Lion EA

If the employee is a NC resident, doesn't he report ALL wages on his NC resident income tax return? Then, can't he take a NC credit for any taxes paid on the same income to MA or any other jurisdiction? (I have only one NC client, so those are questions and NOT facts.) You said your client worked IN MA, also. KPMG NOTE: Beginning September 15, 2021, employees working remotely outside of Massachusetts should have wages reported and taxes withheld to the state where they are physically performing services. Employers will want to make sure they are registered for payroll in the states their employees are working remotely, and able to handle the complexity of compliance for a mobile workforce. From the 2022 MA NRPY instructions: What Is Massachusetts Source Income for Nonresidents? The term “Massachusetts source income” is used throughout this booklet to describe the types of income which are taxable to a nonresident. A nonresident is only subject to tax on items of income derived from or effectively connected with:◗ Any trade, business, or employment carried on in Massachusetts (see the following section);...◗ All wages, salaries, tips, bonuses, fees and other compensation which relate to activities carried on in Massachusetts, regardless of where or when the compensation is paid;... I've had decent luck calling the MA DOR.

A lot of east coast states use "convenience of the employer" to determine tax home, but I don't know about NC. MA has survived at least one court challenge to it's telecommuter tax rule: https://www.twrblog.com/2021/06/supreme-court-denies-new-hampshires-challenge-to-massachusetts-telecommuter-tax-rule-convenience-of-the-employer-lives-to-see-another-day/

Good to know. Thank you. This is also one of those cases where the wife is taxpayer and the husband is spouse. The wife does handle the finances, and she DID make the payments in her SSN as instructed by me. So hopefully all goes well with the ancient IRS computers. (Found out when working on their return in the fall that they hadn't made ES payments. But not a return you want to paper file with part-year overseas after 7 years overseas, part-year state, couple of college coeds, husband's mother passed away leaving IRA distributions and investments to husband, self-employment, other investments, state with different rules for part-year, etc. I'm not allowing some IRS/state data entry clerk to put this return in the computers after I've carefully proofread it, not risking something entered on wrong line changing the returns!)

I use CCH's eSign. It does the ID verification. I think it was the first to meet the IRS's requirements. And, easy, peasy from right within ProSystem fx, but probably also ATX.

Late filing 2021 client owed a lot but wanted to wait to e-file, so paid about $35,000 to IRS and $4,000 to state using IRS DirectPay and state equivalent after Thanksgiving sometime but is e-filing today, probably. Where do I, or do I, enter those amounts on the 2021 return? They're obviously neither an extension payment nor an estimated payment for 2021. Do I leave their balance due showing those amounts and leave it to the IRS/state computers to match their balance due with their December-ish payments? Or, do I enter them someplace and leave it to the computers to match their payments?

I launched into my "get an estate lawyer" speech, but they've already done that and he's filed whatever CT courts need to appoint the co-administrators and alerted them to the wait for the court to act. It sounds like the deceased did have a will plus beneficiaries listed on her retirement accounts and credit union.

I think they're still in shock over the sudden death of a healthy, active woman. (Not a recent vaccination!!) But if they can gain some help from my general comments, then I've helped some of my husband's coworkers' family.

When I can talk to the admin, I'll be able to tell her, based on my annual conversations with her sister-in-law, that her sister's largest income is from the school district where she taught, and that all her income and deductions are associated with that income by retirement contributions, donations, (in appropriate years unreimbursed employee expenses), credit union interest, HSA, etc., and direct her to the right office/best employee in the district office. But that step needs to be done by the admin in person, and they need to get back to their home/work in FL next weekend. (Probably can't do that step until they have court papers, but my old client's lawyer was hopeful that they'd be able to collect some of the tax documents this week. Maybe he was talking about paperwork that's at the house.) SIL/brother are just trying to get the refunds to help their mom. The deceased lived with and cared for their mom (dad passed away years ago), so without that income stream and volunteer help from her daughter, mom is stressed. (Brother with wife, college kids, mortgage, etc., has had less to send mom each month than his deceased sister had.)

Ask for ChatGBT's cites. You probably want to find out where that error sits, so you can attempt to refute it. Not nice being associated with FTX.

No. She was a client from 2007 or earlier through 2015. (She was a school teacher at the same school where my husband taught.) I had not charged her for extensions from 2016 through 2021. I don't have any of her documents, because I return all original documents and was not scanning everything back in 2015. So, the only thing I have of hers is her electronic copy of her 2015 educator expenses spreadsheet that I hadn't purged yet, probably wanting to keep it for comparison purposes when she would finally bring in her 2016 tax information. (Probably time to purge this year!) Her sister-in-law called me about filing the unfiled tax returns through 2022 (and perhaps 2023 if it's needed), but won't have her court appointment for at least 30 days. Will my client now be the administrator or the taxpayer on the income tax returns? No matter which, what do I need from the administrator to give a copy of my former client's 2015 tax return to the admin/SIL? Or, to the lawyer? And, what is my due diligence in identifying that the person asking for the return is who she says she is? Do I need something at the ID.me level where she holds up her DL next to her face on Zoom or a cell call? Is the DD the same for a lawyer identifying himself to me? Would the answers be any different if the taxpayer had never been my client, but someone called to ask about filing her dead sister's 2022 income tax returns? No spouse. What do I need to release a copy of a prior year return or give out information on the phone about what she should look for in the way of tax documents arriving? What do I need to do my due diligence on who this person is that's on the phone?

