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Do you think that if enough of us signed a petition we could get the IRS to change the nasty 'on-hold' music that hasn't changed since the infernal revenue code was enacted in 1913? It was awful before but now that they're leaving us on hold for longer and longer periods, it's enough to drive me loony (yeah, I know, loonier). What think ye?

Better odds of you winning the PowerBall!!!

Thought I finally understood and do not use the reimbursement plans for employees (even sole prop.) because of the ACA $100 a day per penalty. This applies to sub S, etc., anything that basically does the reimbursement route, versus having a 'proper" (ACA approved plan). Now an article from a knowledgeable source states otherwise (as I read I, anyway). Any help in seeing if I am reading/understanding it incorrectly would be appreciated. It is a bit lengthy but I figured, better here than asking you to go to a link. I basically agree about the "wrap-around" approach if you have an ACA approved policy in place, etc. BUT the employee reimbursement part -- STILL has me wondering/worrying. ----------------------------- excerpt follows ---- ad and identity parts removed -------------- LIES, DAMNED LIES, AND STATISTICS. A marketing example was mentioned of a client using a medical expense reimbursement plan to write off the cost of her daughter’s braces as a business expense (rather than a regular itemized deduction subject to the 10% floor on medical expenses). It was then asked something to the effect of this: “Doesn’t the Affordable Care Act make medical expense reimbursement plans illegal and impose a $100/day fine on employers who use them?” First, a little background. A Section 105 medical expense reimbursement plan, or MERP, is a long-established benefit plan dating back to 1954. The MERP lets an employer reimburse employees for any eligible medical expense they incur on behalf of themselves, their spouses, and their dependents. Typically, companies that adopt a MERP will buy group health insurance for their employees, then establish a “wraparound” MERP for expenses the underlying insurance doesn’t cover. Alternatively, some employers will “self-insure” and dispense with group insurance entirely, paying costs directly out of pocket and saving the cost of an insurance company’s profit and an agent’s commission. A MERP can cover anything that would be deductible as “medical or dental” under Code Section 213. It can also cover any type of health insurance – individual policies, Medicare and “medigap” premiums, and even long-term care coverage. This is all well-established, black-letter law. Over the past few years, group health insurance has gotten more and more expensive. In fact, it has gotten so much more expensive than individual policies (because insurers can underwrite individual coverage) that some employers are the saying the heck with group coverage, dissolving their plans, and buying their employees individual plans. I can’t tell you how many clients have asked, “My client wants to get rid of his group policy; can he set up a MERP and use it to reimburse employees for their individual policies?” And the answer, until recently, has been “have at it!” I’ve seen this sort of substitution cut plan costs in half or more. It really is amazing. But now there’s a new rule that has upended that perfectly valid (and effective) strategy – courtesy of our newest BFF, the ACA. The ACA says, among other things, that health plans can no longer impose annual limits on benefits. This is part of what the law calls “market reform” provisions, and for most providers, it’s no big deal. Insurance companies have eliminated their caps on benefits, priced it accordingly, and called it a day. Everything was fine until September 13, 2013, when the IRS issued Notice 2013-54. This is the most confusingly written piece of government “guidance” I’ve encountered in my entire career. And it takes direct aim that the individual premium reimbursement strategy I just outlined. The Notice says that if a MERP “wraps around” a complying group health insurance policy, it will be considered “integrated” into that compliant