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  I'm still not sure if Jack's chinese food response had anything to do with me offering to eat the chocolate lab with lava cake for dessert.

In an earlier topic, Pacun mentioned that it is possible to e-file a return without having box 61 checked. ATX will give a 'yellow' cautionary warning but not a red one, and so the e-file will transmit. I posted this in General Chat because it is more about the processing of returns and not really any sort of question about the ACA itself. According to the ATX blog earlier this month, for returns that are totally "silent" as to the ACA, meaning that box 61 is blank and no form 8965 or 8962 is included, the IRS will pull the return for error resolution and any refund will be delayed. If this is an ERC or Fee Collect return, the preparer's fees will not be collected if the IRS chooses to mail the refund as a paper check later, rather than as a direct deposit.

And how about lawyers? In NYS...you need a CPA or lawyer "on the premises". By training, they know the least. Whenever someone asks me "my credentials" I tell them I've been doing this over 20 years...and I have an MBA. If the person feels that his situation is "so complicated" only a CPA can handle it...I'm more than happy not to take the job. I actually tell them that they should look for someone else. (IMHO...potential PITAs)

I agree with Margaret as well.

This helped answer some of my "procedural" questions on the ATX software --- From a comment on the ATX site made 11/17/14: The software will include the IRS instructions and forms, however there are several pieces of data that you must obtain from the client and enter manually. If the taxpayer had full coverage all year, then you will just need to check the box on line 61 of the 1040. If the taxpayer receives a 1095-A, you will need to complete Part II of the 8962. If there is a difference between the Premium Tax Credit calculated and the Advanced Premium Tax Credit received, it will flow to line 46 if the taxpayer received too much or line 69 if the taxpayer did not receive enough. If the taxpayer didn't have insurance or is claiming an exemption, you will need to fill out form 8965. If the taxpayer claimed an exemption through the marketplace, then the preparer will enter the Exemption number in Part I. (The taxpayer would provide that exemption ID number to you) If the taxpayer is claiming an exemption on the tax return, then you will select the exemption in Part III. If the taxpayer did not have insurance, then you will have to complete the Shared Responsibility Payment worksheet for each member of the household that didn't have insurance and the total amount will flow to line 61 of the 1040. Note: Part I, Part III and the Shared Responsibility Payment worksheet could be filled in the same return depending when the exemptions or lack of coverage apply. It is also possible that a 8962 and 8965 could be completed in the same return if the taxpayer had insurance for part of the year. Stephanie B Customer Care Director

Naveen, the 3115 will not be created automatically, if needed. This is a very complex form and needs a lot of studying. I have taken several classes on it and have determined that I am an idiot. I keep reading posts on various blogs, forums and emails and there are lots of different opinions on the 3115. I just sat through a webinar from my CNA liability insurance and their suggestion is to put most of your business returns that are affected on extension so that we can prepare the returns correctly. The IRS has not been very helpful yet and the ramifications of not filing the form(s) correctly or timely are very serious. My suggestion is look for webinars right away and start studying. I'm sorry, but for small preparers, this is terrible news. One of the webinars suggested farming out the work if we don't feel comfortable preparing it. That's not a very affordable option for me.

The way I read it is less than 3 months.

The gap exceptions is only 2 months (not 3).

Welcome to the board. You got the answer and I just want to add: 1.- Fill out the form anyways because they computer might generate a letter to your client if you don't mention ACA for 2014 and later years. 3.- Even if they register before Feb 15, client will be penalized if they didn't have insurance in 2014 AND they will be penalized for not have 2 months of insurance when they file their 2015 taxes in 2016. There a good course at www.apluscpe.com that is called ACA in the real world, you should take that video course since it only costs $5.95. I took it and it is worth it. If you have more questions, please feel free to post them and a lot of people will help you.

