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Michalemars is correct. Follow the regs. It is not our place to make a judgment call based on our experiences. If he can show business intent and profit motive based on the parameters established by the IRS, he is eligible for the losses.

Start developing a Deferred Compensation plan with his employer. Put those dollars away for the future. If equity is coming 5 years from now, ask for Restricted Stock units now, that can not be sold or transferred for 5 years, let some of the income be used to fund those. No income on W2, no taxes to pay. Have the employer reimburse the business expenses at a higher rate. Lower the salary some, more in reimbursement. Rich

Move to the Bahamas. And, bring Tom over at tax time, paying his expenses.

We've had 5 client with identity theft so far this season--3 whose SS numbers were already used and 2 who got 1099Gs from other states showing they got refunds for 2013 returns filed there in 2014. Last year we had 4 the entire season. Before that, we averaged 2 per season, all deceased (that was before Congress bent the freedom of information rules and allowed HHS to stop posting on the internet the SS numbers of everyone who died). Remember way back in the early days of efile when taxpayers had to put their last year's AGI on the 8879? Reinstating that requirement would eliminate much of this rampant identity theft. Or is that solution too easy?

I think I'd interrogate the client, and ask him what percentage he considers the seminars to be: 1) training him for this job, or 2) maintaining / improving his job skills I would carefully explain training vs maintaining/improving. I would not tell him why I'm asking until after I got his answer. I do this type of thing with people who give me what I suspect are business plus commuting miles as business miles. I explain commuting, do not tell them that commuting miles are not deductible, and ask them how many of these miles are commuting. Cause, you know, the IRS wants to know. I do explain that commuting miles are not deductible after I get an answer.

Bahahahaha, best qualifier ever. Crying.

Or, beneath you...

And it's a sole proprietor. Schedule C. And you did all the bookkeeping. You, the accountant. And it's a Schedule C.

My bad!! It's the "Google Search" -- middle tab between "Calendar" and "MyATX" in the main title lines.

if you use the accountants version you have a "working trial balance" I demand that from every preparer here, that way I can see if any item was created by the transactions or by journal entries. Also I print out the adjusting entries, just makes it easier for next year reversals. Comparative BS and PL. You don't really need to compare trial balances if your opening RE matches you prior ending. On the Working TB there is a place for notes so for example, accrued expenses, you can list what is in that account right there. Us old timers prepared worksheets like this for every client, people just used to computer programs don't really see what they tell you but they tell yu more than anything else.

Not until they're divorced or separated by state law. Living separately does not make them single. MFJ or MFS.

Yeah, it would be nice to be able to search for NOL, AMT, etc. Ok, not etc, but you know what I mean.

I think you are right and I think another idiot made that request a few years ago. That other idiot being me!!! I think I need a break.

Animals that accidentally saw you naked... http://fellowshipoftheminds.com/2015/03/06/animals-who-accidentally-saw-you-naked/

I like your answer and I will add: Since your client invited you to the seminar, I would tell your client that you are not interested to go to the seminars but you would love to be his accountant if he starts making a lot of money as promised. I bet you that if you ask him, "when people start making good money?", he will say, "max 3 three years". Then tell him that he will NOT be able to deduct his losses this year but if he starts making real money within three years, you will amend his return from hobby to a real business venture and all his loses will be accounted for.

The varidesk is what I'm going to get. I have a large corner desk that it will work great on. Thanks for all of the great ideas and pictures everyone. I use my treadmill every day, but it would be very nice to not have to sit all day long.

Don't remember where I first heard this - maybe on this forum. "Rather than work for free, I'd prefer to just take the time off from work."

Brilliant. I'm an idiot, but you rock! Thanks so much.

Have you tried filing out part III on 8606 to report the basis of the Roth IRA?

The 1250 recapture should have been reported in the year of sale, and the GP% and installment gain to be reported over time relates only to the cap gain portion of the sale. The installment portion of the cap gain and the interest income received are reported each year until the note is collected in full.

Always one. Just when you hit the button, they call and say - "oh - i forgot to tell you....." :pop: :pop:

The HVAC is a structural component of the building system. HVAC usually has - 1. Heat Pump, 2. Indoor Air Handler Unit, 3. Duct Work. 4. T-stat Heat Pump performs a critical function of HVAC system. It's a restoration to building system, so an Improvement to the Building. Structural components recovery period is 27.5 on residential rental property. OP said "replaced" not repair. He replaced a major component. IMO

I disagree, I would capitalize the new unit and do a partial disposition on the old unit.

