BulldogTom

I am aware that there are commissions and admin fees included in the cost he paid that are not premiums for insurance and do not increase the cash value of the policy. The thing that has me stumped is this client is pretty meticulous in his recordkeeping, especially for someone 81. He does not have any records of anything coming back to him as dividends. He remembers they sent him a letter telling him he did not need to make payments anymore, but he says he never got a dividend check. As soon as he decides to cash out the surrender value of the policy is nearly equal to the face value of the policy and 100% of all contributions have been returned as non-taxed distributions of premium. Something does not add up. Or maybe it does and I just see conspiracies everywhere I look. Tom Longview, TX

No taxable dividends since I have been doing his returns (5 years). 1099INT from the insurer this year in addition to the 1099R. Cash value was a little higher than the face value of the policy. Tom Longview, TX

I am thinking that is the case. Client tells me that a couple of years ago (? how many) the Insurer told him to stop making payments because the earnings took care of the premiums. I am inclined to believe the calculation of the Insurance company on the surrender. Tom Longview, TX

Facts and Circumstances. Document, document, document. Be ready to defend at audit. You can distinguish the BS from a person who really wanted to start a business and make a profit. IF the expenses were things like filing fees for SOS, software, letterhead, accounting and legal, things that are really business expenses that have receipts and cannot be used personally after the closing of the business, then I say you have a good argument. If the startup expenses are a new iPhone, awesome computer and trips to resorts to hear about an awesome opportunity in a MLM company, then I would be very, very leery. Tom Longview, TX

My point is that when the idiots leave the beltway to campaign and hear that this is a problem, they may try and get something done before the election to win votes before people go to the ballot box. Tom Longview, TX

But the box 1 & box 2 amounts are the same Tom Longview, TX

Client is 81 years old. His father bought him an insurance policy when he was 12. Has paid the $126 per year until last year when he cashed out the policy. 1099R shows distribution fully taxable. Shouldn't the premiums paid over that 68 years be deducted from the taxable amount? Or am I missing something. Tom Longview, TX

I sent my clients who were subject to the reporting the FinCen guide last fall. I think that guide is well written and clearly explains the process. I told my clients I was providing the guide as a courtesy but I would not be filing for them. I have answered a couple of questions about when to file (my advice, this is an election year and some people are upset by this perceived government overreach - so wait till after the elections to see if anything changes in the law). That is as far as I have gone with advice on the situation. Tom Longview, TX

Just read an article on MSN page that Drake software users are also getting those emails. They are after us. They know what we hold in our systems and they want it. Tom Longview, TX

How are you getting into the K2/K3? It is not available in ATX yet. I have 2 that I am waiting for the K2/K3 to download so I can finish up. Tom Longview, TX

A quote from a Bloomberg article this morning on MSN: "A coalition of 250 business groups including the US Chamber of Commerce, Business Roundtable and National Association of Manufacturers has lobbied hard for the legislation authored by Ways and Means Chairman Jason Smith and Senate Finance Chairman Ron Wyden. Boeing Co., General Motors Co., Deere & Co., Caterpillar Inc., Amazon.com Inc., Microsoft Corp. and Apple Inc. are among the companies that stand to benefit, according to Bloomberg Intelligence. The measure would restore expired tax breaks allowing businesses to more quickly recoup the costs of domestic research and development, interest on business loans and investment in equipment." If you want to know what Congress is going to do....follow the money. Tom Longview, TX

Did you get a new computer this year? Seems to me I had to do that same thing the last time I got a new computer. Tom Longview, TX

You are correct. If there is no refundable portion of the credit, it will not be affected by the changes. What is proposed is that the refundable portion will go up by $200 per child to $1,800. So your lower income folks who get the refund on the credit will get more if they wait. Or they can file now and get the difference later when IRS goes back through and fixes the refunds. Tom Longview, TX

https://www.guidestone.org/Updates/Ministers-Tax-Guide This is my go-to for ministers issues. We used to have a clergy tax expert on the board but I have not seen him in years. I think he is the one who gave me this resource many years ago. Tom Longview, TX

House is set to vote tonight at 8PM eastern. Toss up as to if it will pass. Senate is a toss up as well if it passes the house. Don't forget any of your Businesses that have R&D costs are affected as well. I am going to be sitting on one because I don't know if the R&D costs can be deducted or have to be amortized over 5 years. Also affects bonus depreciation for your business returns. I think that will apply to rentals as well for new business property installed in 2023 (stoves, refrigerators, etc) So, if you have any business returns or any individual returns with dependent children or rentals, you need to consider when to file. Tom Longview, TX

There is one that I get regularly that comes from an email that is .corn instead of .com. Pretty sneaky. I think that extension allows them to use legitimate company names. The email address will be [email protected] or something similar. You gotta be vigilant on email. Tom Longview TX

Why do people make their estates beneficiaries of their retirement accounts? I will never understand that... Life would be so much easier if people named a person as their beneficiary. Tom Longview, TX

Who was the final beneficiary that the funds were paid to? The estate or the son? I think this determines where the income goes and where the deduction for the charitable contribution. I am pretty sure that if the son's SSN is on the paperwork as the beneficiary, he takes the funds into income via a 1099R and provided he files a Sch A and the charity gives him a receipt, there is no problem with him taking the deduction. Did the son write the check from his personal fund? Or did the check come from the estate of decedent? This is a real stretch, if the funds were paid to the estate, could you argue that the paperwork showing the attempt to make the contribution was an addendum to her will? It was clearly her intent and if she knew the trustee was going to deny her wishes, she could have amended her will. Tom Longview, TX

My clients are increasingly taking pictures on their phones of their documents to upload in my portal. We discourage as much as we can since the pictures are hard to read. The big issue is with iPhone photos. I have no way to open them (I can open a jpeg). Is there a tool out there that converts HEIC photos to pdf or jpeg that doesn't require me to get an apple ID and join the Apple universe? I encourage my clients to use Genius Scan or another app that will create a pdf, but clients will be clients and I don't get a lot of cooperation. And no....I can't fire them, I need all my clients. Tom Longview, TX

You are a great American! Tom Longview, TX USCG BM2 1984-1987

No problems here. About 8 rolled over. Tom Longview, TX

If, BIG IF, this bill passes, looks like ERC claims will be shut down on 1/31/2024. Statute of limitations will be extended on all ERC claims. Tom Longview, TX

I keep reading articles that says that Congress will "pay" for these credits and deductions by pulling money from the ERC program. I wonder what that will entail? Deny all claims? Put a shut off date for claims in place? Audit the ones already completed and try to claw back? Something else? Tom Longview, TX

The 5 year amortization of R&D costs is pushed out in that bill as well. Wonder if Apple and some of the other giant tech companies and drug companies are lobbying hard in an election year for these changes. I am sure they will take this all the way to Jan 28th which for some dumb reason congress thinks is the deadline for getting these provisions into the tax code giving the IRS 1 day to update their computers and the software companies 1 day to update so e-file can start on the 29th. Dumb and Dumber in Washington DC... And I was so looking forward to a "normal" tax season this year. But I guess I got it because there is no "normal" anymore so "not normal" is the new normal. Tom Longview, TX

Are the bonus depreciation changes retro to 2023 as well? We were supposed to go to 80%. Tom Longview, TX