This is the last season for me and I am not sure I am going to make it through the whole season. I cannot find a cite that states we have to use the W-2 for preparation and not the last pay stub but I know we have to. I have a client that has made an appt. called 7 times and even had her MIL call then the last call was...I don't have husband's W-2 but we can use his last pay stub. Sorry....make another appt after you have the W-2. She makes an appt for Monday but doesn't have the W-2 yet...really? Please tell me where to get the cite so I can include it in her packet to take home. Another client called, made a appt. didn't show up, called the next day and said her boyfriend didn't know about the appt so he let her sleep. She wanted another appt as soon as possible but was told that 3 people wanted her original appt time and I was booked for 2 weeks. Another local bookkeeper e-mailed me so I could create 1099-MISC for one of her clients. She did forget to put amounts in the e-mail. Last year I did this for her and she called a couple days later to say that the amount was incorrect and I needed to re-do the 1099-MISC. This year I told her that I didn't buy the software. Mostly rant and thanks, Karen

This may not be exactly relative to your situation, but I'll post it anyhow. I once had a client who was selling his business to another company. The lawyer kept telling me it was a non-taxable event because of the way he had it structured. I kept telling him there was no way, but invited him to give me any tax-specific cites he could provide. He sent me a quirkly little article written by another lawyer, but it just tap danced around the tax implications. I finally asked him if he would be interested in preparing the return, which of course he was not. But he kept insisting that this was commonly done, and he knew lots of CPA's & tax preparers who were following his advice. TRAP SPRUNG ! I asked him to provide my client with the names of 2 or 3 tax pros so the client could retain one of them to prepare the return. I told the client I would not follow the attorney's advice and that he should be giving the client a referral. Last I heard, the attorney never followed through and I think the client self-prepared his own return. (I think 7 years have passed, so the fact is he probably got away with it. But in any case it wasn't my problem.)

You are exactly correct. The complexity starts with those that are not insured for the whole year, or those that have coverage purchased through an exchange.

Here is a plain english article that I copied from the website of CliftonLarsonAllen which will give you an overview of what you're dealing with: Contractors may have an opportunity to save on construction and building costs based on the IRS’s recent overhaul of the regulations that govern the handling of expenditures to produce, acquire, or improve tangible property. But first you have to clarify whether your expenditure is considered a repair or improvement, among other considerations. Also, on August 14, the IRS released final regulations on the disposition of tangible depreciable property. So if repairs or improvements were properly capitalized in prior years, a partial disposition loss for the old components might be claimed with an accounting method change to write-off what was previously capitalized. Improvements or repairs Improvements are attributed to one of three areas: betterments, adaptations, or restorations (often called the “BAR” test). Betterments are a material addition to a unit of property (UOP) or a material increase in capacity to correct a material condition or defect that exists prior to acquisition or during production. Adaptations are putting a UOP to a new or different use that is not consistent with the ordinary use of the property at the time it was first placed in service. Restorations include returning a UOP to its ordinary operating condition after it deteriorated to a state of disrepair, or rebuilding a UOP to like-new condition after the end of its IRS defined class life. Replacing a part that comprises a major component or substantial structural part of a UOP also constitutes a restoration. When applying the BAR test to a building, the regulations separate the building into the building structure (roof, walls, windows, floors, and ceilings) and eight defined building systems (HVAC, plumbing, electrical, escalators, elevators, fire-protection and alarm, security, and gas distribution). Activities that are not considered an improvement can often be deducted as a repair and maintenance expense. For instance, building refresh costs (e.g., cosmetic changes such as power washing walls and repainting, cleaning or resealing wood floors), most likely should be deductible. However, if remodeling involves replacing large parts of the exterior walls or upgrading the electrical system, these costs most likely should be capitalized. BAR test example A contractor uses equipment for highway and road construction operations. Each independently operable piece of equipment is a UOP with a class life of six years. The contractor does scheduled maintenance every so often such as cleaning the engine, oiling specific parts, inspecting parts for defects, and replacing items such as springs, bearings and seals. The BAR test determines that these costs are deductible repairs and maintenance expenses, since they do not materially increase capacity, adapt the equipment to a new use, or rebuild to like-new condition. However, if the equipment was reconfigured with additional components that enhance its capacity, then it may be considered betterment and those costs would need to be capitalized as improvement. De minimis safe harbor rule If a company has an applicable financial statement (AFS) and a written book capitalization policy in place at the beginning of the tax year, then it can deduct items below this threshold but not in excess of $5,000 per invoice or per item. An AFS is defined as a financial statement filed with the Securities Exchange Commission (SEC), a certified audited financial statement by an independent CPA, or a financial statement required to be provided to a federal or state government or agency. If you don't have an AFS, you may still be able to deduct up to $500 per invoice or per item if the other requirements are met. This is an annual election made on a timely filed original tax return. Routine maintenance safe harbor rule Recurring costs to keep property in ordinary operating condition can also be deducted, when the costs are reasonably expected to occur more than once within the class life of the property. Safe harbor rule example Machinery and equipment used in road construction may need to be serviced more than once during its class life (six years), which may require disassembly, cleaning, inspection, repairs, replacement, reassembly, and testing of its component parts. (Buildings use a 10-year period class life.) So if you own a building and service the HVAC units every four years — especially if within the maintenance interval recommended by the manufacturer — these costs should be deductible. Finally, costs with longer intervals might still be deductible on a facts and circumstances basis, but would fall outside of the safe harbor rule. Disposition rules applicable to 2013 and 2014 tax returns Disposing of an entire unit of property requires the recognition of gain or loss. Partial dispositions (i.e., a disposition of less than an entire UOP) were generally not allowed in the past, but the new regulations allow for this if an election is made in the year of the disposition. You can still make this election on 2013 and 2014 tax returns for dispositions that occurred in previous tax years. It would be beneficial to make this election where repairs to a roof were capitalized in prior years (regardless of the refund statute being closed for the year), so the net tax value of the old roof at the beginning of the 2013 or 2014 tax year can be written-off. In addition, the costs of removing an asset should follow the initial treatment of the asset. So if the old asset is treated as disposed, then removal costs are part of the disposition (i.e., increase the loss or reduce the recognized gain). If the old asset is not treated as disposed, removal costs are deducted or capitalized based on whether they directly benefit a capitalized improvement. How you can benefit from the new rules If repairs or improvements have been performed on tangible property in prior years, there may be an opportunity for claiming additional deductions. Items that were capitalized in prior years due to a conservative approach and/or just following GAAP treatment might be claimed with an accounting method change to write-off what was previously capitalized as deductible repairs. Also, if improvements were properly capitalized in prior years, there may be a chance to claim a partial disposition loss for the old components that were removed. On the flip side, you can get audit protection if you have been under-capitalizing repair expenditures and then finance the resulting taxes over a four-year period with no interest or penalties

