2021 ULTRATAX PROFORMA & CLIENT ORGANIZER, v.2021.1.0 User Bulletin ...

2021 ULTRATAX PROFORMA & CLIENT ORGANIZER, v.2021.1.0 User Bulletin 1040US-21.1.0: Initial Release

November 22, 2021

This release contains a fully functional federal 1040 program, which is used to proforma client data and produce client organizers.

Many of the forms included in this release are preliminary or prior year versions and are subject to change. As a result, final testing of all federal calculations has not been completed. Therefore, we recommend that, beyond proforma processing and producing client organizers, you do not file actual tax returns with this release. The December release will include fully tested calculations to match all available final government forms used for filing tax returns.

We also recommend that you do not customize or proforma prior-year customized UltraTax/1040 form print collations until you receive the next UltraTax/1040 software update, which is scheduled for release the week of December 13th. The December release of UltraTax/1040 will include more final government forms, which may cause UltraTax CS? to override any form print collation customizations you may complete prior to the December release.

CHANGES

This release includes the following changes. The Economic Impact Payment (EIP) data entry section of Screen Cr located in the Credits folder has

been updated for the third economic impact payment (EIP3) which was part of the American Rescue Plan Act, enacted on March 11, 2021. By default, the Rebate Recovery Worksheet will calculate unless the Setup > 1040 Individual > Federal > Other Return Options > Return Presentation tab Default Recovery Rebate Worksheet to only calculate when EIP data exists is marked. This option will automatically proforma to 2021 UltraTax when selected in 2020 UltraTax. The American Rescue Plan Act of 2021 made significant changes to the Child Tax Credit. Schedule 8812 is now the Credits for Qualifying Children and Other Dependents instead of the

Additional Child Tax Credit. Schedule 8812, Credits for Qualifying Children and Other Dependents contains three pages

instead of one. As of the release, the IRS has not released final or draft form instructions for Schedule 8812,

Credits for Qualifying Children and Other Dependents. Schedule SE, Self-Employment Tax, removed page 2, which contained the Maximum Deferral of Self-

Employment Tax Payments. Form 2210, page 2, Short Method, is obsolete for 2021 and has been removed from UltraTax CS. Screen 965, Deferred Foreign Income has been removed since it is obsolete. Screen TPW-EIP3, Tax Projection ? EIP3/Rebate Recovery Credit has been removed since it is

obsolete.

UltraTax CS Copyright 1991-2022 by Thomson Reuters. All rights reserved.

Page 1

Proforma Changes

Proforma of 100% Charitable Contribution carryovers (for regular/AMT) to new Screen CO 5-Year Charitable Contribution Carryover fields

Proforma of deferred Schedule H and Schedule SE Taxes to Screen info. An UltraTax FYI diagnostic has been added to make sure 1st deferred payment was made and to remind of upcoming 2nd payment.

A projected amount from 2020 UltraTax/1040 will proforma to the Projected EIP3 from 2020 TPW amount and tax year field on Screen Cr if the 2020 TPW ? EIP 3 and Recovery Rebate Credit Worksheet projected an EIP3 amount for 2021. This field is non-enterable and can be used for comparing to the amount reported by the client. You can use the amount that proforma's by marking Projected EIP3 was amount received by taxpayer(s) use in credit calculation field after confirming with your client the amounts are the same. There are many reasons why the projected EIP3 amount may differ from the actual EIP3 amount received, such as you requested the 2020 Tax Projection Worksheet to use a year different than the year used by the IRS, etc.

A blank Subject to self-employment tax field on Screen 1099NEC in the Income input folder in 2020 will proforma as code 2 (2 = No) in 2021 for Screen(s) 1099NEC that proforma.

Proforma of AMT Net operating loss carryover when both carryover before 2018 and after 2018 and the amount of pre-2018 carryover was completely used on the 2020 return did not consider the amount used when the post-2018 carryover to 2021 was calculated. Review returns with both carryover periods to adjust the post-2018 carryover if necessary, by the pre-2018 used. To identify clients with possible adjustments, use 2020 UltraTax Data Mining search Net Operating Loss (NOL) clients.

The IRS has released a 2021 draft version of a redesigned and expanded Form 7202, Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals. New input fields were added to Screen 7202 in the Credits folder. Information from the 2020 Form 7202 may be required for Parts 1 and 2. Per the 2020 Form 7202 form instructions, the net self-employment income reported on Form 7202 via the Form 7202 Net Self-employment Earnings Worksheet may have differed from the net self-employment income reported on Schedule SE; therefore, the 2020 Form 7202, line 7 and/or line 26 amount will need to be entered by the preparer. UltraTax/1040 will trigger a critical diagnostic indicating to enter the 2020 Form 7202 net self-employment income, if any.

