jklcpa

I like reading most of the posts in the politics forum, just like I read almost all of the topics in chat. Even when I've disagreed with topics, I've learned some things I did not know about the workings of our government, just like I've learned things over the years about tax issues that I don't deal with in my own practice. No one knows everything. We won't always like everyone at a party or agree with everything someone says, but why is it so hard to be civil? Would you send your children to school and let them - Shout at their classmates and insult them simply because they have a differing view? Take it personally because their view differs from others in their class? Walk up and insult another student before they are even spoken to? Demand answers? Follow someone around the playground and dog their every move? Kick sand in their face? How long would it be before the principal called the parent or sent home a report? Now substitute yourself for the student with you attending a professional seminar with a group of your peers. I guess some here might act like that, or want to, because it's been happening on this forum lately, and it's not just in the politics forum either. The internet gives anonymity, but that shouldn't be an excuse for bad behavior.

I'll jump in on the PA bashing with you. PA returns can be a PITA with their categories of income and so many difference from the federal. PA business returns are even worse! I'll never forget the first time (as a junior many, many moons ago) when I tried to calculate the tax accrual for a PA corp under the 2 methods. I was all of these:

Eric, when someone is warned and it is required that they acknowledge the warning before being able to post again, is the system automated to accept his or her response, or do one of us have to "release" this person to post again. If its manually done, there would be a delay if you or a moderator wasn't available for a period of time.

If we start listing specific words that are off limits, people will still be abusive by using other words and get away with it by saying it isn't on the list. As for categories: abusive behavior/personal attack of another member spamming multiple posts with the same garbage (thinking of that Florida guy), but maybe this shouldn't be part of this program because we can simply delete the spam? offensive posts with vulgarity/profanity maybe posts that receive a high number of "reports" because other members find it offensive? That would at least alert you and the moderators that enough people are finding it offensive to be considered for a warning to be issued, although we generally recognize offensive posts before that high a number would be tallied, so I don't know if this is a good idea. Just throwing it out there. what have been other reasons in the past that you or KC used that should be included?

No, it isn't just an opinion. I provided unedited information directly from the PA DOR's website and PA's tax guides. And fwiw, PA does not have any reciprocal agreement with DE. DE doesn't have reciprocal agreements with any state. PA has reciprocal agreements with IN, MD, NJ, OH, VA, and WV.

To add to the above post, think about this hypothetical, very common scenario: I have a client that worked for years for a DE employer while being a PA resident. That person contributed to a 401(k) thereby reducing their federal and DE wages by the deferral. PA does not allow the deferral and taxes the entire compensation in that year because they are a PA resident. When that PA resident retires from the DE company and starts collection on the 401(k) and the 1099R shows code 7 for the normal distribution, PA isn't going to tax it again simply because it came from DE.

Taxed, the town I live in is on is located right on the PA border. I've prepared plenty of PA returns over the last 30 years for PA residents that worked in DE and are collecting pensions from their former DE employers. Since there is confusion about the definition, here is the way PA defines an "Eligible Pennsylvania Retirement Plan" (from the PA PIT guide): Criteria for Retirement Plan to Qualify as an Eligible Pennsylvania Retirement Plan. Under Pennsylvania law, retirement plans are considered eligible Pennsylvania retirement plans only if the plan meets all of the tests under Eligible Pennsylvania Retirement Plan. I already provided the link in my first post of the tests that must be met to be considered and "eligible PA retirement plan". It says nothing about the pension having to be located within PA. It means only that the pension making the payment must meet PA's criteria. You are unsure about this. You should call the PA DOR.

In general, distributions with code 7 that are from "qualified pensions" will be excluded from PA income. If the distributions were paid after she met the age and service requirements of the plan and meet the other criteria for being a "qualified pension" then it should be nontaxable. Being a state teacher's pension, I can't imagine that she wouldn't meet the rules to exclude it, but review the rules and put in your file: https://revenue-pa.custhelp.com/app/answers/detail/a_id/433/related/1

