Lion EA

I have NOT taken this instructor's classes, but for anyone frantically trying to get 1065s and 1120Ss out the door in the next 11 days... Expanded from 1 to 2 Hours. March 8, 2022 - 3PM ET Live 2-hour Webinar: Schedules K-2 and K-3 Knock 2021 Form 1065 Out of Orbit How to Prepare (or Not) K-2 and K-3 for 99% of Clients Presenter: Bradley Burnett, J.D., L.L.M. https://accountantsaccelerator.com/schedules-k2-k3-cpe-course/ NASBA Sandra L. Leyva, Inc. is registered with the National Association of the State Boards of Accountancy (NASBA) as a sponsor of continuing education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Our NASBA sponsor number is 112525.

I can't get the CA 3849. Program keeps generating CA 3853 instead.

If necessary, short-year 990 and short-year 1120. Extend both.

Is he a US citizen/green card holder? I know a couple of the answers. He DOES pay SE tax (can exclude only income tax.) He can take the FEIE OR the FTC, but not both; you'll have to look up the income ceiling on the FEIE. You probably deal with more US citizens moving out of the US than I do. (My one family of citizens living/working in Singapore qualified for AOC for one daughter going to college in the US, but the other daughter attended a non-qualifying school in Europe for a couple years before transferring to a qualifying college for her junior year.)

I asked for them all. I have only 4 partnerships and S-corps and prepare the personal returns for 2 of those businesses that are H/W only and work closely with the personal preparer for a single owner S-corp and know the H/W for the 4th, but don't prepare their personal returns. I did NOT have the 2021 personal information for any of the individuals when I began the biz returns. I knew at least 3 out of the 4 businesses (suspect all 4) had owners with foreign taxes paid in 2020 &/or 2019, but not over $600; but did not know their 2021 personal situations at the time I needed to start the biz returns. I gave the double-letter forms from Compass Tax Educators (biz version plus individual version) to each biz and asked them to survey their owners (themselves) and touched base with individual preparers for those where we work as a team. All 4 businesses returned signed letters from the biz and from each partner or shareholder. I did begin the biz returns prior to the most recent notice. Don't know how I'll feel next year. But this year I wanted to cover my butt, and those businesses, owners, and personal preparers, too.

C-corp returns are due 18 April unless a fiscal year filer.

Tom's class is about 15 minutes with two of them discussing the Forms K-2 and K-3. Then, when the most recent Notice came out, he/they did a 10 minute update. Look for the links at the Compass site: https://on-demand.compasstaxeducators.com/

FOUND THE OTHER VERSION I HAD FROM ANOTHER CLASS. DON'T KNOW IF THIS WAS MARC'S. Schedules K-2 and K-3 Client Statement Owner Name:-----------------------------------------------Owner SSN: Partnership Name:__________________________ Partnership FEIN: The IRS has instituted 2 new form requirements (K-2 and K-3) comprising 39 pages of disclosures that could double or even triple your company’s tax preparation fee. These forms are not required if your partnership or S-corporation has no foreign activities and if the individual partners or shareholders are exempt from filing IRS Form 1116 (Foreign Tax Credit) with their 2021 individual Form 1040. I you do not acknowledge that you are exempt from filing Form 1116 with your 2021 Form 1040, we are required to complete these new forms and your fee will increase dramatically. IRS Notice 2021-39 allows us to rely on a good faith safe harbor of your statement that you do not personally have to file IRS Form 1116 with your 2021 individual Federal income tax form. If you are not required to file Form 1113 with your 2021 individual Federal income tax return, please sign below. Please reproduce and have all other owners individually sign as well in order to avoid our required filing of Schedule K-2 and K-3. “I confirm that I am not personally subject to filing Form 1116 (Foreign Tax Credit) with my 2021 individual Federal income tax return Form 1040.” Signature of above individual:___________________

Email me and I'll attach the one I'm using for you. (Too large, it tells me, to upload here. And, it loses its formatting if I just copy the text.) If I can find the other one which is shorter, I'll include that, too. RitaLewis @DollarsSense.com

Compass Tax FREE on-demand course by Tom Gorczynski includes sample letters. Marc Dombrowski also presented something on this issue, but I can't find it now.

