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  1. This form or the calculation in ATX is not as straightforward as it could be, so I wanted a second opinion to ensure I am calculating it correctly. https://www.irs.gov/pub/irs-pdf/f1040s8.pdf If I check 13A, then I complete Part-1B. If the individual received Advanced Child Tax Credits (ACTC) payments, I enter that total amount on Line 14f, in this case $1,800. If the taxpayer doesn't have any dependents on their 2021 return, this will generate a repayment tax on Schedule III, which is expected. However, a red error will then generate regarding Part III Line 30, asking for the number of qualifying children taken into account in determining the annual advance amount you received for 2021." Initially I thought I should enter "1" here because that is what the payments were based on (1 child). However, entering "1" on that line will wipe out the repayment tax for the ACTC and clear the error, and that seems wrong. Entering in "0" on that line will reinstate the repayment and clear the error. Is this correct and is the correct entry in this case "0"? Then I am assuming that if the taxpayer received ACTC payments for 2 dependents but is only claiming 1 on their 2021 return, they will only need to repay the ACTC on that dependent, correct? Food for through, The form doesn't ask to specify which child the ACTC is being repaid for so I can only imagine how the IRS will issue the entire CTC amount to the parent who actually files for the child, unless they assume it is the child who was left off as compared to the payments. I'm going down a rabbit hole here...
  2. I have always used a rep to renew but last year she never returned my calls and I was forced to renew online for the first time.
  3. So the consensus is that I should not file an amendment with the same amounts but different W2 Payer info, while explaining the amendment under Explanation of Changes on Page 2? Would the Payer info on the W2 Entry form being different not typically trigger such a delay? The IRS Where's My Refund page is useless as it has said "Your tax return is being processed" since March with no specific info. I know there may be two forms the IRS uses to authorize the preparer to discuss a client's return with them. One is the 2848 Power-of Attorney which I believe is more effective. I can't remember the other. Is the 2848 generally sufficient?
  4. I prepared a return for a family member back in March. The return as EIC and CTC but nothing unusual. She hasn't received her refund yet but she has received 3 letters from the IRS stating they are working on their return but they need more time etc. However, a letter has not arrive in over 2 months, even though the last one indicated the would respond within 60 days. I assumed the return was caught up with the sometimes aggressive screening process the IRS uses for HH and EIC returns, but I know these are her kids that reside with her and there are no shenanigans happing in this situation so I figured the refund would arrive in a few months, but nothing yet. I took another look at the return and realized I made a mistake on the W2 entry form. Apparently she used to work for a temp agency and had since become a permanent employee for the same company. However, obviously the W2 was now being issued by the the company and not the temp agency. The W2 amounts are all correct but the payer info such as EIN and Company Name and Address are different. So what is the most efficient way to address this issue since it's sort of caught in IRS system limbo. Should I electronically file an amended return with the correct W2 Payer Info and indicate the mistake on the 1040-X? Should I call the Practitioner Priority Line? I have hesitated to file an amendment because I don't know if that will make it worse and delay it more. She is understanding but I feel bad because not only has her refund taken this long, she also hasn't received any of the Advanced Child Tax Credit Payments. I'd like to get it resolved prior to next tax season but that's looking like a long shot.
  5. How difficult is it for a tax pro to sign up for this service? Seems like it would save me a ton of time when I occasionally need to help a client pull a transcript and the taxpayer online request side is a nightmare of complexity and works 50/50.
  6. I was thinking the same thing, but I assumed that if the reported amount doesn't match was was reported on the 1099-G, it may cause it to be flagged anyway.
  7. I have a client who made just over the Unemployment Compensation Exclusion: $10,341. When the exclusion is applied on Sch 1, the remailing amount is only $141 that transfers to the 1040, because she had no other income. However, she had $1,026 federal tax withheld from her unemployment compensation, so she's due a refund. She also claiming the Recovery Rebate Credit, but that's unrelated. However, I keep getting this E-File reject message (see attachment) which seems to be be a bug based on a rule before the exclusion existing. I can't seem to delete the exclusion either, and even if I could it would probably cause a delay anyway. Any ideas? I hate to tell this woman she needs to paper file. She may not see the refund until 2022.
  8. Apparently the IRS will make the calculation automatically and refund the difference https://www.nytimes.com/live/2021/03/18/business/stock-market-today
  9. I'm assuming this won't affect those taxpayers who used their previous year AGI to calculate their Child Tax Credit and Earned Income Credits, because this will just make their 2020 income even lower than 2019. And do we know if this will impact EIC eligibility? Or will the EIC still calculate the full 1099-G amount as part of eligibility for the credit? If it impacts EIC, I can see many people filing amended returns to both save on the taxes and gain EIC.
  10. I had a similar client. Better to get it over with and pay the income tax. Also, to my knowledge the 10% penalty has been waived for 2020, and is not deferred, which is big.
  11. So here is a weird one. I have some clients from 2019 who are Rideshare drivers. In 2020 their Rideshare income is way down or zero, they may taken a part-time job with little wages, and they also collected some unemployment benefits. They have kids but their 2020 EIC is near zilch. First of all, clicking the box on the EIC Questions tab to use 2019 Earned Income doesn't pull from the 2019 Work Sheet B for the Sch EIC. It pulls Line 1 of the 2019 1040 which is Wages. However, these folks have income on Line 7A from the 2019 1040, which is business income. When I open up the client's 2019 Sch EIC and go to Worksheet B, on Line 6 of Part IV, it says exactly what the Earned Income was for 2019. This is what doesn't carry over to ATX 2020. The strange part is that if I manually plug this number into the 2019 income on the Sch EIC, It generates a bigger refund than 2019 because although the same income amount is being used to calculate the 2020 Earned Income Credit, there are no self-employment taxes to be paid because the income was earned in 2020. This all sounds logical and perhaps it's a inadvertent benefit to self-employed filers but I just wanted second opinions if this sounds correct.
  12. Came on here to ask about this as well. This is horrible. I too noticed the missing language related to Coronavirus on Line 12N of 5329. When I went to check the Form Update Report I saw a change was made to 5329 but no exact information about what was changed. This is horrible. I don't think I have any clients that hadn't been transmitted before this change was made. I was about to transmit a return and noticed the client now had a tax due when the penalty was reinstated and that's how I caught it. However, I'm wondering what is going to happen to those clients who I transmitted beginning Feb. 12 that had the old form. This doesn't appear to have been handled in the best way.
  13. This is good news. I've read conflicting info on this. Also, can anyone confirm whether they would be eligible for both the (EP1) $1,200 and the (EP2) $600? Or would they only get the $500 for EP1 if they file a 2020 return and they are not someone's dependent?
  14. Something new this year that I am seeing as a blue informational message when running error check is in the 1040 EdExp Tab. Client received a 1098-T with $1,500 in Box 5 Scholarships or grants. This reduces the otherwise amount i Box 1: Payments received. The blue message indicates "It may be more beneficial to choose to include tax-free scholarships or grants as income rather than allocate some to be tax-free." When I include the Scholarships amount on the 1040 under "Other Income" instead of on the 1040 EdExpTab, the client's tax obviously goes up but the refund goes up because the Lifetime Learning Credit increases due to not the scholarship income not reducing the amounts paid on the 1098-T. For some reason this does not seem correct, or am I interpreting this message wrong?
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