Discussion:Devil of a time with DPAD Proseries Software
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Discussion Forum Index --> Business Growth Community --> Devil of a time with DPAD Proseries Software
| 28 February 2007 | |
| I have had a day full of issues with ProSeries Professional...online with tech support all morning and got my 1120S clients to finally show up...something about a "patch"...anyways.
I completed the worksheet in Pro for the DPAI for a client, but the information is not showing on my K-1....I filled out the 8903 worksheet, but nothing is flowing through to my k1...any ideas here? | |
| 28 February 2007 | |
| I will check Kevin, but I hate overrides...I want it to calculate, but somehow this information is not going to the s/h for his 1040.... | |
| February 28, 2007 | |
| They don't flow thru like you expect. They go to box 12 with some codes, and when you import the K1 into the 1040, you have to open the K1 supplemental and fill in the info off the 8903 info out of the corp. It's easier to do than 'splain. | |
| 28 February 2007 | |
| K-1 Box 12 should have 2 codes and 2 amounts. Code P should show the DPGR. Code Q should show QPAI (subject to the wage limitation). I'm using Proseries, and the 8903 worksheet works like a charm. | |
| 28 February 2007 | |
| Well...the K-1 shows code q and a statement but no deduction...perhaps I am entering it incorrectly in the system.... | |
| March 1, 2007 | |
| It doesn't work that way. You have to open the K1 supplemental or the 8903 worksheet, can't recall which, and manually enter the figures... | |
| 1 March 2007 | |
| Yup - this year has been the worse with Pro Series Professional. the NOl form K-1's (from an estate ) are not carrying forward to line 21 . I do not like to over ride either, but in this case I had to do it. even the tech support guy said" well, you know more than I do here - you need to help me out " LOL Ah what the heck! | |
| 1 March 2007 | |
| Sandy, I am looking at one I did recently. The amounts flowed correctly. Before worrying about the amounts flowing to the K-1, make sure the amounts are correctly calculating on the 8903 worksheet. My worksheet shows lines 5, 6, 8, 10, 11 & 14 all in black (calculated amounts) and the other lines in blue (input amounts). You may be missing an entry on that worksheet which is causing the calculation to come up with zero. | |
| March 1, 2007 | |
| OK, JD, tomorrow at high noon, you'll be conducting the class. I've got a couple more of these left, and it would be nice to figure out how it's supposed to work. | |
| 1 March 2007 | |
| This sucks....thank you J....I have been fighting with this for hours....I did one by hand and I got the correct numbers; now in the software it is driving me nuts!!
In Proseries I entered the top portion of the worksheet that it qualifies for the simplified method...it is drawing from 1120S page one the gross income and the cogs amounts. It then calculated line 1, I entered the total expenses per the p&l on line 4, it then calculated lines 5, 6 & 8; I entered the amount in line 9 as net income from the S corp...or should I put in here the agi from the sole shareholder? It then calculated the lines 10 & 11. I entered the w-2 wages on line 13 and it calculated that to show on the k-1. Now my K-1 shows as code P the amount from line 10 and code Q from line 14.... Hell if I know if this is correct....I don't think I like this game :) | |
| March 1, 2007 | |
| I'm not sure if this will help, but try unchecking the simplified method. Also, did you check the box for "If the amounts entered above qualify for the DPA, select this box" in the General Info Smart Worksheet? | |
| March 1, 2007 | |
| And I'm assuming that you're completing the 8903 in the 1120S? I do check the simplified method box... | |
| 1 March 2007 | |
| Yes, if I uncheck the simplied method, I get an asterisk on my K1...I then check the simplified method box and click that it qualifies for the DPA....but one more question and then I will call this a day on this one...."this is not even a paying client...my bf return"....but he is my guinea pig...hehe
Second, when I put in the deductions for QPAE, do I include the total expenses or just what is actually deductible by the S corp? I have some Sec 179 items on the k-1 and 1/2 of M&E...do I add these back to arrive at the total deductions or do I back them out for the book/tax reconciliation? When I get this one, then I can go on to other paying clients returns to make sure it calculates correctly. Most of my S corps have this deduction coming as they are in the business of renovating homes at a high dollar value :) thank you sooo much you guys!! | |
| March 1, 2007 | |
| My understanding is that the amounts you enter on the 8903 are the amounts for the entity you are preparing the return for--and not from the individual's return.