I didn't have too many issues either, and I converted 2011 ATX to 2011 Drake for 1040, 1041, 1065, 1120 and 1120S returns. I hardly ever used any overrides except on my Delaware returns because ATX simply couldn't get some of the calculations correct, so maybe that helped in the ease of conversion. After using it this past season, the positives for me are the increase in speed of all processes and its handling of the out-of-state credits. Drake handles those credits correctly and much easier than ATX which always required fiddling with the numbers. That was a very welcome surprise that was a real timesaver for me. I live right on the PA border, and can be in NJ or MD within 20 minutes, so lots of my clients are multistate. I don't do any business work without a balanced set of books, so I know before inputting what the bottom line and balance sheet will be. I find the auto balance feature to be annoying because it is constantly trying to fixing the $1 rounding on its own. It happens frequently with any of the programs when individual items are rounded from another part of the program that flow to the balance sheet. Fixed assets and the related depreciation are one of the most common causes of this. I had the auto balance feature turned off in ATX too. One thing I had to enter on all the returns is the county of residence on the demographics screen. If you do a large number of returns, you could set up a macro for that field. It was easy for me since all my DE resident clients all live in the same county, uh, because we only have 3 in the entire state. The conversion issues I did have - one individual return with vacation home carryover didn't come over properly because the property is out of service as a rental, but I was leaving the asset info in ATX in the event of its eventual sale. I made printouts of the schedules from ATX and made it a permanent file record for that one client. I spent time checking every single asset converted, and they all converted perfectly with no errors! The one thing was that my state piggybacks federal law, so there are no differences and I never used that "state if different" box in ATX, but Drake put the #s there, so now I get a state report. No big deal, I just don't print it. The main issue of conversion was with the business returns 1065 and 1120 series in the detailed worksheets. The bottom line totals were correct, but the lines didn't match up in conversion. For example, on the detail worksheet for line 26 on 1120 for other deductions, I might have entered an amount for accounting expense in ATX that ended up on the bank charges line in Drake. It wasn't necessary to really fix those, because the totals were correct, but I did fix them anyway while I had the file open. Almost everything came over exactly to the dollar. There were a couple of returns that had dollar rounding of the tax, but again, really had no effect. I don't recall exactly what didn't convert properly on several of the 1065s, but it was something on Sch K that affected every subsequent schedule it flowed to: the M-1, M-2, balance sheet balances, K-1s and basis schedules. Whatever it was, I found and fixed it easily enough in the 2011 converted Drake file prior to rolling over to the current year, so that what rolled over as beginning balances were correct on all schedules. Once I saw the what the cause was on the first affected 1065, the others were easy to spot and fix.

My two would have been fraudulent returns than being disappointed in the refund, or lack thereof. # 1 was a couple that I had done their individual return for in the past, BUT then they came back this one year having opened some sort of café establishment in something like a farmer's market co-op type place. It supposedly had a few tables that required someone to wait on. They admitted that it was purely a cash business, were skimming, and paying someone under the table in cash to run it and wait the tables when they weren't there. They were planning to underreport the cash sales by the amount they paid the person, and thought that would be o.k. They were refusing to give me the gross sales and wage data, wanted no parts of filing payroll returns or paying employer's taxes, they had no business license...and the list would probably have gone on and on if I hadn't stopped the conversation. With their attitude and those issues, they were shown the door. # 2 was a new client, expressed concerns about keeping the fee down. I told them that being disorganized would cost them more because I'd have to do more work, and they told me twice that they had it all organized and totaled. We had several detailed conversations on the phone before their scheduled appointment to aid in organizing and getting all that would be required. They were running a daycare out of their home (need I say more?), and when they finally showed up, they were toting one of those large paper grocery bags filled with unsorted receipts. They wanted to sort them into the expense categories with what would have been numerous piles all over my desk. It would have taken hours to go through all of that, and they thought if they did it that I wasn't going to charge them while they sat in my office?! AND they wanted to deduct their personal groceries and other things that weren't even related to the daycare, that they thought I was going to overlook or bury for them. I don't even remember all of the details now, there were too many negative issues with these people, they had to GO too!

In 17 years of having my own practice, I've only fired five. The other few clients that I lost were due to death, divorce where one party went elsewhere, or the client moved out of my area. Some that moved away have stayed on though. Of the five, two were new clients that sat at my desk and asked me to cheat at the initial meeting, so I handed them their papers and escorted them to the door. Maybe I shouldn't really count those, as I never produced a return or any other work for them. The other three got the letter, two were consistent late payers/non payers. The last was a long-term individual return client that I was sorry to see go. I let her go because of a conflict of interest when one of my larger business clients split their business up and she became an owner of the competitor, the side that I no longer worked for. That last parting was on friendly terms.

Here's a link to one from the AICPA that you could paste onto your letterhead and customize: http://www.cpai.com/show-article?id=78

I've used the one from PPC that says basically these things: I've enjoyed our relationship. I've reached the decision reluctantly and after substantial deliberation because of (pick one): cannot provide the level of services that you require growing conflict of interest unpaid fees, or continued failure to pay on a timely basis lost confidence in the integrity of company's management or data provided Remind about any unpaid fees that cover services provided through (date). Include an invoice if possible, or make sure they are paid up before terminating. Mention any steps the client needs to take that require attention (and list them to CYA). Offer your cooperation to make a smooth transition with your successor, and indicate that client must send you a letter authorizing you to make disclosures.

