Lion EA

From the 2022 partnership instructions: 3. Partner notification. With respect to a partnership that satisfies criteria 1 and 2, partners receive a notification from the partnership at the latest when the partnership furnishes the Schedule K-1 to the partner. The notice can be provided as an attachment to the Schedule K-1. The notification must state that partners will not receive Schedule K-3 from the partnership unless the partners request the schedule.

I'll be glad to pass your contact info along to the parents, who will probably be the ones to set their grown son up with some help to get and stay compliant. Send me a private message.

I'm in CT with CO clients who have a grown son in CA who need tax help and education. "...son..., who lives in Santa Barbara, CA. We were wondering if you know someone who can advise him about his current and future financial situation? We would be willing to pay for this person to help him out. He got into trouble awhile ago not paying his quarterly taxes (we didn't know at the time) and now has quite a bit of debt owed on back taxes and credit cards. We’ve encouraged him to find someone to work with but he doesn’t seem to understand the importance of it at this juncture. He’s admittedly unorganized as his girlfriend and we worry about them! Any suggestions you could send our way would be greatly appreciated!" A small firm with a tax preparer to access prior damage and file now and going forward, and then maybe an admin or bookkeeper to remind Andrew of deadlines and educate him. Perhaps a subscription service billed monthly. Girlfriend needs help, too. Let me know if you'd like me to pass along your contact information to these nice folks.

My clients have a LOT of wash sales, so I love importing spreadsheets.

Have your client make his broker send you a spreadsheet to import.

...paying for everything he could think of out of his corp...

I have only 2 S-corps left, and both pay their shareholder/employee well. One has very cheap union insurance; the other has very expensive (pre-existing conditions) family insurance ~$35,000. I turned away a potential client who wanted to use his S-corp like his personal bank, paying for everything he could think of our of his corp, OIH, Cadillac health insurance, taking distributions whenever he needed funds to live on, telling me that HI should be the only amount on his W-2, because he wasn't going to pay payroll taxes nor use a payroll company. I declined to accept him as a client. Maybe that one part was correct, but he was too much of a player for me and my biz model.

Show him the Form 8949 instructions, especially pages 3-4 with exceptions to listing everything on Form 8949 and the sentence, "If you choose to report these transactions directly on Schedule D, you don't need to include them on Form 8949 and don't need to attach a statement. For more information, see the Schedule D instructions." If he doesn't agree, he's a lawyer, ask him to show you the code section.

So, HI in Box 1 does NOT help an employee/shareholder meet RC, because no SS/Medicare is being paid on HI.

Does the IRS compare RC to Box 1? Or, Box 5? I have clients that RC would compare well to Box 1 (HI) and wouldn't have to have any Box 3-5 income at all if it won't reflect poorly on their RC. They could take all the rest they need to live on as distributions.

And, with his "simple" pricing adjusted for the 3115 and for his time suck to you of being a PITA.

https://www.irs.gov/taxtopics/tc557

Why is the S-corporation paying the shareholder's health insurance? Is it because he provided services to the corporation? If so, then he's an employee; the corporation should issue a W-2 with HI in box 1 However, the S-corp HI is pretty much a wash anyway. You add it to wages on W-2 and S-corp deducts, but shareholder/employee subtracts it above the line on the 1040 and doesn't have to use Sch A. (Was that law written when the % was less than 100% or something?) It always seems like going around in circles for no extra benefit to either!

I told my own son and daughter-in-law to have their partnership prepared by someone else for 2022, because they are divorcing. I think I could do a better job, and could make sure my son's interests are protected, but I don't think I'm getting the full business story from DIL. So, I don't want to sign my name on their 1065. For that reason and similar reasons, I'm encouraging my son to file MFS, but my DIL is pushing for MFJ. If my son chooses to file MFJ with his estranged wife, I'm not sure if I'll be their preparer.

IRS Pub. 4012 https://apps.irs.gov/app/vita/content/globalmedia/1099r_exclusion_worksheet_4012.pdf A taxpayer should not receive a Form 1099-R for a trustee-to-trustee transfer from one IRA to another, but should receive a Form 1099-R for a trustee-to-trustee direct rollover from an employer qualified plan to an IRA with code G.

It doesn't take long BEFORE retirement to get rusty! Thanx for lurking around, and much love to you.

See IRS Newswire IR-2023-23 of February 10, 2023.

