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His filing correctly will not hurt his wife. Her filing incorrectly could hurt her. But, we know how efficient the IRS is! I would probably suggest he bring his wife in with him to discuss MFJ. Or, if I didn't like her, let her continue to deal with her new preparer.

I had to chuckle at the title. Thought ILLMAS was doing my ex's tax return. Just the title. None of the details are remotely similar. Just to be clear.

Taxable scholarships go on recipient (kid's) return, on Line 7, note at left "SCH 500" or (whatever amount is). No, not subject to SE tax.

I had a non-client call me last week and left me a message that he had some questions in how his tax return was prepared to call him back.

"I left you a surprise in my diaper. Wanna guess what it is?"

Exactly, @RitaB! They are signing under penalty of perjury, so we at least have to try for as long as they are willing to listen.

Paper (22 lb) copy. Nice folder. Discuss until client is satisfied with explanation or gives up on understanding. Hard to tell. I am very patient and know you explain thoroughly when people ask questions. And try to use words they understand. I think some figure out that they will never figure it out, but if she is willing to try this hard, I'm going with whatever she says. Always tell them to call if you think of something else to ask. No problem. Many, perhaps most, don't want to know anything, just tell where me to sign.

She will happily shoot at anybody or anything.

Maybe I'm old fashioned, [OK I know I am] but I've always believed that giving the client, even the up-to-date ones, a decent folder with a paper copy on 20 lb paper is just good marketing. We all tend, when we pay a nice fee for something, to like walking out with something tangible in our hand. And we like, if we need to show someone our return, banker or such, usually, to have a nice professional looking copy to show. Even if you give them a flash drive, I'd give them that nice folder with that good-looking copy, too. It's a form of advertising, and pretty cheap, but when the fee is high, it's especially valuable if that folder is nice and thick. All flash drives are small, whether it's a 6 page return or a 47 page one.

Every state is a little different, but they all are similar, and the lawyer should be able to provide the date very quickly. BTW, Judy, your cite reminded me of something I've been proud of since I was old enough to understand it. My sister was adopted in 1943, and I was adopted in 1944, in Arkansas, and at that time AR inheritance law made a distinction between a natural child and an adopted child. My father thought that was wrong, and he got busy on lobbying to change it. And although it took some convincing, and even a bit of bribery, he got it changed! Did I mention I had a wonderful father? Thank you for bringing up that memory.

perhaps I am reading something incorrectly here ...but if grandaughter is 19 unless she is a full-time student she is a qualifying relative not a qualifying child and the gross income test for qualifying relative is $4,000

I ALWAYS CHARGE $2.00 for a 1065

I was trying to find a post with a prediction that I made a few years back and I couldn't find it. I wonder how far we can search. I was looking for "I predict", "Maryland will go" "Maryland will file" and I couldn't find my post. If any one find my comments from a while ago, please link it or let me know. In any event, I few years ago, I said that Maryland was very relaxed with EIC and with other credits on their returns. They were accepting efile returns without checking if a federal return was filed. People were claiming dependents without or fake social security numbers (just to mention a few). I said something like "if Maryland doesn't change, that state will file for Bankruptcy in the near future". Today I was so happy to see the Comptroller on my local channel (I live in DC), he was talking about how Maryland is blocking certain preparers, especially Liberty Tax. We have discussed the Liberty Tax blockage here on this forum and I am happy that Maryland is moving in the right direction. I have also noticed that DC and VA are also questioning some returns and they are asking for last pay check stub and copies of W-2 to match withholdings when efiled.

Well, what if kid got 3,000 in scholarships that was designated to be used for tuition, and tuition was $2,600? Wouldn't $400 be taxable scholarship on kid's Line 7?

It's going to cause a problem all the way around. MFS will crosscheck to the wife's SS#, and the same address for both. All of that is secondary to the fact that it is wrong and needs to be amended.

