Lion EA

What Lynn said. "Languishes." My bank has only gotten as far as sending us all a video re what documentation to gather, what to do WHEN they start accepting forgiveness applications. They tell us to get ready, but to WAIT. Although, if your clients were on an eight-week window and DO qualify for 100% forgiveness AND are willing to pay you for your services AND you have time now, go ahead. I'm not touching those applications until after 15 October, even my own.

Thank you, Judy and gentlemen. I have so few of these. Kids have aged out or parents have income too high. I had read something about AOC not being available but misremembered why not; it's the lack of a degree program and not the lack of a 1098-T. Son has R&B much higher than 529 distribution, so that takes care of those earnings. And, his excess scholarship is not a big hit at his low tax rate. Just reading everything I can about using the Dartmouth tuition for mom, especially without a 1098-T. She paid plenty out of pocket to maximize the LLC. No double dipping; no expenses being used to gain more than one benefit. And, no LLC (or AOC) on son's return this year (AOC only on mom's 2017 return). I warned mom she might receive an IRS matching letter looking for a Dartmouth 1098-T. But, we have Dartmouth's invoice that breaks out tuition, scholarships/financial aid, and mom's payments; and we have mom's canceled checks ($1,000 deposit and $3,000 final payment). We have only Dartmouth's verbal assertion that they are not required to issue a 1098-T due to the program not qualifying toward a degree. Have I done my due diligence?

I was nervous about claiming AOC without a 1098-T, so was going to claim LLC instead. I'm not, as you said, trying to claim education credits on son's return AND on mom's, just on one -- and it's more beneficial to mom and son is definitely her dependent (under 24, full-time student, didn't have a job in 2019, lives at home when not in dorm, I'm preparing both returns so I KNOW son is NOT claiming himself, etc.) and mom paid the R&B and books/supplies/equipment (music major) and the Dartmouth balance due while the scholarships took care of most things at Yale except for health insurance and books/supplies/equipment and a chunk of R&B, which we're using to cover the 529 earnings. I have all the bursar's statements and the Yale 1098-T. But, Dartmouth says no 1098-T. We used AOC on son's return his freshman year/fall semester. Last year, scholarships were too great for any education credits. 2019 would be the same except for the extra semester at Dartmouth with less generous scholarships, so I want to use whichever credit on whichever return it does the most good. 1. Is it OK to use the Dartmouth tuition on mom's return when the Yale taxable scholarship and the 529 distribution are on son's? 2. Is it OK to use the AOC without a 1098-T? Mom is the type of client who will stress out over an IRS letter.

I have a single mom and college son who is a dependent/full-time student. Son finished sophomore year at Yale and has a 1098-T with scholarships in excess of tuition; I know how to handle that. And, a 1099-Q but lots of non-tuition costs to cover the small earnings. Son did not work during 2019. My question is that he also took a summer certificate (not degree) program at Dartmouth. This had $11,000 tuition, $7,000 scholarships/financial aid, and still $4,000 that mom paid out of pocket. Dartmouth tells us they do NOT issue a 1098-T when it's not a degree program. Can I claim LLC on mom's tax return? All other items are on son's return, right? His name is on the 1098-T and 1099-Q. His name is also on the Dartmouth documentation, but mom paid. There is NO education credit on the son's return at this time. Can mom use the $4,000 she paid for the LLC on her return?

If none of your clients complain about your fees, you're not charging enough. If only one complains, you're still not charging enough. I provide better service than HR Block, so I make sure I charge more. (I know, because I worked for them for 11 years.) But, I haven't checked their fees in a couple of years.

Plus/minus 2018 K-1 items. Did the partnership “close” books at 2019 buyout date or does he get a pro rata share of 2019 Schedule K items?

Unless Congress acts, the PPP expenses are not deductible. Profit is larger. Taxes are higher.

Drake will exile 17 August, but you can transmit to Drake to hold until then.

CA is not my specialty. But, look for a CA-3115-type form and read its instructions as a starting point. Perhaps it has cites to the CA tax code. If there is NO CA-3115-type form, then you need a different starting point. Does Spidell give cites to the CA tax code? Does Spidell have an on-demand course? Spidell is certainly the CA expert.

I always send the paper vouchers with a note that I suggest paying online to have confirmation (or this year, to make sure it gets processed any time soon!) and the links. Unless I'm sure they'll pay online, I send vouchers WITH addressed envelopes.

And, register with the NJ secretary of state as a "foreign" LLC and get her insurance for her NJ location and any local biz licenses and board of health licenses in NJ. Register for NJ sales & use tax, probably. I don't have any NJ clients, but I would guess (with what I know about NJ) that there still is more paperwork, some annual. NJ has something funky about worker's comp for a SMLLC, or used to, maybe that owner has to opt out. Spend some time on the NJ websites for the SOS and Revenue and S&U Tax and Health Dept. and...

I agree that she should register her business in NJ where she conducts business. If, she's going to register as a SMLLC or other entity. I'd also think that hair dressing requires some state licensing and maybe local health department fees/paperwork. Again, in NJ where the business will be conducted. If her biz is a NJ entity, the entity will file a NJ return. Then, unless a C-corporation, she'll have pass-through income to her federal return which results in a NJ non-resident personal return as well as her PA personal return. If a C-corp, she'll have a W-2 from NJ and still have the NJ NR and PA resident. As Judy says, the SMLLC won't give her much legal protection, especially since she's the one providing the services. So, she'll want a good insurance policy on her business (no matter what form it takes) in NJ. It's so much easier to "go up the ladder" to a more structured entity as time goes on and needs change. But, "going back down the ladder" usually has a tax impact if she decides later that she doesn't want the extra reporting requirements, costs, whatever of a formal entity. In fact, going from an employee to a business owner is a leap in the best of times. Has she really thought through what adding a new state into her regulatory and reporting mix will cost her in time and money?