Proforma of client documents All 2020 UltraTax/1040 client documents are available for proforma. Capability to edit client documents will be available on a future update. The Required Minimum Distribution (TL) custom paragraph was not modified in 2020 UltraTax/1040;

therefore, the custom paragraph is available for proforma from 2020 UltraTax/1040 to 2021 UltraTax/1040. The CARES Act temporarily waived required minimum distributions for 2020. The following elections have been removed for 2021 and will not proforma from the prior year. 2018 NOL Carryback 2019 NOL Carryback

Proforma of state data When you receive and install state programs for a later release, UltraTax CS automatically proformas the prior-year UltraTax/1040 state data as you process the return for each client.

Note: If your federal data has not already been proforma'd, UltraTax CS proformas the federal and state data simultaneously for clients you have selected for proforma processing.

UltraTax CS Copyright 1991-2022 by Thomson Reuters. All rights reserved.

Page 2

ENHANCEMENTS TO 2021 ULTRATAX/1040

There are many enhancements in 2021 UltraTax/1040, including those listed below. Form 461, Excess business loss. CARES Act postponed code section 461 until 2021. New Form 5471, Schedule G-1 New Form 7203, S Corporation Shareholder Stock and Debt Basis Limitation New Form 8915-F, Qualified Disaster Retirement Plan Distributions and Repayments. For tax years

beginning after January 1, 2021, Form 8915-E, Qualified 2020 Disaster Retirement Plan Distributions and Repayments, is replaced by Form 8915-F, Qualified Disaster Retirement Plan Distributions and Repayments. A new Screen 8915F20 has been added to 2021 UltraTax/1040 to report 2020 qualified disaster distributions. New Form 9000, Alternative Media Preference, has been added to UltraTax/1040. New fields, Written communication preference for IRS ? Taxpayer and Spouse, were added to Screen Contact within the 1040 folder to accommodate Form 9000. New QCD Report - The SECURE Act requires the Qualified Charitable Distributions (QCD) exclusion to be reduced by current year IRA contributions. Net Operating Loss converted back to farm loss only. EIP 3 payment reconciliation calculation added to the Recovery Rebate Worksheet. Under the American Rescue Plan Act, the IRS was required to establish a program to make monthly advance payments of the Child Tax Credit (CTC). These payments started in July 2021 and will run through December 2021. To report these monthly payments in UltraTax/1040, a new input screen, AdvCTC, was added in the Credits folder. Clients should refer to Letter 6419 received from the IRS or the Child Tax Credit Update Portal () for the appropriate amounts to enter on Screen AdvCTC. Added a new 100% Limitation Carryover section to the Charitable Contribution Carryover Worksheets (for regular/AMT). New UltraTax diagnostic has been added to alert preparers that the client may be required to pay Section 453A additional tax on deferred income from installment sales. Box 1 income on Screen 1099NEC will now default to be included as self-employment income subject to self-employment tax when entered through the Income input folder. New Box 14, Other codes on Screen W2 for reporting the amount of qualified sick and family leave wages paid to employees for leave taken in 2021. New UltraTax diagnostic was added to alert preparers that using the Look-back election for the Earned Income Credit may be more beneficial.

Infrastructure Investment and Jobs Act (IIJA)

Congress passed the Infrastructure Investment and Jobs Act, H.R. 3684, on November 5, 2021. President Biden signed the bill into law on November 15, 2021. A few highlights of the tax provisions in the Act include an extension of the Employee Retention Credit to qualifying wages up to and including September 30, 2021, clarification of what qualifies for a federal disaster for due date purposes, changes to Private Activity Bonds relating to the Carbon Sequestration Credit, excise tax changes, and Cryptocurrency reporting by the issuers of the cryptocurrency starting in 2023. Provisions impacting tax year 2021 will be included on a future update(s) as the IRS determines the nature and scope of reporting requirements including updated forms, schema changes, and business rules.

ELECTRONIC FILING

IRS Opening Date for 1040 Electronic Filing

UltraTax CS Copyright 1991-2022 by Thomson Reuters. All rights reserved.

Page 3

As of the date of this bulletin, the IRS has not announced an opening date. At the present time, the IRS is continuing to update its programming and processing systems for 2022 amidst the coronavirus pandemic. The IRS anticipates that it will not be able to announce a filing season start date until later in the calendar year. The IRS will continue to work closely with the nation's tax professionals and software community as preparations continue for the 2022 tax filing season. Thomson Reuters is working closely with the IRS and will announce the opening day through a product news announcement on the UltraTax CS home page as soon as the information becomes available.

Please note that the UltraTax/1040 Electronic Filing utility will be included in a future update of UltraTax/1040. Refer to User Bulletin 1040US-21.1.0, Electronic Filing Setup Procedures for more information on setup procedures and other information you may need to address prior to electronically filing 1040 returns with UltraTax CS.

