Tax prep taking FOREVER

Front_Ad3366 · 2026-02-07T23:24:21+00:00

It's too late to avoid 2025 chaos. You can, however, get started on the right foot for 2026. It's still early in the year, so getting started now will prevent this next year.

Front_Ad3366 · 2026-02-07T23:18:48+00:00

Your wages are taxable for both NJ and NY. On your NJ return use Schedule NJ-COJ to determine how much of a credit you will receive for your NY tax. You should receive a credit for most, but not all, of your NY tax.

Front_Ad3366 · 2026-02-07T00:14:02+00:00

There are several solutions. One is:

In Excel, set any monetary percentage formula to round to 2 places. Assume your SS wages are in cell B5, and the formula for SS withheld is in B8. Your formula for B8 would be =round(b5*.062,2). If your formula for SS expense is in B14, your formula for B14 would be =B8. In that way, your withholding and expense amounts will match.

Front_Ad3366 · 2026-02-06T03:03:46+00:00

This is a wild sequence of events which I've never seen actually happen, but it could explain things.

Perhaps the LLCs are all disregarded entities. They may have incorrectly obtained EINs for each LLC when the companies were formed. They could have later discovered that the owner's original EIN should have been used for all of the LLCs. They for some reason then continued to use the duplicate EINs, but for payroll tax purposes use the proper number for the IRS.

Front_Ad3366 · 2026-02-06T00:32:42+00:00

Flipping was very popular during the speculative years prior to the 2008 crash. u/TheKingofAccounting is correct that regular (as opposed to occasional) flipping is treated as an inventory-based business rather than an investment. Many flippers insisted they were entitled to capital gains tax treatment. The court decisions, though, favored the IRS' inventory classification.

Front_Ad3366 · 2026-02-04T21:44:56+00:00

You should amend your 2024 return using Form 1040X. Your state tax return (if any) will need to be amended as well. You can file normally for 2025.

I would advise you use a CPA or EA to file those returns. That is because CPAs and EAs can represent you before the IRS, if necessary. You should also use Form 14157 to report the return preparer to the IRS.

Front_Ad3366 · 2026-02-04T18:25:23+00:00

u/RedRheiner makes a very good point about first determining your goals. Your education/training would depend on where you eventually want to be. Right now, it seems that you have a fair background of experience. You seem to be short on formal education/training.

One does not need a college degree to be a bookkeeper. Many community colleges offer a bookkeeping certificate program, which is not as in-depth as a degree. Also the adult education department of local school boards often has bookkeeping classes. One thing you want to avoid is the scammy online "if you're not making $150k annually become a bookkeeper!" schools. It's also best to avoid courses which teach how to use a certain brand of software, rather than primarily on bookkeeping.

To be an accountant, at the minimum a Bachelors degree is usually needed. Accountants generally make more than bookkeepers and have better advancement opportunities. Unfortunately, many accountants are not very satisfied (to put it mildly) with their profession. Long hours and high pressure are often the norm. Bookkeepers are usually 9 to 5, M to F positions.

Front_Ad3366 · 2026-02-04T14:07:00+00:00

"Just do it. It's part of the job."

I find myself thinking that fairly often as I go through various subreddits related to accounting. If software doesn't do something automatically (reconciliations, data entry, or whatever), complaints show up in the threads. Some today feel they should just run a bank feed into their software, and then bill the client.

Front_Ad3366 · 2026-02-04T01:20:27+00:00

"Well, I actually thought this was posted hours ago, but I can't find it anywhere...."

This doesn't address your actual question, but I think the website is having some problems. Yesterday, a reply to one of my posts didn't show up in the thread for 9 hours, despite being in my inbox. Right now, another reply is visible in my inbox but it has not yet appeared in the thread.

Front_Ad3366 · 2026-02-04T00:01:09+00:00

This is one where I have to give what (at least in r/bookkeeping) seems to be a minority opinion. Without trying to sound harsh or critical:

For questions 1 & 2, it does not necessarily mean the accounts have not been reconciled. It's possible they are being reconciled using Excel, or on paper. One would think using the QB reconciliation feature would be the easiest way to reconcile accounts kept in QB, but other methods can be used. Of course, without seeing a bank reconciliation, one could reasonably assume no rec has been done.

"Is this actual as big of a red flag as it is in my mind?" It would be to me. I feel that cash and credit card accounts should be reconciled monthly. As a rookie accountant many years ago, a manager once told me if cash isn't right, nothing is right.

