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  1. You might want to suggest the client converts enough IRA money to Roth to have enough income to take advantage of the charitable deduction.
  2. My bad. Deductible IRA's need to be added back for MAGI in this case. If the higher 2023 income is a one off he can also keep the money in, pay the penalty and then use 2023 contribution as a 2024 contribution. The penalty is calculated each year the overage remains in account so the only way this may make sense is if 2024 income will be low enough to be within the higher 2024 income limits. It is rather strange that someone at this income level is not covered by a retirement plan at work.
  3. Yes, he can withdraw the contribution and what it earned by due date without penalty. Next year he will receive a 1099R and the earnings will be taxable but no penalty. When you say they does it mean MFJ? Would spouse maxing traditional make AGI low enough to keep Roth?
  4. Thanks for confirming. I don't remember ever having a state that started with federal taxable and then took deductions off that. Am I correct that this years negative amount will not carry forward to next year?
  5. Retired client moved to CO in 2023. Is it correct that the return starts with federal taxable income instead of AGI? Then it takes off from the fed taxable income amounts from pensions? It results in negative CO income. Seems like double dipping to me and just wanting to make sure this is how CO handles tax for retirees????
  6. I have an elderly couple with a carryforward. Their income is too low to ever use it so it keeps carrying forward. State income starts with federal AGI, so they get the state benefit of the same 3K year after year.
  7. Definition of gross income: https://www.law.cornell.edu/uscode/text/26/61
  8. Say the holder of Roth IRA dies in 2023 and adult children inherit it. They can leave the money in a Roth and let it continue to grow for 10 years. If they die in 2032 do their adult children get another 10 years, or since it was inherited is distribution required at death?
  9. I've never used organizers and never will. Some I've seen are more complex that completing a return. I mail 4 pages in January. One is my letter where I discuss recent legislation and other things I want to discuss. Second is basic info such as phone, email, cyrpto, foreign accounts, estimated payments and lines for them to enter any changes they want to make me aware of or discuss. Third is sheet for dependents with yes/no questions that I need to complete 8867 or know to ask more questions. Fourth is checklist of items in 4 parts; part 1 is income items which includes a line "any other items of income", part 2 is for adjustment items, part 3 is for itemized deductions and part 4 is for credits and state specific items. Just a one line description as a trigger of what forms or documents I'm looking for. At bottom is a place to sign that they reviewed the list and provided documents on it that pertain to their situation. When preparing the return I open the pdf of prior year documents to see if they may have missed something such as an investment statement, 1099R, etc. Also if code W on w-2 I specifically ask about 1099SA.
  10. From Pub 559: Fees Received by Personal Representatives All personal representatives must include fees paid to them from an estate in their gross income. If you aren't in the trade or business of being an executor (for instance, you are the executor of a friend's or relative's estate), report these fees on your Schedule 1 (Form 1040), line 8z. If you are in the trade or business of being an executor, report fees received from the estate as self-employment income on Schedule C (Form 1040), Profit or Loss From Business. If the estate operates a trade or business and you, as executor, actively participate in the trade or business while fulfilling your duties, any fees you receive related to the operation of the trade or business must be reported as self-employment income on Schedule C (Form 1040).
  11. kathyc2

    form 8962

    You actually use the 2022 poverty levels for 2023 returns which is 73,240 for a family of 2. The 78,880 is 2023 levels which will be used for 2024 returns. The credit is based on FPL when they signed up which would have been late 2022.
  12. kathyc2

    W-4 issues

    Formulas before redesign always had a cushion built in for 1 exemption. Some yahoo at Treasury decided to take away the cushion. I knew at the time it wasn't going to be going over well. So, before redesign the simplest situation of single no income other than wages was pretty much guaranteed a small refund by claiming Single and 1 exemption. Usually marginal rate times that years personal exemption amount. Since they took away the cushion with new form that person will break even. Then if they have a few hundred of investment income they owe.
  13. kathyc2

    W-4 issues

    I assume you are talking about the 12,900 for MFJ and 8,600 for others that needs to be subtracted from wages to use the box not checked tables in Pub 15T. That is not even close to being the same as claiming 2 or 3 exemptions on the old W4. It's not that difficult to calculate what the withholding will be depending on how W4 is completed. Certainly don't need to just take a blind stab to see what withholding will be for a month.
  14. kathyc2

    W-4 issues

    But is has everything to do with how much of their liability is paid in during the year. The original comment was that the tables are no longer available. Simply pointed out that they moved to a new pub. You seem to be itching for a fight, so I'm done.
  15. kathyc2

    W-4 issues

    Say what???? Those of us who understand how they work can use the formulas to calculate what the withholding will be based on the W4. Clients want different things. Just this afternoon I had a gal with a balance due of around $600 federal. She doesn't want to have a balance due whether there is a penalty or not. Just told her to have an extra $15 a week withheld so next year should be close to break even. Another young couple had a 13K refund. It's due to withholding and not refundable credits. Asked if they wanted to adjust W4 to have a smaller refund, and the answer was no, they want the big refund. Not what I'd do, but it's their money. One thing we should all do is when a dependent is turning 17 or graduating college give them a heads up how that will affect next year.
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