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I swear practitioners of this trade should be automatically awarded full membership in the American Board of Psychiatrists and Bartenders. The clients are actually much more interesting than their tax problems. Last week I argued with a guardhouse lawyer (specializing in W-2 forms) who demanded to claim two kids living with his sister for his EIC since she had told him "I've got five, but I only need three for that "UNearned Income Credit" and you can have the other two." He left complaining two perfectly usable kids were "going to waste." March is more interesting. Heavy-lifting returns started two weeks ago and it brings out some amusing characters. #1: 1099-B: What can I do about this? BB: Nothing. You bought $10K stock back in '01, you sold it for $48K this year, you owe tax on the difference. #1: No, not THAT. I mean your $300 fee! BB: #2: Elderly clients had to cough up $5K for taxes/estimates. Very grouchy about everything - quite stern and chit-chat does not appease them. To wrap it up, I make out payment envelopes for their convenience and (to make sure it gets done) put stamps on them. Whole mood changes; they're happy as larks - never mind tax and my $600 fee - they've scored $1.88 in free postage. ____________________________________________________________ What a piece of work is a man! Shakespeare. --- Hamlet. Act II. Sc. 2 And how was your week?

A tale of two new clients. 1) Lady bitched about my $150 fee yesterday, which included searching property tax data to set up new rental and the sale of business property from closed trucking business. She always paid her friend $75. Always. Is this the same friend you told me always fixed up your return so you have never paid SS/MC tax and now you have no SS benefits? That friend? No, the new one. The one in FL who is not answering his phone, which is why you're here? That friend? Yeah, that one. 2) Retired gentlemen who came in three weeks ago, 88 years old, had a friend preparer with an actual PTIN who really screwed up his 2014 return nonetheless. I was sick when I saw other guy charged $40. I charged $150. Client wrote the $150 check and also handed me a $20 cash tip. He came in yesterday (which is not easy, he's pretty frail) to say, "Well, I got my refund check yesterday, just had to come by and tell you I'm now obligated to come back next year if you'll let me." I gave him a nice hug (not the one where I measure for the grave in the back yard), and said, "Well, then I am obligated to be right here waiting on you." "Yeah, buddy," he says. What I have to learn to do is think about the second client more than the first.

Client is an engineer - Strike one. Client is a millennial - OK, whatever. Client set up his own LLC online - strike two. Tells me about it at the end of doing his 1040 return. No activity, just set it up and did not do anything with it. So I do the CA 568. We are reviewing and I show him where it is a disregarded entity and I used his social for the TIN. "Oh, what about my EIN". He did that too, and told the IRS he was a partnership. Life is too short to deal with smart people who think they know everything and need to just click some buttons online. Tom Newark, CA

My favorite picture of Rita at work.

I have a lady (real nervous nellie) who has called twice a week for a month either talking my ear off or leaving long rambling messages with ZERO information. She dropped off some missing papers - put them IN my assistant's hand - then called me the next day to "make sure I got them" (no, my assistant used the paper as rolling papers because we now have medical marijuana here in MA and if YOU aren't a valid reason I don't know what is... but I digress, and I'm not serious about that). Her bill is going up $5 for EACH phone call. Now, the crazy lady who calls several times a week - we're lucky. She calls the trustees of her special needs trust (you see, she really *is* crazy) several times a DAY. They just pay our fee, knowing there is a hazardous duty portion tucked in there. And *we* are grateful not to them *them* dealing with her daily calls.

Well, he and I both knew he'll likely be in heaven this time next year, so it really was the sweetest thing ever. But that other heifer...

client just emailed me to tell me that he will be sending his info next week. I guess he thought I was sitting around wondering when I will get his stuff.

As long as they see it on the Schedule A, they *never* make the connection to the "itemized or standard deduction" on pg 2 of the 1040. It makes them content, and saves me TONS of time explaining things they already have their minds (wrongly) made up about. Print the Sch A!

Of course. If you don't, they talk all over town about how you didn't "let" them take their deductions. I get a new client every couple of years that tells me that. You can explain to some, but others will never get it. Easier to do the form.

I do the Sch A and charge for it, even if it does not make anything better. "Yes ma'am, I deducted those union dues, your $400 church giving and your husbands work boots. I also included the $200 donation of items to Goodwill. You can see them here on Schedule A."

I am going to stop telling clients the results of the return until I receive payment. The results are MY WORK and they should pay BEFORE they receive my work. I think people find out they are not getting thousands or owe and decide to let them set. We will see how this works.

