Lion EA

Just barely begun. (Finished last payroll taxes and already have partnerships/S-corps dropped off, a busier January than usual.) The firm has existed for some time, but new ownership tried to bring it up to date in both functions (video chat is new, I think) and in security. Maybe too much too fast... I'd hoped to spend January getting familiar with it, starting a few early clients on it. Maybe February; except for businesses, my clients don't get all their documents and drop off for another three weeks or more. You may hear from me!

Depends on amount you were expecting. A couple with two kids would've expected $3,400 for 1st and $2,400 for second. So, at $175,000 they should've received $2,150 and $1,150. Single, it's 5% of excess over $75,000 subtracted from expected $1200 and $600; but having a couple of kids changes the base numbers to $2,200 and $1,800 and then subtract 5% of excess. It's going to be a real pain explaining it to our clients, especially remotely! I'm one for pointing and color highlighting. Might have to Zoom instead of telephone and email...

Pacun, did you make just under $175,000? In round numbers, $25,000 over at 5% = $1,250 to subtract. For EIP1 @ $2,400, you received about $1,150 or so. For EIP2 @ $1,200, you received about $0 or so, right? EIP2 was a smaller amount for all families, so it "disappeared" faster. Do the math. Unfortunately, we'll be doing the math for all our clients!!

I did some reading of instructions/etc. this year, because I have a new IT guy who bought some items for my Schedule C business that I reimbursed, so provided more than just services. My understanding, and what I did for my own company, is that everything you pay to an unincorporated person/entity that provided services to your business goes on the new Form 1099-NEC. He'll deduct his expenses on his end, and that'll lower his SE tax. If paying ONLY rent to a non-corporation, for instance, then use the old Form 1099-MISC. By the way, more state DOLs (as opposed to the IRS or state DRS/whatever your state's revenue department) flag accountable plans as an EMPLOYEE benefit and conduct employee vs IC audits. Employee vs IC has been a big issue in the northeast. I'm answering off the top of my head, because you want to get it out the door. But if you want to research, start with the instructions, the IRS Pub addressing Forms 1099, and your own research service. Or hold through the weekend in hopes of more experienced posters responding.

I can't speak to either yet, but am trying to consolidate my client communication with Taxaroo. The CEO is a tax preparer, a security consultant, and just it case it matters a Methodist minister. Check out their demo or watch a tour at least: https://taxaroo.com/

You want a final 1040 to start the SOL running.

Supposedly the IRS is mailing Notice 1444 and 1444-B about three weeks after direct deposit/mailed check. As slow as the mail is lately, you probably don't have your 1444-B yet. How many clients do you think are keeping the notices AND giving them to you?!

tax1099 has a default for each state. I think CT was e-filing over the threshold, with or without withholding. You can edit their defaults. AL will default to mailing. You are charged separately for the state. I don't think you can file the state only, but you can go back in (prior to actual filing) and add/delete states. tax1099 will file the states separately, but you have one group you export from QB. I did feel like I was going around in circles when I did my own company. (I haven't had an IC before, and QB does the W-2s from within and not exported to a 3rd party.) But I wanted to get through it with my one IC before I worked with this client's company today. I think there are steps where more thorough explanations would've been appreciated, but I did like that I don't have to retype information and that it seems to be updating state rules. And, a lot nicer than having to give paper copies to a client to sign and mail; contactless. It is an addon. But from my viewpoint as the customer, a price addon. I still give it my information in one file and either accept their defaults or edit for tax1099 to file the states. You guys are all great. Thank you for information and advice as I try something new to me.

I went through the tax1099.com KBs re states. I had figured out from doing my one yesterday that the -NEC does NOT have the combined Fed/State filing, but that tax1099 had default info and options available by state. Finally dug deep enough to learn tax1099's default is to file (if filing fits their default criteria or you've edited) in the resident state (again, you can edit) which is what I need for all the ICs for this client. I now feel more comfortable filing from QB through tax1099 for the first year.

