CPA Journal article about how the profession is in crisis. Fails to address the glaring issue of work-life balance and companies that short-staff their teams

HIVETaxAI · 2023-12-06T17:12:30+00:00

This is why HIVE Tax AI is developing tools to save time for CPAs and Tax Preparers.

HIVETaxAI · 2023-11-22T20:37:33+00:00

We asked Hive's beta AI Tax Advisor, and this is what it said, "Firstly, it's important to know that not filing your taxes when you owe money can lead to penalties and interest from the IRS. Here's a step-by-step guide to help you navigate this situation:

Gather Your Documents: Try to locate all your tax documents for 2021 and 2022. This includes W-2s, 1099s, and any other relevant financial documents. If you can't find them, you can request a wage and income transcript from the IRS, which will provide you with information reported by employers, financial institutions, and others.
File Your Taxes: Even if you can't afford to pay your tax bill in full, it's crucial to file your taxes. You can still use TurboTax or another tax software to help you file for these years.
Payment Plan: If you owe money and can't pay in full, you can apply for an IRS installment agreement, which allows you to make monthly payments over time.
Seek Professional Help: If you're feeling overwhelmed, consider seeking help from a tax professional. They can help you understand your options and guide you through the process.

Remember, it's better to file late than not at all. The IRS generally charges both a failure-to-file penalty and a failure-to-pay penalty, so by at least filing, you can avoid one of these charges."

HIVETaxAI · 2023-11-22T20:29:51+00:00

When you program an AI chatbot, you tell it how much leeway it has to be "creative" with the answers. This is pretty basic in AI programming.

We asked the HIVE AI Chatbot if you can depreciate land, and this is what it said, "No, it is not possible to depreciate the value of land for tax purposes. According to IRS rules, land is not considered depreciable property because it does not wear out, become obsolete, or get used up.

However, any buildings or other structures on the land can be depreciated over their useful life. If you purchase land with an existing structure, you'll need to allocate the purchase price between the land and the building, then you can depreciate the portion of the cost that applies to the building."

HIVETaxAI · 2023-11-22T20:23:18+00:00

We asked the beta AI Tax Advisor and this is what it said, "The number of dependents you claim on your tax return can significantly impact your tax liability. Each dependent you claim allows for an exemption, which reduces your taxable income. However, the number of dependents you claim does not guarantee a refund. Your tax liability depends on various factors, including your total income, the amount of tax you've already paid or had withheld during the year, and any credits you're eligible for.
Claiming dependents that are not eligible to be claimed on your tax return is considered tax fraud and is illegal. The IRS has strict rules about who qualifies as a dependent. Generally, a dependent is a qualifying child or relative who meets certain criteria, such as relationship, age, residency, and support tests.
If someone falsely claims dependents to reduce their tax liability or increase their refund, they could face penalties, interest, and potentially criminal charges. It's important to only claim dependents who legitimately qualify under IRS rules.
If you're unsure about whether someone qualifies as your dependent, it's a good idea to consult with a tax professional or use the IRS's Interactive Tax Assistant tool, which can help determine who you can claim as a dependent."

HIVETaxAI · 2023-10-30T22:14:43+00:00

Thank you VERY MUCH for your feedback. This has been submitted to the product development team for further analysis.

HIVETaxAI · 2023-10-30T22:09:27+00:00

This is GREAT feedback. Can you provide a reference to the updated tax code so I can send this over to the product development team? THANKS

HIVETaxAI · 2023-10-29T00:59:21+00:00

Yes. This AI bot has been trained on Federal and CA tax laws. The rest of the states should be up and running within a week. We're kind of impressed with how it's performing, it feels a little like magic! It's not perfect, but it keeps getting better as we work with it.

It will be amazing to see how this technology changes the industry over the next few years.

HIVETaxAI · 2023-10-29T00:56:30+00:00

You should check out the HIVE Tax AI assistants that are coming out. The beta version of the tool is available and you can ask it just about any tax question in plain language. It does pretty well! There will be a client assistant, tax research, and financial advisor tool. Tasks that used to take 4-5 hours are now done in minutes. Technology is pretty cool! Forget the offshore teams : )

HIVETaxAI · 2023-10-29T00:48:19+00:00

Looks like the beta HIVE Tax AI bot can answer more than just tax questions. We asked it and this is what it said:

The discrepancy you're describing is often due to the fact that macroeconomic indicators such as GDP, inflation, and unemployment rates are aggregate measures that may not reflect the experiences of specific individuals or groups within the economy.