Yeah, my girl here that's so smart she apparently just hires me to save time made a big production of telling me she didn’t bother with adding medical and donations or bringing 1098 for mortgage interest because she has done the math and doesn’t have enough to itemize, yet she highlights husband’s union dues for me. And tells me what it is because apparently I can't read or see yellow. Oh, yeah, I'm doing the 2106 and Sch A. Don't be telling me about yer taxes.

That's right. Be nice to me and I'll be nice to you.

I made a little boy CPA cry the other day. He is the brand new CFO for one of my business clients. I prepare reviewed financial statements for them. He's been awfully patronizing and arrogant. I found a major, major error and gently let him know that it needed to be corrected. Had to do with the book depreciation. He cried that it would be a lot of work. I empathized (on the outside) but felt just a little glee on the inside.

And he is probably too big to put over your knee and spank, too. Worse yet - he might not be too big, but would enjoy it! (ick) Candidate for a Rita hug?

This week for the first time I am charging "Loitering Fees" for those that I am waiting on information. This is in addition to my "Numerous Telephone Call Fees" to the same people. For some reason this year I have about a dozen all with various excuses as to why they have left their returns with me in a nearly finished state for weeks, even a month. But it's my fault, I need to get tougher on them with higher penalty fees, not just a phone call saying, "are you mad at me?" or "did you forget me?" I'm thinking of going with "hey knucklehead, I gave you an easy task, I guess I can't fix stupid!"

Well said, girl - well said. I've got a couple of those frail #2s too and, like you, I'm pretty fond of them.

And all I heard, Tom, in your post was "ching ching"! And that did not even include the PIA surcharge!

I did this for a client a couple of years ago; she took the money to buy a new condo, and re-deposited it on Day 58 (or was it 59?); close but still inside the window. While everything was fresh, I wrote the CP2000 response letter and had pdf's of all the support documentation. When the IRS letter showed up, I opened the document, put on the current date, printed the whole kit and caboodle, and off it went. Solved. I wish we could write ahead for all these issues when everything is fresh!

Pacun I totally disagree. The way the OP stated the 1099R was completed is correct. The broker is required to report the withdrawal as a taxable distribution. The amount rolled over within the 60 day window is reported on form 5498 thus making the distribution non-taxable. The advisor is correct. Only other thing to add is look at the new rules with the 60 day rollover and be sure the client has not had a rollover within that last 365 days.

Catherine is right. We still need to make sure of what the school has included in the numbers on the 1098T. The last one that I saw had some expenses included that do not qualify to be included in the calculations for any of the credits.

Get a printout from the Bursar's Office of actual charges and payments in 2016 to see what really happened. I have seen several 1098-T's with NOTHING in Box 1 but scholarships listed - but the Bursar's Office statement clearly shows charges for tuition and other fees, scholarships, and payments. Those forms (in my experience) have a tenuous connection with reality.

This year a new client came in and told me they itemized last year, I asked a series of questions, do you own a house, pay property and mortgage interest, had high medical expenses, donated lots of monies to charity or have high amounts of unreimbursed employer expenses, they said NO. Then I told them I would need to see your prior year tax return to see if your really itemized and I am still waiting for them to come back.

Off the top of my head, I am thinking that if the shareholder is the only one, then take it into income on his 1040. I know it is not correct, but the corporation is defunct and cannot receive the payment (no checking account, no way to take the money in). Give the utility a W9 with the shareholder's TIN and bring it in on the personal return. Unless you want the headache and the extra income that goes with it. Tom Newark, CA

Just get ready for the CP2000 in about a year.

Well, this will end up with the proper tax result if the full amount was rolled over, but the notation will be missing from the face of the 1040 and the backup schedule will show the wrong code, if you do happen to print those for the client. If you want the software to print the proper notation of "ROLLOVER" in the margin near line 15 of the 1040, you should enter the 1099R information into the software with the code 1 so that the distribution is entered in box 15a, and also enter the amount of qualified rollover that was transacted within the 60 days. If the full amount was rolled over, then 15b will net out to zero.

But did everyone in the family have some sort of coverage, either through the Marketplace or covered by Medicaid? Most Medicaid does qualify as MEC under the ACA, and if that is the case, why would you not check the box? The 1095A is to reconcile the APTC received to the final amount that this family was eligible for. A 1095B might be received showing the medicaid coverage, and I think the due date of these forms was March 2nd, so it is possible that they may still receive the form...I think.

