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Sara EA

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  1. A client had filed an estate return and was supposed to get a big refund. The original was efiled and we have IRS acknowledgement that it was received. When I got involved on the decedent's final return I noticed an error on the estate return, amended it, and the client sent in a check for the balance due. (In essence the original refund shouldn't have been so big.) They hadn't received the refund yet because the 1310 was missing. I fully expected an IRS notice asking for the 1310. Instead, client just received a notice that IRS got their check for the amended and didn't have an account to
  2. Check the EINs. Sometimes one division of the same company has a different EIN from another. I had a client who switched divisions and got two W2s, same EIN, with excess SS withholding. The IRS said my client could only get the excess back from the employer, but the employer refused to change anything. We eventually resolved it by providing the refusal letter to IRS, but it took a long time.
  3. An old friend brought his practice to ours a season before he retired. The preparer copies of returns were exactly like this, with other returns, P&Ls, etc printed on the backside. We finally realized that like many old timers, he didn't want to waste paper so printed his copy on the back of other returns that had a change after printing or statements he no longer needed. Chances are your clients were given his preparer copy with their file after he died. Do what the others suggest--copy the appropriate side and shred the whole thing. It is beyond your responsibility or ability to tra
  4. Have them send Form 14039. There you can check that you don't know if anyone filed taxes for you but that you are a victim. Then explain the circumstances. I did this for one client who was involved in a big data breach and hadn't yet experienced adverse consequences but was worried. He was given an IP PIN. The same for another client who had his cell phone shut off when someone bought a new one with his account info.
  5. I have clients who filed a paper return for a deceased taxpayer in mid-May and it's still not in the system.
  6. Sara EA

    No BS

    Thanks for sharing the link. Note that carrying costs pertain to costs while the property is being developed or improved, not day-to-day grass mowing. It looks like only the taxes can be capitalized and nothing else in this case. This leads me to wonder how those costs were paid. Did the partnership also have a cash account? The attorney surely was paid (surely!), and that is a deductible expense in the year paid.
  7. Sara EA

    No BS

    Since the house was never rented, it is treated as investment property for tax purposes. Operating expenses are never capitalized. For individuals, real estate taxes can be capitalized but an election to do so must be made each year. If the rule is the same for partnerships, the best they can do is deduct any RE tax paid at the closing in 2019. Their basis is $200k, period.
  8. The lawyers are the ones who should handle this. You stay out of it. It is not up to you to determine if they have to file jointly for 2019, and you certainly can't give him her W2. Usually in these cases she provides her lawyer with the requested info and that lawyer works it out with his lawyer. Civil court rulings do not override federal laws. I have had cases where a couple divorced before the end of the year and the divorce decree stated they had to file jointly for that year. I don't think so....
  9. Illmas, you are not delaying your RMD, you don't have to take it all. Theoretically, that allows the money in the account to continue to grow tax free. Of course, it can also lose, and with this frothy market that isn't trading on fundamentals, who knows? I agree with Lion that if you don't need the money, this is a good year to convert what would have been your RMD to a Roth. Then you won't have to guess about what future tax rates will be and can take the money out when you need it, not because it's required.
  10. I always put myself on extension and try not to get refunds, but sometimes it happens. I usually file in August and have never gotten interest on an overpayment before. This year I filed in May, only because I moved to VA which had a nonextended June 1 due date and being a part-year resident, I couldn't even guess what my tax liability would be so had to prepare the return. I had an IRS overpayment (my bad), and just had interest deposited to my bank. What??? The regular due date was July 15, so they were not even late in paying me (I actually applied the funds to 2020 so didn't even requ
  11. Good decision. Pub 970 does state, "However, you may claim the credit if the student doesn't receive a Form 1098-T because the student's ed-ucational institution isn't required to furnish a Form 1098-T to the student under existing rules (for example, if the stu-dent ... is enrolled in courses for which no aca-demic credit is awarded). If a student's educational institu-tion isn't required to provide a Form 1098-T to the student, you may claim the credit without a Form 1098-T if you oth-erwise qualify, can demonstrate that you (or a dependent) were enrolled at an eligible educational institut
  12. There are lots of divorced dads who can't claim their children as dependents but are required by the divorce decree to keep them on their insurance.
  13. No client can admonish us for a mistake more than we admonish ourselves. I still regret the first error I made over 20 years ago, and the CPA I worked for still agonized over his first that was older than that. We made a pact that we were each allowed one guilt-free error per year, but that was easier said than done. Torturing yourself won't help, so you need to focus on fixing it. In this special case, I think in addition to paying interest and penalties, I would refund their tax prep fee. It would at least show that you feel awful and are doing your best to help them. We have all cl
  14. We moved last year and changed banks. Our return was of course on extension, so when the IRS tried to deposit our stimulus payment into our old bank listed on our 2018 return it bounced back. They then sent up a check in the mail. Right on the envelope there was a dark black box that said something like "if recipient is deceased, check here and place in the mail." I don't think they meant for deceased people to get them.
  15. Does anyone here question a client when they submit some huge figure like $30k for meals or 62k in mileage, especially if their gross doesn't seem to warrant such expenditures? I know we're not required to audit clients, but I wonder how others approach seemingly unreasonable figures.
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