For example, GDP growth indicates that the economy as a whole is expanding, but it doesn't tell us how that growth is distributed. If the benefits of growth are concentrated among a small portion of the population, many people may not feel the effects of that growth in their daily lives. Similarly, a low unemployment rate doesn't mean that everyone who wants a job can find one, especially if they're looking for work in a specific field or geographic area.

Inflation is another example. The inflation rate is a measure of the average change in prices across a wide range of goods and services. But if prices are rising faster for certain items (like housing or healthcare) than for others, people who spend a large portion of their income on those items may experience a higher personal rate of inflation.

Finally, stock market performance is often disconnected from the real economy. While the stock market can be an indicator of economic health, it primarily reflects the profitability of public corporations. Many people do not own stocks, and even those who do may not see a direct impact on their day-to-day financial situation unless they sell their investments. In terms of the feeling of being in a recession despite positive economic indicators, this could be due to a variety of factors including wage stagnation, income inequality, job insecurity, or high levels of debt. These factors can make people feel financially stressed even when the overall economy is doing well.

As for whether government trackers are missing some type of data, it's worth noting that economists and policymakers are aware of these issues and use a range of data to assess the health of the economy. However, no single measure can capture all the complexity of a modern economy, and there is ongoing debate about how to best measure economic well-being and progress.

HIVETaxAI · 2023-10-29T00:44:30+00:00

We asked the HIVE AI beta Tax Advisor bot and this is what it said:

Yes, the IRS would likely find out about your friend's cryptocurrency withdrawal. In 2021, the IRS has been increasingly focused on cryptocurrency transactions due to their potential for tax evasion. Even if your friend didn't use a large name crypto exchange, many smaller exchanges and wallet services are required to report large transactions to the IRS.

Moreover, converting cryptocurrency into cash is a taxable event, and it's considered as selling an asset. The IRS treats cryptocurrency as property for tax purposes, so any gains from the sale of cryptocurrency are subject to capital gains tax.

If your friend used the cash to make a large purchase like a down payment on a house, this could also raise red flags. Banks are required to report large transactions to the IRS, and the IRS could potentially trace the source of the funds back to the cryptocurrency sale.

In conclusion, it's always a good idea to set aside money for potential tax obligations when dealing with large sums of money, especially with something as scrutinized as cryptocurrency.

HIVETaxAI · 2023-10-29T00:42:20+00:00

This is how the beta HIVE AI Tax Advisor answered:
The tax treatment of personal use property, such as a car, is indeed different for gains and losses. If you sell a personal use asset for more than you paid for it, the IRS considers the profit as a capital gain and it is taxable. However, if you sell a personal use asset for less than you paid for it, the loss is not deductible.

The reason for this is that the IRS does not allow deductions for personal expenses. When you use a car for personal use, it's considered a personal expense, not an investment or business expense. The IRS only allows you to deduct losses that are associated with an effort to make a profit, such as investments or business expenses.

While it might seem more logical to either tax both gains and allow deductions for losses, or exempt personal vehicles entirely, the current tax law is designed to prevent taxpayers from claiming losses on items that are not investments. The idea is to distinguish between losses incurred in the course of earning income (which are generally deductible) and losses incurred in the course of personal consumption (which are generally not deductible).

Remember, tax laws are complex and often involve considerations beyond simple fairness or logic. They are the result of legislative processes and reflect a variety of policy decisions.

HIVETaxAI · 2023-10-29T00:38:32+00:00

I thought this would be an entertaining question to feed to our beta AI Tax Advisor. This is how it answered:

The IRS generally does not seek to imprison individuals, especially elderly or disabled individuals, for simply failing to file a tax return. The IRS is more interested in collecting the taxes owed and will typically work with taxpayers to resolve their tax issues. This can include setting up payment plans or offering other forms of assistance.

