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Several weeks ago, my 2002 XP machine refused to boot. That is no longer my main computer but it has a lot of information on it and several useful programs that I still use. In fact, it has every program and files for ATX/Saber on it back through 1999. I was told everything from failed hard drive to dead battery to bad files. Due to some extremely sad circumstances and other issues, my IT friend couldn't get to me until last night. My greatest pain was not being able to access my labels and business cards on Print Shop 5. I had them all saved on a jump drive, but that version of Print Shop was not compatible with Win 7 and the new Print Shop Program that I purchased was not compatible with those old files. What to do? He finally got to me last night. He manually booted into startup. He then changed the order of the boot up drives so that it would boot to the CD. He inserted his disk for the backup/restore program we use and was able to restore the entire system intact from a recent external HD backup that I had made. I look across the room at that lit-up monitor and just smile. Even if the hard drive had failed, he could have done the same thing because I had a good current backup in the safe. As it was, it turned out to be a corrupt boot file. Please, please always remember to back up your files. On the computers I use every day, I have alternating drives for complete system backups and , as I have stated often enough, I export each and every file to a jump drive that lives in my machine all day. Every time I make a major change to a return, I do another export. In all of my years, I have never had this happen, but I had a good teacher and I was a good student. You will never know the pain until it happens to you; nor experience the joy of seeing your system come back to life. The program that we use is a simple little free program called EaseUS ToDo Backup and is installed and updated on every one of my machines. This is a happy day.

I just noticed I made it to 1002 posts, I've graduated!

Got up early this morning and dropped a 15lb brisket on the grill. Supper is served at 1:30 today. Thanks to the weatherman for giving me a break in the much needed rain to get my grillin' on. Last night I made a 4 layer German Chocolate cake for my wife and son, who celebrate birthdays this week. Today is a good day. Tom Hollister, CA

Not to stray too far from the original post, but with all the exempt companies (those with less than 50 employees) out there, there is no way, as Obamacare is currently written, that the DD code can be used for a source document for any tax law. It is just not required to be calculated by all employers at this time. And it does not break out the level of plan that the employee has selected, so it cannot be used for determining whether the plan is "affordable". Also, it is an option to include dental coverage in the DD number. You don't have to, but you can. For example, I can select any of 12 plans at my day job. Only 1 of those plans is considered "affordable" for every employee in the company. It meets the minimum requirements under the law and is priced "affordably" according to our insurance broker who did the analysis. Almost no one in our company selected that policy. We also include dental insurance in the DD number calculation on the W2. Our company does not contribute to the dental plan, the employees pick up 100% of that cost under a salary reduction agreement. If you don't know this as the preparer for anyone in our company, how can you work with the number? What I am saying is that the DD code does not, will not, and can not give us any information that will be useful in calculating the penalty tax next year. Maybe they will tweek the law, but not in time for next tax season, as payroll is already going out for next year's returns. That DD number cannot be made useful for any year before 2015 tax returns, but most likely, not until 2017, to give all employers time to comply. Tom Hollister, CA

Three powerful, inspirational, and touching short films by Wacoal. Beautifully shot too. One is 6 minutes, the other two are 7 minutes each: http://www.collective-evolution.com/2014/02/07/3-touching-short-films-that-we-all-need-to-watch/

KC is right on the nose!!

Only if the 9 year old has enough other income to make the SS benefit taxable.

Most taxpayers hear that they can get their money out of a plan under the "hardship rules" and think that applies to the tax law as well. I don't know how we got to the place where people don't know the difference between advice given by a 401K plan administrator about a plan and tax advice. It costs them so much money for the things they do under the advice of the wrong expert. Tom Hollister, CA

Yeah, that will last about 6 months, usually!

If it is coded DD, none of it is deductible. http://www.irs.gov/uac/Form-W-2-Reporting-of-Employer-Sponsored-Health-Coverage

Very easy to explain.... This is a "tax free" benefit....you aren't paying tax. It's on the W-2 for informational purposes only. Since you don't pay tax.....you cannot deduct it, You can only deduct things from your taxable income that you have paid tax on.

