BulldogTom

My spouse was able to figure out how to make the form work when the filing requirement was below the filing threshold. If the taxpayer did not have insurance and they are under the filing threshold, DON'T check the box on the bottom of page 1 on the form. Hit the green arrow and jump to the worksheet, Go to Step 4 and fill in line 2. That will check the box for you and not give you all those red errors. Tom Modesto, CA

This is why I never argue with Judy. She is an encyclopedia of tax knowledge. We are very glad you are here for us Judy. Tom Modesto, CA

Years ago I had an IRS RO tell me that the best way to get an audit letter is to do the 50/50 split of income on MFS returns in a community property state. He said that since none of the documents would match up with the taxpayer (W2, 1099, etc.) it almost always ended up in a letter to both spouses. He said that if each spouse took their income onto their own returns, there would almost never be an audit. Not sure if this was true, but I thought it was interesting. Tom Modesto, CA

Did they replace the skidsteer? If they did, you have an involuntary conversion and the new skidsteer will have a basis equal to the basis of the property destroyed (plus any amounts paid above the insurance reimbursement). If they did not replace the property and pocketed the money, then they have a sale or other disposition and the insurance $ received is the sale price. Tom Modesto, CA

Wife caring for husband. Definitely qualifies. Tom Modesto, CA

There is a dropdown on the W2 entry screen for Medicaid Waiver Payments (way down at the bottom). When you enter that code in box 14 on the W2 Input Screen, ATX will make an adjustment to income, making the amount non-taxable. The issue is there is a court case (Feigh v Commissioner) where the taxpayer was allowed to exclude the IHSS payments, but also claim them as earned income for the purposes of the EITC (double benefit). But ATX, while making the proper adjustment for taxable income when box 14 is filled out, is not including that income on the EIC Earned Income worksheet for calculation of the EITC. The only way I can find to get the income on that form in ATX is to either override the income calculation on the form or leave the W2 alone and allow the income to be taxed. I am wondering if anyone else has a way to make ATX follow the tax court case without an override. Last year when we contacted support they said that they would have it fixed in the 2020 software. Tom Modesto, CA

I don't know for sure if what the IRS rule is, but in my office we don't send it if we did not prepare it. Period. End of discussion. So I don't care what the IRS rule is. That does not help you, I am sorry. Just putting an opinion out there. Tom Modesto, CA

Anyone? Bumping up Tom Modesto, CA

I can override the forms to get this information in the return, but I am wondering if any of you have had success in putting in the W2, excluding the amount using box 14, and getting the amount back onto the EIC Earned Income tab without doing an override? Thanks in advance. Tom Modesto, CA

CA allows you to take the STD deduction on Fed and Itemize on CA. Because the STD deduction is so low in CA compared to the Fed, lots of my clients are itemizing only for CA. Tom Modesto, CA

Same for CA. Put it on the 2106 and flow it through to the state. Tom Modesto, CA

I am jealous. Would love to be in TN with the two of you. Tom Modesto, CA

Go to line 30 on the 1040 and click the green arrow. It will take you to the form. You will need to read it carefully and check the correct boxes to make it work. Pretty simple when you get through it the first time. Tom Modesto, CA

NOOOOOO!. I am short on revenue this year and I need my clients to start showing up. About 25% behind last year at this point, and last year was about 10% behind the prior year at this point. I will get to the same revenue eventually, but I would appreciate it to start coming in and if they delay the season I am going to be sitting here waiting a few extra months to get the work done and get paid for it. Tom Modesto, CA

Thanks all for the help. I just did my first one of these and the software made it very easy. I was worried because there was the QCD portion and another portion that was taxable. All the documentation is perfect (letter from the Broker, acceptance letter from charity) so I am feeling good. Tom Modesto, CA

I will say ATX has been warning us for years that they want the vehicle info on the FA worksheet and not anywhere else. We have been warned. Tom Modesto, CA

I don't think so. It is the entire building. It is basically putting off for 10 years the replacement of the roofing system. Extending the useful life of a 50 year old building. But it is not that they want it all deducted right now, what they want is to spread it over the next 10 years because they think the tax rates are going up and they want a substantial deduction over the next few years. Tom Modesto, CA

Client has a commercial building they use in their business. Put a coating on the roof (not a teardown and replace) that cost over $100K. The warranty on the coating is 10 years. They are not happy that I am telling them it is 39 years. Any chance I am wrong on this? Could it be anything other than 39 years for the useful life? I know they can §179 the full amount for Fed (not for CA - they don't conform) but what they really want is a 10 year life since that is all it is warrantied for. I can't find a way to get it to a shorter life. Thanks Tom Modesto, CA

This is one thing I wish the IRS would change. It seems very inconsistent that you can take money from 1 retirement account penalty free for a first home purchase and not from another. Rant over. Tom Modesto, CA

OK, after thinking about this over the weekend, I believe I figured out the instructions. I read it as Roofs being QIP, but I think what the instructions are saying is there are two things that are eligible for §179: QIP and Roofs, HVAC, Fire, Alarm and Security systems. So I think I should use the same coding on the return for 39 year commercial property and take the §179 on it. I hope I have this right. Tom Modesto, CA

Client is domiciled CA, Full Year Resident. Bought a rental home in AZ. I am looking at the instructions for Line 40 on the AZ 140NR and I think AZ is looking for bonus depreciation adjustments. Since the home and land were placed in service in 2020 and are not eligible for bonus depreciation, I think all I have to put on line 40 of the 140NR is the amount of federal depreciation that was backed out on line 28 of the 140NR? Is this correct? Thanks in advance. Tom Modesto, CA

Bunny hop from the Schedule CA where the adjustment is doubling up and it will take you to the spot where the error is occurring. Random numbers populating on that schedule behind the sch. CA. Clear them out and the problem should go away. At least it did for me. Tom Modesto, CA

Yes. When you check the box in Part II per the instructions (for under the filing threshold) the form goes bezerk and it gives red errors telling you to call support. Since we know that the taxpayer is exempt from penalty we checked the box for full year coverage and filed the return. We will call support on Monday to report this issue. Tom Modesto, CA

From IRS website, see the last bullet point. FS-2018-9, April 2018 Businesses can immediately expense more under the new law A taxpayer may elect to expense the cost of any section 179 property and deduct it in the year the property is placed in service. The new law increased the maximum deduction from $500,000 to $1 million. It also increased the phase-out threshold from $2 million to $2.5 million. For taxable years beginning after 2018, these amounts of $1 million and $2.5 million will be adjusted for inflation. The new law also expands the definition of section 179 property to allow the taxpayer to elect to include the following improvements made to nonresidential real property after the date when the property was first placed in service: Qualified improvement property, which means any improvement to a building’s interior. However, improvements do not qualify if they are attributable to: the enlargement of the building, any elevator or escalator or the internal structural framework of the building. Roofs, HVAC, fire protection systems, alarm systems and security systems. These changes apply to property placed in service in taxable years beginning after Dec. 31, 2017. Tom Modesto, CA

Under TCJA a roof overhaul on a commercial property is a "Qualified Improvement" 39 years, and eligible for §179 expensing. So the entry in ATX Fixed Asset screen for the sub-category should be 12 - 39 yr Qualified Improvement Property. Do I have this all correct? It is a large re-roof on the property and I don't want to mess this one up. Thanks Tom Modesto, CA