Community Q&A
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EA Part 1 Updated
Does a county value assessment make a prepaid property tax deductible?
Not by itself. A value assessment and an assessed tax liability are different facts. A property-value assessment estimates what the property is worth. A property-tax assessment or levy fixes the amount the taxpayer owes under state or local law.
How do I report household wages if I pay the worker's FICA share?
Treat it as a payroll reporting issue, not as a casual reimbursement. If a household employer pays the employee's share of Social Security and Medicare tax from the employer's own funds, the employer may need to include that employee-share payment in income-tax wages.
Can I deduct a home office for months when the payer issued a W-2?
Usually, the W-2 period needs to be analyzed separately from the self-employment period. If the taxpayer is self-employed, a qualifying home office may be connected to Schedule C income.
How do I depreciate a former home after it becomes a rental?
Start with the conversion date and the property components. When a former personal residence becomes a rental, the taxpayer generally needs to separate the personal-use period from the rental-use period, land from building.
When should I review wage records in an identity-theft tax case?
Review them as soon as the facts suggest the liability may be built on wages or earnings that do not belong to the taxpayer. Some identity-theft cases are about false earnings records that drove the tax assessment in the first place.
Can the IRS keep offsetting my refund while an identity-theft case is pending?
They can continue showing offset activity until the disputed liability is actually corrected, which is why procedure matters so much here. An identity-theft case does not instantly erase the bad account history.
How do I escalate a large refund claim that has stalled for months?
First confirm whether the case is merely slow or whether the IRS is still waiting for something. For a stalled large refund claim, sort the file: verify the return was accepted, list every notice date, confirm responses.
What should I do after an IRS refund is reversed as a processing error?
Start with the account record, not the wording of the notice. If the IRS says a refund was issued because of a processing error, the main questions are what year the payment relates to and whether the taxpayer was actually entitled.
What should a representative prepare before calling the practitioner line?
Prepare the call like a short case conference. At minimum, the representative should have authorization status, taxpayer identifying details, tax years involved, notice numbers and dates, transcript highlights.
When can a practitioner use an IRS secure upload link?
Use it when the IRS provides that response channel for the case and the representative has the authority and documents needed to respond. The upload channel is not a substitute for authorization.
Does a catch-up estimated payment fix missed quarterly payments?
It can reduce the balance, but it does not automatically erase the timing issue. For estimated tax, the taxpayer should ask what tax year the payment is for, whether it is designated as an estimated payment, when the payment was made.
How should I verify an unexpected IRS direct deposit?
Start by matching the deposit to the IRS account record. Do not rely only on the bank description. Pull the likely account transcript, match the transaction date and amount, identify the tax year and posting reason.
How do I handle adjusted basis when Form 1099-B looks wrong?
Find the source of the basis before changing the return. For employer stock, automatic sales, and discounted purchase plans, the broker's basis may not tell the whole story. A supplemental employer-stock statement may show compensation already included in wages.
Why can Form 1099-B proceeds exceed the cash I received?
Because Form 1099-B often reports gross sale proceeds, while the bank deposit may reflect later cash movement. You need a bridge from gross proceeds to net cash via trade confirmations, settlement dates, fees, withholding, and transfers.
Should I report a home sale if Form 1099-S was issued?
Often yes, because the form reports proceeds even if the final taxable gain may be zero. The return should show the sale, adjusted basis, and any exclusion or adjustment that explains why the proceeds do or do not create taxable gain.
Why is my return rejected for a missing Form 1095-A?
Because IRS systems may have marketplace coverage data that the return has not reconciled. If a taxpayer had marketplace coverage or advance premium tax credit, the return may need the Form 1095-A figures and premium tax credit reconciliation.
Does a child's business income go on the parents' return?
Usually no for earned business income. A dependent child earned income is generally the child income, even if the parents still claim the child as a dependent. If a dependent is required to file and cannot file personally, a parent or guardian may need to file for the dependent.
When does barter create taxable income?
Barter can create taxable income when a taxpayer receives goods or services in exchange for goods or services. If taxable, the amount is generally measured by the fair market value of what the taxpayer receives. Business barter is the cleanest exam case.
Do cash sales count as taxable income?
Yes. Cash sales are income when they are receipts from a business or service activity. The fact that no card processor or payer sends a tax form does not create an exclusion. The exam habit is to separate gross receipts from deductions.
Is a business write-off the same as getting reimbursed?
No. A deduction usually reduces taxable income. It is not the same as the government repaying the cost. The business expenses may reduce taxable profit if they are ordinary, necessary, and substantiated. A valid write-off needs a tax rule and evidence.
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