Dear new maybe client, Yes we've only communicated by email and you never gave me your phone number. And I'm sorry you didn't read on my website that I work from home and have critters, one of which might be in the yard, so when you came to my address, you were not sure you were at the right place. I booked out two hours for your appointment since you have a complex tax matter, and I usually don't start on other work when I'm expecting an appointment, especially when my inside doggie doorbell goes off a few times and I go to the door to see if you've arrived. If you'd actually gotten out of your car you might have noticed me at the door. Or if you'd brought my phone number and used the cell phone you keep only for emergencies, we could have not wasted a bunch of time on both ends.

Dear Out-of-Town Client, Thank you for leaving three messages yesterday saying you would be here today (Friday). I wasn't really clear on that Monday when you said you would be "in town" Friday, and I said that your return would be ready to pick up Friday. Thank you also that in message # 2 you advised that your cellular telephone would be in the console while you are en route should I need to reach you. Finally, thank you for updating that to "cup holder" in message # 3. Keep in touch.

There's an app for that!

OK, you quoted the list of exceptions, so what is your question? Exception 5, "not in excess of the amount allowable as a medical expense deduction for the year, whether or not the distributee itemizes" means just what it says. ALL of it is subject to tax, of course. The only part the exception protects is the penalty for early withdrawal. And that is not as inclusive as clients often assume The way I calculate it is by doing a Sch A even if the client is not itemizing, to determine how much of his medical costs would be DEDUCTIBLE on the A if he did itemize. That amount then goes on the 5329 Line 2 with Code 05. Keep the Sch A in your notes, even if not used in the return, to back up your amount you excluded on the 5329.

Under return manager, preferences, then choose zoom. It will become global for every return you open. There are many things under preferences that can save time. Check out each tab closely.

Marilyn, I had a newly married couple years ago in the same situation, and I found myself being their "Mom" and hugged and consoled them because they owed $116.00 on their 1040. I had to fight myself really hard not to offer to pay their balance...not because I didn't advise them properly on how to fill out their W-4's because they were a first year client. It was just that the situation was so brutally painful for them. Fast forward to present day....same couple's income has grown by 15 times what it was back then, but you guessed it, they never have owed since that first year and they always call me before they make any financial decisions that will affect their income taxes. The maturity as you spoke of has definitely increased by at least 15 times as well.

I have never trusted the backup on this or any other program. I do my own system backups periodically and at the same time export every return to a jump drive as I am working on it. I am going to start another thread to explain when and why this is so important.

Same here, though my Client letter explains where they can go to check on status of both Federal and State refunds. Saves me a lot of time as they used to call and foolish me would drop what I was doing and go check it for them. Now, I just tell them to read the directions in their letter.

JB, Although stated above, just wanted to clarify and note the importance of the taxpayer obtaining the statement from the charitable organization (churches included) PRIOR TO FILING HIS/HER TAX RETURN or ON OR BEFORE THE TAX RETURN DUE DATE (4-15-14 for 2013 returns), WHICHEVER DATE IS EARLIER. In one court case, the taxpayer was able to get the necessary statement he needed specifically for his audit....HOWEVER, the audit took place, of course, after the due date of filing his original return. As the church dated the statement (for his audit) on the date they prepared it, the statement wasn't allowed for the purposes of his audit, thus the taxpayer had to pay the income taxes on the donation(s) to the church as a result of his audit. I feel the court case took everyone by surprise....a hard lesson for the taxpayer, but a very beneficial lesson for tax professionals as prior to the court case, I wouldn't have been concerned that the taxpayer obtained the statement a couple of years later for his audit...especially from a church. Just another example of why the code needs to be overhauled! Common sense is nowhere to be found in the code any longer. Take care, Cathy

No. This flexibility is what makes 1031 such a great tool. You can either downsize or increase your investment as much as you desire. You can combine or split investments. You can take up to six months to decide if you even want an exchange, and longer to decide you don't want one. Basis is pretty straightforward when there is no new investment. The $30K adjusted basis just rolls over into the new property, and the SAME depreciation continues as previously scheduled for the remaining life. (That assumes both properties are depreciable over the same life. You may have to make adjustments for the percentage of land value, whether it's residential or not, etc.)

