Now with Quick FAQs at the top of each Part linking to each question and answer.
A: we need to await guidance on that one, not sureI assume it would be based on records presented that show they qualify for the tips and a tip code applies and they have records to prove. The 2026 NEC is not yet in draft form, maybe there will be something when it is released. — Kristy Maitre
A: Technically, the information must come from the employer. The IRS generally does not accept a pay stub, we could still get guidance before year end. The employer is to use a reasonable method but IRS has not defined what "reasonable menthod" entails. — Kristy Maitre
A: I will answer live — AJ Reynolds
A: Probably — Randy Adams
A: again I will have to research and will address later. — Kristy Maitre
A: for 20025 use box 14 to report to the client — Kristy Maitre
A: Well some places might charge for a credit card charge fee- that is different. If the 5% is a required tip i do not believe this would be deductible. — Larry Johnson
A: Agree — Larry Johnson
A: As always a client in a business must keep track of income of all kinds. The 1099 NEC for 2025 does not show a box for tips. So it will be up to the client to track. — Kristy Maitre
A: Tips have nothing to do with hours worked,Tips are voluntary only, the hours worked are not related — Kristy Maitre, Kristy Maitre
A: Tips is an allowed deduction but the client must track the tip voluntairy given — Kristy Maitre
A: Your original question was on tips. The client who is paid overtime is allowed a deduction based on overtime worked. You are self employed. the overime issue does not apply to the self employed,Though there is a n area for the overtime on the NEC or 1099 Misc, you must be paid overtime to take the deduction. Just because you work long hours does not means you bill the client for overtime. If the person this would apply to those self-employed who actual recievd overime in preforming their services. Ex: a contractor need to complete a job sooner and must pay overtime to his independent contractor for thier time to complete the job. The amount would be on the 1099 but it will be up to the contractor who receives overime to track for 2025 through a reasonable method. It will apply to some indivuiduals but the fact that you work long hours, you are generally not paying yourself overtime. — Kristy Maitre, Kristy Maitre
A: Did you charge them overtime in completing thier tax return? Probably not as you may have a set fee depending on the forms. If you are billing them for overtime in 2025 it will be your responsibilty to track through a reasonable method. Or example I work for Basics and Beyond, I do not charge them any overtime. I would not have any deduction. — Kristy Maitre
A: Generally a contractor has bid on the job, if additional time is needed like in my example he would have to bill them separately. I think there will be a lot of fraud in this area.,Tis will be an area where I think there will be many audits — Kristy Maitre, Kristy Maitre
A: no,you are most welcome — Kristy Maitre, Kristy Maitre
A: agree — Larry Johnson
A: Yes they could get the $25,000 — Larry Johnson
A: for 2025 the tips would be on schedule c and deduct on Sch a-1. The company would have to provuided a statment in 2025 with the code that states they are eligible for the tip deduction — Kristy Maitre
A: No, once you make a valid election to opt out of the centralized partnership audit regime (BBA) for a tax year, you cannot change your mind and revoke the election without the consent of the IRS. The election out is generally considered irrevocable once it is properly made on a timely filed tax return. This rule ensures the IRS can properly administer audit procedures for that specific tax year. No, once an eligible partnership has made a valid election out of the centralized partnership audit regime (CPAR) on a timely-filed tax return, it cannot be revoked on a superseded return for the same year. Revoking the election requires IRS consent. — Kristy Maitre
A: In general: No, you cannot opt out late. The election is binding for that tax year and must be made on a timely filed return (including extensions). If missed: The partnership is in CPAR by default. There is no provision for a late-filed opt-out. Relief?: The IRS has not provided a blanket late-election relief procedure (like 301.9100 relief) for the CPAR opt-out. Unless special legislation or IRS guidance changes this, partnerships that fail to timely elect out are stuck under CPAR for that year. — Larry Johnson
