kathyc2

Unless the TP itemized state taxes and were not limited to the 10K, I don't see how this could affect federal tax????

14 cents. The same rate that they could take a deduction for it they itemized deductions.

If you look at the last year or two of 1040 of deceased, you be able to tell what the fund was.

How do you answer Q 15 on 8867?

I understand you are trying to be helpful, but what info would you have that would be needed in the next 30 days? If they are looking for what bank or investment accounts she had, that could certainly have changed in the last 7 years. In that case how would you know what documents to have them look for?

IN has a bill in the works that would allow pass through entities to make an election to pay state tax at the corporate level. The shareholders would then receive it as a refundable tax credit to use on their individual returns. They are saying that state tax paid by S would be a deduction for federal tax. Since it's an election i.e. voluntary, how could it possibly meet the Sec 162 "necessary" requirement? Do any other states do this?

Ain't that the truth! Not so much here, but on other boards I've seen people hold themselves out to be "tax professionals" when they are nothing more than a glorified keypunch operator. Software is a great tool and there are times when it catches my mistakes, but then again, there are other times when it gives an answer that I know if not right. Generally it's because I didn't click on a box or other. If someone doesn't have a good idea of what the result should be, they don't know to look at what has to be checked. I think those of us who "could" do a return with calculator and pencil are going the way of dinasours!

With a formation date of 2020, if the agent processing the request is on the ball, they should be asking more questions before approving. Did the principal take paychecks in 2022? If not I wouldn't even try for late relief if it was me. Hedging too close to being a fraudulent return IMO for me to put my name on the return.

The late relief is for if they meant to be taxed as a S but just forgot to submit the form. If they have already filed Sch C for the LLC in prior years, that argument doesn't hold much water, does it?

Was the LLC formed during 2022 or earlier? If earlier, it can not be backdated. If in 2022 were they acting as if they were a S all year, such as taking paychecks?

It's going to depend on how they normally book entries. The correct way under normal circumstances would be to debit employer match expense and credit 401K liability each pay period. Since the forfeiture is reducing the amount they need to pay debit 401K liability and credit match expense. A detailed description in journal entry why the entry is made for future reference.

It sounds like this would be overcomplicating things. Why do you/they want two different companies? Do they share the same building? Is food purchased, and then the same sold or used in luncheonette? Do you or they really want to do all the accounting to allocate between the business cost of food, rent, utilities, insurance, etc? Why not keep it cleaner and have one LLC that opts to be taxed as a S corp?

Anyone else remember when IRS sent mail with a label with SSN clearly visible? How times have changed!

I need slight (.75) magnification for paper/computer work. However, then things are blurry in distance. I solved it by ordering glasses with left lens plain glass and right side with magnification. Much easier to deal with than bifocals.

Why can't they get an ACA plan? Unless over age 65 or coverage available, which doesn't seem to apply, they can buy insurance there. Of course they wouldn't get premium assistance, but they would have coverage. Plans may not be the greatest, but they can't be denied due to health problems. As pointed out, a charitable donation from a Sch C or S corp would not lower MAGI.

It used to be my goto source to answer questions. I find it much easier to google what I want rather than open index of a book and then turn to the page where it's addressed. I think a lot of hard copy reference material has gone the way of a paper phone book.

I'm confused on how they are making 300K, can live on 40K, yet can't afford insurance????

It's kind of a touchy situation. If someone is truly abused, I wouldn't want to give the impression that I don't believe them. On the other hand, they may just be claiming it to save money. Use your gut instinct, but I think I would have the TP write out and sign a description to keep in file and explaining to them that you need this for both of your protection.

I've not had that but it stinks that we need to act as social workers to prepare a tax return. Is the spouse that is claiming abuse the only one that had ACA? Had you prepared prior returns for them?

If one of the spouses qualifies as HOH you don't need to worry about the domestic abuse exception. I would just use the normal due diligence for HOH.

I'm confused as to what your goal is. Is it to raise fees with the goal of doing less returns and still having the same revenue? Is it certain types of returns you no longer want to prepare?

Are you using the living apart and qualifying as HOH exception? Or, the domestic abuse exception?

My understanding is the "changes" were meant to be temporary. I suppose there is a small chance that some are extended in lame duck session, but after we have divided gov't with the new Congress in January I highly doubt they will be extended.

I learned a long time ago that tax policy will never be fair, as "fair" is a subjective term.

The 65 restriction does NOT apply if there are qualifying children.