mcb39

He pays property taxes, mortgage interest, a Rental Management Company; as well as me in Wisconsin.

18 hours ago, Medlin Software, Dennis said:

No one answer.  Each tax agency can have their own nexus rules.  (Nexus is the proper term, to me, not residency or domicile.)  Some have one second nexus, some allow 30 days, etc.  Some even have a no physical pretense nexus!  (Company not in CA, has a web site also not served from CA.  Customer in CA clicks an "email us" link on said web site, business just created CA nexus!)

Once you determine nexus, you can then figure out the proper report, whether the tax agency calls it resident, NR, or whatever.

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OP.

WI resident "legally" (likely applies to WI purposes, other states do not have to honor what WI says). Likely contradicts what TX may have to say about someone present for more than half a year (or whatever TX uses as a time trigger).  DOMICILE could remain in WI, since that word ties in to where the person claims home, keeps their stuff, has their bank accounts, and plans to return to, but tax residency/nexus/residency can be different than domicile.

Therein lies the dilemma.  All of his rentals are in his home state of Wisconsin.  Texas does not have income tax.  Wisconsin would certainly frown upon him not paying income tax on his Rental Income.  He receives his mail in WI and someone forwards it to wherever he is working.  Last year he had LA, CO, TX and WI.  What bothers me is that this job in TX is predicted to last approximately 14 months.  He lives in a Camping trailer which he can move from job to job and save considerably on travel expenses.  He retains a WI Drivers license.  My strong leaning is toward WI residency, but the length of time in one state troubles me, even though he would owe no tax to that state.

I might add that this client has had income from up to 3 different states in the past and always has rental income from Wisconsin, which is his original State of Residency.

For  Income Tax purposes, please help clarify the difference between Residency or Domicile.  This question is from a client currently a Wisconsin resident (legally) who is doing extended construction work in Texas.  Change of Residence to Texas would only be temporary but could extend beyond a year, but not always in the same location.  I have always filed him as a WI resident, but TX does not have State Income Tax.

I have always used Medlin when I have had payroll clients.  Recommend it to clients who do their own payroll.

1 hour ago, cbslee said:

?

Do you reply in Chinese characters?  Was supposed to be a joke.

2 hours ago, cbslee said:

The robocalls to my office landline have dropped significantly since I only answer those calls which have a clients caller ID.

All of my non business calls go to my personal cell phone where I only answer if I recognize the caller ID.

If not, they can leave a voice mail which the robo callers and spammers don't do.

The weirdest thing is every 2 or 3 months I get a text message in chines characters?

Do you reply in kind?

I have to interject for one reason.  Yes, they have increased.  Usually my cell and my landline will identify as Spam Risk.  I don't answer.  However, I have found that since medical facilities have gone to central calling; I have not answered some important calls.  We learned early on that if we answer with our business name, spammers will hang up immediately because they are not supposed to call businesses.  Yes, they have increased.  No, I don't know why, but I do try to answer because we have a multitude of medical and other appointments that send out recorded calls that should not be missed.  The situation is hugely annoying to say the very least.  Just my two cents worth.

4 hours ago, cbslee said:

The key question is, "When do you cross the line from the proper recording of client transactions to making decisions which should be made by your client?"

I don't believe that I have crossed any lines.  Because these Partners are my husband and two sons.  I am not a Partner; however I make many of the financial decisions for them.  I have even been "the Bank" at times.  Every single transaction that occurs is carefully documented; posted and backed up.  I also have an assistant doing the balancing of the checkbook and the posting of the transactions so that there are always two heads in the works.  Every single transaction, deposit, expense and disbursement has been recorded, backed up and saved for all 50 years.  I wouldn't be doing this for just any client; but I have several business clients and I always want to know as much as possible and tutor them on the proper recording of all transactions.  My worry has always been that if something happened to me, who would know the status of my family's business. None of them would have a clue. That is why I brought in a third party to get to know how things flow.  In the case when I have been the bank; an amortization schedule was created; I charged interest and 1099d myself for interest received.  When my son makes cash donations to cover large purchases; it is clearly noted as Cash In and Cash out when the item sells.  The year end Balance sheets and Cash Flow reports clearly show this.

I know this has gotten far away from the OP, but I was just trying to show how things can be done without creating chaos.  Perhaps Judy should remove the thread from my first post on down.

Their business is their business and mine is mine, which makes for one of the most extensive tax returns that I do and is usually one of the last.

I could probably write a book on this subject, but I won't.  Mine is a 50 year old Partnership wherein one partner often funds purchases when cash is low.  I never add it to his Capital Account; but I carefully document his Cash In and Cash out when the particular item of stock is sold.  The profit stays with the Partnership.  The only time I show it as an outstanding loan is if there is one that has not been repaid at the end of the year.  I have done their bookkeeping and tax returns since 1972 and the IRS has never questioned a thing.  You might call this creative accounting; but it works and the simpler you keep things, the better.  I will add that this is a family owned Partnership which could (might) make a difference.  I can only stress the importance of documentation and this poor fellow doesn't seem to have that to fall back on.

