It would be a great advantage if the list of 1099s at the left of the return currently being prepared could be displayed by name in alphabetical order. When preparing a return with up to 40 1099s, it would certainly save time in entering the information after transferring to the next year's return. So much time wasted in going through that long list searching for a particular name. If in alpha order, not so much of a problem.
Also, the option to change the Font Size in the HomeBase would be of immense help.
The idea is a worthy one. Entering a total for all 1099s in an individual tax return is a sure way to get a CP 2000 IRS notice or an audit. Carlos Roman CPA.
Maybe it's just me, but in a lot of cases I would find it odd that the only income that someone earned during the year came from payments that required 1099s. Nobody ever paid them less than $600?
" The idea is a worthy one. Entering a total for all 1099s in an individual tax return is a sure way to get a CP 2000 IRS notice or an audit. Carlos Roman CPA."
Really? I've been doing taxes for 4 decades. NONE of my clients have EVER gotten a CP 2000 notice because of just entering totals for income. Now, if that total didn't include ALL F 1099 income, a notice would be generated. But that notice would have been generated because of under-reporting, NOT because of failing to list one of many F 1099s.
The IRS doesn't look at that detail; I'm not sure if it is even transmitted with the efile.
Edit - there's another thread, stating that MS requires a listing of F 1099's for interest & dividends. I don't speak "Mississippi", but it is NOT an IRS requirement.
The IRS doesn't look at that detail; I'm not sure if it is even transmitted with the efile.
When did that change? In past years if all 1099s weren't reported in a client's tax return, because they didn't submit all of them, they received a letter from the IRS stating that they had unreported income and were assessed additional tax, penalty and interest. This was the case even though the total revenue reported was substantially greater than the total amount of 1099s. We had to submit proof that the missing 1099(s) were included in the revenue reported on the tax return. This happened on several clients in past years.
Why does PS show the line for income reported on 1099s if the IRS doesn't require it?
The only look at total income reported on Sch C vs 1099s reported to them by the payers. As long as the income reported on Sch C meets or exceeds the income reported on the 1099s that IRS has on record, theres no issues.
Ive never once, in over 25 years, input the actual 1099 MISC that clients receive. If they bring me a stack of them, and tell me thats the only income they received, I add them up and stick the total on Line 1 of the Sch C.
I also have never entered the actual 1098 for mortgage interest for Sch A or the 8829, I just input the figures.
NOTHING has changed. Lacerte, ProSystem FX, UltraTax - all high end tax prep software that I've used in the last four decades, to prepare well over 15,000 tax returns - do NOT require a separate listing. NEITHER does the IRS.
ProSeries (probably) has to assist you in making sure *nothing* gets missed. But it's a tool, that's all.
Your occasional IRS letters were not because a specific Form 1099 was missed in the listing. Most likely they were because of a mismatch of ID numbers & names.
Forms 1099 are supposed to be issued using an individual name & SSN. OR, a business name & a FEIN. If that gets messed up (which I see, regularly) there can be mismatch issues. OR, a client forms an LLC, or incorporates part way thru the year but the F 1099's are issued under the wrong ID number
"In past years if all 1099s weren't reported in a client's tax return, because they didn't submit all of them, they received a letter from the IRS stating that they had unreported income and were assessed additional tax, penalty and interest."
If all the income that had been reported to IRS on 1099s wasnt included on the Sch C, yes, you'll get a CP2000 for missing income, but its not due to individual 1099s not being entered, its due to the total income not matching IRS records.
Your clients need to reporting ALL income their business received, they should be keeping track of this themselves (thats what businesses do!) regardless if they received a 1099 or not.
I do fill out the W2s, 1099-SA and SSA1099 worksheets.
W2s have too many different things on them that flow to different places, the 1099SA figures might be able to be entered on the 8889 itself, but its easy to just use the worksheet, the SSA1099 lets you put the medicare ins and fed withholding all on one sheet and it puts it where they go, so its easier to use it that jump around entering those in other places.
I summarize stock sales (ST, LT, covered and not covered, etc) from 1099B on Sch D though, I dont enter each and every sale. Many people scan and attach the actual 1099B to the return, but I never have.
The only time I do enter the actual 1099MISC is if its got federal or state withholding on it, the program likes it better when withholding is linked to a tax document.
I summarize stock sales ST and LT covered on the summary lines provided on the Sch D input screen.
I would love to get away with entering one line for all the ST and LT non covered stock sales. What do you enter in the Description of Property section of the Sch D input screen for the total non covered stock sales?
I separate entries out by brokerage (because thats just how my brain works LOL) so 'Schwab LT Non Covered Transactions' then in the box for Brokerage I put the Brokerage Name and Account Number, Sch D has that 1099B Reconciliation Smart Worksheet right below the entry boxes that will show the gross proceeds for each account and I can cross match to make sure my gross proceeds for each 1099B match up and avoid the dreaded CP2000 notice.
I wonder why PS doesn't have a summary line for non-covered like they do for covered transactions since the IRS doesn't require non-covered to be reported separately?
I've been doing this for over 40 years; the IRS has never required specific F 1099 matching. As long as the total gross income reported is equal to or more than the F 1099's issued AND the income is reported in the correct place (NEC = Sch C, rent = Sch E, etc) there is not an issue.
Now if the client give you an amount for Sch C that you use on the return, and the F 1099's issued to the client actually total more... your client *will* be getting a friendly letter from the IRS. Not because they don't *match*, but because the gross amount is incorrect.
I just double click on line 1a to get the supporting statement and enter the payer and amount, this way I have a record of 1099's given to me, so if 1 is missing, they can't blame me.
I like the completeness of having them all listed but would like alphabetical order. That way if one or two or ten haven't been entered, you can ask your client if they did or did not receive one. It is a great check tool. My client added about 30 new ones this year alone. How difficult can it be to sort these? Give us what we ask for. If there are those who don't want to be bothered, so be it. Since they match those 1099s, why not do it right?
I prefer to enter them individually in order to insure the client has not missed any from year to year. IMO that is part of preparers due diligence.
Anonymous
06-28-202207:50 AM
06-28-202207:50 AM
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