BulldogTom

Green with envy over the 3 screens. I remember when you all were talking about two screens and I thought you all (or is that all y'all) were just spoiled. Now I can't wait to get 3rd monitor. Tom Modesto, CA

Thank you Max

If you have taxes due, but not paid until the following year, do you file the Schedule S? TP has out of state rentals that threw a profit and had to pay taxes to the other state for the first time ever. Do I include the schedule S in the 2017 return (when the tax was calculated) or on the 2018 return when the taxes were actually paid to that state. When I look at the instructions for the form, it is unclear to me. Thanks in advance. Tom Modesto, CA

One is for efiles and one is for returns. I sometimes leave the return box unchecked while I am waiting for payment, even though the return is technically completed and the efiles have been accepted. Tom Modesto, CA

That is where I was going. And then, to follow my thought process, the expenses paid by the child can be deemed to have been paid by the parent. I don't know what the phaseout is for the Ed Credits off the top of my head, but if the parent is otherwise eligible, then I think she can take the credit for the education paid for by the trust for the dependent daughter. It is no different than the child taking a student loan in her own name, and the payment goes strait to the institution for the tuition. The parent can still take the ed credit. Tom Modesto, CA

Just a point of bookkeeping clarity. Some of us (me) will keep 2 equity accounts for each shareholder of a small S Corp. The first is the "Paid In Capital" or the initial investment of the shareholder to purchase the stock. I never post to that account again. The second equity account is the "Shareholder Retained Earnings". I post all of the distributions for each shareholder during the year to this account. Then there is the running retained earnings account, to which all of the profits and losses of the company are posted monthly during the year, without any breakout by shareholder. At the end of the year, I close this retained earnings account to the shareholder's individual retained earnings accounts based on their ownership percentages. To get the "true" basis for the shareholder, you need to combine both shareholder equity accounts. I know, it may sound incorrect to do it this way, but I like to keep the initial investment clean in the balance sheet. This may have provided no insight at all to Terry, and I apologize if I am muddying the water. Tom Modesto, CA

How did the trust pay for it? Gift to the daughter for educational purposes? I would like to know how that transaction went down. Tom Modesto, CA

Damn, Sara is on a roll....cussing on this site is now an event that can be sanctioned! I need Judy to go back and change the title on my post about the iterative method of determining the SE HI deduction before I lose my license. Tom Modesto, CA

Is that income "earned" and can it be used for EITC? Tom Modesto, CA

Just had one of these situations. Had to go back to the prior year and current year disbursement records. Stanford still reports the 1098T on the school year quarterly system, but the disbursement records are very clear. Agree with this. The excess scholarship goes to the child. Any tax credits go to the return where the dependent resides. Tom Modesto, CA

It is a full year calculation. This is one of the pitfalls (critical oversights/flaws/stupid law crap) of the ACA. You have to estimate your future income, and the penalty for not knowing the future at the time you sign up can be financially devastating to the taxpayer. I am not being critical of the politics, just the actual law as it is written. It is unfair to the TP to make their estimate of income the determining factor in the amount of a tax credit that will need to be repaid if the estimate is incorrect. Getting off my soapbox now. Tom Modesto, CA

Did mine last night. Picking up and e-filing them today. I have to say, I am pretty impressed. The IRS and ATX both got this accomplished pretty darn quick. Unexpected to see both perform at an acceptable level. Tom Modesto, CA

There is no 4361 in place for the Taxpayer. He had a long career in the working world and is not religiously opposed to government payments. @jklcpa That is what I wanted to know. Now I just need to fiddle with the Clergy Worksheet to get the additional SE Tax from the housing allowance on the return. I think I have this ...Thanks Tom Modesto, CA

New client, Pastor at a church. His W2 shows earnings in box 1, 3 & 5 and withholding from his pay in 2, 4 & 6. I don't think this is correct. Shouldn't his Salary be in box 1, blank for the rest of the boxes, Housing Allowance in box 14? Or is it possible that he can be treated as a "regular" employee of the church with the church paying 1/2 of his SS & Med Tax? I know enough about clergy to do a return when everything looks right, but this is different to me. Tom Modesto, CA

