy to avoid being considered late?

Thank you!

It has been two days since the efile transmitted. Does anyone have experience with efiling a Kentucky nonresident return? Does it take long usually?
Thanks.

Can anyone help explain how to treat 1250 gain in NJ 1040? The default treatment by ATX software is ignore the addition of such gain to income. Does anyone have experience on this?

Thank you so much!

partnership filed composite return for the partner and paid some tax to one state. But based on the K-1, if the partner files the state return by himself, he will not need to pay tax to the state. Is there option to withdraw the composite return and file by himself?
Thank you so much!

36 minutes ago, Max W said:

When you say "non-resident", is that the visa status, or the tax status?  For tax status residency, NJ only requires 30 days of residence in the state.

NJ also excludes foreign Earned Income.

Thanks for the prompt response. I mean nonresident for tax purpose. The spouse did not live in NJ in 2019 at all. Thanks. 

One spouse is NJ resident and another is NJ nonresident. They file federal joint return. Since the NJ nonresident spouse has foreign country income and filed form 2555. NJ seems does not recognize 2555 income exclusion. So, I am thinking if I file NJ separate returns for them, the non resident will not need to report the foreign country income. 

My questions are:

1. can they file NJ joint return if one is NJ resident and another is NJ nonresident

2. if they choose to file NJ separate return and federal joint return due to one spouse is NJ nonresident, does ATX accommodate such treatment? Does ATX allow me to choose MFS for NJ and MFJ for federal? If yes, can I efile NJ separate return or I have to paper file?

Thank you so much!

2 hours ago, Lion EA said:

A great book is 1040NR? or 1040? U.S. Income Tax Returns for Visa Holders by Jean Mammen, EA. Do get the latest edition, after TCJA, maybe fourth edition or higher. I got my older edition on Amazon.

Thank you so much!

12 hours ago, Pacun said:

How much money did the person made while abroad and without "green card".

File as resident by reporting global income and attaching a letter stating that both tax payer agree to treat the foreigner as a resident for tax purposes. Then you can take the credit.

the taxpayer prefers to file as dual status rather than make the choice of treating the nonresident as full year resident. In such case, he can not take the child tax credit, right. ATX Max has the checkbox where I can choose dual status return but under such choice, child tax credit is still available. Is it the bug of the software? 

Any comments? Thank you!

12 minutes ago, Lion EA said:

As long as you checked the tax code, go for it. (I don't need to know.) Just remember worldwide income for both spouses and any foreign financial accounts.

Thanks for the reminder!

6 minutes ago, Lion EA said:

I haven't worked with a client married to a nonresident, so hopefully someone with that experience will jump in. But, I don't think your client can choose to file MFJ with a nonresident.

Don't forget to ask your client if they are joint or individual signers on or owners of financial accounts in that other country.

Here is what I got from IRS website:

"Nonresident Spouse Treated as a Resident

If, at the end of your tax year, you are married  and one spouse is a U.S. citizen or a resident alien and the other spouse is a nonresident alien, you can choose to treat the nonresident
spouse as a U.S. resident. This includes situations in which one spouse is a nonresident alien at the beginning of the tax year, but a resident alien at the end of the year, and the other
spouse is a nonresident alien at the end of the year.
If you make this choice, you and your spouse are treated for income tax purposes as residents for your entire tax year

Example. Bob and Sharon Williams are married and both are nonresident aliens at the beginning of the year. In June, Bob became a resident alien and remained a resident for the
rest of the year. Bob and Sharon both choose to be treated as resident aliens by attaching a statement to their joint return. Bob and Sharon must file a joint return for the year they make the choice, but they can file either joint or separate returns for later years. "

taxpayer is a non resident for first  few months of 2019 and got green card afterwards and plans to file dual status return. Does child tax credit apply to him for the period he is resident alien if all other child tax credit qualifications are met. On IRS website, it lists restrictions for dual status return filers including the following quotes but does not specifically mention child tax credit issue. anyone can give some guidance on this?  Thank you!

"If you are a nonresident alien and married to a U.S. citizen or resident alien, you may not take the earned income credit, the credit for the elderly or disabled, or an education credit unless you elect to be taxed as a resident alien jointly with your spouse in lieu of these dual-status taxpayer rules."