Ah, inventory, good catch Mr. Davis. I have managed to avoid clients with inventory. Well, except for the optician with some contacts for sale, but I know he found his ending inventory on his own ceiling, and he's gone now. He was the only one willing to pay for my time to adjust his QB file after preparing his returns (or even to LET me adjust), though, and did his own payroll beautifully. So, I miss him. As for property tax, I can't seem to get them to believe equipment isn't an expense. So, for the most part, I gave up. I print their Equipment detail and prepare the income tax returns and property tax returns. But, if I adjust their QB file and explain why, leave them written instructions on where to put what, they don't continue. (QB prefills the transactions for them, so it's always SALY.) The DIY owners/wives or PT bookkeepers use QB for money in/money out to record checks/charge cards and not for accounting. (Had one call me to ask where to put large check the shareholders/H/W wrote to themselves at tax time. I'd set up an account labeled with their names and 95/5% for distributions so bookkeeper didn't have to do the math or even understand QB terminology. I explained, as I do about twice/year, to put it in 95/5 and I would break it up into their names at tax time. I found it under Marketing expenses!) CT property tax forms ask about the amounts paid to ICs/Forms 1099-MISC, consumable office supplies, etc. So, my biggest issue with property tax forms has been to get Postage/Shipping in it's own account and out of Office Supplies to not inflate the expenses we have to report. Yeah, I've given up. I get a Backup. Do my own thing with it for my tax prep purpose. I pick one issue each year per client and work on that. Since late 2013, have been working with one on the $500 threshold for Equipment. Just worked on that firm yesterday to start their returns, and moved all the little amounts out of Equipment. And, Repairs was actually Office Cleaning, so I think I'll insist on a name change on that account. And, don't get me started on the ones who bring me a Quicken file.

I got that, but I'm still old school here and would print a complete set of books. When entering the transactions after the fact, it's easy to enter the wrong date, especially if working in early Jan or Feb. Yeah the QB will give the warnings about the dates, but it's still easy to do when entering fast, or entering a transaction with the current day's date. I've done both on occassion, hit the enter key to fast and then had to go back to fix. At least I catch those at the time and know the transaction I had just entered.

At the firm, we have over 200 clients with 6 figure Mary Kay income.

Well, these people have been separated 10 months, I believe. I bet the biggest issue here is she is not getting EIC. There's a good one to play loose with. No, she wouldn't get caught, but that's not the point. Just like the people who fudge on mileage and don't report cash. Doesn't make it right. I personally get tired of paying my fair share and everybody else's, too. It's enough to help people legally avoid tax. Anything else is above my pay grade.

Perhaps those wins had something to do with GA state law? Does GA have a provision that considers a separated couple to be considered unmarried after some length of time? As an alternative to that, I've had clients of long term separations that both still considered themselves married to each other, got along great as long as they didn't actually physically live in the same house, still called each other as "my husband" or "my wife", there was never a separation or division of assets, and didn't want a divorce.

It will also contain negative A/R if recurring invoices post automatically on, say, January 1st -- but payments pre-dated that (for example, business space rent).

It only backs up the files that have changed. It automatically backs up each client as you close it, unless you've turned that off in preferences. You can watch it happen at: C:ProgramDataCCH Small Firm ServicesATX 2014 ServerATX 2014 Backup Warning: ProgramData is a hidden folder. You have to change view Folder Options to see show hidden folders.

I wanted to share this step that I was thought at the CPA firm I worked for; check retained earnings for clients that do their own books, I know everyone here has a horror story when it comes to deleted items.

I knew my friend Joe D would show his set up. He has a "normal" desk which faces the other direction that he meets the clients and faces them. My arrangement, would be to the side, so that the monitors are 90 degrees to the clients. Or more like 60 degrees so they can not see what is on them. Plus one that does face them for tax planning or Qbooks training... Rich

Do you play audit roulette in your practice as when to follow tax law? I don't.

I just printed some reports tonight for an S-corp: P&L, BS, detail of equipment, detail of shareholder distributions. I'll also get detail of salaries to split out officers from other employees. I did a lot of drilling down, because I am not their bookkeeper. She put things in equipment that didn't belong there and had some expenses as negative income, things like that. As Ill said, for a Sch C you will only need a P&L.

