Industry Discussions

Happy New Year Everyone, from NJ Practitioner!Question whether the Use Tax exemption under N.J.S.A. 54:32B-8.13(a) / N.J.A.C.18:24-4.4. (Manufactures) applies where a company is preparing Firewood for sale to the public in NJ, where such product is exempt from NJ-ST due to its Energy / Fueling nature.Only the packaging and delivery costs of Firewood are subject to NJ ST.My client purchased a significant amount of Equipment for this process and didn't pay ST my concern is whether Use Tax will apply. Any thoughts / direction would be appreciated.   Not that I’m any expert bit it seems like N.J.S.A. 54:32B-8.13(a) “Production is limited to those operations commencing with the introduction of raw materials into a systematic series of manufacturing, processing, assembling, or refining operations, and ceases when the product is in the form in which it will be sold to the ultimate consumer…” N.J.A.C.18:24-4.4. To me, this should apply to just about all the items we purchas

House Republicans to vote on bill abolishing IRS, eliminating income tax | Fox NewsRepublicans in the House of Representatives will vote on a bill that would abolish the Internal Revenue Service (IRS), eliminate the national income tax, and replace it with a national consumption tax.Fox News Digital has learned that the House will be voting on Georgia Republican Rep. Buddy Carter's reintroduced Fair Tax Act that aims to reel in the IRS and remove the national income tax, as well as other taxes, and replace them with a single consumption tax.The vote on the bill was made as part of the deal between House Speaker Kevin McCarthy, R-Calif., and members of the House Freedom Caucus and was pushed forward in his quest for the gavel."Cosponsoring this Georgia-made legislation was my first act as a Member of Congress and is, fittingly, the first bill I am introducing in the 118th Congress," Carter said in a press release exclusively obtained by Fox News Digital."Instead

When do you begin preparing 1040's?  For me, I normally wait until the first week in February.  That ensures that the majority of my client's forms should have arrived and it allows me to being entering their data and preparing their returns.  Just wondering the process for others?I sent all of my clients a preseason email on January 2.  It reminds them of my process and time frames.  It also provides guidance on my preferred means of obtaining their information:  ProSeries Link.     

I have closed my commercial office space and moved my practice to my homehow do I update my address in proseries?? DD

Normally, where there is a conflict between state rules and federal rules, I would think state rules prevail.  In the case of CoVID-19 as a qualified disaster for the purpose of Sec.139 Qualified Disaster Reimbursement Deduction, which jurisdiction should the taxpayers follow if state and federal opinions differ?  See FEMA website showing each state lifted CoVID-19 disaster in 2020 and 2021: https://www.fema.gov/covid-19 See President Biden issued "Notice on the Continuation of the National Emergency Concerning the Coronavirus Disease 2019 (CoVID-19) Pandemic" on February 18, 2022, stating "...the national emergency declared on March 13, 2020, and beginning March 1, 2020, must continue in effect beyond March 1, 2022".  https://www.whitehouse.gov/briefing-room/presidential-actions/2022/02/18/notice-on-the-continuation-of-the-national-emergency-concerning-the-coronavirus-disease-2019-covid-19-pandemic-2/ Section 139(c) stated: the qualified disaste

My new client has been a very profitable Sole Proprietorship for multiple years, and her only tax strategy was to contribute approximately $20K SEP IRA for the past two years.  I took over this client and noticed her large schedule C profit for at least three years, and considering to use Rev. Proc 2013-30 to retrospectively elect S-Corp status.  I also noticed significant missing tax deductions due to the bookkeeping error (equipment purchases were booked into equity distribution).  For the two reasons, I think her prior year tax returns are worth amending.    But this will push part of her prior year SEP IRA contribution into the bucket of excessive contribution, and she probably would subject to the exercise taxes.  I see the IRS allows SEP IRA to be converted to a qualified plan 401(k) and have a tax free roll-over. I am not familiar with how such roll-over would affect the prior year contribution limit, but do you think this conversion

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Happy New Year Everyone, from NJ Practitioner!Question whether the Use Tax exemption under N.J.S.A. 54:32B-8.13(a) / N.J.A.C.18:24-4.4. (Manufactures) applies where a company is preparing Firewood for sale to the public in NJ, where such product is exempt from NJ-ST due to its Energy / Fueling nature.Only the packaging and delivery costs of Firewood are subject to NJ ST.My client purchased a significant amount of Equipment for this process and didn't pay ST my concern is whether Use Tax will apply.  At the end of the day the State receives no ST on the Equipment purchases nor the sale of finished product to customers,Any thoughts / direction would be appreciated. 

