TexTaxToo

Sara, the only point of annualization is to avoid penalties for underpayment of estimated tax. If the cost of preparing the form is more than the penalty, you're right. Christian, what deductions are you talking about? As Margaret said, pretend that the period is a 'year' and you are preparing a return for that 'year'. What deductions would you include? If you are cash basis, only things that you actually paid during the period. There might be a few things such as the sales tax deduction from the tables where prorating makes sense, but for most things, it is when they were paid.

Line 1 contains only income, expenses, adjustments for the partial year only. That is, items which were received or paid during that period. Similarly, line 4 contains only deductions paid during that period. The column periods are not quarters, they are year-to-date. These are then annualized so everything after line 6 is based on the full year (as if their AGI for the year was the amount in line 3). Nothing gets divided by 4. The annualized self-employment tax is calculated separately in Part II.

I wondered that too, but it would take a lot of kids to get a $3000 advanced payment! Due to an error, ITIN holders were not sent July payments. Their August payments were increased, as the plan was to split the missed July payment among the remaining months. That plan got criticized, so the new plan is to issue the remainder of the July payment separately, and go back to the normal amounts for the remaining months. Just so you know.

Anything's possible this year. Any idea why it was held up? Is it possible that ACTC was disallowed in the past and they are still banned or you did not file Form 8862?

If stimulus payments are based on a joint return, the IRS considers each spouse to have received half the amount, so I think they would expect her to report receiving $1,450 on the RRC worksheet. If she claims the incorrect amount of Recovery Rebate Credit as a result, they will consider it a math error and correct it, but this will delay the refund.

Some analysis of Notice 2021-49 is here: https://www.currentfederaltaxdevelopments.com/blog/2021/8/4/irs-releases-additional-guidance-on-the-employee-retention-credit-and-its-not-good-news-for-majority-shareholders

I would be wary of scams where a deposit is made (which later turns out to be fake and is cancelled), and the person is called, told it was a mistake, and is asked to return the money via wire transfer or gift cards.

The scholarship is taxable (Line 1 with notation 'SCH') - your software should have a place to put it so that happens automatically. You can first subtract out the cost of books and other required fees, equipment, if any. The Kiddie Tax does come into play if the kid is required to file. The taxable scholarship income is unearned for purposes of the kiddie tax. SImplest would be if there is no filing requirement. If kid has no other income and $300 book expense so gross income drops below $12,400 - there is no filing requirement (scholarship income is treated as earned for purposes of the filing requirement), and you can forget the whole thing.

What's your experience with efiling an amended return? Does any refund get sent as quickly as for a regular 1040 - that is, does it appear they are handled automatically in most cases?

They can now use the opt out portal to change direct deposit information. They'll be able to change address, children claimed, expected income later this year.

In Windows, I normally see what JohnH and jklcpa describe, but when I reduce the width of the browser window below a certain point, the top area and blue stripe completely changes, and I see the hamburger as Lion EA describes. It also changes based on your magnification level (when use use Ctrl+ and Ctrl- to change magnification).

The law already provides for a safe harbor of $2000 per child on payback of advanced CTC. Low income taxpayers (AGI < $60000 MFJ/QW, $50000 HOH, $40000 other) will not need to pay back anything. The safe harbor phases out for an AGI of double those amounts. The IRS is calling it "repayment protection": https://www.irs.gov/credits-deductions/2021-child-tax-credit-and-advance-child-tax-credit-payments-topic-h-reconciling-your-advance-child-tax-credit-payments-on-your-2021-tax-return#collapseCollapsible1624567062314

The IRS is now using an external vendor (ID.me) for identification verification. It looks like it's just for the Advanced CTC payments now, but maybe it will work for other secure access (now or later). https://help.id.me/hc/en-us/articles/4402754222615-IRS-CTC-What-does-ID-me-do-for-the-IRS-#!

I wonder if underpayment penalties will be assessed if you don't opt out and need to pay back the advanced payments. I hope not, but I agree that would be a good reason.

Have you tried recently? I got a similar message when I tried to create a personal account a couple years ago. I tried again last week and was able to create an account online. I didn't even have to lift my credit freezes - they did a "soft inquiry" only.

The "Update portal" which may be used to opt out of the payments is now available here: https://www.irs.gov/credits-deductions/child-tax-credit-update-portal I don't see much reason to opt out, but you can also use it to see what you'll get, and future enhancements will allow: changing bank account information changing mailing address changing family status and income (will this allow opting in?)

Yes, see this topic and post: https://www.atxcommunity.com/topic/25543-3rd-stimulus-taxpayer-with-itin-dependents-with-ssn-are-they-eligible/?do=findComment&comment=179741 The IRS first said no, but now says yes.

Correct me if I'm wrong, but I don't think the EIN from the 1099-NEC is actually sent as part of the e-file. The IRS just compares the total amount reported on Schedule C to the total on the Forms 1099-NEC the IRS knows about.

Maybe it is - from Pub 463: https://www.irs.gov/publications/p463#en_US_2020_publink100033937

The only "option" is that they can agree on who should claim the children. If they are treated as one household, only the one that paid more than half of the household costs can be HOH. If they are treated as two households sharing living quarters, only the one with the higher AGI can be HOH. They cannot split the kids and each claim HOH. In those years, the one who worked may be able to claim the other as a dependent.

And this "shifting" is only allowed if the terms of the scholarship or grant allow it. Scholarships that are restricted to paying only tuition and other qualified expenses cannot be shifted to income. (Pell grants are unrestricted - many scholarships are not). Even though the income goes on line 1, it is considered unearned for most purposes and could result in the student being subject to the kiddie tax. But for purposes of the filing requirement, the scholarship is considered earned income, and if the student's income is less that the filing requirement, you needn't report it at all.

There is no question about that. There must be a different qualifying child for each HOH. That is the case under the proposed rules. As far as I know, they have not yet been finalized. That means you can rely on them if they support what you want to do, but do not have to rely on them if there is support for what you want to do under the current regulations. So you have plenty of support for the father claiming HOH. For the mother last year, not so much.

Under proposed rules, the tie-breaker rules will make a difference in who can claim head of household: https://www.federalregister.gov/d/2017-01056/p-110

There are instructions for returning the payment: https://www.irs.gov/newsroom/questions-and-answers-about-the-third-economic-impact-payment-topic-i-returning-the-third-economic-impact-payment However, they do not say why or when you should do so. I guess if someone just doesn't want the money, they can return it.

For EIP3 (unlike EIP1 and EIP2), the law says that the IRS should try to prevent multiple payments for the same person "to the maximum extent administratively practicable". I assume they will use SSN to track payments and not allow RRC for anyone for whom EIP3 was paid, even if they are now a dependent on a different return. I don't see a similar provision for CTC and advanced CTC, so it will be interesting to see what the IRS does.