Lion EA

I feel behind, because all those partnerships clogged up the last month while 1040s kept dropping off. And, when I think I can pick up speed on personal returns now with no more stops for businesses, they're missing info and the new NY DL requirement and the time change and I'm tired and my granddaughter will be here for a few days next week and every single one has something new -- I retired; I received this 1099; I moved to a new state last summer; my kid dropped out of college and moved back home; my health insurance changed. You know, I was really good about asking for DL at the beginning of the season, but spending a couple weeks/a month on biz returns broke my stride. I've been forgetting, and then have to wait for them to upload a copy or fax. I'm using the E word as of today and just hope that my back log before today can be completed by the deadline. Today received tax info from a client who emailed me 3/2 about giving me his documents, and I told him as of 3/2 we could file on time; don't think he'll be happy today when I tell him as of 3/20 we cannot file on time. I think I have more in-house/complete this year with new clients, but I have more that I haven't touched right now that at this time last year.

I put Roth first, because it would be my preference and what I actually did with my son when a 1099 showed up when he was a teen (we thought it was C-I-T with no money either way, but he got a check and a 1099 at the end of camp, so we immediately opened a Roth). But, I've had parents insist they want the traditional for their child if it saves the kid only $1. I don't make the decision; my client does, or their parent if a minor child client.

It was for services rendered, so Box 7 and SE tax. Unless mom wants to risk loss of chair by having daughter file an SS-8 and Form whatever-it-is that says she should be an employee and pay only her half of the FICA/medicare. Do check your state laws re labor in a salon, probably something like 16. Might give you some leverage over salon owner to issue a W-2. But, didn't mom notice that daughter had no withholding? Didn't mom have daughter turn in a W-4 to salon owner? Why is mom upset months after the fact, but didn't mind daughter getting money during the year?! Silver lining is that daughter can start her Roth or Traditional IRA and get a jump start on college saving.

College kid has investments with Vanguard and pays taxes on interest, dividends, and capital gains on his/her tax returns. Kiddie Tax applies, also. If kid is a dependent, parents will take education credits. Lots of twists along with the above, but that's the short course.

I had given out my cell when I went out on my own, but quickly found out I could have a second line from Optimum for only $14.95/month bundled with our house phone, TV, and internet (actually, hubby noticed that on the bill). So, I weaned most of my clients off my cell to my office line with all the voice mail, call waiting, caller ID, voice messages sent to my email, etc., services. I had a couple of holdouts. But, if someone called my cell, I returned their message from email or my office phone. I did not call back anyone who didn't leave a message. Now, as you say, I have a few who text. I don't like it, because it's not as easy to save to their file on my computer, and I don't like texting back with my old eyes. But, when I re-printed my biz cards, I added a line for Txt and my cell # after the lines for Tel and Fax.

And, those expenses do not duplicate on Schedule A. Those expenses were paid with pre-tax monies. They do not create a Schedule A medical deduction. They do get reconciled on Form 8889 where they keep the corresponding amount of the HSA distribution from being taxable income.

Facts & Circuses!

I grow corn and soybeans in IL and have sharecroppers who pay me both cash rent and via crop shares. My tax return includes Schedules E and 4835. I file a non-resident IL return. I don't know much more than that, because I don't have any farmer clients in Fairfield County, CT. I just do what my cousins do because they own a lot more land than I do, have been farming for much longer, and their land is contiguous to mine.

And, traditional IRA with basis. A ratio. And, a pain during busy tax season. Charge for it !! (And, keep your calculations.)

Over 24 years old in the OP.

Educate your client; and then let your client make the call, if his call sounds reasonable to you.

Only if QC, not if QR and she pays 0. And, HOH still requires over 50% of costs of keeping up the HOUSE, so has its own support of house test as well as qualifying dependent test.

Is there a substantial presence test to be a resident of the US like there's a SPT to qualify for FEIE? I know that would be too logical. But, if mother is here 330 days out of a 365 day period...?

Yeah, it ain't logical; it's the law.

As much as the IRS insists we round off to the nearest dollar, in their own instructions to forms, for instance, they themselves truncate. It leads to some silly letters like you mention from DC. And, clients have brought in letters saying they were missing interest from ABC, as an example, for sometimes large amounts like $123,456, when we reported $123,457 from ABC; the IRS is reporting a second amount from ABC was missing instead of just a mismatch of $1 on the one and only ABC interest. Time consuming. I even had a client bring in a letter stating they owed $0.00. It was obviously a less than 50 cents rounding difference that showed as $0.00 on that computer generated letter. I told her to ignore it, that the computer or a real person would catch it next month. Nope. At least one more letter asking for $0.00. So, I told her to write a check for $0.00 to mail in with the payment voucher from the letter. That did the trick!