plan for purposes of meeting the market reform requirements. However, if an employer uses a MERP to reimburse an employee for the cost of individual coverage, that MERP will not be considered to meet the market reform requirements. Now, this makes no logical sense at all. The IRS says that a using a MERP to reimburse the cost of individual coverage is treated as imposing an impermissible limit on benefits (specifically, the cost of the reimbursement). This is true even though the underlying individual health insurance policy being reimbursed has no annual limit on benefits! But even though the ACA itself runs over 2,400 pages, apparently there’s no room for common sense in the IRS interpretation. Here’s where the worst of the misinformation comes in. An employer who offers a plan that doesn’t meet the market reform act provisions is subject to an excise tax of “up to $100 per employee, per day.” Somehow, the insurance industry, along with their willing accomplices in the financial press, have turned that tax into THE WORST THING THAT COULD EVER HAPPEN TO YOUR CLIENT. OH MY GOD, THE SKY IS FALLING AND IF YOU EVEN THINK OF SETTING UP A MERP, THE IRS WILL HOUND YOUR CLIENT INTO BANKRUPTCY AND THEY’LL SUE YOU TO WITHIN AN INCH OF YOUR LIFE!!!!! FORGET ABOUT THE EARTH GETTING HIT BY AN ASTEROID – YOU COULD BE LIABLE FOR $100 PER DAY PER EMPLOYEE!!!!! I can’t tell you how many articles came out last summer, when the deadline for the new rules kicked into effect, warning everyone on the planet about that $100 per day disaster. But that warning has morphed into a rumor that MERPs in general are now “illegal,” and group health insurance agents (who get paid more to sell group policies than individual policies) have been only too happy to tell clients that if they adopt a plan, they’re just begging the IRS to fine them out of existence. Here’s what the agents and press don’t tell you: The market reform provisions don’t apply to a single-employee plan. Are you taxed as a sole proprietor, with no employees? Want to set up a MERP, hire your spouse, and reimburse them for the cost of your family’s healthcare costs. Go for it – the ACA doesn’t change a single thing about it. It’s also still perfectly legal to offer a MERP that wraps around a group health insurance policy. Nothing about those wraparound plans has changed. It’s even perfectly legal to offer a premium reimbursement plan to pay for individual health insurance. (Except for subsidized policies from an exchange. No double dipping!) Those “premium reimbursement plans” aren’t “illegal” at all. They’re just subject to a penalty tax. If the IRS ever does come in and tell you your plan doesn’t comply, you have 30 days to correct the flaw before becoming subject to the tax. No harm, no foul. Now, let’s say you thumb your nose at the IRS and continue offering your noncompliant plan. You’re not ready to join a militia and take over federal property, are you? But you’re going to take a stand against Big Brother and tell the government “no.” That $100 per day tax, that multiplies into a terrifying $36,500 per year, per employee? It’s capped, at just 10% of the cost of noncompliant benefits an employer provides. Pay $8,000 per year for your employee’s coverage? It’s capped at just $800. In fact, for larger employers, it’s even further capped at $500,000. No employer will ever get caught owing a $36,500/employee tax. In fact, it may still make perfectly good financial sense for an employer to get rid of their group coverage, buy noncompliant individual policies, pay the damn 10% tax, and still come out ahead! Now, I haven’t seen a single article in the popular financial press that mentions those limits. But I’ve seen plenty of scaremongering! And that scaremongering is what leads to questions. But please, for the love of God, if you hear that using a medical expense reimbursement plan (or any other strategy) is “illegal,” do your homework! Don’t let your clients take tax advice from sensationalist reporters or untrained health insurance agents looking to fatten their overrides and bonuses. Don’t let them be intimidated out of perfectly legal strategies that might save them a ton of money!