A: Yes. Most of our clients are not at the highest rate so we would always push out. Accuracy related penalties and fraud penalties can get assessed at the partnership level- other penalties I believe will be at the partner level — Larry Johnson
A: For tax years 2018 and later, under the Bipartisan Budget Act (BBA) of 2015 centralized partnership audit rules, partnerships must file an AAR (Administrative Adjustment Request) instead of a traditional amended return. This is done on Form 1065, checking the “Amended Return” or “AAR” box, depending on which regime applies. — Larry Johnson
A: A partnership that is subject to the BBA centralized partnership audit regime must file an AAR to request an administrative adjustment in the amount or other treatment of one or more partnership-related items. A BBA partnership filing an AAR shouldn't file an amended tax return or amended Schedules K-1 and/or K-3. For an exception where a BBA partnership is itself a partner in a BBA partnership and is filing an amended return, see Partner amended return filed as part of modification of the IU during a BBA examination, later. — Larry Johnson
A: A partnership that is subject to the BBA centralized partnership audit regime must file an AAR to request an administrative adjustment in the amount or other treatment of one or more partnership-related items. A BBA partnership filing an AAR shouldn't file an amended tax return or amended Schedules K-1 and/or K-3. For an exception where a BBA partnership is itself a partner in a BBA partnership and is filing an amended return, see Partner amended return filed as part of modification of the IU during a BBA examination, later. — Larry Johnson
A: The Bipartisan Budget Act of 2015 (BBA) created a new centralized partnership audit regime effective for partnership tax years beginning after 2017. The new audit regime replaces the consolidated audit proceedings under the Tax Equity and Fiscal Responsibility Act (TEFRA). The new audit regime applies to all partnerships unless the partnership is an eligible partnership and elects out by making a valid election using Schedule B-2 (Form 1065). — Larry Johnson
A: Yes, but the exception is the superseded return cannot be filed to change a CPAR election. For other issues yes. Some states do not allow Superseded returns — Kristy Maitre
A: agree — Larry Johnson
A: Yes,For inherited IRAs of owners who passed away after 2019, beneficiaries (except for spouses, disabled individuals, or minor children) generally must follow the 10-year rule, meaning the entire account must be emptied by the end of the tenth year after the owner's death. If the original owner was already taking Required Minimum Distributions (RMDs) before their death, the beneficiary must also take annual RMDs during years 1 through 9, with the remaining balance distributed in year 10. — Kristy Maitre, Kristy Maitre
A: No, the original owner of a Roth IRA or a Designated Roth account in an employer plan does not have Required Minimum Distribution (RMD) requirements during their lifetime. However, beneficiaries of inherited Roth IRAs and designated Roth accounts are subject to RMD rules. — Kristy Maitre
A: Are you asking about making QCD from multiple accounts? — Kristy Maitre
A: Remember a QCD can tital be $108,000 in 2025. They can take the rmd from multiple accounts and designation each separately. you must calculate the Required Minimum Distribution (RMD) for each of your Traditional IRAs, SEP IRAs, SIMPLE IRAs, and rollover IRAs separately, but you can then total these amounts and withdraw the full RMD from just one of those accounts, or from a combination of accounts. However, RMDs from other types of retirement accounts, like 401(k)s, must be calculated and taken separately from each individual account. ,Did this answer address your issue. — Kristy Maitre, Kristy Maitre
A: $20,000 would show up on the 1099 R with a Code Y, but if the client directly distributed $6,000 to a charitable orgaization then $6,000 of the $20,000 would not be taxable. And if the RMD required is $20,000 you have met the requirements — Kristy Maitre
A: The rmd must be made to satify the RMD amount but you can desiginate at the same time that some of that dist goes to ZYX charity — Kristy Maitre
A: You use Form 8606 to calculate taxable amount. — Larry Johnson
A: good question - The IRS hasn't made a determination on this process yet. — Kristy Maitre