It actually makes me less mad, because I'm still filing 2021 returns! My clients are dropping off 2022 tax information earlier than usual (usually a lot of investors waiting on brokerage statements), but I haven't gotten to any of the 2022 returns yet. A surprising statement by the IRS.

Issue Number: IR-2023-23 IRS issues guidance on state tax payments to help taxpayers WASHINGTON – The Internal Revenue Service provided details today clarifying the federal tax status involving special payments made by 21 states in 2022. The IRS has determined that in the interest of sound tax administration and other factors, taxpayers in many states will not need to report these payments on their 2022 tax returns. During a review, the IRS determined it will not challenge the taxability of payments related to general welfare and disaster relief. This means that people in the following states do not need to report these state payments on their 2022 tax return: California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania and Rhode Island. Alaska is in this group as well, but please see below for more nuanced information. In addition, many people in Georgia, Massachusetts, South Carolina and Virginia also will not include state payments in income for federal tax purposes if they meet certain requirements. For these individuals, state payments will not be included for federal tax purposes if the payment is a refund of state taxes paid and either the recipient claimed the standard deduction or itemized their deductions but did not receive a tax benefit. The IRS appreciates the patience of taxpayers, tax professionals, software companies and state tax administrators as the IRS and Treasury worked to resolve this unique and complex situation. The IRS is aware of questions involving special tax refunds or payments made by certain states related to the pandemic and its associated consequences in 2022. A variety of state programs distributed these payments in 2022 and the rules surrounding their treatment for federal income tax purposes are complex. While in general payments made by states are includable in income for federal tax purposes, there are exceptions that would apply to many of the payments made by states in 2022. To assist taxpayers who have received these payments file their returns in a timely fashion, the IRS is providing the additional information below. Refund of state taxes paid If the payment is a refund of state taxes paid and either the recipient claimed the standard deduction or itemized their deductions but did not receive a tax benefit (for example, because the $10,000 tax deduction limit applied) the payment is not included in income for federal tax purposes. Payments from the following states in 2022 fall in this category and will be excluded from income for federal tax purposes unless the recipient received a tax benefit in the year the taxes were deducted. · Georgia · Massachusetts · South Carolina · Virginia General welfare and disaster relief payments If a payment is made for the promotion of the general welfare or as a disaster relief payment, for example related to the outgoing pandemic, it may be excludable from income for federal tax purposes under the General Welfare Doctrine or as a Qualified Disaster Relief Payment. Determining whether payments qualify for these exceptions is a complex fact intensive inquiry that depends on a number of considerations. The IRS has reviewed the types of payments made by various states in 2022 that may fall in these categories and given the complicated fact-specific nature of determining the treatment of these payments for federal tax purposes balanced against the need to provide certainty and clarity for individuals who are now attempting to file their federal income tax returns, the IRS has determined that in the best interest of sound tax administration and given the fact that the pandemic emergency declaration is ending in May, 2023 making this an issue only for the 2022 tax year, if a taxpayer does not include the amount of one of these payments in its 2022 income for federal income tax purposes, the IRS will not challenge the treatment of the 2022 payment as excludable for income on an original or amended return. Payments from the following states fall in this category and the IRS will not challenge the treatment of these payments as excludable for federal income tax purposes in 2022. · Alaska[1] · California · Colorado · Connecticut · Delaware · Florida · Hawaii · Idaho · Illinois[2] · Indiana · Maine · New Jersey · New Mexico · New York2 · Oregon · Pennsylvania · Rhode Island For a list of the specific payments to which this applies, please see this chart. Other payments Other payments that may have been made by states are generally includable in income for federal income tax purposes. This includes the annual payment of Alaska’s Permanent Fund Dividend and any payments from states provided as compensation to workers. [1] Only for the supplemental Energy Relief Payment received in addition to the annual Permanent Fund Dividend. [2] Illinois and New York issued multiple payments and in each case one of the payments was a refund of taxes, which should be treated as noted above, and one of the payments is in the category of disaster relief payment.

Great explanation. Where did you find that? I want to pass it on to my church, with a cite.

W-2 for the child or else he'll pay SE tax. And, he's not an independent contractor if his only work is for his parent's business using the exclusion from FICA for a child of the owner.

I've heard on other boards about a couple of cases where a child use the info of a parent to open an account (eBay, for instance) because he needed to be over 18. Any enterprising teens in the OP client's family?

Thank you!

I'm firing clients this year. If he can't answer questions to make me feel comfortable, I would NOT prepare his return.