Have to go...client is walking in. | |
| March 1, 2007 | |
| Sandy, I'm totally confused about what you're doing. From the beginning. In the 1120S, open the 8903/worksheet and get it filled in. Then, in the 1040, import the k1 and then open either the k1 supplemental or the 8903 worksheet, and fill in the same numbers that were in the corp. You're done, it'll flow. And I hope that's right. | |
| March 1, 2007 | |
| And from my understanding, the W-2 wages you enter are the wages reported on the entity's return you are preparing. In the case of an 1120-S, enter the wages from Box 12, Code Q, on line 13, Form 8903.
From line 9, Form 8903, right-click and click About Income Limitation to see what is not entered on this line for S-Corps. | |
| March 1, 2007 | |
| Deductions for QPAE are cost of goods sold, as far as I know, and not the other deductions, such as Sec 179, etc. But the instructions for line 4 are not completely clear to me yet in relation to other deductions or losses ratably apportioned to DPGR. | |
| 1 March 2007 | |
| You have to allocate "other expenses" also - which means overhead etc. If all receipts are DPGR, then all overhead gets allocated, either SBSOM or SDM methods. | |
| 1 March 2007 | |
| Deb...I wish I had researched this last year as well. Per my S corp calculations, the deduction is 3% of the NI of the corp which would be 729.00. Per my 1040 for the S/h the deduction is 621.00. I will let it ride for right now and do a simple 1040 and 990 and come back to it later. Thank you again!! | |
| 1 March 2007 | |
| You also have to reduce officers' comp for amount attributable to management of corporate affairs. | |
| 1 March 2007 | |
| Kevin...send me your notes on your workshop??? I think I understand this....it is complicated, but is easy if I don't try to make it difficult...All revenue is qpa if that is the only type of business they are involved in and less than 5% is anything but...so all expenses...ALL whether non deductible by the S corp or not are expenses allocated against that, then w-2 wages for the officer...6% of those are reported in box 12 of the K-1....
Then on the 1040, the K-1 flowed through; albeit not the same amount that I calculated, but when I step back perhaps it will fall out. Am I understanding this stinking deduction correctly? | |
| March 1, 2007 | |
| I'm not sure if you are or not, since I know I don't understand it completely, either. Wonder why they made it so complicated, if the deduction is simply 3% of taxable income? Why do we have to figure out what deductions should be included on the 8903? | |
| 1 March 2007 | |
| AGREED Deb...when I was doing tax planning for clients who could take the deduction, I calculated 3% of the NI and then just assumed that was correct...now we have to calculate not only the NI from the activity, but w-2 wages and AGI as well....
If it did not mean a difference in taxes for my clients, I would just forget it....but when you save 1K or more in taxable income, they don't want to hear that I don't have a clue about this deduction...now in 07 and forward, it increases...if I get it right (hail Mary) I will help my clients and myself....I hate to not understand something...arrgghh | |
| 1 March 2007 | |
| Sandy, another instructor wrote the text for that workshop, so I don't have the copyright privileges to send it to you. :(
But, your thinking is correct (except I haven't considered the non-deductible items like 50% of meals yet). Deb - it is only easy for our smaller clients whose total receipts are ALL DPGR. For the multi-national corp, it is a nightmare. But, they will get a HUGE deduction anyway. AND, the % is going up to 6% next year and ultimately 9% so it will become even more important for our size clients. Sandy - don't give up. Nobody attending my sessions had a clue either, but by the end of the 4 hours they all said "Hey, this isn't so difficult and more of my clients qualify than I thought." | |
| March 1, 2007 | |
| All mine are ALL DPGR, so take my comments in account. Nothing complicated about it in that case. | |
| 1 March 2007 | |
| That is the quagmire Kevin....the non deductible M&E are we taking the book net income or tax net income? I guess it is 6 of one/1/2 dozen of the other since the S/H picks up the remaining 1/2 as non deductible, but the instructions did not give me a clue...thanks again. | |
| March 1, 2007 | |
| Kevin -
The few I have are smaller clients, with total receipts being all DPGR (assuming that, in order to qualify for this deduction, the company must have paid wages). The concrete business is the largest I have, with about $755K in sales. My understanding is I only show the COGS under deductions and all of the wages. But I'm sure I'm still missing something in regards to the other deductions part of it. I'll be working on their return in the next couple of days, since I just got their Raymond James year-end statement today. | |
| 2 March 2007 | |
| Deb, when all receipts are DPGR (or the de-minimus under 5% is not), if you are using the Small Business Simplified Overall Method (SBSOM), then all the COGS plus ALL other business expenses will go on line 4 of the 8903. If you are using the Simplified Deduction Method (SDM, but don't let the name fool you it is more complicated than the SBSOM), then you would use lines 2, 3, and 4 of Form 8903.