No. The relationships that are considered a "child" and allowed under the "qualifying child" rules includes the son, daughter, stepchildren, foster children, stepbrother or stepsister, half brother or half sister, and lineal descendants of any of those. If any of those meets all of the rules to be a qualifying child AND are also under 19, or under 24 AND a F/T student, then they can make more than $4K and still be a qualifying child for the dependency exemption. There is also the exception to gross income to be considered if any of those are permanently and totally disabled where certain income can be excluded when determining whether or not the "child" meets the gross income test. The relationships allowed under the "qualifying relative" rules are broader that I won't go into for this discussion, but those are limited to under $4K of income, unless the person meets the test of permanently and totally disabled and falls within that exception to exclude income from sheltered workshop from gross income.

I have one lady who over-withholds and uses the refund to fund her IRA contribution. It's the only way she is certain she can't use the money for other reasons during the year. I really dislike the tactic in general but for her it makes sense. She still gets her total tax line highlighted.

Of course it is "simple"! They ALL are!!!!!

My family will tell you that my temper is flash-in-the-pan. Something gets me royally ticked off, for ten seconds I yell at whatever thing has offended me (or some inanimate object for when the thing is a client or family member), it's done. Can't even remember it; don't hold grudges. I'm generally a happy person.

Yes, of course. I was just trying to say that 100% of the scholarship might not go on line 7, not the part actually for the tuition.

About the same for me. Except, I stopped using nicer paper a couple of years ago. As I realized how many never open the folder, I stopped using the heavier stock. I explain until they tell me to stop, and then tell them they can call me with any questions or issues.

^ that, but if the student is a degree candidate, only include the amount on line 7 that is for other than tuition and course-related expenses.

I will happily shoot at any piece of paper with concentric circles and a bulls-eye that is properly and safely back-stopped. When other conditions are also safe, and I have safe equipment.

This works both ways. Some people just can't save money and a nice check each year is good for them. Even at no interest. Others who have to pay, whew. How do you get them to have more withholding or make ES payments. I have a few clients who don't do this year after year. And they wonder why they have to pay so much.

I give paper copies in a nice folder. It's just as much of a hassle for me to put things on a CD or flashdrive. I have a few clients who don't want the paper copy. I load it on my Sharefile site and they can get it there.

Why not just leave the W-2 as it was and let her get a refund when she files? Too many chances for things to go wrong using the "amend everything to put it in proper order" method. Sometimes simplest is the best. However, now that the return has been amended, just send the W-2 showing the withholdings and let her get the refund on her return. (Providing she chooses a properly knowledgeable preparer.)

They never moved. Just disappeared from my client list with no explanation. Still living in the same house.

KC- I would never think you suggested or implied for me or anyone do anything unethical. It may not seem like it, but you and I have been around on this board and the older ATX board since 1998 and I am sure that I know very well that you wouldn't advocate filing anything incorrectly so I do apologize that I didn't see the sarcasm in your response which I should have. I will ask about the marriage certificate as I didn't think about that. The waters were muddied a bit with the granddaughter now having educational expenses which she states only she paid approx. 500.00 and no one is sure who paid the rest. Form 1098-T shows amounts billed of 8k and scholarships of 3161.00 and she doesn't know where the rest of the money came from to pay for her schooling so I can only take the 500.00 + 3161.00 as the actual amounts paid for the AOC on my client's return. It just doesn't get any better than this.

KC, thanks for sharing your story. Your father sounds like an amazing man. Randall didn't say where the client's adoption is, whether KY or a neighboring state, but KY is his home state and the reason I chose that.