I thought that once a corporation is formed, for tax purposes, the it has to file income tax returns until it dissolves. But wait for someone who files more Forms 1120-S to answer.

2020 only. (But never say never with this Congress.)

Bursar's statement. Usually the student can download a copy online.

I don't think CT allows DL rollover, but then it's still optional to enter for CT residents. So, I don't enter CT DLs unless needed for NY, CO, etc. That did save my butt when a client working in Singapore, so little contact other than via his wife via email, had lost his DL and gotten an entirely new number when he was in the US on biz. So glad I asked for them to confirm their #s before just copying from his prior year return.

I just duplicated the return so I can try that. It just seems counterintuitive to delete a form from Covered CA in a CA return! But I always say that taxes are not logical, they're just the law.

I can NOT check the box manually without a diagnostic. I'm reluctant to delete a form/CA Sch 3853 that the program generated, but that's what the CA instructions imply. CCH Support told me that the CA schema requires "this box does NOT check if there are ANY 1095s or 3895s in the return." I could un-enter her 3895, but can NOT delete her 1095-A nor 1095-B without creating errors in her federal return. Anyone have a Covered CA 3895 for LESS than 12 months plus 1095-B, so they total 12 months? (Next year should be good with 12 months on Covered CA. Then the following year will be another mess with reaching 65 for Medicare during the year!)

Darn. My software has been slow on us small states. Just got CT last week.

In ProSytem fx the check box on data entry is to be checked only if NOT full-year coverage. I'm going to make manual changes, the check box for sure. Not sure if I should delete the Covered CA form she received first to see if that deletes the CA 540 Schedule. Client gave this afternoon as a time to talk, and other dates also, but I want to sleep on it and reread the stuff on CA's website and 540 instructions. Buried in all the legalese was something about nothing in column C on the Covered CA form; she has all zeros in Column C. She's going to want a reduction in my fee for dropping a form, I just know her. And, dropping this form is costing me hours more time than just entering it. I want to RAISE her fee for including documents that I had to determine are not needed. I began her returns 14 February, but she picked at little things, needing the little things explained to her, while I tried to pin down the big things, the diagnostics that I needed to research. Rant over!

[Cross posting to increase my chance of hearing from a CA preparer] CA 540 Box 92 is not checked by software. 1095-B for 4 months & 1095-A for 8 months & FTB 3895 for those same 8 months. Small Federal repayment & small CA repayment. But she DID have full-year health care coverage. CA instructions say: ISR Penalty Line 92 – Individual Shared Responsibility (ISR) Penalty Enter your Individual Shared Responsibility Penalty from form FTB 3853, Health Coverage Exemptions and Individual Shared Responsibility Penalty, Part IV, line 1. If you, your spouse/RDP (if filing a joint return), and anyone you can or do claim as a dependent had minimum essential coverage (also referred to as qualifying health care coverage) that covered all of 2020, check the "Full-year health care coverage" box on Form 540, line 92. If you check the box on Form 540, line 92, you do not owe the individual shared responsibility penalty and do not need to file form FTB 3853. For more information, get form FTB 3853. Does that mean I check the box manually? And, delete FTB 3853?

Here's a link that than links to both FREE short classes (15 minutes and 10 minutes, maybe): https://on-demand.compasstaxeducators.com/courses/k2-k3-brief-discussion?fbclid=IwAR3cqKMeUC4XhEUBT_i-5QAxtikiYk8EstgBAH2fvtIWlFj342h7tN_5yW8