A: By naming a trust, the IRA owner can specify in the trust document when and how the money is distributed (e.g., staggered over years, for education, health expenses, etc.). This is especially important if the beneficiaries are young, financially inexperienced, or have spending issues. If property drafted as a look-thru trust the RMD's can be calculated on the life expectancy of the beneficiary. — Larry Johnson
A: Yes. The QCD should be done first and then the RMD satisfied next. — Randy Adams
A: We use a secure platform- SafeSend to move documents. I worry about the security surrounding such a strategy. — Larry Johnson
A: IRS generally wants 6 years — Larry Johnson
A: You should be able to put the RMD once taxed, into what ever vehicle you want. As long as you meet the Roth requirements, which are limited by phaseouts. — Kristy Maitre
A: need more information, Yes, a trust's final Form 1041 can be filed even if there is remaining income or corpus (principal), but this income and corpus must be distributed to the beneficiaries during the trust's final tax year. For the trust to be considered officially terminated for federal income tax purposes, it must have zero taxable income and zero tax liability. — Kristy Maitre, Kristy Maitre
A: For a special needs trust, the taxation depends on how the trust was established. There are two primary types, and the tax reporting differs for each. First-party special needs trusts A first-party, or self-settled, trust is funded with the assets of the disabled individual, often from a personal injury settlement or inheritance. Taxes pass to the beneficiary: This type of trust is treated as a "grantor trust." For tax purposes, the trust's income (like dividends and interest) is considered the beneficiary's income and is reported on their individual tax return. Beneficiary is responsible for taxes: The beneficiary is legally responsible for paying the tax on the trust's income. However, since the beneficiary may not have their own funds, the trust document can authorize the trustee to pay the tax liability from the trust assets. Informational return is filed: The trustee files an informational IRS Form 1041 to report the trust's income, which is then passed through to the beneficiary. Third-party special needs trusts A third-party trust is funded by someone else, like a parent or grandparent, with their own assets. Taxes are paid by the trust: This type of trust is typically treated as a separate, non-grantor entity for tax purposes. The trust itself is responsible for paying income tax on any income that is retained within the trust. Beneficiary's portion is taxed to them: If the trust distributes any of its income to or for the beneficiary, that distributed portion is considered income to the beneficiary and is reported on their personal tax return. Trustee files a return: The trustee files IRS Form 1041 to report the trust's income and issues a Schedule K-1 to the beneficiary for any income distributions. Qualified Disability Trust status: Many third-party special needs trusts can qualify as a Qualified Disability Trust (QDT) and receive a larger tax exemption than standard trusts. To qualify, the beneficiary must be under age 65 when the trust is established and meet the Social Security Administration's definition of disability. — Kristy Maitre
A: Yes, I would consider this IRD since it was received after death — Randy Adams
A: Agree — Larry Johnson
A: agree — Larry Johnson
A: Yes. I see no reason why not. What state,Per Iowa Department of Revenue A business entity that is taxed as a partnership or S corporation for federal and Iowa income tax purposes and that is required to file a federal and Iowa partnership income tax return (federal form 1065 and IA 1065) or a federal and Iowa S corporation income tax return (federal form 1120-S and IA 1120S). This may include an S corporation, general partnership, Limited Liability Company (LLC), Limited Liability Partnership (LLP), or Limited Partnership (LP).,A business entity that is taxed as a partnership or S corporation for federal and Iowa income tax purposes and that is required to file a federal and Iowa partnership income tax return (federal form 1065 and IA 1065) or a federal and Iowa S corporation income tax return (federal form 1120-S and IA 1120S). This may include an S corporation, general partnership, Limited Liability Company (LLC), Limited Liability Partnership (LLP), or Limited Partnership (LP). — Larry Johnson, Larry Johnson, Larry Johnson