I do have to file the states, though. I was concerned that ALL the 1099-NECs would go to CT, because that's where the company is based. But at least one IC worked in another state all year; I don't want his form to go to CT. I just need to learn how to designate his correct state for filing. Does it start in QB? Have you used tax1099.com that flows from QB? Do I make the designation there?

Great information, Judy!

That's brilliant, Margaret. Thank you. You're right about running more than one set/more than one 1096. I'm going to do just that by state.

Forms 1099-NEC. I have only one biz client who uses QB and has ICs. Of course, he hasn't received his December statements, so is unreconciled. And, his bookkeeper can't get me a back-up copy, but that's another story. I may have to drive to borrow their laptop. Company is in CT. At least one IC is NOT in CT. How do I designate the state that the 1099-NEC is supposed to be filed in, in QB? I'm trying to use the 3rd party tax1099.com that flows from QB. I used it for my company, but any and all ICs worked and reside in CT. My client has at least one out-of-state vendor who did NOT come to CT. How do I get that 1099-NEC to NOT send to CT and TO SEND to AL or where ever he is?

What does your Notice 1444-B say?

EIP2 is NOT supposed to be taken for anything, not even child support. Did the couple make almost the top of the phaseout range? What is it, 5% for every $1,000 over the threshold?

I'll charge extra for two MFS returns instead of one MFJ return when one spouse make less than $75,000 and can claim RRC1 and RRC2 as MFS. Maybe a Research charge for all the questions, explanations, and especially phaseout calculations.

Is it a business or a sale of personal property? Schedule 8949 with no loss allowed for personal property? Anything that doesn't have extra "business" fees won't be a deduction on Schedule C, things like internet that's the same cost with or without biz use. What's the From 1099-K threshold now? I guess if she made 200 sales or sold $20,000 or whatever, she might be in business!

You're welcome to stick around, working or not.

For a taxpayer to change their residency, they have to leave the old state and "stick the landing." VA will look at her facts & circumstances, so you must, also. I just took a great FREE course from CPA Academy on State Personal Income Tax Issues Created by COVID-19 taught by Mark Klein, chairman Hodgson Russ LLP, but I see a couple of other FREE courses you might want to take on similar issues: https://www.cpaacademy.org/

Form 8915-E and its instructions: https://www.irs.gov/pub/irs-dft/f8915e--dft.pdf https://www.irs.gov/pub/irs-dft/i8915e--dft.pdf

My clients are all long-term clients, often referrals from other clients, their family members. I trust them to mail me a check or pay via my website after their next payday or give me their CC info to charge on a certain date, that type of thing. During 2020 a few asked to pay me on installments, which I took. Two paid their last installments in December, which is not as late as it sounds because I was preparing returns through 15 October.

I take all major credit cards, PayPal, Venmo, checks/e-checks, and cash. Clients can pay me in person (not since March!!), via a link on my website, or give me their CC or bank information (for e-checks) over the telephone that I then process via QuickBooks. My clients seldom get much of a refund, but I do NOT take my payment out of their refunds.

I turn 74 this year, so I'm going to continue whining! But I agree that those youngsters don't know how good they have it. After I had my hip replaced, it struck me that ALL my joints are the same age as I am and must be as tired as I am! My stepdaughter used to say that I was the only one of her four parents that had all my original parts. That's no longer true, but I'm the oldest of the four so went the longest with only original parts and still have only one replacement (her mom had two new breasts, mom's boyfriend had a new knee and new hip, and her dad/my hubby had two new shoulders before I got a new hip). This getting older stuff is not for wimps!

I've done it, too, skimmed above too quickly and typed the wrong name!

I'm not going to send before the 12th. I can't count on no more new clarifications of laws, reprogramming, etc. In fact, the 12th will probably crash the IRS computers! I might e-file on the 13th. But, yes, you can send to your software company when they're ready for holding until the 12th. I will probably have two different partnerships shortly and two different S-corporations to keep me busy after I finish payroll taxes/W-2s/1099s.