Industry Discussions

Continued from https://accountants.intuit.com/community/tax-talk/discussion/toon-d-jour/00/260300

I have two 1065 K-1s issued by different ETFs, and have a question on each of them. 1. The first K-1 has $63 in both Box 13 code AE and Box 20 code B. On K-1, the $63 investment expense was included to calculate "current year net loss" in the Capital Account Analysis section. In ProConnect, the $63 was not showing up in Basis Limitation Worksheet, which I think it should. So, I put it on ProConnect input page: 1065 K-1 => Basis => Other current year decreases to basis. The $63 now shows up on Basis Limitation Worksheet and reduced basis ending balance to the same amount as capital account ending balance, although they don't have to be the same all the time. I'm not too sure about it because normally ProConnect would pick up the right numbers to show on basis worksheet. Is this just a glitch or there's a reason $63 should not be included in basis calculation.2. On the other K-1, the box 19 distribution is empty, but there's $40k reported as Withdrawals & Distributions under Ca

My client is in the entertainment business and been hired to complete a commercial project for a client. The client received a 1099-NEC for revenue not earned yet; the deposit is for expenses, earnings and costs associated with the commercial project that client is hired to complete. The client is starting this project, and the money provided is seed money for project. This is a first-year Partnership, has elected accrual accounting for reporting, small amount of expenses allocated toward project. I am asking the community the best way to report 1099-NEC on partnership return to show the 1099-NEC amount and backing out the amount, then explaining the client is an accrual basis partnership and the deposit is unearned revenue. What documents or attachments would the community suggest sending with return not have any issues with the IRS reporting, along with showing the 1099-NEC amount for matching to the pre-payment. The revenues and expenses for the project would be coming in the next y

My client is a small business LLC partnership and is building a drive thru restaurant to lease out to a national tenant. He spent several thousands in soft cost last year 2022 ; architect fees, legal fees, permit fees, and other soft cost.Construction began this year in March 2023.Can we expense the soft cost on 2022 returns then capitalize direct building cost on 2023 return.How does the TCJA impact this scenario for small businesses ?

As a QuickBooks ProAdvisor, I would love to see more opportunities to participate in paid research studies, user interviews, surveys, and product testing programs.Accounting professionals use QuickBooks daily and can provide valuable real-world feedback that helps improve the platform. Expanding these opportunities would allow Intuit to gather insights from experienced users while giving ProAdvisors a chance to contribute directly to product development.I recommend creating more frequent paid research studies and making participation opportunities easier to find and access.

We add estimated underpayment penalties to our client tax returns. Starting this year, almost every single client is receiving a letter that the penalty being calculated by ProConnect was incorrect and the IRS is refunding a portion of the client's money back to them for the extra penalty that was paid.I've noticed this is happening with other software that we use as well.Has the penalty calculations changed starting in 2025 or something? 

TP is 81 and an owner of rental real estate (an apartment building.)  I amended her 2024 1040 to reflect her "claim" that she has a profit motive in this activity and therefore qualifies for the QBI deduction. She does not meet the RRE safe harbor. However, she can prove that she has a profit motive with facts.  The 1040 X was filed in March. The IRS sent a letter in April stating "we changed your account for 2024 to correct your Qualified Business Income Deduction."  So, I feel like the IRS is going to challenge this deductionHer occupation was listed as Retired on the Original 1040. It would have been better to list it as "RE Investor" or something similar on the 1040. I didn't change it.

Master Sergeant in his 80s.  Receives monthly check from DFAC.  Tax withheld, but all of it refunded.  Not thinking, I fill out a W-4P in February and mail it for him.  I know, old soldiers never retire, they are always subject to recall so they can't remind others not to obey illegal orders.  In April they send it back and tell him it requires a W-4.  So I fill that out, he makes another trip to the office to sign it, I check the "Exempt" box.  Now they have sent that one back, saying he should not have filled out marital status.  (He's married; she has no income.).  Sure enough, the W-4 instructions say to fill out just name and SSN.   I give up.  We'll try again next year.  And maybe avoid the Exempt box, so a new one doesn't have to be filed every year.  Live and learn.  Thank you for your service.  

 A recent report from the Treasury Inspector General for Tax Administration: From January 2022 through March 2025, the IRS accepted approximately 116,000 e-file Provider applications. The IRS performs suitability checks on applicants for the e-file Program. However, we found that programming errors, procedural updates, and unaddressed suitability issues contributed to the approval of potentially ineligible applicants. We reviewed a statistical sample of 138 Responsible Officials associated with accepted applications and found that 14 had suitability issues that were not addressed: 8 had tax compliance issues (i.e., they either did not file a tax return for one or more tax periods, did not pay a tax debt, or did not establish an installment agreement to pay a debt owed). 5 had a criminal history that the IRS had not researched and addressed, or their criminal history was not reviewed because there was no fingerprint data on file. 1 applicant’s citizenship was not verified. During t

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How do I allocate the two - W-2 incomes so that the non NYC w-2 is not included on Form NYC-1127 calculation. And how do I get form 1127.2 

 I had a consistent price increase of 1.0559% since 2016 - and for 2026 renewal they want to increase it to 1.4869 - which is an 8.12 X higher increase compared to the last 9 years...

