JJStephens

I serve clients (mostly clergy) all over the country. I can't meet with most so years ago I created an interview style Organizer. It's worked very well and my clients love it. I send all my clients a link to my web site where they can go and download the latest version (I update it throughout tax season as I think of new and improved ways of doing things).

I haven't done much more than change a few dates on this year's version--hope to add some more tweaks over the weekend. Anyway, here's a copy in case any of you want to use it. Feel free to personalize it any way you wish.

Tax Organizer.pdf

When I was just learning to write in kindergarten my mother was freaked out that I wrote everything upside down and backwards. She talked with the teacher who just laughed. She said she saw it all the time and that I'd grow out of it within a few weeks. She was right. But I never really grew out of being weird in so many other ways. Go figure.

First, I'm assuming the employing church is a small employer (the vast majority of churches are) and therefore, not subject to the large employer reporting requirement.

Were the premiums paid for a group health insurance policy? If not, they probably have a problem. I work almost exclusively with churches and other ministries and find that many of them are still paying premiums on private/marketplace insurance. In most cases that is no longer permitted. It might be worth inquiring about--might be a revenue generating opportunity helping the employing church correct their procedures.

I just got some spam from the folks at TRX Software. Remember them from several years ago? I do. Bad, really bad memories.

They offered me their super duper new product for a mere $399.99. As I suspected, they're the outfit behind the deluge of offers to set up a tax prep kiosk in some of the dollar stores.

Well, garsh, I had a pretty good day going. Now I'm in a foul mood.

Nothing to it. I could do that.

If I wasn't so old and weak and clumsy ;-)

First year Drakie--still learning but loving it so far!

That's what I ended up telling him to do.

This is one of those 'I ought to know this but don't' questions.

Client received a K-1 from his deceased mother's Living Trust. He incurred some expenses related to maintaining her property and administering the trust (mileage, supplies, repairs). Can he deduct those? My guess is they'd be a Schedule A, Other Misc Deductions item. He also had to pay an assessment to the trust to cover some expenses.

What say those of ye much wiser and more experienced than me?

Quick update on this.

The problem continued to happen and even got worse. I wrapped up a return last night, saved it and closed ATX. When I opened ATX this morning the return was blank.

I called ATX support. It is apparently a known issue following 14.7 updates. She renamed a hidden file deep in my Windows folder forcing ATX to recreate that file. She said that would take care of it. I asked what specifically was wrong. All she would say is, "It's just a file that got corrupted. We made it create a new file so that should take care of it." I tried to press but that's all I got out of her. So far, I'm half way through re-entering the data and it appears to be working ok.

By the way, when I first called she asked if I had upgraded to Win10. When I said no she replied with an enthusiastic, "Good!" Makes me wonder if Win10 isn't playing nicely with ATX software.

Client does a fair amount of business travel and occasionally stays with family or friends. He has a CPA friend who told him that for her clients she allows 1/2 the standard per diem rate when her clients travel but stay with family/friends. Is there some special rule I don't know about that allows for that treatment? I thought you either qualify or you don't.

Aarrghhh! It just happened again. I was working on a return for about 30 minutes. Had to step away for a few minutes. When I came back I had a message saying ATX was not able to connect to the server (I've gotten that a lot over the last couple years) and asked if I wanted to retry or cancel. I clicked retry and the program closed. Lost the whole thing.

I'm normally pretty serious about frequent saves but I was so intense on this one that I don't recall having clicked the save icon. My bad.

So auto-save hasn't worked since 2011. I didn't know that.

Well, I guess I'm only at risk for another 10-15 extensions. I've already purchased Drake for next year. I used to love ATX. That seems like a long time ago.

Thanks for the tip Jack. Alas, it didn't work. There was only one version listed and it was also blank. I ended up just rekeying in all the data.

I started a return back in August--entered all the data I had. However, client mentioned farm rental income so everything got put on hold. Just started to work on the return again. It's empty. Nothing there.

Anyone else ever experience this? Better yet, anyone have any idea what happened and if it's a loss? I don't think it's a failure to save issue. I'm set to auto-save every five minutes and I'm stickler for frequent saves.

I've used ATX most of the last 20+ years and have never seen/heard anything like it.

I went to a Drake sales seminar over the summer. While I decided to go with Drake (a decision I had been mulling for 10 years), even the demo of the hosted version didn't go very smoothly and the presenter didn't push it at all.

I don't have the same aversion to cloud based software some others have (I'm using it in some other areas). As far as Drake Hosted is concerned, maybe someday. But IMO they're not even close yet.

Thanks all. Very, very helpful.

So I guess it turns out I did the right thing ... even if my rationale for why was a bit vague!

I don't do many trusts (which is probably a good thing) so I need to borrow some of the wisdom of some you trust gurus.

In 2014 a long time client became administrator of a complex, grantor trust (mom's estate) that owns a small cottage and also has some residual mineral rights on another property sold long ago. I recorded the royalties on the extracted oil & gas and the taxes paid thereon. I did not include repair and maintenance costs on the cottage (used exclusively by family members for brief get-aways). My rationale was that costs can be deducted only if they are related to the source of income.

One of the kids--an attorney--is questioning my handling of the cottage costs (and now, so am I). Did I do the right thing or should those costs have been deducted on the 1041 (if so, where)? One way or the other, the attorney is asking for specific cites to back up whatever I do.

Help!!!

My main machine & main laptop are both Win7 but I have a laptop and a tablet with 8.1. I don't care for Win8 tiles so I use a Win7 shell--after it loads I can't tell the difference performance-wise.

