Sara EA

UltraTax also doesn't allow payments to be scheduled after the filing date after April 15, so it must be an IRS thing. You can schedule a payment date on DirectPay. Note that you can only schedule a payment no more than 365 days in advance and for no more than $10 million!

These PTPs are notorious for showing losses year after year yet making nice distributions so investors think they are making money. It's return of capital, lowering basis and adding to the surprise gains when they eventually sell. At least they can take those suspended losses at the end, mitigating the tax bite a bit. Always check that the K-1 is in the taxpayer's Soc Sec number and not in an IRA, in which case you don't have to do anything except alert the client that the custodian may have some UBI reporting.

The 6% penalty applies each year the excess contribution remains in the account. The excess and associated earnings must be distributed before the penalty disappears.

Things like direct deposits of refunds, direct debits of balances due, application of overpayments to estimated taxes, are computerized functions that should and used to work almost seamlessly. And if they still are, the computers that spit out letters are getting the wrong information. The DOGE kids had gotten into the IRS systems at one point. Could they have somehow messed up the coding? I can't imagine why electronic transactions and/or automated responses have become unreliable. I have seen a number of know-it-alls mess up their computers by rapidly clicking away without reading what is on the screen. If the kids inadvertently broke something, they surely know enough to fix it so hopefully these odd letters will cease soon.

Proposals are pretty consistent that a share of some costs will be passed to the states, e.g., Medicaid, education, disaster response. This means that even if federal taxes go down, state taxes will have to increase. This kind of negates the argument that an increase in SALT deductions benefits blue states. Residents of red and blue states alike will find themselves bumping into the cap. Many of the proposals also add a lot more complexity to the tax code. Tip income is exempt at certain income levels and certain occupations. Interest on loans for certain cars will be deductible--how do you calculate that without a lot of paperwork? It goes on. If they are going to pass this thing, let's hope they do it soon because our CE providers need time to put together courses and we need time to take them and digest it all .

Oftentimes the child is a student somewhere who has income in three states! Our fee for dependent returns is $50, like Patrick trying to avoid them claiming themselves and leaving us with a mess to clean up. More if the child has investments, plays with cryptocurrency, or has income in another state.

This might not be as bad as it sounds. The income threshold to file a return for OR nonresidents is about $2,700 single and $5.500 MFJ. That one OR client who pays you $500 is not going to trigger your filing in OR. Or is there some other rule governing tax preparers? EAs don't have to worry about it at all since those who reside in other states can't prepare OR returns anyway. So if you're a CPA preparing an OR return, be sure to keep your price at $5,495.

Same goes for other types of heavy equipment. I had a client who sold a dump truck that was over 30 years old for something over $30k. I actually called him to verify. The truck had been overhauled over the years and had a relatively new bed. But even if the rebuilds had been added to basis instead of bonused or expensed, basis is usually low on these older pieces and depreciation recapture yields high cap gains.

I stay out too, but sometimes you just have to say something. I was called in by one of our CPAs whose clients were setting up a trust to explain to them the tax effects. Talking with them, it was obvious they had no idea why they were doing this. They had limited assets, not much to protect, and had gone to one of those free dinners. I ended up telling them to write down a list of questions and go back to the advisor, warning them not to sign anything until they got answers. Another time a client came in with a dozen 1099Rs. His advisors were buying him annuities and cashing them out for new annuities every single month, costing him enormous fees. That one we just had to call the state insurance commissioner on.

Our dentist's office is a sole proprietorship--not part of some national chain. There are two people working in the office. Yet when I call them there is a menu, "press 1 for appointments, press 2 for billing, press 3 for...." It's not like they have 16 different departments to route my call to. Grrrrrrr. Some of our clients have expressed surprise that when they call us a real person answers the phone. Sad.

NY and CT have long battled over who gets to tax the mega incomes of big shots who live in one state and work in the other. For remote workers, NY has a "for the convenience of the employer" test, meaning if you work for a NY firm from your home in another state, you can only avoid NY tax if your employer requires that you work from home. After this passed, CT instituted the same rule for residents of NY (but no other state). I have a client who works for a NY firm from his CT home for her convenience, so she's taxed in NY except paid time off, which is taxed in CT. No kidding.

You can always ask for more time to complete your response. IRS really does want to work with you, and I've never had them deny such a request. Of course that was when they still had employees....

To clarify Lee's post: "An eligible educational institution is a school offering higher education beyond high school. It is any college, university, trade school, or other post-secondary educational institution eligible to participate in a student aid program run by the U.S. Department of Education." IRS Pub 970 No gray area here.

How can this be tuition? For education credits, money must be paid to an accredited educational institution eligible to participate in gov't student loan programs. One can no longer deduct education expenses on Sch A and even if you could, they can't be for education leading to a new profession.

Hey, please don't beat up on engineers! We have two engineers in our immediate family. Both are very smart, work hard, are kind and caring and friendly. Sure they like some things exactly so, but they can give a little. I think that where the clash with taxes comes from is that in their wildly complicated math computations, there is only one right answer. Both of my relatives are civil engineers, and if that answer isn't right millions of dollars could be wasted or even worse, people could die. In the tax world, our most common answer is "it depends," which drives engineers off the wall. So be charitable, recognize where your engineers are coming from, and praise them for being smart enough to come to you.