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I am not as good a friend as you. I would report this on Sch C as it was compensation for work. If she had worked at McDonalds for two weeks (or two hours), never to return to the food industry, SS and MC tax would have been withheld and paid in starting at the first clock in, and no tax pro would give a second thought as to regular and continuous. Yeah, she was really an employee, but just because that was done incorrectly, it doesn't mean you have to break your neck to help her escape the tax liability somebody should have paid. She can rat out sister-in-law I suppose, or ask sister in law to pay half her SE tax, but you have other fish to fry.

My opinion is that this should have been an employer employee relationship and there should have been a W-2. I will leave it to your judgment as to where you take it from there.

We want you to know how very much we appreciate YOU and how valuable a resource you and this forum are to us. Hopefully the notices helped you tolerate better the miserable commute you had. You make ours so much nicer.

A+ is a certification for computer technicians, N+ is for network certification, MCP is Microsoft Certified Professional, MCP+I is plus internet, and MSCE is either a Microsoft Certified Engineer or a Master of Science Civil Engineering. MCSE is probably more common - a Microsoft Certified Solutions Expert. Anyway that you look at it, that is an impressive list of credentials. BUT if I had that many certifications in IT, I would probably work in that field instead of being an unpaid auditor and data entry clerk for the IRS.

Or just sit quietly and bill the time and let the abuser know you are billing time. Let them determine how valuable that phone call or text is. At your hourly rate, they might be tempted to turn it off or you might just make more money billing time.

Holy smokes! I was on the road all day, got a flat tire on the way back, had to change it in the mud/ice/slush, and when I got home my email had blown up with paypal notifications. Thank you!

My apologies to you (Pacun) for startin' all this mess. Like Gene, I didn't know what all those things were (although I've got the EA and DID also ONCE get an A+ ). They certainly ARE much more impressive (and real, of course) than the Beasts & Fishies guy's and congratulations to you on having the brains and fortitude to slog through what I imagine would be a very long and tough road to get them. Darn it, Gail; it certainly does smart when a body gets slapped with the truth ("...being an unpaid auditor and data entry clerk for the IRS.") But you're right on the money and even though it's too late for me to start technifying, I may yet run for mayor of Dogpatch.

So they can hear it when the ambient is noisy? To match the caller? To take out their rage against the world in general?

I'll vote for you!

Shouldn't it be subject to SE? I see it this way, I would normally do my own copies, filing etc..., however if I hire someone "temporary" to do my office filing, I see them as a temporary employee and would issue a box 7 1099.

I think you have to add a 2106 for the spouse.

Did last month already when that last upgrade was put in.

Do you have 5 minutes... your help is needed? Maybe I should say "Do you have 5 minutes, your appreciation is needed?" We might have different software and for moments we could argue which software package is better. We could also argue about who knows more about certain areas of tax preparation but there is one point that no one argues... THE VALUE OF THIS FORUM!!!!!!!!!!!!! So, please donate something today so that this site stays power up!!! Share with us if were able to donate or if you have technical difficulties. THANK YOU.

I put my phone in Do Not Disturb mode whenever I'm in a restaurant, doctor's office, theatre, etc., but I never turn it off. I only had a problem once with one client who had the annoying bird whistle sound for text messages and he was getting messages every few minutes. I just asked him to silence his cellphone before I lost my mind. Why do people like obnoxious sound effects. I try to find the most soothing, shortest sounds I can for my phone. Most office phones have the most frantic, alarming rings you've ever heard, for some reason. We have our office ringers set at the lowest volume so you can barely hear them. Sometimes, we turn them off for awhile or even the whole day.

I prepare returns on weekends and at the end of the day. That's why it is easy for me to give their papers back even when I have finished the final return because this is a part time job. The job that pays my rent is my regular IT job. I would like to retire early, very early and do taxes from Jan 31 to April 18 and then go to my country and then come back on Jan 28th to purchase the software and to get ready for my 2.7 month year and so and so. With technology, anything is possible. My clients barely get letters from the IRS or states.

I've taken it and a lot of clients have taken it and NO ONE has been questioned. I think the IRS claims that they pay close scrutiny but don't.

Crying. I also see it like ILLMAS. SIL is escaping SE tax on the amount she paid for this work. I don't think IRS really wants us all looking for hobby office grunts and shifting our income to them. Even if they hug us.

I know what EA stands for but I don't believe I have ever seen the other designations. Well, I have seen A+ a couple of times during my lifetime on test papers but I'm not sure if it means the same thing here.

We removed the town names and the returns were accepted. The tax doesn't change without the town name.

The four stages of Tequila, in Espanol y Ingles: 1) Estoy feliz (I'm happy) 2) Estoy guapo (I'm handsome) 3) Estoy invencible (I'm invincible) 4) Estoy invisible (I'm invisible)

Now that sounds like fun! I'll be there shortly.

I used to offer the client a cookie, then when they sat their phone down, my boss took over...........