http://www.irs.gov/uac/Tips-for-Choosing-a-Tax-Return-Preparer See bullet point six. It's probably in here someplace: http://www.irs.gov/pub/irs-pdf/p1345.pdf especially pages 11, 12, 27 (what to keep)...

Are we having fun yet? The advanced credit was based upon her projected income, family size and insurance plan she was buying and how the income flirted with the poverty level or 4 times that number or something like that. She would have had the choice of taking the credit in advance or taking it with her return. Since she took it in advance, as you are seeing, she may have too much advance credit and have to pay some back. Don't cry too deep of a river for her. It was still a good deal for her. But your point is very well taken - this is so weird! By the way, you are seeing first hand how the preparation fees are going to be higher for those that can least afford it. And trust me when I say that I have, six times now while I have been typing this, got up and then back down off of my soap box. I am fighting hard to stay off that.

Deb, It really was a sale. Again, they can call it whatever they want. If Dad no longer has any interest other than a % of revenue, then he is receiving payments for the sale of his client base, goodwill, what have you. And issuing a 1099 Miscellaneous is the wrong thing to do. This is often the way professional practices are sold. The seller will get a payout % of continued billings that were in place at the time of the transaction. That is no different than what you are describing. If I sold my practice like I just described to fund my retirement, it would be a sale. Continuing the argument, in proposing the transaction the way you are, you are penalizing the Dad by converting capital gain income to ordinary income.