A: The payments are deductible in the year paid. In Illinois the estimates are due 4/6/9 & 12-there may be a difference in when the payments are deductible in and for. — Larry Johnson
A: ok — Larry Johnson
A: At this time only for 1040". Guidance for amended partnership returns by non-BBA partnerships For Form 1065 taxpayers not subject to BBA, the easiest process for e-filing the amended return will be to update the underlying original for the changed items. Once the return has been updated with the changes, attach the Amended Return Statement (see Section A below) and any other supporting explanations and re-file the complete new return, ensuring that the Amended Return checkbox is selected. For taxpayers who e-filed original returns with voluminous PDF and/or who filed returns that used the paper or PDF option, some of the PDF/paper information may not need to be re-filed with the amended return if the changes do not affect the information contained in those files (e.g. PDF elections, paper/PDF 8858, 8865, etc .) Amended returns Form 1065 returns not subject to the BBA will require, at a minimum, the following: The corrected Form 1065, including all Schedules K-1, completed in its entirety with the Amended Return checkbox selected. All forms, schedules and attachments that changed or that support changes on the amended Form 1065. Placeholder forms to pass any applicable business rules (i.e. 8858, 8865, etc.) where there is no change to the underlying data on that form. If the underlying data has changed, the corrected form must be attached. An Amended Return Statement that identifies the line number of each amended item, the corrected amount or treatment of the item, and an explanation of the reasons for each change. The statement should be attached to the 1065 return. The statement must be named Amended Return Statement. A signed signature document (Form 8453-PE), or use of a Practitioner’s Pin (Form 8879-PE). — Kristy Maitre
A: As I stated IRS wants the last 6 years. Once these are filed IRS gebnerally does not pursue other years ubnless the income was not declatred. Or they think there was fraud or an unstatement of income. Also they are still condiered a non-filer for tax year 2025. — Kristy Maitre
A: There is always a chance, but basically they only want the last 6 years. Partnership returns were due in September for 2025 that is if they filed the extensions. So for 2025 they are still considered a non-filer. Based on my experience people try to get vurrent and then fall behind again. It is not a prority and they only file for specific reasons like buying a home, or the court requires or a divorce. Once that crital issue has pasted they fall back into former habits. No always but this is a client you need to keep on to make sure they filed timely in the future. — Kristy Maitre
A: In my experience you can pay late however you will be penalized — Larry Johnson
A: Yes — Larry Johnson
A: on unfiled returns — Larry Johnson
A: They take it on their return for the adjustment year — Larry Johnson
A: yes — Larry Johnson
A: Yes applies to S corp. — Larry Johnson
A: Yes, but their authority is very limited — Randy Adams
A: There is more and we will cover in Ethics. — Kristy Maitre
A: No set time-however within 30-60 days — Larry Johnson
A: Great idea!!!!! — Larry Johnson
These items didn’t match our patterns. We can refine rules or hand-tag.
A: I believe you "elect out" in Iowa by not choosing to make the election. — Larry Johnson
A: Bringing in a partner is a standard occurance in our industry. If you are bringing in the partner for the purpose of sellng the practice, you should treat this as a sale. — Larry Johnson
A: It is my experience that you must notify clients and ask for permission. If the client does not respond consent is presumed — Larry Johnson
A: It is complicated if you hand the client files to purchaser or do you simply make an introduction. It seems like there would be transfer of records/electronic records to the individual aquiring the clients. You need to be very careful in that case. — Larry Johnson
A: It is an above the line deduction and will transfer from Sch A-1 whic we will liik at lkater,Schedule A-1 is new — Kristy Maitre, Kristy Maitre