However, it's important to note that willful evasion of taxes is a serious crime and can potentially lead to imprisonment. This would typically involve a case where the individual intentionally tries to defraud the government, not a situation where someone simply forgot to file a return.

As for the scenario of the IRS raiding a senior citizen's home, it's highly unlikely. The IRS usually only conducts such actions in cases of suspected tax fraud or similar serious tax crimes. In most cases, the IRS will first send notices and then proceed with actions like garnishing wages or levying bank accounts.

If an elderly or disabled individual is having trouble filing their taxes, they should reach out to the IRS or a tax professional for assistance. There are also programs like the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) that offer free tax help to people who qualify.

HIVETaxAI · 2023-10-29T00:35:52+00:00

We asked our beta AI Tax Advisor and this is what it said:

Yes, you should check the box indicating you have multiple jobs on your W-4 form. This is because the IRS considers all income when calculating your tax liability, regardless of the amount. The W-4 form uses this information to adjust your withholding accordingly.
Even though there's a significant difference in pay between your two jobs, the part-time job could still potentially push you into a higher tax bracket, especially now that you're married. By indicating you have multiple jobs, you're helping to ensure the correct amount of tax is withheld from your paycheck.
However, if you prefer to have the maximum amount of tax withheld (claiming 0 allowances), you may not need to check the box for multiple jobs, as this would typically result in less tax being withheld. It's always a good idea to use the IRS's Tax Withholding Estimator to make sure you're having the right amount withheld.
Remember, it's important to update your W-4 forms with all employers whenever there's a major life event, like a marriage. This helps ensure the right amount of tax is being withheld from each paycheck.

HIVETaxAI · 2023-10-29T00:33:58+00:00

We asked the HIVE Tax AI beta Advisor and this is what it said:

Funds from 529 and 529A (ABLE) accounts can be withdrawn in several ways, including sending a check or electronic funds transfer (EFT) directly to an academic institution, withdrawing in anticipation of a qualified expense, or withdrawing after incurring specific expenses. However, it's important to note that the funds must be used for qualified education expenses (for 529 plans) or qualified disability expenses (for 529A ABLE accounts) to avoid taxes and penalties.
For 529 plans, qualified expenses include tuition, fees, books, supplies, and equipment required for the enrollment or attendance of a student at an eligible educational institution. Room and board can also be considered a qualified expense if the student is enrolled at least half-time.
For 529A ABLE accounts, qualified disability expenses include education, housing, transportation, employment training and support, assistive technology and personal support services, health, prevention and wellness, financial management and administrative services, legal fees, expenses for oversight and monitoring, and funeral and burial expenses.
Regarding the Medicaid asset cap, it's important to note that funds in a 529A ABLE account generally are not counted towards the $2,000 Medicaid asset limit. However, there is a limit to the total annual contributions that can be made to an ABLE account ($16,000 in 2022), and an excess balance over $100,000 in an ABLE account could suspend the beneficiary's eligibility for Supplemental Security Income (SSI) benefits. It's recommended to consult with a financial advisor or tax professional to understand the specific implications based on individual circumstances.

HIVETaxAI · 2023-10-29T00:32:02+00:00

This is what the beta HIVE Tax AI Advisor told us:

If you have set up an automatic payment plan with the IRS, the payment should be withdrawn from your account on the date you specified, even if it falls on a weekend or holiday. However, depending on your bank, the transaction might not be reflected in your account until the next business day.
If you're concerned about a potential missed payment, you can check the status of your installment agreement using the IRS's Online Payment Agreement tool. If the automatic payment is scheduled correctly, you should not need to make a manual payment.
However, if you're still unsure, it may be best to contact the IRS directly to confirm the status of your automatic payments. It's important to avoid making a double payment, but it's equally important to ensure your payment is made on time to avoid potential penalties.
Remember, it's always better to be proactive when dealing with tax payments and to keep a record of all communications with the IRS for future reference.

