BulldogTom

Called my mom this weekend just to check in on how she is holding up. As we were talking, she mentioned that my sister-in-law was going to go to the website and see if she could set up my mom to get the stimulus money. WTH? I explained to her that people on SS would be getting it in a later round of funding and that they know who she is and since her SS check is DD, she did not need to do anything. The mis-information out there may be part of the reason the IRS site is clogged up. I wonder how many people on SS have gone out to the site and entered information to get their stimulus payment when they don't need to? Tom Modesto, CA

You need to tell them you will refer them to your friend RITA THE GOOD HUGGER. Tom Modesto, CA

Hmmm, I was able to get a 2020 first quarter 941. But that was 2 weeks ago. Tom Modesto, cA

The employer cannot hold the participant's vested portion of the 401K. It belongs to the participant and they are allowed a tax free rollover to their IRA of those funds. The 401K plan rules cannot stop this from happening. Tom Modesto, CA

Easy now. I resemble ...uh resent... that remark. Tom Modesto, CA

I read the fact sheet, but I am still unclear on how this will work. These are made up numbers but the scenario is real. Company can apply for loan of 2.5 times prior year PR costs. 2019 Avg Monthly PR is 500K. Loan request is 1.25 Million. Avg employee headcount is 150 in 2019. Loan is made by bank. 1.25 Million. Company has 20 employees on PR during the forced shutdown. Monthly wages are 100K. Health Insurance (for all 150 employees) is 50K. PR Taxes and other benefits are 25K per month. Total Payroll cost is 175K per month during April and May. June 1, life is back to normal. Company hires back all workers. Money spent from Loan is 350K for PR, and 400K for Rent, Utilities, Insurance etc.. Amount remaining in the bank is 500K. How much of the loan will be forgiven? Can they pay back the 500K in the bank? Since they did not spend 75% on PR costs during the 2 months will they have to repay all of it? Would it be better to only borrow $425K so they get the full amount of the loan forgiven? I don't understand this part of the fact sheet and this is what is hanging me up. Is just enough to cover payroll + 25% the right amount to advise a client to request from the bank to ensure they get forgiveness? Or can they get forgiveness on the part they use for payroll if it is not 75% of the loan? Thanks for looking at this and sharing your understanding. Tom Modesto, CA

Passive income does not have to come from the same activity to offset passive losses. It just has to be passive income. Are you sure his K-1 from his S Corp is really throwing passive income? Tom Modesto, CA

The unemployment boost of $600 per week, no waiting period, should be able to cover most of what is missing from payroll for a lot of those folks. That is $15 per hour for a 40 hour week on top of what they would normally get from their state. I am not heartless about this, but this situation is temporary and congress did something to take care of the massive layoffs. I can't agree with this one, no matter how hard I try to see the compassion that others do. It is long term damage to these people's financial health. We are just going to have to disagree (respectfully) on this one. Tom Modesto, CA

This is stupid, stupid, stupid. How many of our clients are going to raid their 401k's and then get the shock of a big tax bill. And they are going to raid the account and the worst possible time, when the value of the account is incredibly low. Locking in losses forever, paying taxes on the money, and not having a chance to recover those losses or additional earnings. I cannot believe how incredibly stupid our leaders are sometimes. How will our population ever learn how to use these accounts properly when every time there is an economic downturn, the government basically tells the population to treat their retirement accounts like a piggy bank. STUPID, STUPID, STUPID. Off my soapbox now. Tom Modesto, CA

Did you charge him for the time spent looking for the file? Tom Modesto, CA

They call those people LAWYERS. Tom Modesto, CA

I tried both the Client Copy and Preparer Copy batches and CA still shows the full SSN of the beneficiary. It works on the federal K-1, but not CA. Thanks Tom Modesto, CA

I checked the box in the global settings to Truncate the SSN, but it is still printing the full number on the CA K-1. Don't see a spot on the CA global tab to do this. Anyone know where I should look to get the CA K-1 to truncate? Thanks Tom Modesto, CA

Not me. But I am interested in what ATX told you. The DPAD being still available to certain taxpayers was something I heard at one of my seminars, but I looked real quick at who it applied to and I just blew it off since it did not apply to any of my clients. Tom Modesto, CA

@Medlin Software Do we know what the mechanism is for claiming the accelerated credit? I figure you will be dealing with this right now. At my day job, we are going to run into this. We furloughed 151 employees. There are about 15 employees still on payroll. We pay employees bi-weekly and are a semi-weekly depositor. If all our furloughed employees claim the 2 weeks of Paid Sick Leave, we will have a large credit on our next payroll submission. We will not use up the credit and would like to get it refunded as soon as possible (because, like, there is no income while we are shut down and money is tight). How do we get the refund as fast as possible? I went to the IRS website and did not see anything, but I am the worst at finding these things? Any help appreciated. Tom Modesto, CA

