Lion EA

As Sheldon would say, "It's funny, because it's true!"

Love that site, Kathy! I tell people Fairfield County, CT, because no one's heard of Weston, CT, even many people in CT, because we're very, very small. I just put in Fairfield, CT, that Kathy compared to her town in IN vs Weston, CT, and the cost of living is Fairfield, CT, 154.8 vs Weston, CT 184.2. (Housing 318.2) US average is 100. So, my town is even more expensive than any of us thought. And, I'm very glad I bought my house in 1978. Rural CT trivia: Westport, Fairfield, Easton, and Weston, CT, all meet at one point along (in?) the Aspetuck River. Oh, my gosh, we're more expensive than New York City!

Yep, I think I'll lose my CA returns before next tax season. A couple kids are grown and doing their own now. Some clients moved back to the NY/CT area. Two very nice couples remain in CA that I hate to send away; I inherited them from a CA preparer friend who retired. And one long-time client who moved to CA that I would hate to send away -- except her return jumped in complexity this year with the death of her mother and inheritance of multiple partnerships holding multi-family apartment buildings and lots of other investments. With the CA extension for filing AND paying now 15 October, I might put her on extension and then tell her to find someone local to her. I don't think I can charge her enough to make it worth the time I'll spend. Then there's MY return for NR CA !!!

Good point, Robbie. However, both those charts use gross income and then AGI from all sources on the federal return, but based on CA law -- NOT just CA-sourced income. We're working three jobs with our two RMDs and hubby's teacher's pension to stay afloat, so have gross income greater than $52,000 and AGI over $44,000.

Thank you, Tom and Tex and everyone, for the links and for help with interpreting the CA law and requirements. I know a state SMLLC is a funky designation, not recognized by the IRS or "foreign" states. On Forms W-9, I check "Individual/sole proprietor or single-member LLC," so I know where I stand with the IRS. But, CA?

Well, fooey, that's still ambiguous. I don't want to use my SSN. The federal returns have Preparer's name as Lion, my PTIN, and the box is checked for self-employed, then firm name is Dollars & Sense, LLC, followed by firm phone, address, and EIN. But the CA return signature block does NOT have the self-employed check box. It has Paid preparer as Lion, but then Firm as Dollars & Sense, LLC, followed by my PTIN, address (home office), and EIN. That looks too much like a firm doing biz in CA. Foo, again. That's expensive. My CA return fee just doubled.

My largest biz client is a radio broadcaster, so I blame electronic miscommunications on Sunspots!

OK, seeing the discussions altogether, it's bringing up more questions!! I deliver CA NR returns to CT residents who work for multi-state banks and have CT resident, NY NR, and CA NR returns. I deliver the CA NR returns to CT, to CT residents. Is that doing biz in CA? (I also have CA resident clients, so I understand that I'm delivering my product to a CA end-user in those cases.) The LLC entity is a state entity. I'm a CT SMLLC. I am taxed as a sole proprietor. So, for CA purposes, is my tax prep biz an LLC or a sole proprietor?

Do you allocate your SP expenses based on a ratio of income? Is the $800 or whatever minimum tax an expense of your SP or a state tax of you as an individual on Schedule A? I'm going on extension, but really dread preparing my own CA return (as well as IL and CT, and you know that NY will follow CA shortly) that decouples from the federal and has a high tax rate and... Thank you to all you CA preparers and preparers on its border states who have figured this out.

You posted this under ACA. Is that because they had marketplace insurance that included someone NOT on their return, and you need to do an allocation? Or, that they have a dependent on their return who also filed a tax return, so you need to include the dependent's AGI?

I forgot about CA's LLC tax!!! I'm a CT SMLLC filing a Schedule C, but have a few CA clients that moved there/inherited from a CA preparer. Do I have to register my SMLLC in CA if I never set foot in CA? Do I have to file a separate CA NR LLC return or just my CA NR personal return? Definitely doing this in the fall. Like cbslee, my returns were always after all my paying customers. Until the late night in October when our federal 1040 was rejected, because someone had used MY SSN. By the time I learned how to uncouple the states (CT & IL) it was after midnight. So, with printing/mailing federal and the states e-filing after midnight, I had some P&I. Now, I stop after all entity extensions mid-September and prepare AND e-file ours. Then return to the paying customers.

I had that in a past year, and it included a number buried in the error code, something like having a (1) or (2) to designate which dependent. Haven't seen it lately, thank goodness, so that's just my old memory trying to dredge up something I once saw!

We are "delivering" our product (tax returns) to CA residents; therefore, our fees for that are CA-sourced income and require us ourselves to file CA NR tax returns. Fun, huh?! Between CA and NY, I'm fed up. Going on extension myself, so I can break out my bookkeeping later.

