jasdlm

Hi, J R. You will do a Kansas Schedule S, page 2, to delineate the non-resident income. Kansas uses an apportionment (is that a word) method to calculate the percentage of State tax owed to Kansas. Let me know if you have other questions.

Okay . . . we are talking about 2 different types of benefits. The following is cut from a taxslayer.com help center, but I think it clarifies the issue. Susan, sorry. I didn't ask in my previous posts if you were talking about Tier 1 or Tier 2 benefits. RRB-1099 & RRB-1099R - Instructions Tier 1 railroad retirement benefits are equal to the social security benefit that a railroad employee or beneficiary would have been entitled to receive under the social security system. These benefits are called "social security equivalent benefits" and for tax purposes are social security benefits. These benefits are shown on the BLUE portion of Form RRB-1099. Box 5 shows the net social security equivalent benefits for Tier 1 in 2004. Tier 2 benefits consist of the rest of the Tier 1 benefits, called the "non-social security equivalent benefits," any Tier 2 benefits, vested dual benefits, and supplemental annuity benefits. These benefits are shown on the GREEN portion of the Form RRB-1099R, and are treated as an amount received from a qualified employer plan. Vested dual benefits and supplemental annuity benefits are fully taxable pensions. To report the BLUE portion of Railroad Retirement , select the Income Menu from inside the Client's return. Choose the Social Security Benefits Menu 1099-SSA. Select, Taxpayer's Social Security Benefits or Spouse's Social Security Benefits depending on who received the form. Enter the amount from the Blue Box, Box 5, Net Social Security Equivalent Benefit portion of Tier 1 Paid in 2004, on the Taxpayer's or Spouse's Social Security Benefits line. To report the GREEN portion of Railroad Retirement, select the Income Menu from inside the Client's return. Select IRA / Pension Distribution Form 1099-R and then select New to enter a 1099. Enter the EIN and Payer's information. Enter the amount from Box 7, Total Gross Paid of the RRB-1099R into Box 1 Gross Distribution on the 1099-R screen. Also enter the amount from Box 7, Total Gross Paid into Box 2 on the 1099-R screen. After entering the information into Box 2, enter the amount from Box 9, Federal Income Tax Withheld, into Box 4 of the 1099-R screen.

I enter RRB 1099 on the 'bunny hop' from the 1040, line 20. It's flowed through just fine. Hope I am not missing something by doing it that way.

Who told him he had to pay the tax? Did you verify that all $$ distributed was used to pay tuition (qualified education expenses)? Does father claim son as a dependent? There is no 1099Q input sheet for ATX that I am aware of. If the money was used to pay qualified expenses, I don't believe you need to report it anywhere. If it wasn't, you report on 5329.

Me too, Jainen.

Thanks, Michaelmars. I took your first post exactly the way you explained it in the 2nd post. It is very nice to have moral support, and I was definitely losing sleep. Thanks again for taking time to post. I think lbb read your post the same way but was just clarifying. I have thought about the reimbursement for preparers to amend. I guess I'll cross that bridge when I come to it. Thanks again to all of you. I have definitely learned a lesson.

Thanks to all for your advice and support. The W2c's are completed and being delivered to employees this afternoon along with corrected 1099s showing 0 box 7 income. I have amended the 941 and the W3. Still have to do State and Federal unemployment return amendments, but that shouldn't take long. I gave a very long explanation to my client along with my recommendation. The client took the recommendation immediately and thanked me for my attention to the issue. Whew. Glad that's over.

I don't know anything about this, but I wanted to say I'm really sorry this is happening to you. Yuk! Good luck.

Thanks much.

Client bought a residence in 2008. Paid a point. Is there a way to have ATX do the amortization and automatically report the correct amount every year? The only thing I can find on the input for Schedule A is the 'fully deductible points' line. Thanks.

JB . . . I got a new computer (February) and transferred 06, 07, and 08 also. This narrows down the problem. Maybe I'll send an email to the great abyss (tech support).

I'm having the same trouble. Some of mine won't even roll over. I open them in 2007, save them, and then try to roll them over and they won't. I've tried closing and reopening the program, putting a period after the name in 2007 so that when I save it there's actually a change, etc., but nothing has worked. I've finally just re-entered the returns that wouldn't roll because I don't have any more time to mess with it.

I talked with the Employer, and he just wants to talk with the employee. He maintains that the employees asked to receive the money this way, and that he (employer) explained the consequences. He says they grossed up the bonuses to take into account the tax liability, etc., but of course, he has no proof of this as any bonus is discretionary. (These were generous bonuses.) I do live in an employment at will State. Basically, my client feels that he tried to do what the employees wanted (this employee and one other were the ones who specifically wanted to be paid this way) and feels that if the employee wants to make a fuss, he'll amend, etc., but won't be as generous with future bonuses which, I guarantee you, will run through payroll. I feel sick to my stomach. BColleen is right. I shouldn't have done this. I don't think I was forceful enough when I told my client he should run the bonuses through payroll. I told him the consequences to the employees, etc., but I didn't say 'you're violating the law'." I feel like this is going to end up causing big trouble. This employer is a really great guy who pays employees very well. On top of it all, I live in a small town, and I'm sure the employee's preparer is thinking I'm an incompetent idiot. ***Sigh*** I was on a roll until this email. Now I can't think about anything else. Thanks for letting me rant.