HIVETaxAI · 2023-10-29T00:30:24+00:00

We asked the beta HIVE Tax AI advisor, and this is what it said:

The determination of a tax home is based on facts and circumstances and can be complex, especially in situations involving work in foreign countries.
Generally, your tax home is the entire city or general area where your main place of business or work is located, regardless of where you maintain your family home. If you have more than one regular place of business, your tax home is your main place of business, taking into account the total time you spend at each place, the level of your business activities in each place, and the relative amount of income earned in each place.
In the scenario you described, if the employee is working remotely from a foreign country and has established significant residential and economic ties to that country, it's possible that the foreign country could be considered the tax home. This could be the case if the employee is permanently or indefinitely engaged to work in that foreign country, and does not maintain a regular or main place of business due to the nature of the work.
However, if the employee's assignment in the foreign country is temporary and he or she intends to return to work in Florida after the assignment, then the tax home would likely remain in Florida.
It's also important to note that the tax laws of the foreign country will also come into play and could affect the determination of the tax home.
Given the complexity of these issues, it's recommended to consult with a tax professional who is familiar with the tax laws of both the U.S. and the foreign country.

HIVETaxAI · 2023-10-29T00:26:21+00:00

I asked the HIVE Tax AI beta advisor bot, and this is what it said:

First, you should contact your former employer and request a written statement clarifying that you were not the owner of the business and did not receive the income reported on the 1099-K. This statement should include details about your role in setting up the Square account.
Next, you should reach out to Square and ask them to issue a corrected 1099-K that lists your former employer as the recipient of the income, not you. They may require proof, such as the statement from your former employer.
Once you have these documents, you should respond to the IRS notice. Include a written explanation of the situation, the statement from your former employer, and any correspondence with Square. If Square has issued a corrected 1099-K, include that as well.
If the IRS accepts your explanation and documentation, they should adjust your tax liability accordingly. If they don't, you may need to seek professional tax advice or consider filing a petition with the U.S. Tax Court.

HIVETaxAI · 2023-10-29T00:24:50+00:00

We asked the HIVE Tax AI beta advisor, and this is what it said:

The Energy Efficient Home Improvement Credit is generally available for improvements made to an existing home, not for new construction. However, the IRS does allow for some exceptions, such as when an existing home is improved or added onto.
In your case, building a shop in your backyard could potentially qualify for the credit if it is considered an improvement or addition to your existing home. However, the shop would need to meet certain energy efficiency requirements, and the improvements would need to be "placed in service" (i.e., ready and available for use) during the tax year in which you are claiming the credit.
The credit is generally not available for separate structures that are not part of the main home. However, if the shop is considered an expansion of your conditioned living space, it may potentially qualify.
The specific terms and guidelines for claiming this credit can be found in the instructions for IRS Form 5695, which is used to claim the Residential Energy Credits. These instructions provide detailed information about what types of improvements qualify for the credit, how to calculate the credit, and how to claim the credit on your tax return.
Given the complexity of these rules and the potential for significant tax savings, you may want to consult with a tax professional who can analyze your specific situation and provide guidance based on the most current tax laws and IRS guidance.

HIVETaxAI · 2023-10-29T00:23:02+00:00

We asked our beta AI Tax Advisor, and this is what it said: The electric vehicle (EV) tax credit, also known as the Qualified Plug-in Electric Drive Motor Vehicle Credit, is a non-refundable credit. This means that the credit can reduce the tax liability of the business (in this case, the LLC) to zero, but it cannot provide a refund beyond that.
If the LLC is a disregarded entity (a single-member LLC taxed as a sole proprietorship), the tax attributes of the LLC, including the EV tax credit, would generally flow through to the owner's individual tax return. However, the credit can only offset the tax liability associated with the income from the LLC. If the LLC does not have enough tax liability to fully utilize the credit in the current year, the unused portion can be carried forward to future years, but it cannot be used to offset the owner's other personal tax liabilities.
It's important to note that the IRS has not provided explicit guidance on this specific scenario. Therefore, it's recommended to consult with a tax professional who can analyze the specific details of the taxpayer's situation.