Now you changed the species of animal.... Yes, you must enter the 1095-A information on Form 8962. No option. Do NOT CHECK THE BOX!!!!!

I agree with Rich that the parents are able to deduct the r.e. taxes that were paid by the daughter. T.C. Memo. 2010-286 case covered this where it was exactly the reverse, where medical and r.e. taxes of a daughter were paid by by the parents directly to the the payees.

Yes. It doesn't matter what they did with the "gift" cash. The RE Taxes were paid. They meet all the other requirements. Client wants to deduct them, because parents probably get very little benefit from the deduction, but client might. But daughter loses the test. Rich

The bottom line is not the same. An ordinary loss and passive loss can have very different tax consequences. The expenses are those of managing a passive activity and therefore should be allocated to the passive activity. The expenses of a partnership that is strictly involved in a passive activities should be allocated to those activities. If the partnership has both business activities and rental activities then an allocation would depend on reasonableness and materiality. Beside the annual fee, you also mentioned that legal fees, office supplies and accounting/tax preparation fees should be reported on form 1065. Can you give a cite where these expenses are allowed to create a ordinary loss when there is no ordinary income?

That makes good sense to me, but I really doubt he will sell the property and close the business. It sounds like he will go down still trying to work, and his heirs will sell the property.

The end result is the same. That amount is not taxable and the 1040 will be correctly filed. If the IRS questions it, to which it has the right to do so, you will have to prove that the amount was deposited back. By the way, the IRS has the right to question every form you submit, including but not limited to W-2 series, 1098 series 1099 series. I do like jklcpa's comment so I think she has the correct answer. What do you do with a form 1098 that reads that the tax payer paid 10K in mortgage interest and you find out that he didn't pay that amount of interest and he is not qualified to get the deduction? Do you call the bank to correct it so that the form shows 0? Or you simply (technically) correct the form and enter 0? How about if your client tells that their son paid the mortgage interest and that he has his taxes prepared somewhere else? Do prepare a Mortgage interest nominee form for the son so that his preparer can see if he qualifies for the deduction?

Yes, I just had one. I requested the client to bring in account statements showing dates and deposits so I'll have it for my records.

Guess I am 'old school' but it seems to me that the home is the place to learn basic cooking skills and the other things you list here. Schools and teachers are charged with an overwhelming range of tasks to teach already. I had Home Economics way back when for a few weeks but already knew much more than taught in that class. Parents and other adults around maybe could assume 'Life Skills" teaching. I could understand maybe an elective in high school but a short time but these things I learned at home. Yes, back in the 50's and 60's with non-college educated parents who both worked full time.

I agree Tom. I like to think that my clients are (well most of them are) smart enough to know and care about there taxes. At least, that is how I understand my job - to be the facilitator to their understanding. I will occasionally print a Schedule A where it is not required, but only for teaching purposes. And since I do not do form billing, it does not cost the client a penny more for me to that.

I just can't go there. It is too much like stealing to me. I will patiently explain that the standard deduction is better for you. Tom Newark, CA

Catherine...I read up on that and will suggest it. Thank you for posting.

Can parent treat the money as a gift and then deduct the taxes themselves?

No deduction for your client because she is not the legal owner.

Yes. Gail makes particular sense in that he will identify as a businessman until his last breath, so I just did the loss carry forward election since the carry back periods were used up. Thanks!

I am with Gail on this one. I think he is trying, no matter what his physical limitations. I would not go the route you suggest. He says he is in business, has a history of being in business, and keeps good books and records. Still trying to win bids. You have to have a profit motive, and it seems like he does. So long as he is doing the work to submit bids, I think he materially participates. Just my 2 cents. Tom Newark, CA

I disagree with your logic. Maybe it's because it Friday night, I am fighting the flu bug with a pounding headache, but I don't see how you can justify creating an ordinary loss from a passive activity.

Yes, several, due to change in family size, five in all if I remember correctly, from both the starting insurance company and then medicaid but two different starting dates in 2015 for three different family members due to different eligibility dates. She's a pretty good researcher but says she's not receiving 1095s from Medicaid this year. I just told her to check again.

I have my annual mid-tax-season nasty cold, and would be happy with a Friday where my fever went down and stayed down...

Now so many schools don't mail forms. ask kid if it is available on online account.

don't have to allocate to each property, set up an extra property called admin building and put them all there. same results less hassle and we do about 1000 returns like this per year, no issues with irs.