Right on, Michael and John. The practice I came from before going solo didn't prep the 2500 returns, but because our firm had fewer professionals on staff than the example given, on a per person basis the number of returns was equivalent or higher. Actually, the firm was slightly understaffed as we had only a downtime of several weeks in November each year, and worked O/T consistently through 10/15 each year. We went through planned conversions twice, not between Jan and April, but we were still very busy, and the process was a minor hiccup at best. The programs weren't as user friendly or intuitive as they are today either. That doesn't include the time way back in the dark ages when the firm went from offsite processing to totally in-house. As Michael said, the learning curve was done on the first few returns and then smooth sailing after that. I don't even buy the argument that any other software is too expensive. There are other reasonably priced products out there, if they are suitable for the firm's type of returns. If those low priced products aren't good enough, spend the bucks and go to Lacerte or UltraTax which I consider to be top of the line. Even the Cadillac product, ProSystem fx by CCH, that would probably cost $30K would only add $10-$12 per return to fully absorb the cost. The whole point of planning out a backup software or purchasing a second one is to avoid the difficulties that lots of ATX users complained about this past season with loss of revenue and loss of clients, and to be able to make a smooth transition. It is foolish to risk a firm's client basis and professional reputation by not at least thinking out a plan in advance. The software is nothing more than a tool, and if that tool is broken or needs constant repairing, then buy a different tool! ETA - I didn't mention before because it was more years ago, but the firm I worked for first had 42 employees, 35 were CPAs and the other 7 were support staff. That firm was definitely larger than the one we are referring to (has now grown to a professional staff of 60), and it also went through a smooth conversion. So yes, I do know something of larger practices converting!

My philosophy about the backup software is that I have a plan of action thought out in the event my chosen software is defective. So while I won't be purchasing and running second software, I have a good idea of which vendor I'd go to. I switched from ATX in early Feb this last year, so it is doable. I wasn't super busy yet so I took one day on the weekend and converted all of my returns and checked them. Had I been busier, I could have converted them in smaller batches, something like weekly as the client appointments were made. It only took a couple of minutes to check each return's converted file and then rollover, and that small amount of time could have been easily absorbed into the prep time. The time I spent on each return was certainly less than waiting for each file to rollover and load in ATX and the multiple times one needed to shut down so to clear the resources the program was using, or the time wasted when it locked up or lost data.

NECPA, take a look at this article and its links and maybe it will help you: http://ftwilliam.com/articles/AcctPlans13-54.html

I am not going to speculate on why someone/anyone is acting the way he or she is, but what I do know is that all of this nastiness and the blasting needs to stop NOW. It is causing the whole tone of the forum to become really ugly, and there is no reason for us to be treating each other this way!

I'm not getting into helping with the insurance either. I'll deal with the tax aspects and answer general questions, or I'll point them to the sites that will answer their question. I also have several insurance offices that deal solely in health insurance products whose names I'll pass along.

Michael or anyone else - do you have a chart or any kind of a summary of the states' requirements that you could share?

Not a bad idea if you are paper filing the return, but then you might as well attach a proper worksheet that shows the allocation with the fraction used to calculate any taxable portion after the nontaxable portion is accounted for. The problem with using the ATX worksheet, or any worksheet for that matter, is that those aren't transmitted with an e-filed return. We should make sure to get the documentation for our files that will be needed and prepare a worksheet that could be easily photocopied for when the IRS notice is sent. The same question was posted on the official forum and I believe there weren't any responses last time I was over there.

Congratulations to you and your family, Jack. Best wishes that mom and baby are healthy throughout the pregnancy and delivery.

I think you've succeeded too.

Tom, you have a great reason to brag as Patrick sounds like a very accomplished young man. I'm sure he'll have no trouble getting in to any school he chooses.

I just read that the healthcare.gov site will go down over the weekend at 1am each night for a few hours to fix glitches in the site. One thing that bugged me is that a person has to create a user name to even be able to look at the available choices.

It's nothing new. Point at your name in the upper right and choose either "My Settings" or "Manage Ignore Prefs" and from either of those, user names can be entered for those that you choose to block. For those users that are blocked, their posts are minimized in the thread and there is a choice within the thread to view it anyway. You will still see a blocked user's post if someone else quotes them though. The block function has separate blocking of posts, signature lines, and even personal messages.