We know better Rita. Some of us have been to your home and seen how beautiful the garden grows. Who knew hugging was such a good fertilizer. Tom Modesto, CA

let me try asking this again using a couple real world scenarios. 1. I have a client who is a hairdresser. Sch C. No employees. Non-essential. Makes quarterly estimated payments. How do I get her the credit? 2. I have a client who works a regular job and has a sch. C business. Has employees. Is laid off from work. Gets 2 weeks sick pay, but has to give his employees two weeks of sick pay. What do I do for each of these clients. Thanks Tom Modesto, CA

Can someone help me unpack this as it applies to SE individuals? They get a tax credit. Can that credit be used against regular tax or only SE Tax? I know it is early, and there is not a lot of guidance, but we are already getting questions from our SE folks. They seem to think they can call the EDD and get a check like their friends who are employed. Tom Modesto, CA

Who won the pool? Tom Modesto, CA

Those are the easy ones. The transaction happened and was just mis-coded. Or the transaction is not deductible by the company. But to go back in time and recreate what should have happened is a little different. The S shareholder knows or should know that they need to take a reasonable compensation. If they choose to ignore the law, it is not for us to force them to do so. It is no different than worker classification. If the company brings me their 1099's showing 10 workers as independent contractors, should I make them go back and do payroll for it if I think they are employees? If the company presents the documents, says they made their determination, what are we to do? IRS would love for us to do just that, but we are hired to do the work for the client, not the IRS. It seems to me that the IRS wants us to do their job as well. These are the sticky ones. We see these things and we advise our clients on the law, but ultimately, they sign the return attesting to the accuracy of the positions taken on the return. I am not arguing with you Dan, I really see your point, but we are put in these moral dilemma's every day. Tom Modesto, CA

This is always the problem. What to do when the accounting has been done wrong. Edsel got scolded earlier this month by me for suggesting to change the accounting to benefit his client to get a tax credit. (BTW - I am sorry I came off so hard on Edsel, I still feel the same way, but I should not have said it). If we are not paid to do the bookkeeping, we should not be doing their bookkeeping. We advise on the tax laws, we prepare the forms based on the presentation of the books. The client is responsible for the information they give us. But the rub is we need to make "reasonable inquiries". And what if you find something wrong? How to handle it? This is where the IRS tries to drag us in to audit work. This is the dilemma of the tax preparer since the beginning of the code. Tom Modesto, CA

I think your statement above is correct sir. It is getting to that time of year. Tom Modesto, CA

I was not trying to go down this road, I was more looking at this from my own point of view, which may be very ignorant as an accountant and not a health expert. I was just looking at what I thought was a panic produced by the media, and I may still be correct about that, or I may be very, very wrong. My question was more if the media was driving our governments and policy makers to "do something" and they are trying to look like they are "doing something". Time will tell if the steps taken are proportional to the problem, or if "out of an abundance of caution" we have "over-reacted". Personally, I am starting to move my opinion a little bit as I try to understand more about the scope and the outcomes. The steps taken may be appropriate, and I am not going to throw stones at anyone right now... except the people who are standing in line for 3 hours at Costco to get a pallet of toilet paper...I still don't get that one. But if they are trying to get hand sanitizer, good for them. Tom Modesto, CA

From what I get from my client, they are got sucked in by one of those programs and they think this is how they are going to spend their retirement years. When you see the look in their eyes, like they are the ones who found the goose that lays the golden eggs, you know they are not going to listen to anyone but the guy who sold them the program

I have a new client that is buying tax liens. I understand the concept of the investment, but not sure of the taxation. Do any of you have a client doing this and if so can you answer a couple of questions? 1. Are the liens held as inventory or an "other asset". 2. If they are redeemed, do you show that in Gross Sales on the C or as a sale of the lien (same question as #1, just asked another way). 3. Do you split out the interest component paid on redemption from the redemption price paid? Or combine it all as one transaction? 4. If the purchase price is higher than the underlying liability, and it is redeemed, where do you put the loss. Taxpayer is just starting this business. I think it is a mistake, but they believe they can make money doing this. Not my job to give them financial advice, but I do need to prepare the return for them. I believe they should be treating this as an investment, but they contend they will be regularly and proactively engaged in this activity to earn a profit. Thanks in advance for any thoughts. Tom Modesto, CA