I do the payroll for an employer who has about 10 employees. He gave bonus checks at the end of the year which he did not run through the payroll system. I advised him not to do this. He said that the employees understood that they would be responsible for the FICA but wanted to get the bonus checks paid this way (I know . . . really stupid). I W2'd for all income that was put through payroll (and reported on 941s) and 1099'd for the bonus checks. I got an email today from on of the employees saying he had been advised that since he was an employee of CAL, he should contact me and request that his W2 be redone to reflect the 1099 income. My question: Assuming the employer was responding to employees' requests to pay bonuses this way (I just figured they wanted the money in the short-term . . . kind of like credit), did I screw up? Can you issue a 1099 to an employee? I used to work for someone who paid me a 'salary' and 'commission' and issued a W2 for one and a 1099 for the other. However, I don't know that you can treat a 'bonus' like a commission. I'm sure the employee who emailed me was give directions from his preparer (I don't know who the preparer is). I knew this would come back to bite me . . . and I didn't even do it! Thoughts? Thanks.

Is there personal use of the property? How much (%)?

Hi, Marilyn. The very line you highlight from the property settlement agreement assures me that the distribution was not made pursuant to a QDRO. Because of the nature of the instructions for the 401(k) divison, the attorneys will not even be able to do a QDRO until after his sentencing. No fund company/plan administrator is going to accept a 'contingent QDRO', and if the attorneys know what they're doing, they won't even try, because if the Judge actually reads the PSA and QDRO, he won't sign the QDRO. A QDRO is a separate document from a PSA (property settlement agreement). It is done after the Court signs off on the PSA. By definition, the QDRO can not be done until after the PSA is signed by the Judge, because it is the Judge who actually orders the QDRO to be done based on his/her approval of the PSA. I would never take a QDRO to Court until I had a signed PSA back from the Judge. The Judge might get annoyed because it would indicate that I 'assumed' he would sign off on the PSA with no changes. (They almost always do, but they don't like to be second guessed.) Unless I misremembered the facts from your first post, unfortunately, there's no way this distribution is pursuant to a QDRO. Also, agree with MGMEA about the 1099, if it was pursuant to a QDRO, coming in the name/ssn of the alternate payee. Sorry, Marilyn!

Hi, Paul. I had this situation last year (rental house in foreclosure). I don't know any way around the capital gains tax (I assume you mean coming through on 4797). If you're talking about the debt relief, then you probably have an insolvency argument. (You'd have to run the numbers, but given that you mention a bankruptcy, it seems possible.)

Hey, Fred, are you Series 7 licensed? I'm 7 and 24.

If you get the statement for the month of the transfer from the receiving broker, you should be able to tell whether the shares were journaled (transfered in kind) or there was an actual sale. If there was an actual sale, what you will see transferring is cash (and then you should see new purchases). The second method would result in larger commission income for the receiving broker (and possibly also for the selling broker). Usually, if the shares are transferred in-kind, you will see the shares appear in the new brokerage with a 'transferred from . . .' memo.

If the psa (property settlement agreement) is well drafted, it should speak to the allocation of income/deductions for the year in which the divorce is final. I always ask for a copy of the divorce decree and PSA when filing a return for the year of a divorce.

This is my first year to do this client's return. His spouse died 12/25/2007. From what I can tell from the paper copy of the return, the death was not reported in 2007 (does not show across top or on signature line). Taxpayer has a disabled child who lives with him, so qualifies for QW filing status. Do I need to put spouse's name/SSN on return and report date of death, or can I file as is without problem? Thanks.

Thanks so much. I wonder how many of these I have missed through the years. ***Sigh***

It's long term health care insurance (nursing home).

Client is employed as a Professor at the University. He has some consulting income every year (as most faculty do). His insurance agent told him he could deduct his LTHC premiums (and those of his wife) on the front of the 1040 as a self-employed person. University pays HI. I have never seen this done before. I have tried to research, and I'm not finding a clear answer. The University does not offer a subsidized LTCH policy for employees. Schedule C income is more than LTHC premium. However, it still doesn't seem quite right. Anyone know anything about this? Thanks so much.

SCL - that's what the whole issue is about . . . the distribution was not made pursuant to a QDRO because it was pre-divorce. Marilyn mistyped in her original post . . . she means the 2008 tax return.