Sara EA

Injured spouse. Be sure to file one for the state too. I've done this for years for a couple in which the wife has outstanding student loans. He always gets the refund, but it takes awhile.

A 1041 is an INCOME tax return. Unless the will specifically requires bequests to be paid out of income, they are usually paid from corpus and therefore not deductible from income. Charitable donations can only be made if specified in the will. They too are usually paid from corpus unless the will specifically states to pay from income. I think the source of confusion is that the 706 addresses assets and has its own rules for deductions, while the 1041 addresses income and expenses paid out of income.

I think the only time a phone number is required by IRS is when a taxpayer is having a balance due debited from a bank account. CT has had a space for phone numbers for years, and more recently they added a spot for email. I never filled out either. A few years ago at a state liaison meeting someone asked the DRS speaker why CT was asking for this info while the IRS was advertising all over the place that they will not call or email. He did not have an answer. I notice that taxpayers in lots of states can now request an IP PIN. Is anyone advising their clients to apply?

You add it to the student's income, not the parent's. However, since it was all used for qualifying expenses you can just use $2200 as qualifying education expenses or whatever was spent (make sure you see receipts). I second cbslee's suggestion to just take the tuition and fees or Lifetime credit this year and save the AOC for years when expenses are higher.

Property taxes are not passed through separately. The estate will calculate its income and deductions and pass the net income through to the beneficiaries. If it held rental property, those property taxes are deducted from rental income on Sch E. If it sold the decedent's home and paid property taxes at the closing, those taxes go on the estate's 1041 subject to the $10k limitation. Please tell us specifically what property taxes the estate paid.

The data rolls over in UltraTax (at least it did in the past, haven't checked the 2019 version yet). There is a diagnostic if the license has expired. Speaking of which, some states have six and seven years between renewals. I assume aging is not allowed during that time.

Be careful here. Employees who choose to become IC lose benefits like health insurance, pensions, paid time off, unemployment and disability comp. They really have to think if the trade off is worth it. This discussion is enlightening. Most of the time I see ICs who really should be employees, and most of the employee "business" expenses I saw were bs. Among my clients who were most affected by the elimination of the 2% category were outside sales people who drove zillions of miles with only partial reimbursement and those who had huge brokerage fees.

I don't understand why some of these changes were made, particularly those extenders reinstituted for a closed tax year. People weren't marching in the streets demanding the education adjustment back, and with the higher standard deduction, even if folks could include PMI many still wouldn't have itemized. Lobbyists? I thought when the TCJA was passed that these things were taken away to help pay for the lower tax rates, and the higher standard ded helped mitigate the pain. Now we have low tax rates and all the tax breaks back--watch out deficit!

Over a decade ago there was some big change in our state tax laws including filing status. A local employer thought not to trouble employees with new W4s and instead payroll revised them to match the new rules. For some reason lots of people became HOH. I had two clients from that employer and both owed lots of state tax. Believe it or not, the employer paid their underwithholding. Yet another reason for employers to stay out of the W4 business.

TT and freefile have been around a good long time, yet the percentage of taxpayers using paid professionals has hovered just under 60% for years. Perhaps young tech-savy people will never use us so they won't replace the older and middle-age clients who would never touch their own returns. I actually had a couple of young guys who chose to do their own partnership return after the first year to save money. (As a professional, I didn't touch a partnership return until I had 10 years of experience under my belt and a zillion courses on the topic.) They have no fear of technology until the audit letter arrives. After another year or so under TCJA, I do foresee more clients who no longer come close to itemizing drifting away too. That said, the tax rules have gotten insanely complex, especially for the self-employed, and lately they change on a weekly basis. How many Uber drivers even know what QBIA is? Heck, people can't even do their own W4s without professional help anymore. (For the first time ever, we are going to start charging for the new version.) And more and more people are willing to pay for things they can do themselves like car washes, lawn care, food delivery instead of driving to the grocery or McD's to get it yourself. So I don't see all doom and gloom but think we'll have to wait to see how it plays out. Disclaimer: Most of our clients are like Edsel's with complex investments, businesses, trusts, etc. If we had more of an early-season crowd I'm sure I'd think differently about the future.