The PSO (public safety officers) provisions are expanded and include private firefighters and corrections officers. There are many provisions that apply to 2022 and even retroactive to 2021. Example: Roth 401(k) employer match can also be to the Roth, starting for tax year 2022. You can establish a Solo 401(k) up to the due date of the return (not limited to the calendar year) for tax year 2023. RMDS are triggered at 73 yo in 2023 and moves to 75 in 2033. Roth 401(k) RMD will be eliminated in 2024. RMD penalty changes from 50% to 25% in 2023. And of course, some details are yet to be defined. This topic is to document the first great article I read on this: https://www.whitecoatinvestor.com/secure-act-2-0/ If you find others, as this develops, please share.

Client claims daycare business and deducts in home expenses.  Has turned the garage into a play center can she claim the garage by depreciating the value of the garage? If not, how would she claim the play center.

A handful of clients received 1099-Ks last year for selling used personal items of clothing etc. The items were bought years ago for much more than sales price. I put it on Sch C and washed it to zero net, since we are not allowed to take a loss on sale of personal items. This was not a business as such. City Hall seeing a Sch C sent them a letter requesting a business license. NYTimes article today warns to expect more of these 1099-Ks since the limit of sales is now a mere $600. How have you handled this?

My client qualifies for RMD from his SEP IRA but over contributed to the IRA in 2021.  The excess contribution was distributed in 2022.  Does that distribution satisfy the 2022 RMD?

Taxpayer hired as Capital Police Officer and quit job in NH and moved down to Washington.  While training for month had to pay $5000 for hotel.  I realize employee business expenses are not deductible right now.  I also realize moving expenses aren't deductible unless one is an active service member.  Any place this is deductible on the federal based on some fine print government security officer etc?  How about the state taxes down there?   Thanks in advance for your help.  

New homeowners in Florida are finding that life in a state with no income tax can mean life in a state with high property taxes. Florida has a law similar to California’s Prop 13, that limits annual property tax increases to 3% (or CPI increase, if less) but starts the valuation anew when the property is sold. That can triple the taxes for the new owner.https://www.businessinsider.com/florida-homebuyers-shocked-by-skyrocketing-property-taxes-2022-11I have seen this happen with Arizona taxpayers moving to Texas. Arizona, until recent years, has had fairly high income-tax rates, but low property taxes. Upper-middle-class taxpayers would pay maybe $4,000 combined income and property taxes. Moving to Texas, they would pay that much or more, just in property taxes.

I have a client that has been in the lawn maintenance business for several years. He has just informed me that this year he has started an additional business to clean and service garbage bins.  He informed me that he is using the same EIN for both businesses.  Both businesses use the same address.  Is this acceptable and if so, I am assuming that it should be two separate Sch C's.

My client sold a piece of land he inherited from his father.The dad passed away in 2016 and the mom added her son's name on the deed in 2017. The son sold it in 2022.He will file 'married file joint' tax.He received 1099S and he received $460,000 as his share and his mom received $1000,000.What are the tax consequences for this sale?Any help please.

Looks like they are going to try again. hope it won't cost us too much. The Tax Book tax industry news for subscribers recently posted the following article:"GAO Recommends Congress Grant IRS Authority to Regulate Paid Tax Preparers. See link: www.gao.gov/products/gao-23-105217    

I have a doozy of a question! I don't do a ton of returns so here's the question.  Client used wrong tax id for a rental LLC starting in 1999 (first return) through 2008 on a 1065 filing.  Beginning in 2009 forward (with me) filed single member LLC on Schedule E that doesn't ask for EIN.  Client discovered the issue setting up online banking.  She kept getting error duplicate FEIN, so I asked her to look for her IRS letter. She transposed numbers from the letter.  Bank Account has wrong EIN.  No loans. No 1099s etc.What would be the plan of action?  Thanks in advance.  This is new ground for me.