If their phone vibrates or rings while they're in my office, I encourage them to take the call or reply to the text, etc. I usually have something to do while they are on their phone, but even if I don't, they are paying for the time either way. By the same token, if they're on a call or texting, I don't mind interrupting them if I have a question about their return.

And in turn, we learn from your findings. We all get one or two each year of a situation we haven't seen before, and therefore the comfort of coming here for help. Now if this ever comes up we know the source and proper answer to the question. So thanks for posting back what you found and having that strong desire not to just rely on this community, but digging a little deeper! We all benefit from helping each other! I love my Community!

Judy I had to click on the links at the bottom of the page you posted to get to this page. Had you not posted the first page I may not have found this. I too received the message in Drake but, as you said, it did not stop the e-filing. It is always a pleasure to work together on different situations. I guess I could have given up and went with the first answers received, but this bothered me enough that I had to know the right answer before contacting my client.

I've never had a situation where only the K1 Social Security number was wrong, but I'd just send in the amended K1 with a note. The IRS will probably just toss it thought because they gave up trying to match K1s to 1040s.

If it was really a favor between close relatives, then your client can ask for the 1099 to be corrected to zero if money was really just a gift for being a help when needed. Your client can offer her help again to file the forms. Then it won't appear on your client's return. And, if under $14,000 (over $14,000 would seem to be a LOT of help) no gift tax return for the s-i-l.

Maybe SIL should be asked by your client to pay the taxes as a nondeductible gift since she bolluxed up. That would really be nice. Nicer than your client running the SS8 and 8919. And a big hug. I take it your client is probably young and not very wealthy. I'm handing a tax return to a single with no dependents twenty-something youngster who made around $24,000 in 1099M income working free-lance as an admin assistant for several real estate agents. Collected unemployment. No health insurance. She's looking at around $4k in taxes due. Pretty sure she doesn't have that laying around. We'll be talking about an installment agreement. Ugh.

There are two different issues - contractor vs employee, and box 3 vs box 7. I understand Catherine's point - for example, I had a client who got a 1099 from the LTC insurance company for taking care of her mother. Normally, that type of work would result in SE tax BUT the taxpayer was not in that business - she only did the work because it was for her mother. This sounds similar - the taxpayer is not in the business of performing clerical tasks - she only did it because it was her sister in law, and she needed some short term help. However, if the taxpayer goes out and gets a job as a file clerk, secretary or receptionist I think it would be harder to make this argument.

Some years when the DPAD first came out, I omited the DPAD information from the K - 1s. It was a simple fix to amend the 1120 S along with the corrected K - 1 s.

Sorry, I should have mentioned that I am the preparer for the Trust.

You have a point; my thought was not based on "getting out of tax liability" but rather just that my client was not engaged in a for-profit venture of being a temporary office assistant. And one of the employee-versus-contractor questions is who chooses work times, and my client was definitely in charge of when she was available to help out. So I see that as fundamentally different from hiring on, finding out that if you stay you will hug everyone there, and quitting in short order, never to try similar work again.

Are you talking a couple of days, one project, catch up on filing and outta here? Or, an entire tax season. Continuing to file and copy the new paperwork and not just sort the old stack? Only you know if this was a "hobby" or regular and continuous.

I have reported box 7 on line 21 and noted the EIN of the issuer without the client receiving any notices more than once for these situations. Line 21 Hobby activity income is sometimes reported in box 7, for instance.

Done.

Thank you. I am sure Eric will appreciate it.

I love when a word (in this case invisible) is spelled the same in English, Spanish, French and Italian because of its Latin roots. But boy we sure don't pronounce it the same!

Terry, thanks but you are giving me too much credit because none of that was on the page I linked to. However you got to that page though and found the correct answer for your client is always welcome news. What is interesting is in Drake when I enter the $26K deferral with code E I get an informational note that may require attention but that will not stop the e-filing.