I would like to see one of those Intuit "genius" commercials tackle the ACA for a self employed person on the exchange and show how many iterations of the calculations they do to come up with the right amount of SE Health Insurance Deduction and Premium Subsidy. Lets see them explain that in a 30 second commercial? I keep thinking of the woman (sister of the client) who came into my office who "prepared" the prior year returns for a couple who came to me because they were under audit. The clients asked her to come in because they did not know the answers to any of the questions I was asking. The audit had to do with 5 rentals that were throwing large losses and the deductions for those rental losses. I asked her how she came up with the deductible loss on the rentals and she said "I just kept clicking on different answers in Turbo Tax until I got the highest refund". Tom Newark, CA

I use ProSystem fx and pay a fraction of your $18K price. Each year my salesperson works with me on the best option for the returns I do, what to buy unlimited and what pay-per-return. Very easy to use.

See the footnote at teh bottom of page two. https://apps.irs.gov/app/vita/content/globalmedia/tables_1_2_4012.pdf

Eine Kleine Nachtmusik (A Little Night Music) isn't so far fetched, they used to play Mozart's 40th on some lines.

Correct. You're okay on the EIC since the income's irrelevant for that - living with mom and being a student are the things that count. On the other hand, the "provided more than half of her own support" kills off the girl's dependency exemption for mom.

Eine Kliene Nachtmusik?

I vote for this:

Makes you want to jump up and yell "COTTON EYE JOE"!!!!

Hey, my good buddy, I buy my forms from Busiforms! Small, hillbilly world, ain't it?? Yep, and I also like making my little jaunt to the Post Office, they are a hoot in thar. David and Will. I like Jurassic Park and will lay low till the revenuers come fer me. They gonna be abolished soon, I rekkon anyways.

I did a quick scan of the NCDOR web site as you did, and I could not find specific guidance on this issue. However, since there is an entity change I think you need to register a new business and obtain a new number for NC Withholding & Sales Tax. The NCDOR now ties all their numbers back to the Federal ID Number, so having the same state ID number associated with two different Federal ID numbers will inevitably cause some sort of computer glitches along the way. Same is true for their Unemployment Tax number, although in this case you will want to register is as a successor employer in order to preserve the favorable tax rate (hopefullythere is one), and also to avoid the annoying mismatch letters for the state tax credit which show up a couple of years down the road.

BUSIFORMS.COM : a small outfit in Chattanooga. My print version (very simple/good) is $59.95. Efile version is also offered, but I don't know the cost. All good and true advantages. Hi Rita: Nice to hear from you again (and thanks for your support on fees the other day). I do the same as you do and while the folks above are right, I feel more in control this way since I dislike e-flinging (as JohnH would put it) figures into thin air . For some clients I get the 1096 signed and simply keep it until enough time for corrections passes and it's safe to mail (this probably won't work next time - I've heard IRS wants their copies by 1-31-17). But while they say you cain't teach an old dog new tricks, I've learned that IRS can MANDATE some and we'll probably have to get horseless carriages before long. Anyhow, I'm hangin' out in the Jurassic era until they come and GPS me. Best regards, BB.

I have also seen families torn apart contesting wills. (One reason I recommend to all clients who have specific wishes to get a good attorney on board and do everything through trusts: cannot be challenged after decease nearly as easily/successfully.) Any way you slice it, this is going to be hard on your folks and then/also hard on you. All I can reiterate is get a good attorney NOT connected to the family on their side to fulfill THEIR wishes, and tell the whiners to go suck an egg. (If you wish to add specifics such as a salmonella-infected egg, that is your prerogative.) Like SFA mentioned, whatever is received is a gift that did not have to be given to them. If they can't see it that way they need to be spanked. With adults it is usually better to do that verbally (the ones who need it most would probably enjoy it given physically, so let's not go there).

Other benefits of e-filing are that it eliminate the need for red forms for the 1099s, the printer alignment issues, and both the W-2s and 1099 series have an additional month tacked on to the filing date with the e-file due date of March 31st. That due date gives more flexibility for us and can be useful if there is something typed in wrong on the form. We know that some clients don't look at the year-end forms that are mailed to them, so if their tax preparer finds something wrong, we have the extra time to correct the original filing it if it hasn't been submitted, rather than filing more forms as corrected ones.

My clients are also spoiled. That is going to change somewhat this year. My excuse is the same as Tabby's; except that I chose to continue in this business despite breast cancer; which also is going well. I do get terribly tired though and we all know how much worse that is during tax season. This will be their chance to stay or fly under my conditions. I refuse to make myself ill in order to make them happy; and most of my clients wouldn't want me to.

