The-Tax-Lady's Posts

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The-Tax-Lady's Posts

And the IRS says Box 5 is Scholarships & Grants. Clients are very often mistaken in their beliefs of what and how something was paid. Does the client have proof of payment or the Student Account sta... See more...
And the IRS says Box 5 is Scholarships & Grants. Clients are very often mistaken in their beliefs of what and how something was paid. Does the client have proof of payment or the Student Account statement from the college? If the client's documentation confirms what they are telling you, then the 1098-T is wrong and must be corrected.
I agree Bob, I should have said, IRS Guidance is the best "could or should be happening" news source. I'm not following the rest of the mess too carefully, since it is so subject to change, but I th... See more...
I agree Bob, I should have said, IRS Guidance is the best "could or should be happening" news source. I'm not following the rest of the mess too carefully, since it is so subject to change, but I thought there was some talk of trying to make everything right via the 2020 Return if necessary. No idea what "everything" will be comprised of, but I believe there are many 18-23 yr old taxpayers who should be eligible for the EIP. They received zero and the person claiming them received an extra zero, so when the world gets back out there, I expect some equitable solution will be arrived at and become part of the 2020 return. I was responding to the dependent reference by dkh with what I believe will happen, apologies if I made it sound like there was already a line on the 2020 1040. I'm an optimist and it is a long time till 2021, with a national election looming, so who knows what the future holds.
Sometimes the software will let you check a box, but won't perform the action, like trying to mask the 8879. If it's not some stupid box you missed, somehow, then you may want to verify the software ... See more...
Sometimes the software will let you check a box, but won't perform the action, like trying to mask the 8879. If it's not some stupid box you missed, somehow, then you may want to verify the software will actually do it.  Have you done this successfully before in a previous year?
Thanks JeremyNJ. Good to know.
Since the IRS is issuing a new one it doesn't really matter because you can't do anything else to the info, however, my first year of preparing returns, I transposed a number in my EFIN on the accoun... See more...
Since the IRS is issuing a new one it doesn't really matter because you can't do anything else to the info, however, my first year of preparing returns, I transposed a number in my EFIN on the account set-up screen in the software and my first 6 bounced back with that message. Took a minute to figure that one out.:)
That's a big task to take on if you're not sure about what to do and where. CPA Academy offer free webinars on all tax subjects and you might want to look in their archived section for some guidance... See more...
That's a big task to take on if you're not sure about what to do and where. CPA Academy offer free webinars on all tax subjects and you might want to look in their archived section for some guidance. I only prepare 1040's so I can only offer guidance on where you might find the answers.
It's not so easy, reinventing the wheel, and having it roll out smoothly, in 2 weeks. The only statements that matter are the ones the IRS put out as Guidance, the rest are wishful thinking or someb... See more...
It's not so easy, reinventing the wheel, and having it roll out smoothly, in 2 weeks. The only statements that matter are the ones the IRS put out as Guidance, the rest are wishful thinking or somebody's best guess based on somebody else's best guess. I don't know about "holding their hand out" as a accurate description of recovering payments made to an individual who was not entitled to the payment. I my experience, most people receiving excess EIP $$ know they are being paid too much and are asking how to pay it back or quietly hoping the IRS doesn't notice. Based on an the post, obviously they will offset 2019 refunds to recover the EIP and it is our obligation to make sure clients understand that possibility. It's a better option than reversing the direct deposit and recovering the EIP from individuals who already spent the $$, which would really create a banking nightmare and true hardship on the taxpayer. Why would they want payback on a dependent for 2018 or 2019 that is not on the 2020 return?Dependent EIP $$ was paid for children 0 -16 years old, so chances are they will still be a dependent in 2020, not that it will matter, in my view. My concerns, as far as dependents 0-16, are all the baby daddys or mommys, that received the $500 because the court decree gave them the right to claim a dependent child for tax purposes. The actual Custodial parent received nothing and in reality are providing the home and support for the child. That should be a fun fix or court case. Dependents 17-23 were the real people left out of the EIP plan and provisions are being made on the 2020 tax return to compensate them, if eligible. It is a mess and will be for sometime to come, but it's the IRS, when has it ever been easy or agreeable.
The 8283 is a statement you send with the the $500 filing fee for donations over $10,000 to a charitable organization, so I'm not sure where that comes into the picture?  An individual's non-cash ch... See more...
The 8283 is a statement you send with the the $500 filing fee for donations over $10,000 to a charitable organization, so I'm not sure where that comes into the picture?  An individual's non-cash charity contributions are reported on Schedule A and if they are all to the same charity, you could enter the total, I would think. Make sure the client has all their receipts with the details, in case the IRS questions the deductions. Verify how the value was determined and who made it. A person can believe something has a value in their mind but the actual value, especially in non-cash contributions, can be lower. Also make sure they are not receiving any thing in return for the contribution, which will off-set the value, and have that in writing from the recipient.  
As long as your Bank Product provider is still offering the service, and all are, to my knowledge, then yes.
If you prepared the return, enter the address info exactly as it is on the 1040, if not, use ALL Capitals , make sure you are putting the DOB as xx/xx/xxxx and no spaces or dashes in the SS. If that... See more...
If you prepared the return, enter the address info exactly as it is on the 1040, if not, use ALL Capitals , make sure you are putting the DOB as xx/xx/xxxx and no spaces or dashes in the SS. If that fails, and you have someone else that you trust, let them put the info in. Sometimes we enter a wrong number and our brain does not let us see the mistake & we keep making it. I had many clients asking how I found their info when they couldn't, and data entry accuracy is the only reason. If that doesn't work then you're on hold till they figure it out, or the check just shows up. The IRS has just assigned 3500 employees to a dedicated EIP phone line but who knows how long it will take to get thru.
