@Holly Sexton – Hi Holly! I saw your reply.
“@drumkstick you are so right with the salaries thing. The other thing I asked Becker and they said I was right about what I heard. The lecture on page R2-4 says that the contribution can be extended along with the tax return extension – this is not true!”
I read B2-4 as, as long as the taxpayer pays the IRA before April 15, they can take the deduction regardless of an extension. But any IRA payments made after April 15 would be deducted in the following year. I could be wrong though. Find the tax code/law that supports your statement and send it to Becker. If you do win, you should print and frame their response admitting the mistake. Keep me updated!!
“@drumstick the other thing I was questioning on the same simulation question was FICA. (First how can they have FICA taxes if the only salary was to sole proprietor and it's a draw-not really asking, just rolling my eyes and annoyed) They are deducting the whole $2,600 and half should've been taken from the employees portion and not an expense for the sch c.”
Is this in Becker? I haven't seen this Simulation, I'm on R3-M5 currently. You are absolutely right in everything you said regarding self-employment for the owners, the schedule C, etc. Are they trying to trick you or is the deduction in the solution? Is it an employee's or the owner's FICA?
“Becker R2-10 says Tuition and Fees Deduction had not been extended through 12/31/16, but that is not the case, right?”
Congress did not renew the Tuition and Fees Deduction for 2017, but you could use the deduction for Spring 2017 tuition and fees paid in January for your 2016 tax return. The American Opportunity Credit and Lifetime Learning Credit were extended.
https://www.irs.gov/publications/p970/ch06.html
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