Arizona 140-SBI

No new info: 

The release information on 2021.180 at:  http://prodldfp.proseries.com/pro/2021/readme/readazi.htm says:

Forms

The following forms have not been finalized in this version of ProSeries/Arizona. When you open a form in the program, you might see "DO NOT FILE" in red text in the upper-right corner of the form, and you see the new, non-scrolling Form Status bar at the top of the form. The phrase DO NOT FILE - search "updating forms" for Help appears on the printed copy of the forms that are included in this version of ProSeries/Arizona. If your client's return contains any of the following, do not file that return until ProSeries/Arizona has been updated with a final, approved-for-filing version of each form included in that return:

• Small Business Tax Forms

Again, this means to me that ProSeries is still planning on including it, but has not yet.  When there was similar wording on a previous release, I called Intuit and asked them if I was reading into it too much, but the rep thought that based on this statement they would EVENTUALLY include it.

How does someone benefit?

If the taxpayers AZ taxable income puts them in the 4.5% tax bracket (3.5% surcharge tax plus the 1% income tax since the maximum tax rate is 4.5%), they may be able to take advantage of the 3.5% income tax rate on SBI income.

Since we are talking about it only helping those whose regular income tax bracket is over 3.5%.  but it isn't that "hard" to get into that tax bracket (MFJ with AZ taxable Income > $111,229 or other filing status > $55,615).  If they are already in the 4.17% or 4.5% bracket, then can choose to file the SBI and have their Schedule B, C, E, F (and some D) taxed at only 3.5%.

Whether this form solves a problem that does or does not exist is a political question.  However, the AZ legislation passed this law - and if we as tax professionals don't help our clients pay as little tax as they are legally required to pay - then we aren't doing our job.

Now, I would argue that Intuit also isn't doing their "job" in not even telling us when the form might be available (or specifically telling us that it will not if they choose not to do so).

So where is the form.  It's still not in pro series and today is the 29th.

Sandra Lawes

I read the actual legislation before teaching a class on AZ Updates and I recall it said something about if you elected to use the SBI you had to put all your SBI on it.  I was reading it to kind of see whether someone who had perhaps half Schedule C, and then had Schedule E (maybe rental or S-corp) - and interpreted it that they had to put all of it on SBI or none.  So, no I don't think if someone has mostly self-employment that they can put only up to the 4.17% bracket on the 140, and then the rest on the SBI. 

Thank you.  I am reading this to mean sometime before October 17,2022 these forms will be available and fully functional with the ProSeries 2021 tax program.

I am far from the best CPA that there is but I try to take pride in being honest and straight forward with my clients. Unfortunately, ProSeries makes that difficult from time to time by not being forthcoming with information, or providing conflicting information.  I do not want to yet again be put in a situation with my clients because I relied on ProSeries info which turns out to be incorrect. 

Read the ADOR FAQ's - any overpayment on either 140-SBI or on the 140 - will offset any amount owed on the other one.  The FAQ's came out in April after the court cases killing Prop 208 and validating the new flat rate for 2022.  Of course, when I was filing extensions for SBI clients, we didn't have the FAQ's yet, so I printed an SBI extend form and had the client pay, but that form doesn't exist in ProSeries, so you have to manually enter that on the SBI form.