Leaderboard

Aaaaannnnnd, that's why you were awarded the first-ever Tax Stud Star! And, yes, when they love us it goes a long way.

We usually hold broker statement clients to about now, but this guy was in FL and just got back to a stack of mail. But he's one of my longest, best clients and he absolutely loves me... and his wife just died.... so I didn't bill him for a redo.

This is something probably all of us fear. At every juncture during tax season I hold my breath when a program takes a little longer to open or some other non-normal thing goes on. And the fact remains, other than ours and our loved ones health, this is probably the most vulnerable spot for most if not all of us during our busy season. The Serenity Prayer comes to mind right now. God grant me the serenity to accept the things I cannot change; courage to change the things I can; and wisdom to know the difference. Living one day at a time; enjoying one moment at a time; accepting hardships as the pathway to peace; taking, as He did, this sinful world as it is, not as I would have it; trusting that He will make all things right if I surrender to His Will; that I may be reasonably happy in this life and supremely happy with Him forever in the next. Amen.

Another bump in the road of life Hang in there, hopefully you will have your computer back soon, up and running. Keep us posted

Why not tell them :"You need to put $XXXX into your IRA by XXXXXX to reduce your taxes by $XXX. Here's your extension. Let us know when you get the IRA done and then we'll put your return back in the rotation in the following 30 days or so."

Way to go! Me too, in a few hours - and 2 days ago I would have said no way. A few extensions, one of which I can get a head start on, the rest are waiting on K1s or other pieces. So yea, payroll taxes, clean the office, etc. Wow, can't remember the last time I finished early!

Hooray, @rfassett! We have almost everyone not filed on extension. Couple of folks who only owe us signature pages - but if we have nothing by end of business Friday, they go on extension, too. I will do payroll taxes etc tomorrow; ran payrolls today. The usual slew of "I know you're busy, BUT" questions - that we are ignoring for now. (What I want to tell them all is: If you know we're busy, wait until next week, fer gosh sakes! Do I show up at your door when you're in the middle of cooking, saying "I know you're busy, but if I could *just* get those documents real quick" - you'd kick me out on my patootie!)

Carbonite does not backup the default folders that ATX uses for both data AND backups, so if you're using ATX, move your backup folder to a location that Carbonite does back up. Also, Carbonite only backs up frequently changed files (like tax returns) once every 24 hours. This is why I left them for CrashPlan.

Sorry for the rant. The best of luck to you, NE, with hopes for a quick fix!

I don't know where in NE you are, but I'm in Lawrence, KS, and if you wanted to load your trunk and come down and work on one of my machines (if you use ATX), you are welcome. You could roll over the returns you need to do and put them on a thumb drive.

Thanks. I hope that it's hardware and an easy fix. I just hope that Carbonite and/Easeus restore easily if that's what I need to do.

Hey, more tax return to do! Ok by me. No free lunches either.

Congratulations to you all that are finished. I have one last return that was completed days ago and will be in the client's hands this afternoon, and there are a couple that I need signatures forms back that I'll e-file. Everything else is on extension at this point.

Good to hear from you, Ms. TabbyKats! You seem happy in retirement although dismayed about the resulting former clients treatment. Tha's one reason I won't sell my practice, just assist clients with a transition to another practitioner of their choice. Sorry that I am unable to help from Ohio. I imagine this person would appreciate face to face assistance. Hopefully someone else here will be able to step up. Wishing you happy retirement ongoing!

Yes, thanks, and with a few days to go that's what I do with the heavier ones that take more time to review. Tomorrow is my deadline to complete any return. I don't chase anyone.

You cannot discuss your client with the ex-spouse.

