mcbreck

Not only is there a perceived risk on your behalf if the payment doesn't get made (maybe you typed it wrong?), there is also the problem for people who don't have a lot of money that a withdrawal will get bounced for insufficient funds and then a fee is charged. Who's going to get blamed if there is a problem?

These are revocable. On one it was all an ego thing for the husband to separate his investments away from his wife's (which didn't do a 1041). I have a friend who's a doctor who does it because he heard in a seminar it would help keep lawyers from including it in a lawsuit - it won't.

I'm a little uncomfortable with what liability I have if the payment doesn't get made.

I have multiple people who have living trusts file their own tax returns while alive because their attorney set it up that way. It obviously isn't required but you can do it that way. There are fees that can be deducted by the trust which the individual can't deduct.

A trust doesn't have itemized deductions for medical. That goes on the 1040. For a van to be deductible, you must have a letter from their doctor and then they only deduct the cost of modifications.

I just did my first - I like it. Might start doing more. Really wish my state allowed us to do estimates that way.

Do you guys utilize the electronic payment screen to pay state and federal taxes for clients? I've only done it a few times for estimates but my state won't allow it. I'm not sure I'm real comfortable instructing the IRS or State to withdraw payments for 1040 tax bills. Just wondering how often people use it.

Third week in a row a client has called up and said he didn't think he'd be able to make it into the office this week but would we still be able to file on time if he gets it here the next week. I'm 99% sure he wants to file an extension but doesn't want to admit it.

Client just brought me a $30,000 bill for her rental property she forgot paying (new siding on a brick home per Google Maps). It's handwritten and she thinks it'll wipe out any tax owed on their income. This is the 3rd item she found in the past 2 weeks. And she tells me her husband doesn't understand their accounting system so she has to do it. Two years ago he took over for a year and it was worse.

Before IRA enforcement was a real thing - client bought a "bond" for his IRA from a company with a 30% interest rate. He owned the company so it resulted in basically no profit for the business and a massive contribution to his IRA. He found an attorney to process it all for him and then bragged he had a multi million dollar IRA.

In the financial meltdown of 2008, Berkshire Hathaway loaned Goldman $5b at a 10% interest rate. In an interview he said the company kept calling wanting to pay him back but he was always busy when they called because they were making almost $10m each week in interest. My dad sold his business in the mid-80's and put it all in CDs because the interest rate was all at 10-11% and since long term stock market yields are 10%, he decided he didn't need to take the risk. I started selling investments in 92 and it was exceptionally common to find people who had never owned a stock in their lives - today it's exceptionally common to find people who've never owned anything but stock. In 92 we could sell a 6% tax free bond when the alternative was a 4.5% CD. You didn't have to be much of a salesman to make that sale.

In my locality, home real estate activity has collapsed. Residential real estate prices have not dropped at all and are very unlikely to do so. Commercial and apartment complexes are very different scenarios from individual residential. A year ago I saw multiple apartment complexes pitched as having a 5% return on equity - you can get that from a treasury bond - why buy an apartment complex? Think about the price drop required to go from a 5% return on cash flow to 7-9%.

I've never known an issue where SC would be required. It isn't showing taxable income is it? As BrewOne said - you have to select the state of residency for the trust as the deceased person's last address.

Client's W2 shows $380k in Medicare income and $250k in taxable income. Deductions on the W2 show only the retirement for about $18k. Why would Medicare be so much higher? Client doesn't have a clue where they got that number.

The 25/32 income figures go back to the 1983 change to make 50% of social security possibly taxable.

Intentionally lowering benefits without having to actually vote on lower benefits. Making up a new CPI index to determine your COLA increase also cut your lifetime benefit by about 15%.

My state does this also. Only solution I've come up with is to call the tax authority. The problem is both are past the Check Box authorization so you have to file authorization. No clue why anyone in management thought it was a reasonable process.

Once my mind turns off - I'm not coming back.

2022 is just last years tax return. Seems very reasonable to still be processing returns since W2s are often paper filed.

Personally, I'd report it on Schedule D with a cost of $75k. If it's not a viable sale that they received an asset in return, they didn't have a gain and you can't report a loss on the sale of a personal asset. (assuming it's not a business)

I'm at the age where every get together with friends includes a discussion of how long until we retire..... Oddly the closer I get the more stressed I am about it because it feels like this huge irreversible life decision. I've been asking people what they do all day in retirement just to get an idea of what's to come.

Agreed. Between AI, form readers like Gruntworx and offshoring, watch out. Imagine for a second, Quickbooks has your online software - what if they just offer to produce the tax return for you from the file? People use Gruntworx, that's going to be quaint 10 years out. Things like Turbo Tax - you can download or upload into it your 1099s, W2s and even K-1s. What percentage of people is that good enough for a virtual automatic tax return prep? If you uploaded your Profit Loss / Balance Sheet / Cash Flow statements - a Schedule C is done in a few years.

I like when it's a 45 year old, they withhold 5% and you explain the penalty is 10% before you even get to the tax. Every year the same client thinks she can deduct all the clothes she buys for work entertainment events. I explain she can't deduct dresses but every year she sends me all her receipts. Seeing the prices of those outfits, I'm glad my wife is exceptionally cheap.

I'd love to hear their arguments / thought process. Have a client who inherited about $5m from her brother and had NO CLUE it was coming (he was much younger, they didn't really talk, died unexpectedly and had no one else in his life). Every time I talk with her she's royally ticked off that she owes taxes on the income. Um, you retired expecting to live on $40k, now live on $200k per year and you are upset?

While the PIN isn't overly common, 90% of people who got the protection pin lose the letter from the IRS and we have to paper file.