Lion EA

Hang them on your house to scare away woodpeckers.

 The S Corp still can open and fund a SEP, which is an employer only plan.

First of all, it'd have to be a true no-strings-attached donation with nothing in return, and with that appropriate IRS language on his receipt.

Second, he can look up IRS-approved charities: https://www.irs.gov/charities-non-profits/search-for-tax-exempt-organizations

Yep, keep one or neither. You'll fill the spot with a conflict-free client.

It's your job to advise your client how to get her lowest tax liability. But how can you advise the wife on claiming her son while also advising the husband's rep on claiming the son on the husband's final return?! I hope you have their signed conflict of interest waivers on file.

Ah, AFTER retirement no SE tax on HA. Wow! That's quite a good benefit. And, they still continue deducting mortgage interest and property tax on Schedule A, right?

49 minutes ago, Margaret CPA in OH said:

This is also not subject to SE tax but one should still do the math (I have a great spreadsheet) to determine that it is not in excess of the FRV or actual expenses.  If so, the excess is included in taxable income as usual.

Wait, the housing allowance is NOT subject to SE tax? I thought just not subject to income tax, but INCLUDED for SE tax. (I agree with the lesser of FRV, actual expenses, or designated HA to not be subject to income tax.) 

In my software, I just keep adding Box 12 codes and amounts, as many as needed, on the main Form W-2 and e-file. The "second" W-2 might be a limitation at the payroll company and not a limitation from the IRS for e-filing.

Too much investment credit. I don't use ATX, so can't comment on boxes to check or lines to fill in manually. Line by line instructions: https://www.revenue.state.mn.us/sites/default/files/2023-01/m1wfc_22_0.pdf

If the kids are biological children of both parents as a couple, I'd be suspicious that it's one household. But I think we've all seen a bit of everything.

I have two cousins who inherited a house from their grandmother and live there happily ever after. No kids, so don't have to deal with HOH, thank goodness. Split everything 50/50 for decades. Even when they were still working, and the one with higher income would've benefited from a larger percentage of the deductions. They wanted everything 50/50, each year. One always drove them to work and to everyplace for years until her eyesight failed, loving to have a truck and a fast car and a reliable commuter car and a spare car; now the other does all the driving, I think only an SUV. Still vehicle ownership and car tax remain 50/50. The split of deductions no longer matters on their nearly identical retirement incomes and with the higher standard deduction.

I've had divorcing clients/divorced clients who couldn't afford a separate house/apartment close enough to kids/schools, jobs, etc., so one moved into the guest room or the finished basement or the mother-in-laws' quarters or the guest house or otherwise divided up the physical house. Separate households. Didn't Fergie and her Prince live together to continue to co-parent for years?

We see it all in our biz. But we are required to ask more questions if we're not comfortable that what we're hearing is the full, complete story. Don't let your clients tell you how to file their taxes. It's our job to tell our clients their options or option.

What entries do you have in Parts IV and V? Did you answer Yes to using it out of the country?

If you're old enough to remember the old TV show "Kate & Allie" about two single women with their own kids sharing a house, that could've been two households. maybe. I was taught at Block, if they share the master bedroom, it's ONE household. Do what Lynn said.

Even though parents earn enough to be in phaseout territory?! But doing the support worksheets is a good idea in any case to CYA.

In the situation where the parents do NOT claim him but could, doesn't the student get to claim education benefits, except NOT the refundable part? Too tired to look it up now, but check on it, John.

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There are NON-tax reasons for MFS. A divorce on the horizon is a big one.

Other scenarios where you should explore MFS:

Student loan repayments, if they lower the payment more than the MFS higher tax.

I had a lot during Covid where the lower income spouse taking all the kids could get more credits MFS.

To deduct, you have to be legally responsible AND actually pay. H's name is on the loan, and he paid.

If they had paid from a joint account AND agreed, they could divide their payments in any reasonable method. That could give them flexibility if comparing MFS vs MFJ. Same for donations.

I've seen MFS work when the incomes are very different. Either the high income can make use of the joint deductions plus his own to lower his tax liability, or the high income earner is high enough to have phase-outs but the low income earner can use enough of the joint deductions/own deductions to take her tax liability to zero or low. Or, only one has most of the medical deductions. Prior to/after TCJA, a salesman type with lots of Misc 2% deductions. I had a retired couple with a one-off gambling win that saved with MFS. You have to run the numbers. Look for joint deductions that can be divided up differently.

Always check MFJ vs MFS. Your software does all the heavy lifting if you entered all income and expenses as J or T or S. Don't forget to consider the cost of 2 returns.

https://www.cpg.org/redirects/tax-resources/

https://www.cpg.org/globalassets/documents/publications/tax-2024-federal-reporting-requirements-for-episcopal-churches.pdf

Richard Hammar is an expert & author: https://www.churchlawandtax.com/

And Beverly Worth: https://lifeandleadership.com/book-summaries/worth-income-tax-guide-for-ministers/

59 minutes ago, BulldogTom said:

Also affects bonus depreciation for your business returns.  I think that will apply to rentals as well for new business property installed in 2023 (stoves, refrigerators, etc)

So, if you have any business returns or any individual returns with dependent children or rentals, you need to consider when to file.

Tom
Longview, TX

Schedules C. Anyone with depreciation, new in 2023 depreciable property. Right?

Doesn't it change how much of the credit is refundable? Does it look like Congress will vote soon? You might want to wait a week.

Is the church part of a larger denomination? They would have a financial resource person to advise the church and you. Probably a manual.

I pay eFax annually to save a few bucks.

Send/receive very few faxes.

My all-in-one is not printing, so I need to replace it as it's my only copier (but not only printer and not only fax). It's connected to a second landline, so could return to that stand-alone fax when/if I get a new all-in-one. But that means changing my fax number on biz cards, with clients who do fax, etc.

Not sure what directions I'll go.

https://www.irs.gov/businesses/small-businesses-self-employed/members-of-the-clergy

https://www.irs.gov/pub/irs-pdf/p517.pdf

https://www.irs.gov/taxtopics/tc417