WITAXLADY, Tax answer is answered by SaraEA and Catherine as quoted above. I do NOT have anything better ---- however you also asked for "advice with familiar situation", so ------ a few comments for your thoughts and consideration followed by personal experience with several families. When did a committee EVER make a decision that truly honored the "person's" wishes --- it all comes down to what the majority wants rather than the person -- otherwise there would not be a need for a committee (YOUR mother and father want the land kept together -- the proper attorney will advise them and if they (mother and father choose to follow or not; that is there wishes) no need for committee). Somebody is going to "contest" the will regardless of how it might be written (unless it benefits them of course) Once probated or if done through trusts, let them spend their money, time and good will from others, along with lowering whatever they might receive --- it will not change them. Especially if they want to "contest it before it is even placed in probate????? --- let them --- if they chose to not honor your parents --- that is there choice --- they will have to live with the results (both from less inheritance and from family, etc.) --- . Your parents wishes are known to them, if they feel slighted, that is their problem. As far as a lot of money has been spent, that apparently is because --- someone ---- is not getting their way --- it is a shame that their positions are more important than your parents wishes, but ---- the wishes are more important ---- maybe, eventually those persons will realize that the money being "spent" to try to make peace and everybody "happy" is money that will not be there for their inheritance, etc.. Spend what is needed to make/keep your parents wishes. "Is it better to stop doing what should be done because all that has already been spent/given, when the outcome is NOT what was desired --- OR do you spend more to reach the initial goal (your parents wishes)? My own experiences with several families are that many "relations" were stressed, some even broken and that it all came down to those parties looking out for themselves instead of even trying to do what the parents wished. Sad but there is no way everyone can be fully happy here ---- except if they think more of the parents than their own benefit. Some of the folks came back together - eventually --- some did not, but those probably would "NOT HAVE BOTHERED" anyway, sooner or later. Do what you think will honor your parents - regardless of outcome --- and let them choose ONE EXECUTOR who will follow their wishes regardless of the fuss, etc.. That is the executor's duty -- not to worry if they are liked, etc. but to follow the wishes of the will maker according to law. The Tax Attorney just helps keep it all legal --- and remember ---- as an attorney is foolish if they representative themselves; so truly might the "tax professional" be foolish, if they enter into something like this as a policy or decision maker for their close family. The above is my opinion and thoughts ---- some say I am full of good information, some say I am just "full of""" -- all is given with good intentions and hopefully helps you and others think properly. Sorry for your troubles, and hope your parents have an easy transition with their "partners" passing when God calls them. (we feel sorrow and worry because they are not here with us;--; they feel happiness because they are with Jesus & God and have no more pain or worry). God Bless you and your parents.

I agree with everything Catherine said. It isn't for every office, but that could be said of any software product. One size does not fit all. I have to say that there is no excuse for not knowing the refund policy of any product you are trying, and your not receiving a refund is not the fault of Drake Software. Drake would have given you the full copy of the prior year software for FREE for you to try out for as long as you wanted. The only thing lacking would have been the ability to e-file, but it would be the fully functional version that would have allowed you to test drive its functionality without any funds outlay on your part.

I have found that the toggling to "View" mode is lightning-fast and not nearly the botheration I had originally worried about before I switched, several years ago. In general, data entry and return progress evaluation are significantly faster for my office than ATX ever was. Their tech support - on those rare occasions I have needed it - is unsurpassed. Phone gets answered in a couple of rings by people who know the software AND taxes. They make the refund policy very clear - IF you read it. The interface is - in my opinion - clear and reasonably intuitive. Yes, some areas (and especially their CWU program) still feel a little "DOS-y" but I worked with DOS for years so that is not an issue for me. Moral of the story: I switched to Drake and only regret that I had not done it years earlier. YMMV. Please don't use a broad brush to bad-mouth Drake, though -- because I could do an equal job of bad-mouthing ProSeries, starting with their ownership by Intuit (which company I detest with a deep loathing for many reasons) and continuing through one of the worst interfaces I have ever encountered. People have different opinions and ways of working. You didn't like Drake. You didn't read the refund policy before trying. OK. Fine. Warnings to others - no problem. Berating a solid vendor for not being what you wanted them to be - seems unprofessional to me.