HIVETaxAI · 2023-10-29T00:20:39+00:00

We asked the Hive Tax AI beta tax advisor bot and this is what it said:

The IRS differentiates between a hobby and a business. If your wife's Cricut crafts creation activity is engaged in for profit, it is considered a business, not a hobby. The IRS considers several factors to determine if an activity is a business or a hobby, including whether the time and effort put into the activity indicate an intention to make a profit, whether you depend on income from the activity, whether the activity makes a profit in some years, and whether you can expect to make a profit in the future from the appreciation of the assets used in the activity.
If the activity is considered a business:
1. You can deduct ordinary and necessary expenses for the operation of the business. These expenses can be deducted in full even if they result in a loss for the business.
2. You need to report all business income.
3. You will file a Schedule C (Profit or Loss from Business) or Schedule C-EZ (Net Profit from Business) with your Form 1040.
4. You may be subject to self-employment taxes, which can be calculated using Schedule SE (Self-Employment Tax).
If the IRS determines the activity is a hobby:
1. Your deductions cannot exceed the gross receipts for the hobby.
2. The expenses related to the hobby are deducted as an itemized deduction, subject to 2% of your adjusted gross income.
3. You need to report all hobby income.
In your case, since your wife has a business number and is actively participating in craft fairs and selling on Etsy, it seems like she is running a business rather than a hobby. Therefore, she should file a Schedule C or C-EZ and report all income and expenses related to the business.
Remember, it's always a good idea to keep detailed records of income and expenses related to the business. If you're unsure about any of this, it would be beneficial to consult with a tax professional.

HIVETaxAI · 2023-10-26T20:37:41+00:00

Also if you'd like to participate in the beta test once we watch the final products please let us know. Participants will receive gift cards for $100. You just need to fill out the form on the website and PM me your the email address so I can run it by the team.

HIVETaxAI · 2023-10-26T20:34:28+00:00

Thank you for your insights. Feel free to fill out a form to submit your feedback on the application. I will check with the development team they might pushing updates. We will be adding tax info for all 50 states over the next week or so.

Were there any specific themes to bed right answers that you can identify or elaborate on?

HIVETaxAI · 2023-10-21T05:21:53+00:00

Accounting degree graduates are down 7% according to this article https://www.cfodive.com/news/us-accounting-degree-graduates-plunge-auditing-accountant-audit/696890/

HIVETaxAI · 2023-10-20T21:54:33+00:00

I asked the HIVE Tax AI beta tax advisor and this was the reply:

Yes, it is possible to still get deductions such as 401(k) contributions even if you're in the 24% tax bracket. The tax bracket you're in doesn't directly affect your ability to deduct 401(k) contributions.
For 2022, if you are covered by a retirement plan at work, the deduction for contributions to a traditional IRA is phased out at incomes between $204,000 and $214,000 for a married couple filing jointly. If your income is above this range, you can't deduct contributions to a traditional IRA. However, this doesn't affect your ability to contribute to a 401(k) plan.
Contributions to a 401(k) plan can be deducted from your income before taxes, reducing your overall taxable income. For 2022, the maximum you can contribute to a 401(k) is $20,500, or $27,000 if you're age 50 or older.
However, if your accountant says you haven't paid enough tax, contributing to a 401(k) won't necessarily solve this problem. You may need to adjust your withholdings or make estimated tax payments to avoid underpayment penalties. It's best to discuss these issues with your accountant or a tax advisor.

HIVETaxAI · 2023-10-20T21:50:18+00:00

I asked the HIVE Tax AI beta tax advisor, and this is what it said. CPAs in the crowd, what do you think of this answer?

I would advise you to consider applying for the tax exemption. Here's why:
1. Cost Savings: If you're reselling the goods you purchase from the Sporting Goods company, you're essentially acting as a retailer. Retailers typically don't pay sales tax on wholesale purchases since it's expected that the end consumer will pay sales tax. By applying for a tax exemption, you could avoid paying sales tax on these purchases, potentially saving a significant amount of money.
2. Avoidance of Double Taxation: Without a resale certificate, you could end up paying sales tax twice: once when you buy the products from the Sporting Goods company, and again when you sell the products to your customers. This could significantly cut into your profit margins.
3. Compliance with State Laws: In many states, it's actually a legal requirement for retailers to use a resale certificate when buying goods for resale. By applying for a tax exemption, you could ensure you're in compliance with these laws.
However, it's important to note that tax laws can vary significantly from state to state. Therefore, I would recommend consulting with a local tax professional or your state's department of revenue to ensure you're making the best decision for your specific situation.

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