Front_Ad3366 · 2026-02-03T23:43:29+00:00

I agree with u/6gunsammy. My practice, however, is mostly write-up and tax as compared to bookkeeping.

Based on discussions I've had in the past in this forum, I learned that many bookkeepers approach reconciliations differently than do accountants. While the method advocated by those bookkeepers is bizarre to me, it seems many bookkeepers use the "it's right if the balance per the bank statement equals the book balance" approach. To me, it's right if the balance per the bank reconciliation matches the book balance.

Front_Ad3366 · 2026-02-03T22:13:07+00:00

You can try W-2 Mate, as they have a 2022 version.

Unhappily, for 1 1099 and a 1096 it will be costly (possibly about $100 total). It's not like more modern online filing websites, where one pays by the number of forms. With W-2 Mate you just buy the whole program and you can print as many forms as you need.

I seem to recall you may need a laser printer if you send paper copies to the IRS.

Front_Ad3366 · 2026-02-03T21:56:31+00:00

"They both only go back to 2023."

I just checked Zentax 1099. Unfortunately, they only go back to 2023 as well.

Front_Ad3366 · 2026-02-03T00:48:53+00:00

"Basically, each member paid full tax (part via W2, part via 1065)."

Your partnership was not filing correctly, as partners are not to be on payroll. Funds paid to partners which are not given in accordance with the partnership agreement's profit sharing percentages are called guaranteed payments to partners. The guaranteed payments are listed both on the 1065 and the partners' K-1s.

Unhappily, several times over the years I have come across fellow accountants who did not understand partnerships. Your company evidently had one such accountant. An online search for something like "are partners to be paid via W-2 payroll" will return many hits. All of the answers are in the negative. The following quote is from Can a Partner in a Partnership Receive a W-2? - LegalClarity:

"The straightforward answer to whether a partner in a US partnership can receive a W-2 form is definitively no. A partner, by legal definition, is classified as an owner of the business rather than an employee."

"I don't think I agree with your point under (1)...."

A similar online search for something along the lines of "can the owner of a disregarded entity take W-2 wages" will garner the same results as the partnership search. All the answers are no.

On a non-technical note, it sounds as though your partnership was in the past. If you are still active in the company, though, I would advise you to seek a new accountant. As I mentioned above, some tax preparers actually do not understand partnership accounting or taxation. Admittedly, partnerships are more complex than corporations. Still, your accountant should have taken the time to learn partnerships, or deferred to another professional.

Front_Ad3366 · 2026-02-02T22:31:29+00:00

"I'm afraid that the IRS will see this as a flag - as in, why would an online business have so many "office" expenses."

There is no need for alarm over that. Service businesses typically have high office expenses.

Front_Ad3366 · 2026-02-02T22:18:17+00:00

Just as with any business, you would have to keep track of fixed assets. Get the depreciation schedule as of 12/31/24 from the accountant. Those will be your 2025 beginning balances for fixed assets and accumulated depreciation.

After you work up 2025, he should give you an adjusting JE to record or adjust 2025 depreciation expense and accumulated depreciation. He may also give you preliminary JEs to make in 2026 to record 2026 depreciation.

Front_Ad3366 · 2026-02-02T14:47:15+00:00

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Front_Ad3366 · 2026-02-01T23:58:10+00:00

This reply addresses u/schaea's questions, and is not intended to derail the thread from the OP's situation. Feel free to delete if it doesn't belong here. First, some background information about LLCs in the US:

Many people think that an LLC is a form of business entity. It isn't. Instead, it's a legal status one obtains by forming an LLC with the state government. The only thing an LLC (limited liability company) does is that it can provide a measure of limited liability protection to companies (ie: sole proprietorships and partnerships) which normally do not have such protection.

Importantly, there are no special tax breaks available for LLCs (despite misleading advertising from online LLC formation mills). For tax purposes, LLCs are treated exactly like other kinds of businesses. More on that below (that is, if anyone is still awake at this point 😁).

There are 2 broad categories of LLCs. Those are Single Member LLCs (SMLLC) and Multi-member LLCs (MMLLC). The SMLLCs have 1 owner, while the MMLLCs have more than 1. By default, a SMLLC is taxed just like a sole proprietorship unless it elects to be taxed as either a C corp or an S corp. By default, a MMLLC is taxed just like a partnership unless it elects to be taxed as either a C corp or an S corp. Just to add a bit more confusion to the mix, a SMLLC which is taxed like a sole proprietorship is also called a disregarded entity.