Does this help? | |
| March 2, 2007 | |
| Yes, it does, thanks. It helped to get rid of the intimidation I had of line 4, except line 4 states to enter the other deductions and doesn't say to include COGS. (It's like when I learned how to build computers in 1990, most of it was self-explanatory, but it really helped when a friend told me that the side of the cables with red lines hook into pin 1.)
Now I'm only uncertain about whether you include wages in line 4 or not. In the corp return I'm experimenting with (the design business that doesn't qualify), the deduction is still 3% of wages, so adding in the other expenses, in addition to COGS, didn't change the deduction. I realize the credit is the smaller of 3% of the QPAI or 3% of the AGI (for individuals, estates, or trusts) or 3% of taxable income (for other taxpayers) figured without the DPAD, so it seems like the form could have been set up to just figure 3% of taxable income when all income and expenses qualify for this. | |
| 2 March 2007 | |
| wages are an expense so they would be included in line 4 under the SBSOM | |
| March 2, 2007 | |
| That was my guess, but having to include it on the other line was what made me wonder about it. Thanks very much, Kevin! | |
| 2 March 2007 | |
| You're welcome. Have you figured out the form yet? If all receipts are DPGR, then line 1 = revenue, line 4 = all costs of business (SBSOM), line 6 = QPAI from this activity = net profit of business (without taking DPAD). EASY! | |
| March 2, 2007 | |
| Yup, I have figured out the form. And you cleared up the last couple of things I wasn't sure about tonight. It is easy, if all income and expenses are QPI and QPE (or whatever the initials are for them), but I can see where it would be a nightmare if they aren't. Thanks! | |
| March 2, 2007 | |
| Well, I am hung up now on where to enter the adjustment for the DPAD on Sch L, Form 1120, but I can probably figure that out eventually when I get back to it. :) | |
| 2 March 2007 | |
| ha ha ha, there is no entry on L, there is no accounting entry - maybe on M1 deduction taken on return not on books, but not balance sheet. It is a pure "BONUS" | |
| March 2, 2007 | |
| I had gone back to the 2005 amended I did earlier today to change it a little (to use simplified and line 4), and that's when I discovered that Sch M-1 was waiting for me to enter the adjustment for the $344 DPAD. Well, that was easy enough! I'm glad to know there's no balance sheet adjustment needed. Thanks for answering all of my questions! What would I do without you? | |
| 2 March 2007 | |
| WOOHOOO!!!! My 1120S and my 1040 match!!! I KNEW I COULD DO IT....now on to paying clients; at least I got the hang of it....thank you and maybe by the time the deduction equals 9%; I will have this down pat!! | |
| March 2, 2007 | |
| OK, you're conducting the class now. Break out a beverage. It's 5:00 somewhere... | |
| 2 March 2007 | |
| Yes it is JR; but unfortunately not here...I had to understand this; not just put numbers in and not be able to do it by hand as well. That is my curse...if I don't understand it, the numbers that I get don't mean a hill of beans (or is it a hill of ants) to me....thank you all :) :) | |