ENHANCEMENTS TO 2021 ULTRATAX ELECTRONIC FILING

UltraTax/1040 Electronic Filing has the following new features. For 2021 UltraTax, 1040 federal and states, new capability has been added to allow preparers to:

print filing instructions that indicate to the taxpayer that the return will be electronically filed print Form 8879 (or Form 8453) print bank product applications review and clear ELF Critical diagnostics and check the e-file for error checking prior to the creation of the electronic file. E-file creation

will be available when the UltraTax 1040 Electronic Filing is released in January (TBD) 2022. New Custom Paragraph around e-file for clients to add to their Safe Senders list in their

email programs. Some e-file acceptance emails are being flagged as spam and this will help alleviate missed communications to the clients. Form 1040-X electronic filing support for e-signature (Form 8879). Support all 0's (zeroes) in the Employee's SSN (if different from Screen 1040) field on Screen W-2 for taxpayers who received a W-2 with all 0's or Applied for as the SSN. If late filing penalties and interest are included in the amount due on the tax return, Form 8879, Line 5, Amount you owe will now report the amount due including the penalties and interest. In prior years the Form 8879, Line 5, Amount you owe line reported the amount due from the tax return without including any late filing penalties and interest. Form 7203 ? S Corporation Shareholder Stock and Debt Basis Limitations will be included with e-file as a PDF attachment in accordance with IRS guidance.

USING ULTRATAX ESIGNATURE

Refer to User Bulletin 1040US-21.1.0, eSignature Processing Procedures for more information and processing steps for the eSignature feature.

USING ULTRATAX/1040 CLIENT ORGANIZER

The 2021 UltraTax/1040 Client Organizer is a powerful program that allows you to create professional tax organizer packages for your clients. For details, see the 1040 Client Organizer Help Center topic on the Help & How-To Center.

ENHANCEMENTS TO ULTRATAX/1040 CLIENT ORGANIZER

The following enhancements were added to UltraTax/1040 Client Organizer.

UltraTax CS Copyright 1991-2022 by Thomson Reuters. All rights reserved.

Page 4

 Enhanced printing of Preparer Due Diligence Checklist client document which will now print when applicable for the client based on prior year tax return information. Mark box Print Preparer Due Diligence Checklist if applicable on the Setup > 1040 Individual > Organizer tab in the other return options group box.

Questionnaire, Net Client greeting, and Cover Letter have been updated with new information, including advanced Child Tax Credit payments and unemployment compensation exclusion.

Added a new 100% Limitation Carryover section (for regular/AMT) to the Organizer Carryover Information Form

Proforma of 100% Charitable Contribution carryovers (for regular/AMT) to new Org Screen CO 5Year Charitable Contribution Carryover fields.

Proforma on the UltraTax projected amount from the 2020 TPW ? EIP 3 and Recovery Rebate Credit Worksheet (based on 2020 by default) into 2021 UltraTax/1040. The taxpayer will have the option to confirm the receipt of this projected amount versus the actual amount from the IRS.

Under the American Rescue Plan Act, the IRS was required to establish a program to make monthly advance payments of the Child Tax Credit (CTC). These payments started in July 2021 and will run through December 2021. To report these monthly payments in the UltraTax/1040 client organizer, a new organizer input screen, AdvCTC, was added in the Credits folder. In addition, a new organizer form, Advanced Child Tax Credit Payments, was added. If all the following conditions are met, the organizer Advanced Child Tax Payments form will be included in the organizer by default: The 2020 client was accessed on 2020.3.12 or later. The Child Tax Credit Advance Payment Worksheet was calculated. The Opt out of the CTC Advance Payment field on Screen EIC in 2020 UltraTax/1040 was blank or 2 - No.

New Organizer Proforma option to proforma prior year organizer up-front pricing on Screen Letter. Mark box Proforma invoice amount for up-front pricing (Screen Letter) on the Setup > 1040 Individual > Organizer tab in the other return options group box. You may also enter a $ or % in the Adjustment to prior year up-front pricing fields, which will automatically adjust the prior year amount by a dollar amount or percentage.

Important UltraTax/1040 Client Organizer processing tips To use the Lite Client Organizer package for paper or the electronic versions (email PDF and web) of

Client Organizer, choose Setup > 1040 Individual, click the Organizer tab, click the Options button, and click the desired option to enable this feature. If your firm uses the Client Organizer Checklist option for Organizer presentation to your clients, you will need the updated 2021 Checklist information for the CS Default checklist, as well as any as userdefined custom checklists. Prior to processing organizers, click the Modify button in the Organizer presentation group box on the Setup > 1040 Individual > Organizer tab. On the Options dialog, click the Checklist button and then Restore CS Default. Note that restoring the CS default content will overwrite any changes you may have previously made. Modify CS default content if desired, as well as any user defined content such as year-specific information from 2020. When you use this Checklist presentation, the client will receive a list of source documents and tax information based on data that proforma'd from 2020 UltraTax/1040. Since the Checklist relies on proforma'd data and contains only text, no amounts (current- or prior-year) will print on the checklist. To learn more, refer to the Client Organizer Checklist topic on the Help & How-To Center. If your firm does not use zip numbers "[ ]" and "+" control total markers on the printed Client Organizer packages, use the options in the Setup > Office Configuration > Print Options tab to remove zip numbers "[ ]" and "+" control total markers prior to printing the Client Organizer packages.

UltraTax CS Copyright 1991-2022 by Thomson Reuters. All rights reserved.

Page 5

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download