I spent a decade at an HRB Premium office. When I left, I was determined to cost MORE than H&R Block, because I provide more personalized service than the average HRB office. I think I started out that way. But I also think I've been increasing my prices at a much slower rate than HRB over the years. With the costs of my software, IT guy (think WISP and other requirements), equipment replacements, paper/toner even going as paperless as I can, and my occasional helper, I'm increasing 10% this year to try to catch up. My goal continues to be more expensive than the chains but less expensive than the CPA firms that provide one-stop shopping with bookkeeping, payroll, retirement plans, and other financial services. PS: I'm in pricey Fairfield County, CT.

I don't think you're missing anything. I'm working on a gal who won at a casino in December, so is paying back all her 2022 premium tax credit. Annual, calendar year, tax year. Just computed how much of an Traditional IRA contribution could lower her income enough to limit her payback. In her case, if she doesn't have money to pay the tax, she definitely doesn't have money to lock up into an IRA. Presenting her the results today. It's her decision what to do next. Anybody out there know of something we need to know? I have a vague memory of something about -- if you honestly thought you qualified when you applied, there's some exception to the payback. In these two cases, the taxpayer actually did qualify when they applied. I have almost no clients in the marketplace, and probably only this gal receiving advanced premium tax credit, so I'm not very familiar with where to look for help.

Back when the K-2 and K-3 first came out and I was trying to explain to a client, a summer theater actress, but lapsed into a Dr. Seuss-like poem re K-2 and K-3... she emailed back: That's the difference between us - you think Dr. Seuss and I immediately go into dirty limerick mode. When deciding who next they should screw, The IRS knew what to do. They designed with some glee New K-2 and K-3 Nailing client and accountant, too!

Way, way more than $300. I start at $500 for new clients. And, I have a 10% price increase this year for existing clients.

(1) Trustee receives K-1 (1065) and CA state K-1 for the trust. (2) Trustee makes sure Form 1041 is prepared -- federal and state(s) and issues Forms K-1 (1041) to beneficiary (3) Individual reports income from K-1 (1041) on personal federal return and source state return and resident state return.

OK, If our lawmakers can't vote on a bill that we can understand...

You meant to say, "I'll call an office of one of the d--- state senators sponsoring the legislation." If our lawmakers can't write a bill so we can understand it...

So, my DIL is divorcing my son but still married in 2022. Most finances and living conditions have been agreed to, so PA will grant divorce during 2023. However, child custody, visitation, etc., have NOT been decided for their two daughters and will not be for some time yet, long after the divorce is final, per DIL. That includes who gets to claim how many dependents for 2022. DIL just sent me the girls' consolidated 1099s. If a child has less than $1,150 in interest, dividends, and gross proceeds, she does NOT have to file, is that correct? At $1,151 of unearned income, the child DOES have to file, correct? Kiddie Tax will be based on the tax information of the custodial parent or the parent who has the dependency deduction that year?

Yes, you amend the payroll reports to get ERC and amend the tax return to reduce that payroll deduction. If that payroll was reported on a PTE, then you also amend those Forms K-1 and the personal returns. Where did you read that the ERC is tax free? https://www.irs.gov/coronavirus/employee-retention-credit

I have only one S-corp client that also has a SEP, so each year I confuse myself all over again. It has a great bookkeeping firm that gives me great financials, so I should be able to prepare a great Form 1120-S. Please ease my confusion. 2022 P&L has the amount paid for 2021 SEP paid during 2022. 2022 BS has the 2022 SEP that's an Other Current Liabilities - SEP Funding Payable. When I prepare the 2022 1120-S (yes, it's on extension) do I use the actually paid 2021 SEP amount as a deduction on the Pension line? Or, do I use the to-be-paid 2022 SEP amount? If the latter, then how does the 1120-S BS differ from the financials BS to make the 1120-S balance? I don't know why this confuses me every single year or why my notes don't help me a year later. I even have an old printout from The Tax Book in this folder. Thank you for any help you can get through my thick skull. The BS is always my weak point with entity returns. I took a lot of accounting classes for my MBA in finance, but not as many as you CPAs took, and that was over 40 years ago. This is my only SEP for an S-corp (I do have a SEP for an 1165 that dissolved into a Sch C so will be a short year and also is on extension, so you may hear from me again in May!). Thank you.

I used ChatGPT to write my price increase letter and my firing letter this year. I was agonizing over writing them, procrastinating, writing in my head but not on paper, etc. I told ChatGPT what I wanted, and BOOM in seconds I had what I needed and could finally move on.

Remember to ask client if they have any other IRA accounts that might have deductible contributions in them, so you can allocate deductible vs nondeductible to the conversion. Your client might think that only this new contribution to a nondeductible account is being converted, even if he has previous deductible contributions to Traditional IRA accounts.