My hard drive was sending signals to Dell that it was in imminent danger of failing. Due to my huge payments to Dell, they sent a new hard drive and a techie to install it, but I postponed the appointment knowing I had to "clone" my old hard drive to the new or face a long spell of restoring backups. My personal techie quit (apparently a feud with my 37-year-old son who hasn't lived here since he was 17, so why am I punished? I think biblically, it's supposed to go the other way!). Dell techie, an IC, was willing to work with me on the side. It took him two visits and him purchasing some new software, but he got me up and running last Thursday morning at 3 a.m.! Closing down is incredibly slow, so I still worry. And, I've been getting that red screen in Chrome. Thought it was under control with Abby's directions, but it returned this morning. The first thing I did was e-file extensions for every client left. Then I got back to preparing returns. Just had an email from a family where I really needed to compute payments, but didn't; so need to get to that this afternoon. We had an out-of-state funeral the weekend before Easter, then Holy Week/Easter. I even took off Easter Sunday, thinking I was on schedule. But, the computer gods have a wicked sense of humor! I also lost internet on Easter, and three days later Optimum was still telling me it was my computer (which sounded plausible, because that was before the new hard drive). So, unable to update my software or e-file returns, I gave in and booked the techie to install the new Dell drive. But, a patient Optimum tech worked out the Optimum issues and got me back online before the new hard drive. We did get a new router and probably need a new modem, as we've been bumped offline since then, but for shorter times. And, I'm postponing my hip replacement until after tax season! But that means I won't be preparing any returns for a while. Yeah, computers are a great help and time savers when everything works right. But, when they go bad, they are huge time wasters. Rant over. Gotta compute those extension payments. And, I have a few 2014 amendments to bang out today/tomorrow. I'm fried.

I love the Serenity prayer. Someday, perhaps I will be able with God's help to live every moment like that.

So you'll have a lousy 16th and 17th, but a great 18th as you'll fill one of Elrod's big glasses with free liquor.

Sorry that the link I provided in my second posts was about vacation homes, and that does not apply to your client's situation. While we are all waiting on interpretations of areas that are loose in the new TCJA, please consider the following when deciding whether you still think that this HELOC interest will be deductible, because it sounds like you want to treat this interest as acquisition indebtedness where some borrowing on home equity loans (as titled by the bank, to differentiate from home equity indebtedness that is a different issue altogether) will be considered home acquisition indebtedness IF the proceeds are used to buy, build or substantially improve the qualified residence and is secured by that residence. A qualified residence under code sec 163 is the taxpayer's principal residence or one other home used as a residence by the taxpayer, and that would not include a newly acquired property to be used solely as a rental. If the loan was for a property that was originally a second home and later converted to a rental, then that interest continues to be deductible under acquisition indebtedness, but a property newly purchased as a rental and never meets the requirement to be a qualified residence will not be considered acquisition indebtedness. If the rental's purchase came from the HELOC, it is clearly home equity indebtedness that will be nondeductible under the new law. Under the old law pre-TCJA, that interest was deductible under the home equity indebtedness if it was below the threshold for borrowing, and was the reason I suggested capitalizing all the carrying charges that you can. code sec 163(h)(3)(B) Hope I got that right!

Proud of you rfasset. I'm trying to tie things up but unfortunately I have a lot of stragglers trying to decide how much to put into an IRA or simple IRA as that is something I always suggest for them to lower their bill. But it amazes me that they will drag it out to the last minute, no consideration for us. Like we are there to serve them. It reminds me of the "Twilight Zone" episode, "To Serve Man," that's what they make me want to do, along the lines of Rita's thinking...our Queen.

Congratulations!

Closing the season with 474 returns done - 5 -1120; 60 -1120S; 26 -1065; 5 - 1041; 3 - 990; 6 - other; and 369 -1040. Extensions are done. Will be here tomorrow, Friday and Monday working on quarterly payroll reports and payrolls and putting out fires - very low key, low stress.