There are tax people online showing how to use prompts to create elaborate situations, maybe a response to a tax question that then formats itself for something else, such as searching your client base, and then emailing per a specific rubric. Formulae. Complex. So, I can definitely see this saving scammers time! I did go to the ChatGBT and asked it to write a letter saying I'm increasing tax preparation prices 10%. In seconds it gave me an amazing letter. I asked it to refine it to say 10% over 2021 returns for same items; and it explained there'd be additional fees for new issues due to clients' changing situations or new tax laws. Then I had it be more non-negotiable, which it did. The only thing I added myself was for clients leaving to remember to give their new preparer their prior year tax returns. I then asked it for a short, sweet letter to fire clients. (I was having trouble keeping it short.) The two-sentence statement it created is exactly what I wanted. I don't think I'd pay for it, but while it's free I might use it again.

A too-young client died suddenly in CT. Her brother/sister-in-law are up from FL for a few days for the funeral and to deal with paperwork; they are working with a local lawyer. They will be appointed co-administrators of the estate, per the lawyer, but the court appointment is at least 30 days away. They/lawyer would like a copy of my client's last tax return. What do I need from them to release a copy? They hope to get a copy sooner rather than later, so they can search her house and contact her employer, CU, etc., for 2022 and earlier tax documents before they return to FL. They want to know what to look for. Unfortunately, my client hadn't filed since 2015. She'd call me each year for an extension and promise to drop off her information. She was a school teacher and well over-withheld, so no IRS nor CT letters demanding she file, and I wasn't successful in getting her to give me her tax information, even though we'd have nice chats each year. I only talked on the phone with the SIL. Assuming I get whatever document or assurance from the lawyer or whatever, then what do I need to do to actually identify that the person I'm going to release returns to is who they say they are? I'll be uploading to my portal or to the lawyer's portal, so again not face-to-face.

I don't think he'll get SS credit for returns overdue by 3 (?) years or some amount of time, so if he expects the missing years to help his SS calculation it would be better to file them sooner rather than later. Why do our clients think we are SS experts?!

Yes, we never got an answer for if the daughter was a full-time student for any part of 5 months. OP will have to decide if daughter can be a QC or a QR. But HOH is still a separate issue.

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A client could owe back child support which the state would capture from an IRS or state refund, also. I'm sure there are other things.

Going forward, suggest they use a joint account for potential deductions, such as mortgage interest, property taxes, donations, etc., to make their options easier. Not substantial authority, but a starting point with other links: https://www.irs.gov/faqs/itemized-deductions-standard-deduction/other-deduction-questions/other-deduction-questions Then you'll want to dive deeper into your research, such as AnswerConnect with source material, Master Tax Guide, and the IRC.

[Note: I luckily had no client do this.] I would amend the years for which they received ERC now, so they know how much they owe. If they received the ERC monies, I'd e-file immediately, with direct debit or other payment arrangement. Otherwise, I'd hold the returns until the client receives the ERC monies and have them sign then, and I'd e-file. If they have both 2020 and 2021 ERC, those monies probably will arrive at two different times, so I'd e-file each amended return on its own schedule.

Who is legally required to pay them? Who actually paid them? Pacun's question is key.

Do the support worksheets with each of them and keep them in your files: https://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf Is the daughter taking only one course? Or is she (was she for 2022) a full-time student for any part of five months? Many community college students do NOT earn an associates degree but transfer their credits to a 4-year college to earn a bachelor's degree. https://answerconnect.cch.com/topic/48ab0c587cad10009d32d8d385ad169401/support-test-for-dependent Do you prepare the daughter's tax returns, as well as the mother's? If not, you do need to see the whole picture for the household to advise them. Try this out: https://cotaxaide.org/tools/Dependent Qualification Calculator.html

LLC is a state-by-state entity and not a federal entity. I'm a CT SMLLC. Will I fall under the rules for a CA LLC with the minimum tax of $800 and whatever the CA state LLC filing form is? Not only might I revert to a sole proprietor, I might send my CA clients elsewhere. I'll still get those CT residents who work for a large bank or Fortune 500 firm in NY and spend a couple weeks at their CA headquarters so have Form W-2 with CA, NY and CT, unexpectedly. NY and CA seems to be a common duo for nonresident returns due to work locations or part-year returns due to a move. I don't think I can get rid of all CA-sourced income under current CA law; too many surprises at tax time about training in CA, for example.

I already e-file returns for CA resident clients, so I already have CA-sourced income. Someone who emails me from CA but doesn't hire me, won't add to my CA-sourced income.

Let the mother claim her children for any available credits. If mother gets a refund, she can repay grandmother.

My understanding, in very simple so not all-inclusive terms, is that if I prepare a tax return for a person/entity in CA, then I have delivered that product/service into CA and, therefore, have CA-sourced income. I think that means that even though I prepare in CT, e-file from here, and upload the client copy to my portal, that if the person who benefits is a CA resident, I have CA-sourced income. Many states look at where the work is performed. CA looks at where the work is delivered or the location of who/what benefits from my work. I would like to be wrong. I've had two clients move to CA and inherited a couple more from a retired preparer. I'm raising my rates more than usual this year. I don't know if I want to keep my CA clients' rates low or raise them a whole lot more to, as Gail said, cover my additional registration, documentation, and CA taxes.

Bummer. Do I have to pay, like NY? Of course, with the highest state tax rates in the nation, I'll be paying! Anyone want a couple of CA clients that I inherited?