Talking with TaxSpeaker: Video 84 (1.28.20)
1. I have a follow up question on due diligence for new customers. Would a passport by itself be acceptable? It’s my understanding we have to provide our social security card and birth certificate to the Department of State in order to get a passport.
2. I have a question regarding a Qualified Charitable Distribution. Taxpayer wants to make a QCD from her IRA to her church. She will be 70 ½ in November 2020 so she is not required to take RMD until 2022. IRC Section 408(d)(8)(B) states that the QCD is made on or after the date that the individual has attained age 70 ½. Would you take the literal interpretation that this person must wait until November 2020 to make the QCD or can it be made in the year that she attains age 70 ½?
3. I have a LLC taxed as a sub s corporation with 2 members. One member is retiring. I know I liquidate 1/2 of the triple A account. How do I show this on the 1120S? If I do it as a distribution, they will have unequal distributions. Do I show it in other reductions and write liquidating distribution? I know I mark his K-1 as final. Help.
4. If an employer makes all the contributions to an employee's Roth 401k, can that money ever be taxed coming out of the 401k some day, say as a rollover to a Roth IRA or as a withdrawal by the employee under age 59 1/2?
5. How do you recommend reporting a 1099-R received by a client with Code 7 and IRA box checked and it should have been Code “G” ? Payer is uncooperative at this point. The client has no RMD requirement. Thanks.
6. We live in a state that gives a credit for 529 contributions. If I open a 529 with myself as the beneficiary can I get my state credit and use my 529 plan to pay $10000 of student loans?
7. Would a medical student in residency or on a fellowship be able to be reimbursed for room and board from a 529 plan (apprenticeship)?
8. If you have not retired, are you required to take the RMD from your IRA? I know this is the case regarding distributions from 401(k) and 403(b).
9. I’m confused on how HSA contributions are allocated. Both my wife and I are 55 and older. We have HSA qualified health insurance--family coverage. The health insurance policy is in my name. I know I can contribute $8,000 for 2019. My question is my wife’s $1,000 contribution; does she have to open up a HSA account or can her contribution go into my account?
10. We received a few new W-4’s from business clients where the employee marks the “Married Filing Jointly” box, doesn’t do the multiple jobs worksheet, and then signs the W-4 so we have no indication if the spouse works as well. As payroll preparers, what is your recommendation for setting up the employee for payroll withholdings without the knowledge of a two income household? What is your recommendation for follow up with the client (employer)?
11. For the 2019 tax year (2020 filing season) the “shared responsibility Payment” is no longer being charged to taxpayers that do not have qualified health insurance. Does Bob think we should continue to have the client sign the ACA Letter that Bob suggested we have in our files?
12. A fisherman sells his fishing boat but retains the fishing permit which allows the owner to catch a certain amount of fish in its fishing sector. Now the company leases those permits (mostly through a broker) and collects lease income for those permits. Is the income subject to self-employment tax? Since the owner spends very little time on leasing the permits, would this be considered passive income? Thank you!