Lion EA

Gail is right about the origin of the bill. However, there is a bill. And, any votes appear to wait until after impeachment and are marketed to be before the current extra unemployment expires 15 March. So, keep watch. And, you might consider suggesting waiting to file.

Until about 15 March, unemployment is taxable. But if Biden's tax proposal passes about 14 March, you might be preparing amendments. I'm making my clients who had unemployment benefits wait to file or pay my full fee for amendments on a FIFO basis.

I'm waiting until about the 16th, probably. Except for one client who insists on completing and e-filing her return the 12th !!

If you have time for amendments 15 April, I'll hire you to prepare returns for me! Wait to file until client has made a decision. Give client a DRAFT return to give to bank. If he owes 15K and can't pay it now, how will he buy a house and pay closing costs, homeowner's insurance, repairs, moving expenses, etc. Maybe he should invest in his IRA instead of a house. Or, maybe he should invest in a house instead of an IRA. But with a 15K tax bill, can he afford both?

For Pacun's scenario to use option A, you can make use of Form 8888. Then you only have to amend if the refund is less than the IRA contribution reported on the return.

C. Complete their return now to learn how much they'll owe without the IRA contribution (worst case scenario) and hold their return. Their motivation may change with that information! Then, give them a deadline to return with their decision, say 1 April or so, after they've made or not made a contribution.

Yes. You never know when a 1099S is out there. What Gail said. And, if they look at her return when she's 69 and disabled, will she be able to recreate the house basis? Just report it now and start the SOL. What Patrick said. Report it. Depending on your software, just one/two lines to report and claim 121. You don't have to charge her any extra if you don't want to. But report it.

The advances were made based on eligibility on the 2019 or 2018 returns. The actual credit is on the 2020 return. The IRS has been clear from the beginning that qualified advances do NOT have to be repaid on the 2020 return; that the advances are reconciled with the RRC on the 2020 return, but not below zero, either zero or an extra amount of credit on the 2020 return. Don't worry about it.

$450 is what they have been paying for their tax returns (and FBAR?) here in pricey Fairfield County CT. I was able to see immediately that I would not take only $450, but they asked me about FBAR before I ever received their envelope with returns. I spent very few minutes paging through their return and giving them a price rage much more than $450. Perhaps I shouldn't have agonized over FBAR filing until I had their full picture, but it was new to me and I was glad to hear all your thoughts and advice. I would've given more thought to filing their FBAR if their return had been one that I considered a $450 return! You bring up an interesting point, though. Perhaps I should charge prospective clients for reviews. Do you all do that? Then, maybe, apply some part of the review fee to their first tax returns if they become clients? I've only charged for reviews as a consulting engagement for tax planning &/or things like the divorce situation I mentioned.

I would've charged to do a thorough review, but I just turned the pages and added in my head $100 or $50 until I reached the end of their return! And, gave them a broad range. I gave them NO tax advice re errors (small) or tax planning. I did charge an hourly rate recently for a review of 2019 returns to a gal in a divorce who wanted to understand the tax consequences of MFS vs MFJ and also of her soon-to-be ex's proposal. And it resulted in a new client, MFS for 2020.

I think it has to do with being alive for any amount of time during 2020, then still qualifying for 2020 credit. Does anyone have anything specific re DOD after 31 December 2019?

I'd like no extensions forms, automatic extensions like FBAR. Maybe a 15 July payment deadline or no penalties/interest only to 15 October or some other reduction of P&I later than 15 April. I hate breaking my stride to stop to prepare/e-file extensions.

Knowing I'm reluctant to file the FinCEN form, I skimmed through their 2019 return, just looking at the forms, to see if I could meet the price they wanted to pay. No way! He earns over $400,000, so things like NII and phaseout of QBID come into play, CT and NY returns, FL condo rental w/missing depreciation schedule, FIVE partnerships such as oil & gas/passive loss carryovers and restaurants in NJ, huge mortgage interest so may be some refinances with non-buy/build/renovate uses, many interest/dividend accounts plus stocks, and lots of other forms/schedules. And, she'll start drawing her UK "some strange kind of pension" next year. I gave her my price range, which is well over what they want to pay, and told her I will not file the FinCEN, mostly because it's feeling like these would be problem clients after all her emails. She was nice enough to call me this morning to thank me for looking over their returns and is picking up her 2019 folder shortly. Thank you, everyone, for your thoughts and experiences with FBAR.

KY does have forms for dissolving partnerships: https://www.sos.ky.gov/bus/business-filings/Forms/Pages/default.aspx

Did they dissolve the partnership? You can check the secretary of state's website to see if the partnership still exists or the date it was dissolved.

I agree and report it, claiming the exemption. A client signs a lot of paperwork during their closing and might not know they received Form 1099-S in their packet, or it might be mailed to their old address. It takes almost no time to report it and exclude it; but it takes a lot of time to answer the IRS letter, calm your client, and even figure out what happened in the past.

Are you saying that we preparers are required to prepare and e-file FBAR if we prepare a return including Form 8938? If so, I may be firing a couple clients who file their own FBARs.

Once she wrote "some strange kind of pension" I was pulling away!

Taxable. https://www.irs.gov/newsroom/irs-unemployment-compensation-is-taxable-have-tax-withheld-now-and-avoid-a-tax-time-surprise Your state may vary.

I'm adding a line item for The CARES Act and another line for the Consolidated Appropriations Act. How much I put on those lines will depend on how much time I spend on that client's questions, issues, etc., and whether or not they asked questions BEFORE they did things like take money out of their IRA. Yes, this is my way of increasing my total fee for almost every client.

Thorough explanation, Margaret. I may steal this.

Agree. Give it a try. It was your clients (unpaid) preparer who had an illness/death in the family that didn't e-file a completed return plus your client's advanced age/any health issues/any cognitive issues preventing your client from checking on e-filing.

https://www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin

Yeah, I heard the scream of Liability as soon as I received her email. I have about three clients that I remind and check up on their FBAR requirements, but all file themselves. In fact, one decided that their Singapore bank account wasn't needed with their US TDBank account with online bill paying and a credit card, so she closed it years ago and filed her last FBAR the following year. I have enough to do to keep up with the IRS/Congress enacting tax laws. And, I do take CE in international issues, previously scheduled a webinar for next week re FBARS because I do have to advise my clients. Thank you, everyone, for sharing your thoughts. I'm leaning toward declining this client.

Why or why not? Have a potential client that wants her tax preparer also to file her FBAR for her UK bank account and "some strange kind of pension." Not sure I want to do that. Before I quote on her tax returns (she dropped off copies of 2019), I'd like to hear some pros and cons from you that prepare FBARs. Or, no longer prepare them.