Good News! I have my computer back. They think that it may have been a Windows update that went crazy last night. I knew that there was one there, but I had not told it that it was OK to update. They did it for me today and everything is working. I am paranoid, but I am definitely getting my extensions done early. The really nice thing is that they didn't even charge me. They said that there was no sign of the hard drive failing and that if it happens again, to unplug everything but the essentials and see if they are causing a boot problem. Thanks to everyone for their thoughts. The Serenity prayer did come in handy even after I got up and running. We found another carpet beetle in the house after we have spent probably 36-40 hours total moving furniture, pulling up carpet and spraying everywhere. We had not seen one in over a month. I told my husband that this time, it's not Pinterest, we get an exterminator and find someone to watch the cats Lion, I really feel for you. I hope that your computer makes it through the next few days and that your hip replacement goes well when you find the time.

Just WOW!

Let the lawyers fight it out. They get the big bucks. Tax preparers are a little busy 12 April. Their agreement might require them to trade tax returns. But, it can't tell you how to prepare tax returns. Make notes/save emails from your client describing her situation and your choice of filing status. Good luck!

I like trusts anyway because you're getting all the deductions into AGI. Put the house in the trust and deduct the real estate taxes too.

Maybe the 1041 won't allow 2% deductions next year, and my plan will fall to pieces. CPE gonna be intrestin' this summer!

Nice hearing from you, Tabby. Enjoy your retirement. Don't worry; be happy!

A good math lesson, Rita!

I am also glad to see that my thoughts on this exact situation were actually correct. I warned my client that using a HELOC on his current home to purchase a rental house would not have deductible interest because of the new law in 2018. He did not like my interpretation and went ahead and did it. He will not be happy when he has his 2018 taxes prepared, unless he goes to someone else.

My nephew told his watch he was at a certain bar and where was the closest liquor store. The watch said it would call him a taxi.

CA allows you to itemize even if the federal standard is taken, as long as the schedule A is completed. So no much less work for me. I’m seeing big savings in my people that are hit hard by AMT. but then again, the 200-500k range isn’t exactly middle class.

Hi...I was on this board for a few years and retired 2 years ago. I hope all of you are doing well and that this has been a productive tax season. Some may recall, I when I retired I sold my business to a CPA who is, well, let's just say really not very good. I continue receiving e-mails from former clients about the IRS catching "his mistakes" etc.....and I usually give very general advice. But, I wont get involved beyond that. One of "the formers" e-mailed me a few days. It seems that for 3 years she had a pension plan at work, took an IRA, but he forgot to "check the box" on her return, so it was deducted although her income was too high for the deduction. The IRS did not catch this; her friend did. I told her he should amend...Form 8606 needs to be generated....etc. She called him and he was verbally very abusive to her (not the first time I got this feedback). I told her finding someone new would be costly (I mean, he should do this for free). She is very stressed out. And, continues to e-mail me, although, I told her that I don't want to be involved as I am retired, I never handled anything like this so I don't know the penalties etc, and that it's his responsibility. If anyone would be interested in handling his, please pm me. I've told her that nobody anywhere would be available before 4/17. Since I am retired I don't really care about "the rules"...so please, no advice. Unless I can give her a referral I'm ignoring her e-mails. Thanks to anyone who wants "an introduction"!

@NECPA in NEBRASKA I'm relieved for you! Yes, I had a windows update that slowed things up too but not nearly the trouble you had! @Abby Normal, not your fault at all. I remembered about it and when things slowed, noticeable but not terrible, I did something else for a while.

I did learn that about Carbonite. I back up additionally to a folder in my docs. Will that work? I have a plan with Carbonite and I will have to read to see if I can break it in the middle. I suppose I should export them, also to a external hard drive. I back up daily with Easeus to one.

I believe you are 100% correct. I agree with Judy that you don't have a rental, you have a Schedule C rehabilitation business and when they started renting it out it became a Schedule E rental. The interest is capitalized on the Schedule C - it's deductible in future years on the E. Tons of people (me included) take out HELOC or cash out first mortgages to pay for rental property because you get better interest rates and you can avoid a business plan.