I've never been a first day bandwagon person, but have usually been a relatively early adopter of new soft & hard technology. Frankly, I've never had any upgrade issues.

I'm fairly tech savvy (until recently, I built a lot of my own machines from parts) and do my homework and plan my process. Based on my research, I chose to not do Vista nor did I downgrade to Win8 (though 8.1 did come on a machine I bought; I'm not thrilled with it but I've learned to live with it).

For Win10 I will probably wait until late August before upgrading one of my non-critical laptops. After I play with it for a couple weeks and get the hang of it--and, of course, assuming all goes well-- I'll go ahead and move the rest of my machines over.

Hmmm. Mine is 8 short of the actual number processed. I wonder what to make of that.

I love it when people try to reason with animals. My wife sits and has entire conversations with her dog. And the dog is like, just feed me; that's all I care about.

Actually, I've heard that some smarter dog breeds understand a vocabulary about equal to a 2 year old. That would make them a little smarter and a lot more attentive than the same kid when (s)he turns 16!

MAMalody is absolutely correct about the excise tax on unauthorized HRAs. The Evangelical Council for Financial Accountability did a free webinar on this awhile back. Here's a link https://www.ecfa.org/WebinarRecordings.aspx?ProductID=61 Frankly, it was not the most inspiring webinar I've ever viewed, but it does cover the subject.

Taxman--the decision making authority (usually the church board) needs to re-categorize the reimbursement as taxable income. That would likely require amending prior 941s and possibly W2s if it pre-dates this year. Henceforth, the re-categorized amount would be included in the amount subject to income tax withholding. However, as I stated in a previous post, churches should never withhold FICA tax on clergy income. Alas, many churches continue to do that (withhold FICA). I've written a white paper on how to fix clergy FICA withholding when it happens. PM me if you'd like a copy.

Rita--I suggest you show them copy of Notice 20-13-54 http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CB8QFjAA&url=http%3A%2F%2Fwww.irs.gov%2Fpub%2Firs-drop%2Fn-13-54.pdf&ei=po1oVayVCpGbyQSzmoLoCw&usg=AFQjCNGPoEXU2frrtxhaQcLsxamwrlzD5A&sig2=ufVMeodfa_dl5YLTb5Yohw . $100 per day should get their attention. I'm also not sure who it is you're telling. Perhaps you should carefully/respectfully go up the chain of command with your concerns. Your advice should be good enough, but it can sometimes also be helpful to get an 'outside expert' to say the same thing you've been saying (the 'prophet without honor in his own hometown' syndrome). If you think it would help, I'm sure either Michael Malody or I would be happy lend a hand. PM either of us if you wish to go that route.

I could probably use a 24 step program ... though I'd like a crack on whittling it down to 21 steps

I suggest start by contacting the 401k administrator and asking them what kind of documentation they need in a situation like that. In my experience, if you talk with them nicely they're usually pretty helpful.

I finally got my Drake site activation codes. I guess I'm officially a Drakey (or whatever we're called).

I'm anxious to do a handful of my remaining extensions in both ATX and Drake as a learning exercise and to gauge what kind of time saving I'm going to eventually realize. I just hope I don't run into much of the 'old dog/new tricks' syndrome. I've done taxes for 27 or 28 years, about 20 of that with ATX and its predecessor (Parsons and pencil before that). We'll see.

I guess I'm a glutton for software-switching punishment. On Jan 1 I moved all my Quickbooks clients to new cloud-based accounting and payroll softwares and last week transitioned my e-mail/scheduling away from Outlook. I hope a year from now I look back on '15 and continue to think I made good choices.

I don't know if any of you are familiar with the Myers-Brigss personality type indicator test. According to their material, my personality type is what they call the Master Mind and they say it the rarest of all their types. It nailed me. I'm always looking for a better way to build a mouse trap (hence all the software changes). That is my greatest strength--and my greatest weakness. I always have pretty good systems in place, but I can also obsess for an hour writing the perfect four sentence memo about effective time management. I wonder if there is a support group for people like me

Church/clergy issues are my bread and butter. Perhaps I can help.

Churches (and other employers) have historically done premium and other medical cost reimbursements in the form of a Medical Expense Reimbursement Plan (MERP) and more recently using a Section 105 Health Reimbursement Arrangement (HRA). One provision of the ACA made stand-alone HRAs illegal as of 1/1/2014; as of that date HRAs are permitted only if the employer offers it in conjunction with an ACA compliant group health insurance plan (such plans are known as integrated plans). Many employers (including scads of churches) didn't get the memo and continue offering obsolete MERPS and stand-alone HRAs.

The bottom line is the reimbursement must be treated as additional income. That will likely require amended 941s and W2. It will also require a change in procedure for future activities. By the way, it is important to note that the employing church/ministry cannot designate any portion of the reimbursement-recategorized-as-salary as clergy housing allowance because the law prohibits making housing allowance designations retroactively (there is one exception to the general rule but it is so rare that I'll not bore you with the details). 

Rita is correct--clergy are not subject to FICA. Clergy have what is often called a 'dual tax status'. That is, they are (almost always) considered an employee of the church for income tax purposes but are always (100% of the time) considered self-employed for social security tax purposes. I.e., they must pay self-employment tax--unless they opted out of SECA by filing Form 4361--but that's a different conversation. Therefore, the employing church/ministry should never withhold FICA on clergy compensation. The clergy person should make quarterly estimated payments to cover their SECA liability. However, as an alternative strategy, the IRS permits (and even encourages) the clergy taxpayer to have his/her employing church/ministry withhold extra income tax in an amount equal to the SECA tax liability.

Hope this helps.