Sara EA

Oil change records record mileage and may help here. I was at a liaison meeting once when the IRS person presenting said the only vehicle IRS believes has no personal use is a cement mixer. The workers may take the vehicles home at night, out to lunch, to the bank, etc.

One can either be angry or chuckle when a client tells YOU how to do a tax return. Just this week a client told me the cost of her teaching certificate was deductible as an employee business expense. I told her that went away in 2017, plus she isn't itemizing. Then she told me again it was deductible. She wanted to know what line a friend of hers should put her classroom expenses. I told her but then she said that wasn't the same as she read on the internet. I told her if she didn't trust me she could pick up her docs. I went from chuckling to testy.

Forced day off sounds like a welcome snow day for school kids. Enjoy it and sleep late.

Ringers, this is clearly a problem for after tax season. Just the time you spent on the phone could have produced a tax return or two or three. Put the new client on extension and deal with it in May. Warn him that your fee will be humongous. I would also continue with the joint venture; even though it's not correct the bottom line should be the same. I would worry more about having to explain those huge losses. Are they for real?

I have had the same experience as Michael. I didn't prepare the original returns though, just fixed the six years the IRS required. They did question some of the figures I calculated, but I had substantiation (and in some cases explainable inference) and no problems. Clients didn't have to go to jail but paid much more in penalties than they would have paid in tax if they'd reported correctly all along. And this was when there was amnesty! I think many tax pros freak out about penalties. I've been to enough meetings with IRS agents and liaisons to understand that they don't want to break tax professionals--they do consider us helpers. They look for patterns of abuse and go after those preparers. If you have numerous clients with missing FBARs you'll be looked at differently than someone having the one.

PA preparers correct me if I'm wrong, but in my experience local and school taxes for W2 employees are withheld for the exact right amount. If you paid too much I believe you have to give an explanation. The only times I've had to file PA local and school returns is for Sch C clients who don't have withholdings.

No idea what HRB would charge. I would charge at least $150, more when I have to do the currency conversions. You may also have to determine interest, convert it, and add to Sch B or Form 8938, which is another charge. Get paid for your work.

In 2022 CT is no longer taxing pensions if AGI is less than $100k MFJ and $75k everyone else. Couple has AGI of $110k. If they file jointly their pensions are fully taxed. If they file separately, none of their pensions is taxed. The difference can more than make up for the increase in federal tax. Is this for real?? CT only did this when the powers that be finally realized that when people retired they skedaddled out of the state. Did they not think it through?

Maybe I've gotten fed up with 100-page brokerage statements, but I've been entering just the totals for each type of gain (short, basis reported, total proceeds, basis, wash sale total; then onto short, basis not reported etc.). If there are only a few entries I do the trades individually, but the totals end up with the same bottom line and that's really all IRS cares about. Remember when we had to send the brokerage statements with the 8453?. We all knew they just went into a dumpster in Austin and if the IRS ever audited any of those returns they'd ask for the statements anyway.

If there are no employees at all, and the owner doesn't work there either, how does the corp make money? If the corp paid the health insurance, who did the paperwork and wrote the check, a volunteer? Unless you've stumbled across the only corp in the world run entirely by bots or AI, I'd pass on this return.

Just like all the sales people who entice people about the tax credits for solar panels. Nice credit if you buy them; not eligible if you lease them like many people do.

If no one wants them, at least they can be put to good use! I had an estate that contained a bunch of "old liquor bottles" that ended up selling for over $22k.

The penalties for not filing 1099s are large enough that I wouldn't want to take the chance. If your experience makes you comfortable with nominee choice, go for it.

The problem with using the nominee route is that you have to issue 1099s to the nominee.

Tom, congress often writes laws that give the secretary of whatever agency the responsibility of determining the operational rules and regs. In the case of tax, most in congress don't understand the whole thing so often defer the practicalities to the Sec of the Treasury. That's why IRS issues so many regs, just making whatever congress passed workable. "Sound tax administration" is probably something left to the Secretary and thus the IRS. I think the agency did the right thing; I just don't know why they took so long to notice this could cause taxpayers problems. Sure, some states didn't give out the money until late in the year, but the others paid out earlier and IRS could have studied the matter then and applied whatever decisions they made to the late comers.

Enter the 1099B as usual. For the sales that occurred after death, start another line and put "IRD reported by {estate EIN}." Then enter the after-death amounts as a negative number. Do the same for any interest or divs paid after death. Be sure to include those amounts on the 1041 with the line reading "IRD reported to {decedent SS#}." In essence, you're reporting the 1099B amounts to match the IRS records, then backing out the amounts that belong to trust. You will have to comb those 68 pages for before and after transactions, so charge accordingly!

Only taxpayers in GA, MA, SC, and VA have to report their payments as income if they itemized in 2021. All other are home free. The 1099MISC presents a matching problem though. I'd put it in and then back out all but a dollar with the explanation. If you back out the entire amount, the statement will not be sent with the efile.

You can always amend the 2021 estate return, changing nothing but marking it as final so IRS isn't looking for another one. That puts the onus on the beneficiary to voluntarily report the income. Remember that the Code states that all income regardless of source is taxed, unless exempted by the "grace of congress." Six of one and half dozen of the other. I'd go ahead and file the final 1041. Remember the explanation as to why the estate has been open for more than two years.

Me too.

Tom, you only have to amend if you included the payments in income. The IRS statement pretty much says that none of these payments is taxable. I think they did the right thing for "tax administration."

While you don't have to file the 1041, if there are probate and legal fees that are substantially more than the income and can benefit the beneficiary, go ahead and file.

And after all the trouble just opening the notice from VA, it tells you to go to their website to get your 1099G!

Income is taxed in the year received, so the divs will be taxed to the estate. Now to solve the $10k mystery. The taxpayer must have had some kind of basis in whatever it was.

Just make sure he had some foreign income, details of which should be buried in the brokerage statement somewhere. The credit only applies to foreign income so the carryover will reduce the US taxes on that income. I had a client with several thousand in FT credit carryovers who kept questioning me about why I wasn't applying them. He had liquidated all his mutual funds and had no foreign income, so the carryover was wasted after ten years.

Of course it's not illegal to merge personal and business accounts, but it sure creates an accounting and tax audit nightmare. Was that gas fill up for the business van or the wife's car? The trip to Staples for back-to-school supplies or office copy paper? We have clients whose monthly bank statements are four single spaced pages of everything from morning coffee to bars to the occasional business website bill. Their reconciliations cost a lot because they take so much time. Also makes it impossible to tell how much money you're making or spending--should you raise prices, buy that new piece of equipment?