FREE class here: https://on-demand.compasstaxeducators.com/

Or the one I'm using for the company and the partners or shareholders: [Date] [Entity Representative] [Entity Name] [Address] Dear [Entity Representative], Starting with 2021 tax returns, pass-through entities must file Schedules K-2 (at the entity level) and K-3 (with the Schedule K-1) to report various international activities. Until recently, it appeared this new, complex reporting requirement was limited to pass-through entities with international tax attributes. The IRS recently released revised instructions on these new schedules that indicate otherwise. The revised instructions require all pass-through entities to determine if each partner or shareholder 2021 tax return contains Form 1116, Foreign Tax Credit, or other international-related tax form. If so, then you are required to file Schedules K-2 and K-3 with your 2021 tax return, even if you have no foreign income, no foreign assets, or no foreign taxes paid. We enclosed a questionnaire you can use to solicit the partners or shareholders; we recommend you retain the completed responses for your records. You can choose your own method to collect this information, but we strongly advise it be in writing and that you retain responses with your tax return records. If you prefer not to make these inquiries, we can simply prepare and include Schedules K-2 and K-3 with your 2021 tax return; additional fees will apply to the added compliance requirements. Penalties may apply if you fail to properly include Schedules K-2 and K-3 on your tax return when they are required. By [deadline], please sign by your choice. If you don’t meet this deadline, an extension may be required to complete your tax returns. Sincerely, [Preparer Name] [Preparer Firm] [COULD NOT KEEP THE FORMATTING, BUT THEN THREE BOXES TO CHOOSE 1 TO SIGN...] Please prepare Schedules K-2 and K-3 with the entity tax return. We are not going to survey our partners or shareholders. Please prepare Schedules K-2 and K-3 with the entity tax return. We surveyed our partners or shareholders and it is required. Do not prepare Schedules K-2 and K-3 with the entity tax return. We surveyed our partners or shareholders and it is not required. Developed by Fred Stein, CPA, EA and Thomas A. Gorczynski, EA, USTCP [NEW PAGE] Important Notice! For [Entity Name] to prepare its 2021 tax return correctly and to give you accurate information necessary to prepare your individual income tax return, please read the following and complete this document. We need this information to determine if we need to prepare and file Schedules K-2 and K-3 with our tax return and to provide you a Schedule K-3 to accompany the Schedule K-1 we usually give you. If you file Form 1116, Foreign Tax Credit, or another international-related tax form on your individual tax return, we must prepare these schedules. By [deadline], please complete the appropriate selection and return it to us. If you don’t meet this deadline, there will be a delay in providing your Schedule K-1 and accompanying documents. If you are unsure how to complete this notice, please consult a tax professional. Thank you in advance for your cooperation in this matter. Sincerely, [Entity Representative] [Entity Name] Name: [FOUR BOXES FOR PARTNER OR SHAREHOLDER TO CHOOSE 1 AND SIGN] I will file or anticipate that I will file Form 1116 on my 2021 Form 1040 return, or another international-related tax form that impacts my federal tax liability. I did not pay or accrue foreign taxes during tax year 2021 and have no foreign tax credit carryover to tax year 2021, so I will not file Form 1116 with my 2021 Form 1040 return. I paid or accrued foreign taxes during tax year 2021, but the total is $300 or less ($600 joint), and I plan to take a foreign tax credit on my 2021 Form 1040 without filing Form 1116. I paid foreign taxes during tax year 2021 but will elect to deduct them on my 2021 Schedule A and will not file Form 1116 on my 2021 Form 1040 return.

The partnership versions will be released later this season and the S-corporation versions 22 June or so. You can find a couple FREE short videos online by instructors such as Tom Gorczynski and CYA letters such as Schedules K-2 and K-3 Client Statement Owner Name:-----------------------------------------------Owner SSN: Partnership Name:__________________________ Partnership FEIN: The IRS has instituted 2 new form requirements (K-2 and K-3) comprising 39 pages of disclosures that could double or even triple your company’s tax preparation fee. These forms are not required if your partnership or S-corporation has no foreign activities and if the individual partners or shareholders are exempt from filing IRS Form 1116 (Foreign Tax Credit) with their 2021 individual Form 1040. I you do not acknowledge that you are exempt from filing Form 1116 with your 2021 Form 1040, we are required to complete these new forms and your fee will increase dramatically. IRS Notice 2021-39 allows us to rely on a good faith safe harbor of your statement that you do not personally have to file IRS Form 1116 with your 2021 individual Federal income tax form. If you are not required to file Form 1113 with your 2021 individual Federal income tax return, please sign below. Please reproduce and have all other owners individually sign as well in order to awoid our required filing of Schedule K-2 and K-3. “I confirm that I am not personally subject to filing Form 1116 (Foreign Tax Credit) with my 2021 individual Federal income tax return Form 1040.” Signature of above individual:___________________

Is this still a lifetime credit? If so, do you need to check your client's returns back to some very old year, 2006?

You got your answer from the other board where you posted, right?