I have a client that contributed to his Roth IRA for 12 years after he retired so he has excess contributions. He had no earned income during that time.  The investment company fixed 2025 and 2026 but what do I do to fix 2014-2024?

I'm wondering if someone can help me make sure I submit a form 56 to the correct address.  The trust is in MA, however, the home where the decendent lived has already been sold and the trustee taking care of the returns is in OK.  The last 6 months of her life, the decendent lived with her daughter, and her daughter thought she had to change her mom's address with the agencies.  So now, even though the trust is still a MA trust, the address for any mail, including to the trustee is in OK.  Do I mail the form 56 to Kansas City or to Ogden?  The other sibling lives in a different state as well so changing the address at this point doesn't really help, and I just want to get these forms submitted and off my desk.

Is anyone else experiencing a rash of notices where the IRS is reducing or eliminating the underpayment penalty calculated with Lacerte? I have quite a few clients and some are not happy that they paid it in when they didn't have to. Of course I called Lacerte and they said "no one else has reported any issues" but I just don't believe I'm the only one. I believe this is a calculation error in our software. 

How is the basis calculated when selling a book of business as the only asset?

Hi,I am looking to potentially make this switch. The price is almost a triple jump which there's no way I can pass it all to clients, but maybe there's other efficiency benefits that may outweigh this cost. Looking to hear from others that made the switch or other proconnect users in general. Manual entry of the brokerage 1099s is very time consuming for example. It seems with proconnect this would be imported? Is this accurate or does it require a lot of review on your end. Other pros/consThank you!

Paper 1040-X (for 2023) mailed to Austin:  February 10 Notice 21-B and Refund Check mailed by IRS:  April 10. Tax decrease of about $19,000 and interest of about $2,100.  Error on original return was made by a CPA who didn't ask enough questions to determine basis of real estate sold (inherited in 2020, but used 2004 purchase price).  

The Percentage (up to 85%) of Social Security that is taxable is locked in by "provisional income" before the NOL is applied.  The NOL only reduces overall taxable income, not the portion of Social Security Benefits considered taxable. Is this correct? If it is, Intuit's taxable Social Security Benefits is incorrect.

About the auctioneer with a high school diploma who became IRS commissioner?

Hello community I hope you all had a good tax season.  I have a question that I am sure some of you have had the opportunity to experience.I prepared a 1041 return for my client and it had to be mailed in because one of the beneficiaries was missing their social security number.  My client mailed in the federal and Arizona 1041's by priority mail and she did not keep the tracking slip to see when the returns arrived to the government.Yesterday I called Arizona and they told me they received the return.  I called the IRS and they said that I had no authority for them to talk to me.  I checked the box to have the IRS discuss the return with me.  Could this be because my client mailed in the returns around 3-1-26 and it is only 8 weeks ago and they may need some more time to record mailed in returns?  The IRS website said it takes 6 to 8 weeks for mailed in returns to record on the IRS computer system.  Perhaps I should give them 2 more weeks and then ca

I am trying to understand how different firms choose between Lacerte Tax, ProConnect Tax, and ProSeries Tax depending on their workflow and client base.From what I know, each tool seems to be designed for slightly different use cases. For example, Lacerte Tax is often considered better for handling more complex returns and larger firms, while ProConnect Tax is fully cloud-based and offers more flexibility. ProSeries Tax seems more straightforward and commonly used by smaller practices.I am curious how others are making this decision in real scenarios:Do you choose based on return complexity or firm size?How important is cloud access vs desktop workflow for your team?Have you switched between these tools, and what influenced that decision?Would really appreciate hearing real-world experiences.

I'm just getting into researching the November 2025 Kwong v United States decision by the U.S. Court of Claims, involving penalties and interest assessed during the Covid disaster-declaration period that ran from 1/20/20 through 7/10/23 including a 60-day extension period.  Protective claims for refunds should be filed, for amounts already paid, by July 10 of this year.  I don't have that many clients who paid that much in penalties and interest, but this also may include even ES penalty.   There are a number of sources with information on this case, many of which are not particularly helpful.  This is from one of them: Who is eligible for a Kwong refund? Eligibility under Kwong is broader than many taxpayers initially assumed: Individuals and Entities: Includes all individuals, businesses, and nonprofits with obligations due between Jan. 20, 2020, and Jul. 10, 2023. Geographic Scope: Because COVID-19 was a nationwide disaste

I’m trying to understand where manual follow-up is still consuming the most time for firms during tax season.For teams working inside the Intuit ecosystem today, what still requires too much human chasing?Examples:- requesting missing client documents- following up on unanswered client questions- keeping status visible across the team- making sure client responses stay tied to the right return, issue, or transactionI’m less interested in broad “AI for accounting” ideas and more interested in the actual point where operational drag starts.If you’ve found a better way to handle one of these, I’d be interested in what changed most:Would appreciate practical examples from firms that have improved this.

Hello I hope everyone is well. I was wondering if there are CPA firms that use the Lacerte Advanced module with unlimited business and state returns. Wondering how you like it and how the pricing is for the module? Thank You Steve