A: You will do the same taxability of social security like we have always done. Then the senior deduction will be calulated based on the phase outs. It will appear on Sch A-1 and trannsfer to line 13b on the draft of the Schedule 1040,You will do the same taxability of social security like we have always done. Then the senior deduction will be calulated based on the phase outs. It will appear on Sch A-1 and trannsfer to line 13b on the draft of the Schedule 1040,for tax year 2025 — Kristy Maitre, Kristy Maitre, Kristy Maitre
A: Non resident alians are still required to pay tax on income earned while in the country. — Larry Johnson
A: Original use The original use must begin with the taxpayer. Center for Agricultural Law and Taxation +2 Construction start date Must begin after January 19, 2025, and before January 1, 2029. ksmcpa.com +3 Center for Agricultural Law and Taxation +3 Source Advisors +3 Must be placed in service after enactment (after July 4, 2025) and before January 1, 2031. Construction start date mus begin after January 19,2025 and before January 1, 2029. The original use must begin with the taxpayer. — Larry Johnson
A: If you want to control the proceeds and limit the beneficiaries access to the funds. — Larry Johnson
A: When the IRA makes a distribution to the trust it is taxable. The ownership of the IRA is not taxable. — Larry Johnson
A: https://www.ocihsspa.com/sites/ocihsspa/files/2022-11/Social%20Security%20Card%20Examples.pdf — Kristy Maitre
A: Many nonresident owners realizing Ohio sourced income less than $250,000 ($125,000, married filing separate) may qualify to request a refund if the pass-through entity credit exceeds their Ohio personal tax liability. — Larry Johnson
A: Better to pay the tax and deduct on Federal return — Larry Johnson
A: Based on the 1099 R instructions, they do not destinguish what amount is a qualifying QCD. We will need more guidance. i would therefore ask the client for the documentation of the amount was a QCD. Keep document in records. Due Diligance done. — Kristy Maitre
A: Trusts, like individuals, generally are not taxed on appreciation until an asset is sold or exchanged. — Larry Johnson
A: yes — Kristy Maitre
A: The IRS generally requires a handwritten or typed signature on Form 2848, Power of Attorney. Electronic signatures like DocuSign are typically not accepted unless specifically authorized by the IRS. To avoid processing delays, submit a properly signed original or scanned copy with a valid signature. Michael — Michael Miranda
A: personal use only if used for business it would not qualify — Kristy Maitre
A: there is still a miscellanous deduction, as always. The law eliminated the 2% issue. — Kristy Maitre
A: Too bad. I did not know that the IRS is open on a Saturday. Michael — Michael Miranda
A: if it is a grantoir trust where the individual is reporting income on the 1040 - no trust return is required. There the date to apply for the ein is the date of death because the trust then become irrovacable. — Kristy Maitre
A: year of death — Kristy Maitre
A: Dear Steve. I would maintain the new of the trust as originally created in 2018. However, the effective date of the trust would be the day following the death of the decedent. This is when the irrevocable status / complex trust provision would know apply. Great question. Michael — Michael Miranda
A: Thank you for those kind words! Michael — Michael Miranda
A: I have heard that they were to be modified for 2025 tax year issued in calendar year 2026. — Randy Adams
A: I would say yes — AJ Reynolds
A: Yes — Randy Adams
A: Yes — Randy Adams
A: It must be used in production to qualify — Randy Adams
A: Yes — Randy Adams
A: Must be filed before the due date of the original or ameneded return. — Kristy Maitre
A: Got it. Very scary- good attorney is my best response — Larry Johnson
A: A challenge- i think our most important obligation is to not deal with dishonest people. — Larry Johnson
A: So much information. Sometimes i think we should have a week ON and then a week off to catch-up. Possibly a week of meditation once in a while. — Larry Johnson
A: Agree sir. — Larry Johnson
A: I am not familuar with this so we will have to research and address in the Final Q&A posted — Kristy Maitre
A: Not all do farm returns, but we will try to address the basics in the q&a or to make the suggestion. — Kristy Maitre
A: That is a thought. But rememeber the units must be placed in service before the end of the year, If they purchase the products but do not place them in service they will not qualify for the deduction. — Kristy Maitre