When a trust is irrevocable, it is its own person/entity. Someone else's death does not change things inside a trust. If it had always been irrevocable, there never would be any steps-up/down. If the trust was revocable until the father died, then the trust "was" still the father and not a separate entity, reported on father's tax return, until the DOD. So, when the father no longer existed, the trust became irrevocable and all the assets stepped up/down as they passed from the father/revocable trust into the separate entity/irrevocable trust. Only the beneficiary changed when the mother died. No assets of the irrevocable trust moved out of the trust/moved to the son; they remain in the irrevocable trust. The trust did not die. You will need to read the trust document, though. There are as many ways to set up a trust/intertwining trusts as there are trusts.

My sister's first word was "beer," because of that animated Hamm's beer commercial with the jingle about...In the land of sky blue waters. Colorful, and we had a color TV by the time my younger sister was talking. She'd watch the beavers or whatever wildlife singing and chime in on the last word -- beer. It was a small house, so if parents were entertaining, playing cards with the neighbors, etc., and Jan piped up loudly with Beer, my mother got very embarrassed.

Are you asking about the interest in the year of sale? Or about all the interest through all the years that he already elected or didn't elect? Not sure you can change the past. But you can make an election for the current year.

HOH: Living with spouse during second half of the year comes into play only if married. So, if divorced with a qualifying child, then HOH. Support test: How much did she pay toward son's support, how much did dad pay, how much did son pay, how much did anyone else pay? If she paid more than half that total, then she passes the support test. (I realize the real question is how much did dad pay, but you have to do the best you can with what you have. Or, have your client put down the numbers for you and you look them over for reasonableness. I don't create the numbers when it's not clear cut; I have the client put them down on paper and sign. I just provide the definitions.) But, yeah, I don't have these close calls very often and have to drag out the flow chart and go through the questions with the actual client facts and the lists.

I'm copying & pasting John's message!

You're the best. In my blurry-eyed, sleepy state last night (well, really early morning) I wasn't finding deadlines and panicked. Thanks for calming me down with the facts. (Just coming off a binge of 1065s and 1120Ss to meet the new federal 15 March deadline has me not seeing straight, not walking straight. Time to dive into the 1040s.)

Thank you, thank you, thank you! I thought about the deadline again while I didn't sleep the short time I spent in bed. I was hoping the PA partnership did not follow the federal and remained at 15 April. But, is the PA S-corporation 15 April, also? I did come up with Form 276 on the PA site for both types of returns (all types of returns?) all with a Harrisburg address. (Hubby grew up in Harrisburg.) So, do I really have until 15 April for both PA partnerships and S-corporations?

It's always the freebies that take up so much time. My son's mother-in-law has a partnership and an S-corporation. I tried to e-file extensions before midnight. The S-corp is not in my system, so I'll print out an extension and mail it tomorrow -- now that we have until the 20th for the IRS. And, even though the partnership is in my software and the 7004 shows up on screen, it doesn't show up as being able to export to e-file -- again not a problem as I can mail by the 20th. But, what about PA? Is it too late for PA extensions? Or, have you heard that they will follow federal. The businesses are in Starlight, PA, in the upper NE corner and got over two feet of snow, and I'm in CT and got over a foot topped off with a lot of ice. The PA partnership extension showed as if I could e-file, but was all grayed-out when actually trying to e-file. On paper, it needs a signature, not likely from CT to PA by the 20th, if PA accepts the 20th. And, the PA S-corp extension wasn't getting typed into my software by midnight after I spent too much time hassling with the partnership. Does PA require extensions if federal extensions are filed? If PA is giving until the 20th also, are signatures required? I have too many relatives!

Yesterday in foggy Connecticut it was sleeting on the snow!

If it came from a joint return, I think it's 50/50 unless they agree to a different split. Or, unless you can trace the original funds to a different ratio. I would not get involved in the decision. I would ask them how they want it split -- explaining that it will be 50/50 if they cannot agree. Good luck. Are you really trying to prepare both returns when you already can see at least one conflict of interest? Make sure you have each one sign an agreement where you disclose your potential conflict. I'd send one or both elsewhere; I don't have time in March to deal with divorce issues.