jklcpa

No, this won't work to fix your error with 2013; it would be a contribution for the 2014 tax year. If no extension for 2013 was filed and the return that was filed included a SEP contribution that was not made by 4/15, then you should amend that return because that SEP contribution is not a valid deduction. If the return didn't include the SEP contribution then no amendment is needed, but as michaelmars pointed out, the client will owe additional taxes, penalties and interest because of your mistake.

Congratulations on your grandson, Jack, to you and your family.

lol , well keep it in mind for next year. There have been some posters here that would argue that the contents of the closet would cause you to fail the exclusive use test, but the tax court also has a de minimus factor that has been applied in cases too. Iirc, we had a topic on this very issue within the last year where personal photos were mentioned to be a no-no. I'm sure others here can attest that with the things people get away with on their returns and are never audited, that you wouldn't have any worries. I picked up a new client that had oih on the return in prior years, and the things the former preparer included in those expenses would make your head spin; items deducted that are clearly spelled out in the pub as NOT being allowed, and this was from a mid-sized CPA firm in my area. I think you should take the deduction, Eric.

This season seemed easier than in many years, and I attribute that in part to Drake. I, too, used much less paper, file folders and toner than in the past. I went totally paperless for the individual returns and also launched my scanner from within Drake's document manager with its predefined document names. I found that to be a great feature along with the ability to add names to that list that I used all the time. I made some big changes this year: paperless, the new scanner, the secure drop off box, and handled some returns totally by electronic means, accepting payments via Paypal. It was nice not having to worry over the software and to know that Drake would handle the returns. I didn't have any trouble with the software and didn't have any rejects, including those with one of the spouses as deceased.

My last return was p/u at 8:45 am 4/14. Just waiting on the DE state acks that take 24 hrs to come back. DE isn't due until 4/30 anyway, but I don't expect any problems with the return. Sure felt good to take the day off!

There's too much cloud cover here to see the eclipse too. We should be able to see the Lyrid meteor showers in a few days though. I finished the extensions, first quarter estimates and the couple of payroll taxes over the weekend, and my last return was picked up at 8:45 am 4/14. I took the day off and will take tomorrow off as well. Mom has doctor appts Tues and Wed, and then other errands with her that have been on hold on Thursday.

I filed my 3 extensions and have one return left for the client to pick up on Monday. He wanted to come over tonight or tomorrow, but I think not. Monday will have to be the day. I have 3 people to calculate 1st quarter estimates for and that is it. Feeling pretty good now, just very, very tired.

What was actually referenced in the settlement for the portion that relates the emotional and physical distress? I was trying to find something about the future medical expenses for you. I came up with a case of someone named Niles in Rev Ruling 79-427 where the future medical expenses weren't allowed as a deduction because the tax court said it would be excluding them more than once (implied that they were taxed when the settlement occurred). I am frustrated with the results of the searches in my research materials, must not have correct key works to get to the answer, but I found these on the internet that have references to some Rev Rulings that you could look into. http://www.lanepowell.com/wp-content/uploads/2012/07/Babener_Article_MedExpenseDed-Master-2012-v-6.pdf http://openjurist.org/710/f2d/1391/niles-niles-v-united-states

If the $5702 in direct medical expenses were deducted in a prior year and provided a tax benefit, those are taxable if the deduction produce a tax benefit, or if in 2013 then they would reduce the current deduction since she was reimbursed for them. The part of the settlement for her emotional and physical distress might be taxable too, unless you can tie that back to a physical illness or injury, so it seems the settlement would have to be because failed tubal ligation is a physical injury or physical illness. I don't think you can exclude the portion of the payment that relates to the future medical expenses because she hasn't incurred those expenses yet. IRS pub on settlements: http://www.irs.gov/pub/irs-pdf/p4345.pdf

I just filed NC and DE extensions online for 2 clients too. All were zero balances owed.

Short article from Pennsylvania Inst of CPAs website: http://www.picpa.org/ask/public/View.aspx?id=100&ReturnUrl=Search.aspx%3Fi%3D3%26k%3D%26c%3D2 Another from Investopedia, a nice summary & bottom section covers your situation, and talks of the 2 approaches: http://www.investopedia.com/articles/pf/05/annuitylosses.asp Not great sources to rely on, but both are saying and referencing the same thing and same Rev Ruling.

Not true. As JmovichEA said, investment interest expense is deductible to the extent of investment income on Form 4952. And you have to test whether it may be beneficial to elect to treat cap gain income as investment income.

I would stop trying to explain it to this client. I have one like this that will never understand. This is what I would tell him: "You won't get a deduction of any kind for that land until you sell it, and it doesn't matter if you paid for it fully by cash or financed its purchase through a loan. You will get to deduct that land at the time you sell it."

Happy Birthday to the KC & ATX Community (Eric). Thanks to you both for all the work you've put into this forum over the years. Happy Birthday to SCL too. Sorry for the belated greetings to you all.

KC is correct IF Rita meant there was actual blood on the return when she said, "But I had to reprint the bloody tax return." Replace "bloody" with "bleeping" or better yet "frikkin" since this is the ATX Community and you'll see what I mean. Thanks for the laughs RitaB. I'd "like" your posts, but I've run out already.

It's probably deducted as part of the guaranteed payments to the partner, and that's why it's subject to SE tax. If the premiums weren't paid out of the partnership, then the partner would have higher income flowing through as ordinary trade or business income, so the SE income and SE tax would be the same anyway.

I didn't want to read past your first sentence. If he doesn't have employees, he doesn't need an EIN for the Sch C. Did he file payroll tax returns for the business, and if so, what EIN was used on those?

I called support yesterday too. The call was answered on the 2nd ring, emailed a file with the input, and personnel couldn't get to the solution on my state input problem right away and said she'd call back. I solved it on my own a few minutes later and sent her another email saying I no longer needed assistance. She called me back anyway just to follow up because she said she would, and she thanked me for letting her know.

Agree with Elrod. If client misses the deadline for a payment, he's in default and the entire balance becomes payable.

Thanks, Eric, that was fascinating. Seeing the beauty of nature never gets old.

Really cool. The map in the link is updated every day too.

Tired, stiff from sitting so long, and in need of more coffee.

Nine, that is all, and all are bears. Of those, 1 is an extension that is really complete and 2 haven't bothered to come in yet. The other six, 3 will def go out, the other 3 aren't calling me back with missing data after repeated calls and emails from me. This season it's been like pulling teeth to get people to return calls and get the information I need to finish up. I still need to work on some 1st quarter estimates too.

I don't change anything either.

Terry, yes building on different land would qualify for the postponement as long as it is similar in service and use. Building another rental would qualify. Pub 547 has all the details and examples that will help you. In the meantime, here are 2 excerpts that should briefly answer your question: Postponement of Gain Do not report a gain if you receive reimbursement in the form of property similar or related in service or use to the destroyed or stolen property. Your basis in the new property is generally the same as your adjusted basis in the property it replaces. You must ordinarily report the gain on your stolen or destroyed property if you receive money or unlike property as reimbursement. However, you can choose to postpone reporting the gain if you purchase property that is similar or related in service or use to the stolen or destroyed property within a specified replacement period, discussed later. Replacement Property You must buy replacement property for the specific purpose of replacing your destroyed or stolen property. Property you acquire as a gift or inheritance does not qualify. You do not have to use the same funds you receive as reimbursement for your old property to acquire the replacement property. If you spend the money you receive from the insurance company for other purposes, and borrow money to buy replacement property, you can still postpone reporting the gain if you meet the other requirements. Similar or related in service or use. Replacement property must be similar or related in service or use to the property it replaces.