If the son meets the requirement to file a return, has taxable income, had any withholding he wants back, has any carryforwards to track, etc.

Yes and Yes. Wait till June to change. We have 4 systems with SSD at the firm. Big improvement in ALL areas.

I just noticed that it works even better for me. When I create an efile file, my state automatically goes to a "held" position so when I am ready to transmit, I only have the "created" ones on top. I love this feature this year because last year it didn't work properly.

I agree with Jack's earlier statement. The code DD is to get us ready for what will happen when we prepare the 2014 tax return and have to figure the penalty or not for the affordable care act. This figure will be important to us next year but has no effect on us this year.

The last year that the refund cycle chart was available was in 2011 The Where's My Refund link provided by the IRS does give some limited information. The date it gives for the refund is only an approximation. The pop up box has been there for years and is only a warning that the person is using an official government site. It says this, and shouldn't scare clients off from using it: THIS U.S. GOVERNMENT SYSTEM IS FOR AUTHORIZED USE ONLY! Use of this system constitutes consent to monitoring, interception, recording, reading, copying or capturing by authorized personnel of all activities. There is no right to privacy in this system. Unauthorized use of this system is prohibited and subject to criminal and civil penalties, including all penalties applicable to willful unauthorized access (UNAX) or inspection of taxpayer records (under 18 U.S.C. 1030 and 26 U.S.C. 7213A and 26 U.S.C. 7431). The site says to wait at least 24 hours after the return has been e-filed (or 4 weeks if paper filed) before checking and that it is only updated once a day, so checking more than once a day won't yield different information. When your clients ask you, or later calls you about their refund, direct them to the IRS site and the link to Where's My Refund because it's the only place to get any information about it. This afternoon I helped my sister check on the status of her refund. The site showed the date her e-filed return was received, that the refund was approved, and the approximate date that it might be direct deposited which happened to be next Tuesday. My state has a similar link on the Division of Revenue's website to check on the status of refunds. I'm not sure where you are located, so be sure to check your state's official site so that you may direct clients there.

OMG YES! I'd contact the pastor, too, and explain the importance of re-sending EVERYONE a new letter containing the required wording. It is not optional.

I am with Jack on this one. The church may not know the rules as a lot of the bookkeepers and treasurers are volunteers. The receipt must have the wording if the donation is in excess of $250. You said donations, indicating multiple giving events. If none of the amounts were in excess of $250, and the taxpayer has the cancelled checks, they will be all right. But if there are amounts over $250, the taxpayer must have a receipt in their possession at the time of the filing of the return. If they don't have a proper receipt, no deduction. Tom Hollister, CA

Not so fast Rich. That is the total amount of the cost of the policy, both the employer and employee portions. Whether it is pre tax or post tax will take some digging, but the amount in box 12 is not exclusively the employer paid portion. In general, most employers will have a salary reduction arraignment in place and the employee portion is pre-tax, but not always. A copy of the check stub and working your way back through the math on the SS taxes wilthheld can usually find the answer for you. Tom Hollister, CA

That's up to the bank.

Have the client bring you the final paycheck stub. Dollars to donuts it shows the employee's share of health insurance, deducted pre-tax.

Was having the same problem. Just got off the phone with ATX customer service - we found a solution: 1.) In the business return go to the K1 form, next go to input. 2.) For the first shareholder use the COPY function to copy his identifying number (social/FEIN). Not cut, just copy 3.) While the identifying number is still highlighted press "restore" on the toolbar. Between Add Forms and Start Link. This should make the identifying number field go blank. Once blank, PASTE the number you copied back into the empty field. 4.) Save the return. 5.) Open the return you are trying to import the K1 into. Select Import Data, then K1 data and ATX should link the K1 to the corresponding return. Customer support said you would need to do this to each K1 member. I've tried it and it has worked on 2 returns that weren't working prior to this fix. Also, in an effort to save time I've only done the fix to the first K1 and it seems to apply to all the shareholders. Again, have only tried it on a couple returns so not sure how effective this is... Hope this helps

From the 1040 instructions for LINE 7: Disability pensions shown on Form 1099-R if you have not reached the minimum retirement age set by your employer. But see Insurance Premiums for Retired Public Safety Officers in the instructions for lines 16a and 16b. Disability pensions received after you reach minimum retirement age and other payments shown on Form 1099-R (other than payments from an IRA*) are reported on lines 16a and 16b. Payments from an IRA are reported on lines 15a and 15b.

