Hahn1040

IL does not tax active duty military when they are stationed outside of the state most do not have state tax withheld and do not file for the state

Combat pay is not included in box 1; it is subject to ss so is a part of box 3 signing bonus is taxed (part of box 1) but is not subject to ss since the signing bonus does not appear on the W-2, you can't make the numbers add up from the info you have on the W-2

The qualifying rules for the foreign earned income exclusion are very specific. It is an all or nothing qualification. The first thing to consider is that he does not work for the federal government. If he works for a private company that contracts with the federal governement that is fine. One must first meet the tax home test. His tax home must be in a foreign country. Once that is met, then there are two ways to qualify: 1. bona fide residence. Very likely your husband would not qualify under this rule. He does not maintain a permanent home in the foreign county. 2. physical presence: this is where the 330 days in a 12 month period applies. The 12 month period does not have to be a calendar year. Thus, his 12 month period can be from 9/1/2008- 8/31/2009. As long as he meets the 330 day requirement, he can qualify for both 2008 and 2009. If he does not meet the 330 days in a foreign country, then all of the foreign earned income is taxed. If you read through the instructions for form 2555 they are pretty straight forward. I find the problem is with getting the program to put the figures in where I want them The partial exclusion applies only to the max that can be excluded: example: you have determined that you have met the physical presence test. To figure the exclusion: your qualifying 12 months is 9/08- 8/09 for 2008 the number of days of your qualifying period during 2008 is 90. Thus you can exlcuded up to: 90/366 x $87,600= $21,541. If the foreign earned income is less than this amount, then all of it can be excluded. IF it greater than this, then the amount above $21,541 is not excluded. for 2009 the number of days of your qualifying period during 200 is 245. Thus you can exlcuded up to: 245/365 x $87,600= $58,800 ( I don't know if the max changes for 2009 and I did not take the time to look it up) I hope this answers your questions.

Cients are 80+ year couple living in a Sunrise Independent living facility. Their lettter from Sunrise states that typically normal rent and fees do not meet the test to claim a medical deduction. However, if they have been certified as unable to perform (without Substantial assistance) at least two activites of daily living "ADL" then the resident would be deemed to be in the facility for nursing care. the wife had been feeding, bathing and dressing the husband most of 2008 because he was unable to do so. In 2009 they started having outside help come in to do these things because it was too difficult for the wife to continue to manage these chores. I asked if it is documented in his file that he was unable to perform at least two ADL. I have another client who lives in a different Sunrise Independent living facility and his letter from Sunrise states that 30% of his living expenses are considered to be for medical care. I would appreciate some input from others concerning their experiences with this issue. My question is: if Sunrise staff certifies that the husband required help with at least two ADL, and it is the wife that is providing this help, does that meet the IRS qualification to be considered need for medical care? Certainly for 2009 when they have outside help coming in, it will qualify. Then his half of the rent and fees will be deductible as medical expense. My other question is why one Sunrise independent facility gives a percent to be used for medical and another does not. Are there varying degress of "Independent living"? Thanks for any input you can give.

I generally try to avoid NOLs, but I think I have one here...but I may be off track... Elderly t/p sold home in 2007 resulting in $260,000+ taxable gain (purchased home in DC area in 1955; lived in it 35+ years after husband died so his stepped up basis from 1971 didn't help much towards her basis) lived independently all of 2007; standard deduction. Nursing home in 2008; $60,000 medical expenses. Investment income plus taxable ss= $23,000 AGI Net is $42,767 NOL does this qualify for NOL to carryback? 2006 she had no tax- 2007 tax $38,131

I always select "create efile" before putting in the date, that way I know it will not actually create the efile. But it assigns the DCN and it gives all of the reject messages. The goal is to have only the message that you must enter the date. I log the client in my DCN log so I have a record of the number. That way the forms print with the DCN and I know it doesn't have any reject issues that must be addressed. (Obviously not all because you can still get them after transmitting) When I have my signed forms, then I put in the date and anything else still missing, Select modify DCN and put in the DCN previously assigned. Then I hit create efile. Then it creates the file with the correct DCN.

I have never done a farm before. This year I have two clients who are "farming". the one owns land: 6+ acres. They pay someone to cut the hay. He keeps the hay for his own use. They pay $100 they hay is worth $300. Can this go on a schedule F? Can I use the interest and taxes on the land prorated for the percentage of hay land to total land? There is no building on the land- so does not qualify for second home. The other one owns land 65+ acres. He allows a farmer to graze his cattle. No money changes hands. The farmer does some work in return: repair fence/ cut hay. My understanding is that this goes on Sched E. Is it subject to the same passive activity rules as a rental house? His income is over $150,000- so no deduction for his two rentals.