TP reached out to me in early February and told me by email and over the phone she had been separated, divorcing over the last two years and that TP would be claiming the kids because she had them most of the time. Based on these: Can a married person claim the Head of Household filing status? The Head of Household status is designed for single persons with dependents, but in some cases, married persons can claim the Head of Household filing status. To qualify for the Head of Household filing status while married, you must: File your taxes separately from your spouse Pay more than half of the household expenses Not have lived with your spouse for the last 6 months of the year Provide the principle home of a qualifying dependent Claim an exemption for your dependent If you meet all of these requirements, you may file as Head of Household while married. TP qualified for HOH, today I get an email forwarded from the ex-spouse saying TP has to file MFJ or MFS and based on his facts, ex-spouse is correct. I probably won’t be moving a finger since my invoice has not been paid, but who else hates when this happens?

I enter them on the 1099DIV and ATX puts them on the 2% line... where they belong.

Thanks, I won’t, the ex sent my client an email and it was forwarded to me.

IRA distributions are fully taxable, like rfassett said. Is it possible to put the estate on a fiscal year and then have it distribute the income to the beneficiaries within the fiscal year? If the estate gets and keeps taxable income of, say, $100k, it's going to be in the 39.6 bracket plus be subject to the NIIT. If that income is distributed, it goes on the beneficieries' returns and gets taxed at their individual tax rates. I don't know if time has run out for this option. Was the money already distributed? When did the person die?

I think you are correct.... but ....this is where it gets murky for me. If (BIG IF) the son is under 26 and the coverage offered by the son's employer is not affordable, then I think the parents have the "right" to put him on their policy. But then I think his income needs to be included in the PTC calculation. How does that play with him not being on the return? Not sure. Like I said, it is murky. Just like a child who is graduating college this year, but was not a full time student for the spring semester because he only needed two classes to graduate. So he was not a full time student for the parents to claim on the tax return, but they want to put him on the insurance plan until he graduates, but they qualify for the subsidy and they don't have a clue how much junior, who is technically their dependent, will make when he graduates and gets a job, if he gets a job, and if that job offers coverage. Because it is a full year calculation, I don't have a clue how to answer that client. I bet this does not help a bit....sorry. Tom Modesto, CA

I agree, HELOC loan secured by primary residence used to buy a second home would not be deductible under the new rules because it's personal usage, however, I think if the proceeds are used to buy a rental property, even though the HELOC is on the primary residence and not secured by the rental property purchased, then the rental property can deduct the interest of the HELOC loan on the schedule E. Correct?

You're welcome, this was a perfect example of camaraderie. You would do the same for us, and without each other, we might just feel like crap.

This was discussed about a month ago. What Judy is referring to is that the loan must be secured by the property purchased. Example : Proceeds from a Heloc secured by primary residence used to buy second home. Under new rules this is nondeductible. In effect, the old interest ruling rules will not always result in a deduction.

Yeah, she used to live in Modesto. But by the time I moved here, she had moved to Southern Calif. (I think). @kcjenkins Please pop into the board and say hi sometimes. Tom Modesto, CA

Give it a few minutes and someone else may offer some other justification or rationale for taking the deductions.

Nope. 4/16 at 6pm and it's a half hour away from my office. Plan to eat some snack type food as dinner while driving down to count as my dinner break. Still, that's at least one return that won't get done unless I can rally and work an hour later than normal that night.

Catch-22. Assuming the amount should not be on a 1099, the recipient has to deal with the mess, as it is unlikely they are going to educate the charity. Similar to an "employee" who receives their pay, with nothing withheld, because their "employer" thinks they can pull off the IC scam. My wife gets a W2 each year for payments which, by statue, are not wages or taxable. The agency knows, but has no incentive (or reason) to find out if any or all is exempt. Have not yet been audited, but I know some who have. I am not happy with "ignoring" the W2...