kathyc2

LOL! I've always viewed all caps as unprofessional and lazy. To each their own!

Exactly! You have very little flexibility without paying huge penalties if you change your mind about wanting money in them. Which leads to annoying commercials about companies that buy them out. If someone wants to pay ordinary tax rates on the earnings, they would be better off to buy 30 year Treasuries and pay tax on the interest when they cash them in.

Since 1974 there has never been a 20 year period in which the S&P lost money. Since 1974 the only 10 year period with loss was from 1999 to 2008 - 1%, and 2000-2009 -.61%

So, IRS has their money? Why not pay client that the account was dinged the amount plus an extra amount for the error? Then have client who should have paid IRS pay you.

Thanks Judy. I did answer one of my questions. There is a box on the 1099R that shows the NUA amount.

Client e-mailed about having some interest in doing this. I've never had one, and don't even remember really hearing about them. Client left employer in 2021. He is well under 59 1/2. His contributions always went to Roth 401K, so we would only be talking about the employer match that was held in company funds. I'm waiting on numbers from him, but for now let's say 25% of match was held in company stock and 75% was held in regular mutual funds. Publicly traded company, so stock prices are easy to find. What I'm finding from brief research: 1. The entire company match that is held in company funds needs to be removed from retirement classification. 2. The 25% that is in company funds is taxed at regular rates plus 10% penalty. The amount is calculated as # shares purchased times share price at time of purchase from match. 3. The 75% non company funds from match can be rolled to traditional IRA. 4. His Roth 401K portion can be rolled to his Roth IRA. 5. The appreciated amount of the 25% company funds is treated as capital gains if sold. This would be the total value at time of disbursement less taxed amounts from #2. Am I understanding the above correctly? Questions: 1. Can the appreciated amount be put into his regular brokerage account, or does it need to be kept separate for some reason? 2. Can the appreciated amount be put unto a DAF (donor advised fund) thereby bypassing tax on it, and getting a Sch A deduction to boot? 3. What will 1099R look like? Will it show the total and then the amount that is taxable, or is removing the non-taxable part something that happens on tax return?

To each their own. Vast majority of my clients pay with check at time of pick-up. A few pay cash, and like MCB I keep that in safe for items I pay cash for and to have emergency money in the case of wide spread internet outage. A few others pay with CC and while I don't show a separate line item, I do charge them a little more to cover the fees. If I had a storefront practice, I'd want CC payment, but since I know my clients very minute risk of being stiffed. I only remember one over 27 years that check bounced and wasn't made good.

Depends on how you look at the surcharge. Personally, I'd pay by check and take the 3.5% discount.

Age 55 and separated from service, amounts she cashes out of 401K will not be subject to penalty. I had a client try that several years ago and the plan was set up such that if she took any money out, she needed to take it all out. She needs to make sure she understands all the fine print of her plan.

When they run a remote deposit, they don't get confirmation that funds are available like they would with a debit/credit card. Guessing what they wanted you to sign was that you are liable for the fee in the event the check bounces. Since lawyer told them to do it, sounds like they have been burned in the past.

I've seen all kinds of things come out of this person's office to convince me he plays fast and loose. In this case, the LLC had already filed one year as a Sch C for 2022, yet he filed the 2023 as a S without requesting approval first and no payroll. I'm not aware or any late election relief if a return has already been filed for first year. S corp is not always the best answer. In this case business performs services, no employees and minimal investment in equipment. IMO vast majority should be wages and the added costs of an S return, payroll, SUTA/FUTA, lower QBI and lower future SS benefits outweigh any potential "savings".

This isn't a client, just someone I had a casual conversation with. He's a SMLLC organized in 2022. I haven't seen returns, but from what he's telling me he filed Sch C for 2022, which was probably very small. For 2023 return he went to a preparer that plays fast and loose with rules from what I've seen. Preparer told him he should be a S and filed 1120S for 2023. I know if 2553 is filed separately an acceptance letter will be generated. If election relief was filed with return, will the acceptance letter still be generated? He says he hasn't received anything from IRS if election was accepted or rejected.

Donor advised fund. Put's large chunk in at one time and takes the Sch A deduction. Then can have fund pay out over time to charities of choosing.

Are they all citizens? There are different rules for some of the refundable credits bases on status.

You are confusing S and C corps. Basis in a C does not change with non taxable or non deducible items. Nor does it change with profits or losses.

For an ongoing business, this would be true. If the company was liquidated, assets would be zero, liabilities would be zero and different equity accounts would need to net to zero, not a negative amount.

C corp dividends paid out are always taxable in the year where cash payment is made. If beginning equity is 13K, and company is liquidated where did the cash come from to pay out 7.5 dividends and have 9 loss?

1402(e)4 states: An exemption received pursuant to this subsection shall be irrevocable.

Sounds like it would be on 1098T then and not your problem.

Also guessing that because it was just a check and no tax form, majority of people would ignore it and not tell preparer. However, since you know about it, you can't ethically ignore it.

I've never seen a scholarship paid directly to the student rather than the college. If the kid could use it for anything, then I don't see how it's a scholarship just because the memo said it is. I also don't see how it's earned income. Sounds to me like prizes and awards subject to kiddie tax.

It's rounded to nearest $50.

Client received letter from USPS that his payment envelope was mangled by machine. Check was returned to him. No date on letter, and original envelope not returned. He doesn't like electronic payment, so please skip the lectures about that. Any other ideas than to mail check back along with letter from PO and a note asking to abate penalties?

If 1099LTC is only for reimbursed expenses, you don't file 8853.

He is not a qualifying child as he was not under age 19 or a full time student 5 months of the year. He is also not an other dependent as his income is above the 4,700 income limit for 2023.