A: Correct - I think based on some studies I have read that there was alot of abuse in this area - basically the placed in service requirement. IRS does provide Congress with issues that are being absused and generally Congress listens. This applies as well to the Electric and modified vehicle credits. IRS is constantly providing issue to Congress, sometimes they listen, in this case they did. — Kristy Maitre
A: yes that is correct — Kristy Maitre
A: Agree — Kristy Maitre
A: I believe the IRS just made this decision since the form was already finalized AND all of the payroll companies must weave into their software. I guess... — Larry Johnson
A: I have fond memories of those days. — Kristy Maitre
A: Sorry i have been absorbed in addressing question - what deduction are you asking about — Kristy Maitre
A: We will have to await guidance on this issue . This won't apply until 2026. I will make a note to watch out for. — Kristy Maitre
A: This would be a legal issue - i would consult an attorney. — Kristy Maitre
A: AGREE!!!!! — Larry Johnson
A: You are overthinking, and creating a deduction which may not exist — Kristy Maitre
A: no approval given — Larry Johnson
A: Well I believe that this is not relief eligable under 301.9100 late election rules. I may be wrong however i dont think you can amend. ,On an extended not amended return. — Larry Johnson, Larry Johnson
A: The only site i use is the same site - getting the invoice and model number helps to make that determination. — Kristy Maitre
A: That is correct. — Kristy Maitre
A: Then the client should have filed timely. Not your problem. — Kristy Maitre
A: Yes — Larry Johnson
A: i went thru that at the beginning of the class - they are on the cpehours.com website under About and then resources i asked you to download at that time. — Kristy Maitre
A: My best response is- statute never "runs" on an unfiled return — Larry Johnson
A: Nothing is easy — Larry Johnson
A: We love seeing you!! — Larry Johnson
A: I have made a note to see if we can provide . — Kristy Maitre
A: The Medicare Part B premium cost for an individual is calculated using their Modified Adjusted Gross Income (MAGI) from two years prior, which includes adding tax-exempt interest to their Adjusted Gross Income (AGI). Most enrollees pay a standard premium, but higher earners pay an additional Income-Related Monthly Adjustment Amount (IRMAA) on top of their base premium, with the exact amount determined by the IRS tax return from two years ago. To calculate your MAGI for this purpose, you start with your Adjusted Gross Income (AGI) and add back the amount of any tax-exempt interest you received. ,So to address your question, the QCD can reduced income which would affect the Part b Premium - thus could reduce the B premium. — Kristy Maitre, Kristy Maitre
A: You are correct — Kristy Maitre
A: That is correct- personal use only 100% — Kristy Maitre
A: Both — Kristy Maitre
A: Agree- for PTET payments after year end are creditable on the tax return however deducted in the following year. Nothin is easy Roger. — Larry Johnson
A: Good information. Not an easy process. — Larry Johnson
A: The client may take a QCD and take other chartable deduction if they itemize. The new charitable lawe does not apply unitl 2026 . Example: AGI is 1m, Chartable donations are #10,000. .05% of 1M is $5,000 - this $5,00 is not deductible. The remaining $5,000 of the !0,000 would be allowed as an itemized deduction. Now with that sais we have not received any guidance on how a QCD, the chartiable .05% and a $1,000, $2,000(MFJ) above the line deduction that appiles in 2026. This gives IRS time to develop reg and how each chartiable deduction will apply. I check everyday, for new guidance, non has yet been released. — Kristy Maitre
A: THanks — Larry Johnson
A: Great point — Larry Johnson
A: Great point — Larry Johnson
A: Great point- ERC statute now goes on for a long time — Larry Johnson
A: I love why questions. The 70 1/2 was the age Congress set on when the law was passed. It all results in how to "pay" for it with the budget. — Kristy Maitre
A: agree 100% — Larry Johnson
A: if you are talking about car loan interest - no line of credit is allowed. i — Kristy Maitre
A: Intersting — Larry Johnson
A: You need to do the calculations — Larry Johnson
A: must be purchased in 2025,remember this is 4 year deduction so purchased in 2025,2026,2027 and 2028 may or may nopt be extended. — Larry Johnson, Kristy Maitre
A: Purchased in 2025 — Kristy Maitre
Note: Paid attendees can request a replay link for any previously recorded webinar by asking JoJo or emailing [email protected].