Here is an excerpt from the article that Judy had posted that fits my client's situation. They are over 50 and do work in a hospital and have been employed for more than 15 years. So, as it stands, it appears my client has been advised properly. I originally posted this as a code "D" when in fact it was a code "E". When I read the entire article, there are differences with catchup contributions between plans. The last example fits my client's scenario perfectly. This has been good learning for me and I hope that posting the article will help others as well. I plan on forwarding this to my client for them to take to their HR department to be sure this is exactly what they are participating in. Limit on employee elective salary deferrals The limit on elective deferrals - the most an employee can contribute to a 403(b) account out of salary - is $18,000 in 2015 - 2017. Employees who are age 50 or over at the end of the calendar year can also make catch-up contributions of $6,000 in 2015 - 2017 beyond the basic limit on elective deferrals. Limit on annual additions The limit on annual additions (the combination of all employer contributions and employee elective deferrals to all 403(b) accounts) generally is the lesser of: $54,000 for 2017 ($53,000 for 2015 and 2016), or 100% of includible compensation for the employee's most recent year of service. Generally, includible compensation is the amount of taxable wages and benefits the employee received in the employee's most recent full year of service. If your 403(b) plan doesn’t limit the total employer and employee contributions to the annual limits, find out how to correct this mistake. Catch-ups for employees with 15-years of service If permitted by the 403(b) plan, an employee who has at least 15 years of service with a public school system, hospital, home health service agency, health and welfare service agency, church, or convention or association of churches (or associated organization), has a 403(b) elective deferral limit that is increased by the lesser of: $3,000, $15,000, reduced by the amount of additional elective deferrals made in prior years because of this rule, or $5,000 times the number of the employee’s years of service for the organization, minus the total elective deferrals made for earlier years. An employee who qualifies for the 15-year rule can have an elective deferral limit as high as $21,000 for 2016. For plans that offer “15-years of service catch-up” contributions, if an employee making these contributions doesn’t have the required 15 years of full-time service with the same employer, find out how to correct this mistake. Catch-ups for employees age 50 or over If permitted by the 403(b) plan, employees who are age 50 or over at the end of the calendar year can also make catch-up contributions of $6,000 in 2015 - 2017 beyond the basic limit on elective deferrals. If the 403(b) plan doesn’t have the age 50 catch-up and an employee made deferrals over the 402(g) limit (or the 402(g) limit adjusted for a 15-year catch-up), find out how to correct this mistake. If both catch-up provisions apply While the age 50 catch-up is subject to an annual limit, the 15-year catch-up is subject to a use test, lifetime limit and an annual limit. When both catch-up opportunities are available, the law requires deferrals exceeding the standard limit ($18,000 in 2015 - 2017) to be first applied to the 15-year catch-up (to the extent permitted), and then to the age 50 catch-up. Example: Assume Pat, age 50, has worked as a teacher in the XYZ School District for 15 years; is eligible for the 15 years of service catch-up; and has eligible compensation of $70,000 for 2016. The maximum employee and employer contributions to the XYZ 403(b) plan for 2016 for Pat would be $59,000: Pat may have elective deferrals to the 403(b) plan totaling $21,000 ($18,000 plus $3,000 15 years of service catch-up) Employer contribution of $32,000, bringing the total employee and employer contributions to $53,000, the annual additions limit. Pat may also defer an additional $6,000 age 50 catch-up contribution in 2016. Example: Now assume that Pat only deferred $22,000 of his salary under the 403(b) plan. The plan provides both the 15-year and age 50 catch-up deferral opportunities. Under the use test, Pat is eligible for a 15-year catch-up of $3,000. Of the total $22,000 deferred for 2016, the maximum standard deferral of $18,000 is first applied, followed by application of the 15-year catch-up deferral of $3,000, and finally application of the remaining $1,000 to the age 50 catch-up deferral.

Thanks, Lion. I have already given her the homework for tonight, and hopefully she will find something in one of their accounts. Your reply does confirm I'm on the right track though and I appreciate it! Unless the SS employee immediately noticed it was identity theft right away and tried to hide it from my client, I can't imagine why in the world she would tell my client what she did. It'll all come out in the wash as the client is coming back to the office tomorrow and she'll call SS again and let me speak with the representative......but hopefully she'll find the extra money in her account. Still doesn't explain why they would only pay her $800 for 2016, but nothing about this make sense anyway, so we'll have to wait and see. Thanks again, Lion!

I contributed at the start of the season with the upgrade also, but thanks for the reminder.

Great idea! Since I was challenged (I think), I choose squirt guns filled with Tequila. Someone bring limes, Triple Sec and ice!

Done!

These rules are complicated as the tax code!

Wow! This is right up there with the Hamilton-Burr duel. But what I don't understand, is that duel was over defamation of character, but over tax software, you must be using water pistols or paintball guns. The loser buys at the bar, be sure to let us know what day at sunrise. Rita, check you schedule, you're needed to count the paces.

Done ! Thanks for the reminder, Pacun.

Done as well. Thanks Pacun for the reminder and I have to agree with Robin as this site has been invaluable for years. Thanks Eric without you it may have never happened.

I have never called ATX support except for that email I sent and it was answered in 2 hours. Maybe the "long list of credentials" help so I don't have to call ATX to begin with.

Jack, sorry you had a bad experience with Drake. I would have probably felt the same way leaving ATX and jumping into an input driven program. I did issues with that with other programs which is why it was probably easier for me to make the switch. You can dig into the bowels of Drake and solve any issues you may have. As you said, it is important to learn the innermost workings of the program. Pacun, I am sorry but I don't need a long list of credentials to get support from Drake. Believe what Catherine has said. They do answer within three rings which is utterly amazing. Also, the program updates in 60 seconds. Sorry but ATX can't touch that.

Impressive, but I prefer Idi Amin's: "His excellency, President for Life, Field Marshal Al Hadji Doctor Idi Amin Dada, VC, DSO, MC, Lord of All the Beasts of the Earth and Fishes of the Seas and Conqueror of the British Empire in Africa in General and Uganda in Particular." P.S. Sorry, but I couldn't resist.