Profit. Additional Paid-In Capital. Maybe -- sell an interest to a third partner?

I don't use ATX, but clergy are NOT statutory employees. Maybe start with that.

I have a few who won't pay estimates. I don't bother trying to explain estimates to them any more. But if they also have balances due (which they will by not paying estimates) AND go on extension, I do my above method of having them pay enough with the extension to cover 1Q and 2Q ES. That way, at least I have the year front-loaded for them and reduce P&I a bit. IF I can convince them to pay with the extension!

Wow, Sara! I use ProSystem fx but use a lot of pay-per-return; I prepare 1040, 1041, 1065, 1120-C, 1120-S and over 13 states. I pay a fraction of what you pay for UT.

I have them pay federal estimates via IRS's DirectPay and their appropriate state's online system (not mail in with a paper voucher). Don't you have clients who pay estimates? Self-employed, for example?

I have fewer extensions this year than ever before. My clients came in about when they usually do. But the usual May & June crowd were done and not extended this year. I have the right amount to carry me through 15 October. But, this year -- from when the IRS and all the states I needed postponed the deadline to 15 July -- I'm getting an hour more sleep each night, took off most Sundays and even full weekends. I'm healthier and less stressed. I may feel it in September & October. But, I did NOT feel it in April nor July! What filled up too much of my time was taking webinars each time new "clarifications" came out, but webinars are less stressful than tax preparation; and my CEs are in great shape for this year.

I can prepare a lot more tax returns until 15 October than I can to 15 April. This is my job. I WANT to work and make money all year! 15 October still gives me plenty of time to take classes and enjoy various holidays with family.

I always calculate extension payments for my clients to include both the balance due for the old year plus the new year's 1Q and 2Q ES payments, using the safe harbor and rounding up generously. Then, when we finally prepare their returns (maybe in September after that pesky K-1 finally arrives) we're not running behind for the current year. Paying the BD and 1Q and 2Q with the extension instead of separately means they're all dated 15 April (well, 15 July this year) and makes the balance due and 1Q on time and 2Q covered until we can prep the returns. If the payments flow into 2Q and 3Q and even 4Q, that's OK. But, most usually, we catch up (or reduce payments) in 3Q and 4Q. It's so much simpler than trying to calculate exactly how much to pay with the extension and exactly how much to pay with the 1Q voucher and then hustling to prep the returns or calculate exactly how much to pay with the 2Q voucher.

Julie, if you like ProSystem fx, talk to your rep. Do you do any pay-per-return, for example? I prepare only 100 returns or so, so Pro fx has bent over backwards to keep me. They priced out the best way to buy the entities, states, etc., and they've made a couple of concessions to their usual pricing. I pay only a fraction of your price. Put your rep to work to get you the lowest price. If that doesn't work, ProSystem fx is included in CCH's US Small Firms division that might have more discretion re pricing. These contacts are a couple years old, so might not be current: Jennifer Cozier, VP Product Management, US Small Firms, TAA North America Office 770-857-5092 Mobile 470-261-3456 [email protected] Julie Peck [email protected]

If I think they're MORE than a tire-kicker or referred by one of my good clients, my line is something like... I charge by the complexity of your return, which is more than I can see from your documents. It requires me to ask you lots of questions; and you can ask me lots of questions, too. I need to review your prior year returns to prepare this year's anyway, so if you loan me last year's returns now, I'll be glad to tell you how much I would've charged for THAT year. Then, you can compare apples to apples. However, with the Tax Cuts & Jobs Act and the SECURE Act plus any changes in your financial life since 2018, your 2019 return fee could be very different from 2018. Not to mention the new CARES Act which changes our planning for 2020. When would you like to drop off last year's return? If there's an entity return or a Schedule C/E/F or even a K-1, the above "talk" gets more detailed. I still give a price RANGE and try to quote a high enough top range to give myself a margin for error and to make the new client happy when I come in under my estimate, telling him something like..."because you were so organized which saved me time and saved you money...." I'm way off once in a while. I've usually stuck to my high point on the range with a warning that I am reviewing my price structure for next year. I have called a client in the midst of preparation to say I've found something you didn't tell me about (maybe one of the 92-page gas & oil K-1s) which changes your fee to $XXX; would you like me to continue? If they come as a recommendation of a very long-time client -- one that I've raised prices slowly over the years -- and have a similar return to their friend's return, I find myself torn. A stranger walking in the door would get a much higher price for a similar return than a very long-time client. But, the friends have talked with one another. I pick a range higher than their friend/my current client but lower than what I'd charge a complete stranger. Then, I'm back to the "reviewing my price structure for next year" warning. I've lost only one of those, and that was years ago.

"I can e-file an extension for you or you can take your information back and look for another preparer."

My NY residents always owe. My NY commuters always get refunds but owe CT (or PA or...).

I no longer use ATX, so I can't help you from my experience; but if you search this forum on "Connect to Server" and similar phrases, you will get a LOT of advice. This topic comes up OFTEN on this forum. Maybe searching on your second issue will yield results, too.