JB, On a simple 1065, don't overthink it. You still have the same revenues, cost of sales, and expenses to get to net profit. The 1065 just asks a lot more questions about the partners and their business. Then it gets different when you have to put in the balance sheet (do it even if not required) and the partnership percentages to get the K-1's to spit out. ATX is not real friendly in that area, but once you go through it, it is not bad. Take your time and ask questions here about where to find things in the software. From what you posted, this is a nice introduction to the 1065 and well within your ability. Tom Newark, CA

Tom: All I would say, is that your Wife has to slow down on the sorting of the info on those returns, you could bill more! I keep all my receipts in a box, but I use Qbooks to run the biz, and all my info is in there. I also run it for my personal account, and that makes it easy. To the original poster, $154 isn't cheap. And I would not do a return, simple or not, for that, but... It gets more expensive, if you add other schedules to the return, (I believe). And yes, it is designed for a lack of documentation, and to encourage you to check the box and increase the refund. If $1,000 in charity gets me a refund that is larger, than $2,000 or $3k is only going to look better. However, I believe that TT and TaxCut and most of the sold to taxpayers software actually results in a net gain to the IRS. Sure, folks overstate some of the deductions, credits, etc, but the real problem is that they do not get all the credits, deductions and other things that us pro's know about. Rich

Our office is fairly paperless, but not when the return is in progress. We keep the client docs with the return until it is completed, then scan them and give them all back to the client when the return is picked up. This way you can mark right on the document that each number has been double checked, or put a sticky that this particular doc hasn't been entered yet because you need further info or to do more research. We track all returns with a cover sheet (yes, a physical piece of paper). Docs that are brought in with appointments, mailed or emailed in get attached the the sheet, which lists the client name, contact info, date received, and who is working on it. There are lines on the bottom for the preparer to list questions, missing info, etc. There are also places to put the fee, method of payment, whether 8879 has been signed, whether 8453 has to be mailed, that the return has been placed in our electronic file cabinet, that it has been efiled, whatever. When efile has been accepted, the sheet is scanned and shredded. The sheet is essentially our record of everything and serves as a tracking system. The sheet is filled out for every client. If it's an appt at your desk and you finish the return on the spot, it goes into the "efile" tray, then the "awaiting acceptance" box, then to the scanner and shredder. No way to forget any of these steps because that piece of paper is somewhere in the line. For drop-offs and mailed in returns, the sheet goes on top of the client docs. In my office the whole thing then goes into my in box. If I get to work on them and find I'm missing info, I contact the client and put everything into my "need info" box. When done, I give everything back to the client and put the sheet into the "efile" tray, or into the "wait" tray (need sigs or payment). I'm making it sound more complicated than it is. Basically, in my private office I have an in box and and "waiting for info" box. The office manager has a "ready to efile" box, a "hold" box because we need sigs or money (or just want the client to have a few days to think it over), and a third box for efiled returns awaiting ACKs. The routing sheet makes all these rounds. Once efile is accepted, the sheet goes to the "scan" box in the receptionist's office, then into the shredder. You can see everyone's workflow just by looking at the size of the in box or need info box. Both are always overflowing!

I belong to NAEA and NATP. Certificates (along with my EA certificate and one other that I don't recall off-hand) are up on the wall in my office. Along with a gorgeous photo of me with my kung fu double broadswords.

Had an attorney in my office yesterday with a mutual client. I do not work with this attorney much but he was sharing with the client and me about his recordkeeping system. He keeps everything in a desk draw until it gets too full (and in his car console) then he transfers that to a big box in a closet and repeats that exercise until the end of the year when he goes through it paper by paper to get it organized for his tax return. And he went on to share what his wife does for a career. Are you ready for it? She is a CPA. Some people just can not be helped.

Issue the 1099. The vendor received the money. Your client's issue is with the bank, not the vendor. If the vendor claims he received the money, issue the 1099 to remain compliant. The checks are still outstanding and it is assumed that they will at some point clear the bank. So your client is entitled to the deduction. If for some unexplained reason, the bank never ever clears the checks, then your client would need to pick them up as income at some point in the future.

Pacun is correct. Only MAGI of dependents required to file is included in household income. From form 8962 instructions for line 2b - Enter the modified AGI for all of your dependents on line 2b. Use the worksheet next to figure the combined modified AGI for the dependents claimed as exemptions on your return. Only include the modified AGI of those dependents who are required to file a return. Do not include the modified AGI of dependents who are filing a tax return only to claim a refund of tax withheld or estimated tax.