Not boring at all!  The deadlines are what drive me crazy.

My practice would never withstand that kind of increase, at least until they start to check around.  My rates are always based on the client's ability to pay and personal circumstances.  My business is not all about money.  My  business puts the client first.  I can do that because of my personal circumstances and the fact that I pay for extras; not for living expenses.  Also, I have a deep sense of compassion and helping out the little guy.

She doesn't have to change her name to file MFJ.  It's all in the TIN.  I had a married accountant who filed separately for years because his new spouse wanted to stay with her accountant and he wanted to stay with me.  Unfortunately, because she owned the home, she got all the itemized deductions and he got zilch.  People have funny ideas or get bad advice from somewhere.  My client has since passed on.  She has not and has the benefit of all of his possessions.

I agree.  Amending doesn't affect the taxable outcome.  Make an adjustment for the basis going forward.  It's not as complicated as it seems.  I see basis changing often, but not percentage of ownership.  The percentage of ownership from the agreement is what determines the taxable income or loss.  

18 hours ago, grandmabee said:

I have  unmarried parents living together.  One makes about 14,000. the other one 231,000

Can I  file single claiming the dependent for the one making 14,000.  He will get EIC, CTC

File the mother HH without claiming the child.  She of course owns the home and pays all expenses.

Am I missing something with this?

TIA

You have to have a dependent to file HOH.  The mother is entitled to the child and all eligible credits.  The other parent qualifies for EIC on the merit of that low of income.  My research resource says that the higher income qualifies for all credits including HOH.  (I hope I don't get chastised for this reply.)  It's is becoming a more and more common situation.

30 minutes ago, Sara EA said:

 

You do have to calculate the missed depreciation.  Every time I do that, I wonder if newer preparers even know how.  I think we've all become a bit stupider by having software do so much math for us.

I don't think we are stupider, nor should we be.  We have to keep an eye on computer calculations to make sure they are correct.  That's why we have research books and boards like this one to keep us up to date.

If my assistant makes a serious mistake, I can usually tell that her results are wrong even before I go through it. Nothing leaves my office without my scrutiny.  That does not mean that I never make a mistake.  It means that I am vigilant and cautious.

Wow! the (Little) things that nobody (including the IRS) caught.  I am thinking of possible lost credits such as EIC, etc. , which possibly could have affected this lower income taxpayer.  Makes you want to cry when you get one of these and your hands are literally tied. 

It appears that if you answer as a business, they will hang up.  However, that doesn't cure the annoyance and wasted time to both my landline and my cell phone.  If they identify on Caller ID as a spam risk, I just ignore, but it is still annoying and  interrupts whatever you might be doing.  My patience is getting short.

I, too, have never had a monitor that died.  Therefore did not realize they made that much difference.  However, two new laptops this year have already stretched my belt to the limit.  Presently, am looking for a "deal" on paper.   The cost of doing business has gotten out of hand.

One of the greatest joys of my life.  Now, mine are both married and I have two Great Grands.  There are no words.  Congratulations Catherine!

University of Iowa averages about $23 per credit.  Two days garners you 16 credits.

On 7/12/2023 at 11:23 AM, cbslee said:

My first choice is self study preferably thru The Tax Book.

I do a tremendous amount of self study and let me say that this board is the perfect venue for that.  However, it doesn't give me any of the credits that I need.  Therefore, it's the same two day seminar that I have attended since 2009.  It used to be Tax Insight for years, but since Phil Harris passed, has been the Iowa State University.  This year it is once again, in person, but none close enough to me.  I will attend the online seminar in November.  I believe that registration is open this month.  I also get my money's worth out of Quickfinders.

I have been doing online Webinars ever since Covid.  I wasn't thrilled with the idea at first, but even though I feel it is too expensive, at least I don't have to pay for travel and room and meals.  I use a two day Webinar presented by Iowa State University.  We now have the choice of live or online, but I still find it easier to do it online.  If we want or need the credits, we have to bite the bullet.  Also, my assistant gets to sit in for free which was not the case when we went to the live Seminars.  She doesn't need the credits at this point.  

29 minutes ago, Abby Normal said:

Unreal. I always encourage epayments.

Yes, but there always are those die-hard clients who will not allow an epayment.

I can't remember not wanting to read.  However, I don't just indulge any old time.  My pleasure reading is reserved for the end of the day, unless I am on R and R.  I keep a "help yourself" bookcase in my office so that I can share what I have read with my clients.  Believe me, they take advantage of it.  I tell them to take whatever they want to read and then pass it on.  At my age, I don't anticipate reading any books over; although there are still a few that I am not willing to part with. 

My Dad, who only went to fifth grade, became a voracious reader when he retired from a lifetime of being an automobile mechanic. Dad lived to 92 and macular degeneration made him bitter because he couldn't read.  My Mom was always a reader as well.  She read to the age of 90.