Terry is correct and I believe it will be worth it for her to claim them depending on her income. For sure, she will benefit to claim her child because that will make her HOH. That's a given and a no brainer if she made more than $12K and she doesn't itemize deductions. So she will befit by claiming him as soon as she has 1K or more in taxable income. For the other person, if she provided more than 50% of his support and lived with her the whole 2014 (which you already said yes to both), you have to do the math. There must be an equilibrium based on her salary. I am tired right now but let's see if I can come up with a number. Let's say that she is HOH on the 25% bracket. So claiming him will save her about 1K. If on the other hand she is in a higher bracket, she could save about $1,500. So not claiming him will be a good idea only if she made more than $163K or if she only has 1K in taxable income which will mean she made little money. I am really tired today so help a dead horse, don't beat him if he made a math mistake from the top of his head.

Anyone who is claimed on a return as a dependent, must have insurance meaning the taxpayer has to provide the insurance or pay the penalty if they claim them.

Indeed. But if you want details for charities, Charity Navigator is a good source of all-in-one-place info.

I can stand for over an hour before my feet start aching. If I lost some weight, I could stand longer. I can usually stand 3-4 hours out of a 12 hour day. Every little bit helps! My core and legs are firmer for it.

Make it a hobby and amortized the startup costs. When you know he'll never make a profit, don't deduct the losses.

That's why I also have a bar stool. Mostly I stand, but if I need to sit I just pull the bar stool over. Sitting on the bar stool and pedaling away on the little exercise pedals while working at the computer is actually very relaxing.

I'm gonna bet he did a 1035 exchange at some point and split the proceeds into 2 annuities. One was with fully funded with the "untaxed gain" on the original annuity and the other with a combination of previously taxed money/untaxed gain. But...does it matter? The 1099-R gives you the taxable amount.

The following is the link to a video explaining the program above with a taxpayers identity theft and their local law enforcement. It's a complete turn around in policy since Congress called them down for not taking appropriate actions on identity theft! Before Congress chewed them out, a client was told that they (IRS) could not inform local law enforcement neither could they (IRS) tell the taxpayers who stole their identity due to the "privacy issue with the thieves". Another video from IRS tells victims to IMMEDIATELY file a police report, in addition to completing IRS Form 14039 and contacting credit bureaus....not bad ideas!

Yardly, Just saw an IRS video recently....tell the taxpayers to make a police report and ask the police department if they participate in the program to help the IRS in finding the identity thieves ... if the police department does participate in the program, they will have a form for the taxpayers to sign that will enable them to know what's going on with their identity theft.

Yes, please - a link! A friend of mine has one also and raves about it but his taste runs to "Cadillac" brands and lines. I'm more of a Suzuki girl, myself.

All these postings of the popcorn makes me WANT popcorn!

Yeah, I asked. The part about "elderly" really means "it is time for his kids to take over his finances". He can barely remember what we told him on the last phone call. He called me and left a message when he got my letter at the beginning of the tax season to tell me he would be coming in when he had all his documents. I called him back and told him that would be fine, we would make an appointment for him whenever he was ready (I try to return all messages so that my clients know that I got their message). About an hour later, he calls me and asks who I am and why I called him. Told him who I was and that I had returned his call and we just talked about an hour ago about setting up his tax appointment. Forgot that he called me or that I talked to him just an hour ago and proceeded to be offended that I would try to make an appointment when he does not have his documents yet. It is really sad. Tom Newark, CA

  Sometimes you feel like the money will be worth the headache.  In my experience though, it hasn't been.

Hey, if I don't go to the store, I gotta send my three kids with a credit card. Not letting that happen is like doing two tax returns.

Sounds like a good candidate for an extension. Any time I can extend a return that is expected to take a long time to prepare, that means I can complete 2 or 3 others in that time slot and still prepare the extended return when things slow down.

Following all of your suggestions (including the link and information Jack included on his submission) I directed my clients to contact the IRS. They did that and the IRS did cofirm that someone used both of their names and social security numbers (with a different address than theirs) to file a 1040 form. The IRS would not provide any additional information to my clients and we will now move forward and and paper file the return including form 14039 and the forms of identification that are required. I also have to paper file two of their state returns as both states require a copy of the federal return. Thanks to all of you and thanks to Jack for posting the link.