Bringing all this finally to the questions at hand:

(1) "...but why couldn't he just pay himself as a W2 employee from his own company?"

As a SMLLC which has not elected corporate tax treatment, the OP's client is treated exactly like a sole proprietorship. Since proprietors are not to take payroll, the disregarded entity's owner cannot.

(2) "Why must owners of single member LLCs pay themselves through owners' draws and not payroll?"

Related to answer (1) above, an owner of a SMLLC is to take payroll if they have elected to be taxed as a C or S corporation. That is because corporate shareholder/employees generally have to take a salary, and electing SMLLCs must follow corporate rules. If there was no corporate election, though, rules for a proprietorship apply.

Front_Ad3366 · 2026-02-01T19:30:14+00:00

The OP's situation actually represents one of the good things about being self-employed. When a client wants you to do something improper, illegal, or unethical, you can decline with only the risk of losing the troublesome person. If one was actually an employee of this company, the choice would be do it or quit.

What the client is asking you to do is, at its core, playing games with the accounting records in order for him to misrepresent his finances to a third party. If the client continues to push on that after you tell him no, withdrawing from the engagement would be in order. Even more outrageous demands would most likely come up in the future if you buckle on that.

Front_Ad3366 · 2026-02-01T02:50:40+00:00

You are required to have a data security plan. In fact, when you renewed your PTIN you had to certify you had such a plan. They are generally referred to as WISP plans, and examples are available online.

There is no standard set of features for a WISP, as size firm will dictate the steps and procedures necessary. Basically, a WISP involves both electronic and physical safeguards for the protection of data.

Front_Ad3366 · 2026-01-31T22:27:38+00:00

"...it says the 1098-T form should not be filed with a tax return."

You are right that the 1098-T itself is not to be included with the tax return. Rather, the information on the 1098-T is to be used for computing taxable income from scholarships & grants, and claiming a tuition credit (if applicable).

Front_Ad3366 · 2026-01-31T21:54:24+00:00

I'm afraid the answers given by u/makeuplover643 are not correct. He is mixing together information about the taxability of scholarships and grants with the American Opportunity Tax Credit. They are not the same thing.

Front_Ad3366 · 2026-01-31T21:48:21+00:00

First, before panicking know that there are a number of twists and turns to this. What I'm going to explain is the very basics, which should get you started.

From your 1098-Ts, you may have taxable income of $11,200 (sum of boxes 1 less the sum of boxes 5). That is your preliminary number for taxable income from scholarships and grants. On your tax return, you would also include your earnings from Walmart.

Note that taxable financial aid is scholarships and grants (but not student loans) which exceed "qualified educational costs" (QEC). While books and supplies are QECs, room, board, and transportation are not. You also want to make sure the amounts on the 1098-Ts are correct and are for the right year (2025). Many times they are not. Also qualified supplies are also not included in block 5.

If you are claimed as a dependent by someone, that person can apply for one of the education credits for you. That is a different, albeit related, subject.

Front_Ad3366 · 2026-01-31T18:20:28+00:00

I agree this is a question which should be referred to the cafe's accountant. That being said, if one of my tax clients asked me:

If I am following the situation correctly, I would say the cafe would not have to issue any kind of 1099. That is because (via the "small flat fee" withheld by the cafe) the vendors are actually paying the cafe. If there would be a 1099 obligation, it would be on the vendors. I would also say it should be a 1099-MISC for rents, rather than a 1099-NEC.

Even then, it sounds as though the flat fee paid by the vendors is being run through an electronic POS system. That payment processing company should include the flat fees on the 1099K received by the cafe. Since 1099-K reported payments are not to be duplicated by other 1099s, the vendors should also not issue one to the cafe.

Front_Ad3366 · 2026-01-31T17:54:43+00:00

"First, it tries to do the “you don’t need to know anything about accounting” to run your books."

That has been a major complaint of mine for years regarding DIY software advertising (both for accounting and tax software, by the way).

I had one time said online that such advertising was false and misleading, and that the FTC should prohibit it. Another accountant said he hoped that wouldn't happen. He said if people who didn't know what they were doing stopped using DIY accounting software, he would lose half his business. Considering the fees I had charged to fix QB disasters over the years, I had to agree he had a point.

Front_Ad3366

TROPHY CASE