Dear Not a Client Anymore, Thank you for adding me on Facebook, otherwise known as free advertising for your side business that you failed to mention for three years. How do you "like" me now, "Friend"?

For me, it works like a champ. I get all the created returns on top. Then I click transmit on the 1040, as soon as I transmit, the corresponding state return moves to the middle as "held". I normally transmit twice a day so, the next time I do the same process. When the IRS accepts it, my "held" state returns jump to the top as "created" and I transmit a second time. It is nice a clean for me and I will never forget to transmit the state because I don't sort by last name by rather "status". How many times you have made a mistake and the federal rejects and the states accepts it? That has happened to me a couple of times and then I have to paper amend the state. With my setup, I will make that mistake only on April 15 afternoon when I will send both of them at the same time.

Today must have been haunted. I had clients coming and going all day; with and without appointments. A Tues apt showed up today, a 3:30 appt showed up at 2:30; because she got out of work early. My 9:00 showed up at 11:00. In the meantime I had a client show up who never makes an appt and I have usually never let him past the front door. However, with the new office, he walked right in and interrupted my conversation with the client who did have an appt and was on time. When the walk-in left, I had to light candles to remove the aroma from the room. Dear Above: I am going to have a very quiet nervous breakdown tonight and you may or may not ever see me again. Thank you for your inattention.

Dear Tax Client, It was great seeing you this morning. The appointment to drop off all your tax documents and self-employment info for 2013 really was NOT as important as what we ended up doing: hearing about how your sister set up QuickBooks for you. Once you make all the changes I listed for you to make, and finish getting around to entering the data, the reports you then print out will be really useful in eventually preparing your 2013 taxes. Until then, I'll just hold on to the one-and-only-one tax document you actually arrived with. And in your copious free time, poke around at the long-overdue paperwork from 2012, 2011, 2010, and 2006. No rush; we'll get to those one of these years. Also appreciate the $60 payment for the 1099s I sent out for you. You get me info for the one last guy you didn't realize you needed to send one to, and I'll get that last one on its way to him. But I really enjoyed our hour and a half discussion.

Dear Not Even A Client, Thanks for stopping in at 3:59 and acknowledging that you read the sign on the door that said 8 - 4. Thanks for telling me your tax situation in five minutes, and your epic family history from hell in twenty minutes. No, really, it was fun for me. I will see you on Monday. Can't wait. 8 - 2. New hours for you.

Dear Client, Yes, I filed your tax return. I guess I did not make myself very clear when I said that if you don't hear from me, everything is fine. Please refer to your client letter, as it will tell you how to find out from www.irs.gov when the money will arrive in your account. As to your 3rd and 4th texts about the projected 21 days that the IRS is stating they will take to get your refund to you, all I can say is call your congressman and ask him to get the IRS off their collective butts and process your refund. FYI - due to the number of texts we have been exchanging today, I will be a little late from work tonight sweetheart, so please put my dinner in the microwave. Your husband and tax preparer, Tom Hollister, CA

MAS is correct. The penalty waiver is only for IRA's, not 401K's. Your client did the wrong thing. He should have taken a loan from the 401K rather than a distribution. Alternatively, he could have done a trustee to trustee transfer from the 401K (if the plan allowed early roll overs) to an IRA and then taken the distribution. I have seen this before and it really is a shock when the client learns they did it wrong and have to pay the tax and penalty. A lot of times, they don't even realize that even though the penalty is waived, the distribution is still taxable. Tom Hollister, CA