Interesting, just read an article explaining a number of ongoing scams promoting this program, where you are asked to pay hundreds of dollars in advance so the scammer promises to get your loan modified or completely forgiven. In addition some of these scammers collect your personal information and then resell it to others. If it sounds too good to be true ? Just like Bernie Madoff's 12 % guaranteed investment returns

Now that is brilliant, what a great idea!!! My father, a farmer, always said, and I totally agree, "the slickest trick the government ever came up with was the withholding gimmick." When people focus on 'how much is my refund', they usually overlook the "the amount the government keeps", i.e. the amount they paid. The real dummies actually look at their 'refund' as a gift from Uncle Sam. Even those who owe tend to look at just the amount of the check they have to write, not the total tax bill.

"Wah Lum Kung Fu double broadswords" I had to google these, nice swords. here is my favorite pic

I give the client paper returns. Review it with client. Some clients, very brief, usually just mention similarities to prior year, nothing in particular to point out. Unless there is something to point out. Some might ask some questions, etc.

I review very few returns with the client. I am in communication with a good many of them all year long and we both have a good handle on how the return is going to look. For the rest, we have a check-in system whereby one of the girls ask the client a series of pertinent questions and then if anything looks strange during prep I get in touch with the client. I print the client copy and one of the girls check the client out going over highlights that I have made. If there are any further questions, I am called in to answer more technical questions. Having another member of the firm in the meeting allows me to get in and get out with very little time spent. This system is what allows me to prep over 500 returns during filing season - and still maintain what little bit of sanity I have left. We have been paperless (or less paper, more appropriately) since 2006 but continue to supply the client with a paper copy. We have two or three clients that like us to give them digital copies but we still give them a paper copy with the digital copy.

I almost never review a return with the client. Very few ask for it. Some review it at home and call/email with questions. Some review it in the lobby and interrupt me if they have questions my office manager can't answer. I suspect that many never even open the envelope they pick up at the front desk. Most of my clients still get a paper copy but I only print out the 'highlights'.

THATS OVERTIME, MY FEE JUST 2X.

I hope that was over the phone, so you were able to resist the need to hit him?

To answer this particular question: Heck no, I wouldn't recommend that.

I agree. The fact is, the economics of solar vary, depending mainly on location, but it's a decision that should not be based on taxes.

I tell my clients "don't let the tax wag the dog". If it makes sense without the tax credit to install the panels, do it. If you want to "green" the planet because you don't like fossil fuels and you don't care about the economics, do it. If you want to use this as a way to save tax, I will run the numbers for you so you can make an intelligent tax decision. But please....please....PLEASE do not take tax advice from the salesmen. Tom Newark, CA

You nailed it there. I could not believe I had a lady in here worried about what she was going to make on the sale of a rental. I think she was actually trying to figure out if she should sell it for less because of taxes. I stopped her and said, "STOP thinking that way. Sell it for all you can. Taxes have ZERO to do with the decision about what to sell this house for." I thought her husband was going to cry he was so happy. "Yes. Thank you, OMG, thank you for telling her that."

I preach to my clients all the time - economics first, tax second. If the purchase makes economic sense, then let's talk about the tax benefits - and then we can marry the two together. In your case, he must have some other reason for wanting to spend $50,000 on solar panels beyond per economics or tax benefits. Case in point, I just spent $7,000 on a whole house generator. It makes very little economic sense, has no tax benefit, but I sleep way, way better at night now here in the back woods of PA. In your guy's case, he would need to save a ton of money on his energy costs to make this make economic sense. If his goal is to simply get off the grid and he is willing to pay a price to do that, then by all means, go for it and the tax benefit is just a bonus. But if you are asking the simple question of whether to tell a client to spend $50,000 to save $1,400 in tax - no, I would not.

Just remember, if scholarships are used for living expenses such as room and board, they are probably going to be taxable as income. That doesn't mean you should not classify them that way; just be sure to look at all of the ramifications.

I believe you are not correct. I'm sure there are private scholarships that do not allow the funds to be used for room board, but the article indicates that Pell grants can be applied differently than the way applied by the institution. Please see the following link https://www.irs.gov/pub/irs-utl/Pell%20AOTC%204%20pager.pdf