Too many warm corona's??? Tom Modesto, CA

You are the favorite person on this board. And Judy had to nominate you for the star of the week. I think it is a conspiracy to keep me from my star, so I am crying..... Right now, it looks positive for us to get out to see you, so long as there is some business purpose (Abby Class on ATX customization?). I love me some BBQ, and I could use a hug.... Tom Modesto, CA

I am having to deal with this Pass Through Deduction a lot sooner than I thought. TP is fairly high income engineer. Left his job and became a Sole Prop. (before the Tax Law passed - not because). I am working on his estimates for 2018. Total income will be north of 315K. TP will be able to contribute to a SEP, and will have a max SE Tax deduction, which will take him just south of 315K AGI. I estimate taxable income after Sch A deductions at about 265K, but before Pass Through deduction. What I have read about the Pass Through Deduction, it is based on Taxable Income below 315K. Is this correct? If it is, the Pass Through deduction will change the quarterly ES payments dramatically. The difference between Safe Harbor from this year and calculating based on projected income and deductions is about 4K per quarter, assuming the Pass Through deduction is allowed. If the income limitation is before SEP and SE Tax deduction, he will be above 315K. But I think that doesn't matter anyway, because he is an engineer? Do I have this correct? Thanks in advance. Tom

Kook of the week nominee..... Get a call from a Texas number. Guy leaves a message. Referral from another client. I call him back and he starts telling me how he has this little problem with the IRS. Apparently, he has not paid his taxes from 2013 and 2014. Says he has been disabled and he can't seem to get through to anyone at the IRS because they keep getting disconnected while he is on the line. The penalties and interest are really piling up. But the last person at IRS he talked to said if he would fill out a "Form 22 something" he could get all the penalties and interest wiped out. So I start asking questions. Do you have your tax returns from 2013 forward? "Well, I moved and I don't know where they are". Did you prepare your returns or did you have someone do them? "Well, my daughter did the returns". Can you get the returns from her? "Well, we aren't speaking right now". His next statement "I only have disability this year, but I need my taxes filed and that 22 something form filled out. Can you do that?" My response..."Yes, I can do your tax return. The representation is at $XXX per hour, and will include taking a power of attorney, getting copies of your transcripts for the years in question, communicating with the IRS and you, and then coming to some resolution that allows you to pay back what you owe, or put you in the Currently Not Collectible status until such time as you can start making payments. I estimate a minimum of 10 hours, and I require a 50% retainer before I start working on your case." His response..."Well, let me look for my returns and I will get back to you." Tom Modesto, CA

Wimp..... I love all seasons. Give me a cup of cocoa on a cold day, a cold beer on a hot day, and some time on the patio watching the sunrises and sunsets in the fall and spring. Bring it on, I will take it. Tom Modesto, CA

Thanks

Please forgive my ignorance, but what does "ISTG" stand for? Tom Modesto, CA

Is Abby going to teach a class? Making the trip tax deductible business travel for education purposes? If so, I think I can make that. Need to check with my employee (spouse) to see if she can make it as well. Tom Modesto, CA

TP is starting a new job with a non-publicly traded company. He sent me the offer letter because it says check with your tax advisor. The offer contains a grant of Stock Options. They also sent a copy of the plan document that governs the Stock Options. The plan document says the Options can be either ISO or NQSO per the designation of the administrator. The offer letter does not indicate if they are ISO or NQSO, but the description in the letter matches ISO's to a "t". I know the tax rules for an ISO granted to an employee (or NQSO as well), so that is not my question. The plan also places restrictions on the stock after exercise, that they can only be sold back to the company and cannot be gifted, transferred or used as collateral unless the company goes public in the future. Is this enough to consider the stock to be restricted? Thanks Tom Modesto, CA

Not trying to be combative, but who do you think is asking congress for those additional documentation requirements to be added? It surely is not the AICPA or the National EA group. Tom Modesto, CA

The IRS wants us to do their job for them. They think of us a free labor. If they want us to do this work, prices will have to rise substantially, first to cover our time, and second to cover our liability for preparing the return. I have no problem with the oversight on me via circular 230 related to my EA license. But when regulation over me becomes a revenue raiser item in the federal budget, it has gone too far. Tom Modesto, CA