I have a client that is being told by another CPA they can purchase (in December) a 6,000 lb. vehicle, write it off with bonus depreciation in 2022.  Then, sell if in January 2023 without recapturing any depreciation as long as they purchase another more expensive that the previous vehicle in December of the following year (2023).Is this something that can be done, and I don't know about it? Thanks 

I have been reading on the Secure Act changes regarding Kiddie Tax, that it retroactively repeals the TCJA Kiddie Tax rate change for all children and young adults and reinstates the pre-TCJA Kiddie Tax calculation so that it’s once again based on the parent(s)’ marginal tax rate. I also read that:In calculating the federal income tax bill for a dependent child (or young adult) who is subject to the Kiddie Tax, the child is allowed to subtract his or her standard deduction amount.* For 2018, the standard deduction for an unmarried child is the greater of: (1) $1,050 or (2) earned income + $350, not to exceed $12,000.* For 2019, the standard is the greater of: (1) $1,100 or (2) earned income + $350, not to exceed $12,200.* For 2020, the standard deduction is the greater of: (1) $1,100 or (2) earned income + $350, not to exceed $12,400.So it is proper to indicate on the CHILD's return that they are NOT Dependent of someone else, so that the software gives the child the STANDARD DEDUCTION

I have a client that has farm NOLs for 2021 and 2020. This same client had a 12million dollar section 1231 gain in 2019. I believe there is an exception that allows 2 year carryback on farm NOLs. If anyone can help answer any or all of my questions below, that would be a great help! Thank you in advanced for any input!• Is it true we can carry back 2021 and 2020 farm NOLs to 2019 to help offset section 1231 gain originally reported?• What would be the best way to go about applying the NOL – Form 1045 or Amended 1040?• Are there any ordering rules or a tracing method that we need to do to calculate the portion attributable to the farm NOL?• Are there any other limitations or considerations we need to consider?

I have a client just received his ssn he is in the usa for 2 years his wife still live at Egypt can he apply for itin for her and file a joint return? she never entered the usa?

'Where's My Refund' sometimes has no progress bar and says "Your tax return is still being processed. A refund date will be provided when available..." and sometimes it does have the progress bar, with the "return received" in orange and "We have received your tax return and is is being processed.."  Is there a difference in what they mean?

I have a client that received a 1099 NEC for a payment amount related to her divorce.  There were federal and tax amounts showing on the form.  Should those amounts have been included in box 1, non employee compensation?  Example 1099 NEC - box 1 showed $165,000 box 4 showed $50,000 and box 5 showed $11,000; when I entered into the software, I entered it as above.  Should I have instead entered $226,000 in box 1 to capture the tax amounts as well?  She received a letter from the IRS stating  income of $61,000 (taxes) was not included.  I would have thought that the taxes would have been included in box 1.  I have not prepared the 1099s so am not sure of that and this is actually the first time I have seen tax amounts on the 1099 NEC.  Any help would be appreciated.  Thanks.  

This isn't a tax question, but that's ok since I don't want a tax answer.  This is a question for @qbteachmt  Years ago we used to do payroll processing for a number of clients.  Over the years we have tried to get out of that racket but we still have one small client that we can't say no to.  But after looking at the cost of what Quickbooks is charging for their desktop payroll software we are looking at going with plan B or maybe even plan C or D.  But for the question I have I couldn't find any answers to by doing some searches so I thought I would ask the only person outside of Intuit that might know the answer (and I wasn't about to call support and get a wrong answer).  If a client is using Quickbooks desktop and is paying Intuit for the accompanying payroll service, can we print W-2s for them if they provide a backup of their Quickbooks if we no longer paid for our own Quickbooks payroll service?  We have a handful of clients that need their ha