OK, but the amount in Box 5 should never be what the student has paid, how are you determining this $$ in box 5 was paid by the client?
So instead of having to repay the 1200 issued to the deceased spouse herself, the IRS offset the incorrect payment from the refund which simply zeros out the mistake and saves your client the inconve... See more...
So instead of having to repay the 1200 issued to the deceased spouse herself, the IRS offset the incorrect payment from the refund which simply zeros out the mistake and saves your client the inconvenience of sending the money back thru some other method. Sounds good to me.  Anyone who believes the $$ paid to deceased individuals, approx. 76,000, would be OK, and did not advise their client to anticipate a requirement  to repay the money is, in my opinion, not providing the client with a realistic outlook. I told my clients who received the direct deposit of EIP $$ for deceased spouses, to leave it in the account, don't spend it, until the IRS decides what to do and how to get it back, because I always believed it would have to be repaid. Guidance was released last week on repayment requirements and methods. It's raining $$$ out there, lots of mistakes are being made by the IRS and 2020 returns will be a mess. A little common sense advice to clients will ease some of the coming chaos.
If the Employer paid the entire amount, then Box 5 and Box 1 should be equal and the 1098-T is incorrect. Do you have a copy of the Student Account from the college which shows the detail of charges... See more...
If the Employer paid the entire amount, then Box 5 and Box 1 should be equal and the 1098-T is incorrect. Do you have a copy of the Student Account from the college which shows the detail of charges and payments. Did your client receive any other grant or scholarship money, like Pell etc.
Actually, Box 1 is simply the total received by the college. 
Box 1 is what your client paid, Box 5 is scholarship, grants, employer paid money which reduces the amount in box 1. The result is what the ED credit is calculated on. Always enter the 1098-T info fi... See more...
Box 1 is what your client paid, Box 5 is scholarship, grants, employer paid money which reduces the amount in box 1. The result is what the ED credit is calculated on. Always enter the 1098-T info first and the Student worksheet will take care of the rest..
I'm not sure what you are asking: if the box 5 is what the employer paid and box 1 is the actual tuition paid by the employee, your client, then you would enter it as you would any other 1098-T. Box... See more...
I'm not sure what you are asking: if the box 5 is what the employer paid and box 1 is the actual tuition paid by the employee, your client, then you would enter it as you would any other 1098-T. Box 5 is for money paid by others, scholarships, grants, employers etc., your clients payments are in box 1 If your question is, should your client receive the credit because the grade received was not high enough for the employer to reimburse the tuition, the grade is irrelevant to the credit eligibility. As long as the other requirements on the Student worksheet are met, the client should be eligible for an Education credit. There is no question about passing or failing for eligibility purposes and plenty of parents and individuals receive ED credits, even though the person dropped out after the 1st semester. I guess you could say you can get the credit for trying, not succeeding, as long as all the other requirements are met and your client actually paid the amount in box 1.
I'm doing the same thing, but I won't make any formal changes until e-services are up and running and I have all 2019 returns filed. Too risky if it doesn't go smoothly and there's no one to contact ... See more...
I'm doing the same thing, but I won't make any formal changes until e-services are up and running and I have all 2019 returns filed. Too risky if it doesn't go smoothly and there's no one to contact at the IRS, IMHO. Let us know if you do move forward sooner and what you encountered, which will hopefully be nothing, but it is the IRS. Thanks.
I believe the real issue may be the instructions need to be updated. The Reject Value Field is a 4 digit IRS code for why a person did not make it thru the initial, Name, SS and DOB verification. It... See more...
I believe the real issue may be the instructions need to be updated. The Reject Value Field is a 4 digit IRS code for why a person did not make it thru the initial, Name, SS and DOB verification. It was located in the top portion of the Acknowledgments rejection report in the Detail section. ProSeries actually has made it easier now. In prior years, just the Reject Code was there and then you had to cross reference the Code on another list to determine the actual description for the rejection.  ProSeries now prints the description of the Reject Value in the Detail but not the actual Code number. If you need clarification the instructions directs you to review a Reject Value that is no longer on the report, annoying to say the least. In the Description: the number in the [ ]/efile: tells you which dependent was rejected, based on their order as reported on the return, followed by an abbreviated description. The Detail: below the description is the expanded explanation of the rejection. ( the Reject Value). With multiple dependents you could have [1]/efile:DependentDetail[2]/efile:DependentSSN which translates to the first and second dependent, as listed on the return, were rejected. If it wasn't all smushed together it would be easier to read, so just focus on the [number] and the Detail. If data you entered is verified as correct by the taxpayer, then the return cannot be e-filed with the rejected individual on it.
Make sure you ask the client if they paid for it with an HSA or FSA plan before you take the deduction. Many clients do not realize they receive the tax benefit through the payroll deduction and can ... See more...
Make sure you ask the client if they paid for it with an HSA or FSA plan before you take the deduction. Many clients do not realize they receive the tax benefit through the payroll deduction and can not take an additional medical deduction for the cost on the tax return. If they have an HSA, the software will include the distribution amount from the 1099-SA on the Medical worksheet.
I've got 4 on hold for processing with no notices issued, but nothing to do but wait till IRS is operational again. I am so not looking forward to that moment. 🙂