clay

I came across what for me is a unique situation regarding stock options. The client was awarded 1200 shares of the stock of the company he worked for when it went public in 2004. He claims he paid nothing for the shares. He sold the shares in 2010 and there is a code V income on his W-2. Usually in these situations there is a minor gain or loss, but what do I use as his cost for the options sold other than the code V income? This will result in a large gain. The code V should be based on the difference between the FMV on the exercise date and the amount paid (but he says he paid nothing). Has anyone else run across this situation and how did you handle it? By the way this is a new client.

I have over 2/3 of the returns I normally do for the season finished, so you think it would get easier. Uh-uh. Most of the clients from here to the end are disorganized, are much less knowledgeable about finances and taxes, and take forever to get things for you that are missing. Maybe it is just clients from my part of the country that are like this ... and it could be the long hours are wearing me down and I am longing to go out and enjoy the nice weather that is starting to arrive!

Sorry folks, I got sidetracked and was just commenting in general about the AOC, not the specifics of the original post.

Regarding the American Opportunity Credit, either the parents or the child can claim the credit (see pages 13-14 of Pub 970). This works if the parents income is too high. Child should be able to obtain at least the $1000 refundable part of the credit, more if his income is high enough. Work it both ways to see if the benefit of the parent's claiming the child outweighs the child claiming the expense.

My experience has been that the amount shown on a 1098 is not prepaid, it is the current year charges. One client had the details of each monthly mortgage payment and there was a charge for MIPS. Another client called the bank and was told it was just a cost of getting the mortgage. Another client had the mortgage sold 3 times in one year and there was a MIPS from each bank, and the amounts were very small. Based on my experience, the practice of "prepaid" as mentioned in the instructions is the exception and not the rule.

I have a spouse with a sch C who pays HI just for herslf. The other spouse is on SS and pays Medicare insurance for himself. He has no Sch C or other income. Can I deduct the husband's Medicare? Instructions say the owner of the business must pay the HI, so it seems the amount the SCH C spouse paid is OK, but the husband's Mdcre premium is not deductible.

I had the same message today for Sch C efile with SE HI.

I had a client who refinanced last year and the mortgage was subsequently sold to 2 other banks. 1098 from each bank had MIPS. Client called the bank where the loan originated and was told the amount paid was not a prepayment, but a cost of getting the mortgage. The other 2 1098's also had MIPS, but a much smaller amount because they were only with the banks for a few months. If it is not a prepayment, take the amount shown on the 1098.

I have a client who purchased a house in 2010 and paid MIP at the closing. The mortgage has been sold two times since then and the 1098 from each lender has an amount for MIP. The closing statement had $2600 for MIP and this was reported on the 1098 from the original lender. The other 2 lenders have smaller amounts for MIP. The IRS instructions state that if the MIP is a prepayment, to amortize it over the life of the mortgage or 7 years, whichever is less. ATX does not have a worksheet that I can find that allows you to amortize and keep track from year to year - seems to be something we have to track on our own. Also, just as an aside, the clients who purchased the house are not married and the IRS instructions state the MIP has to be split between the owners. How are we or the client to know if the MIP amount is a prepayment? Is everyone taking the amount on the 1098 as being the amount that can be claimed in the current year?

This year, when I open a return, it will often say "not responding". This happens most often when I open a return the first time after it is rolled over. It also happens occasionally on returns that have been opened more than once. Thankfully, the program always has "responded" and opened the return or saved it. I have not lost any data and there have not been any failures in executing a save or opening of a return. I have been using ATX for over 10 years and this is the first year I have seen this happening on a fairly consistent basis. In other years it happened occasionally and again the program "repsonded" properly after about 10 seconds. I am just a little concerned that at some point the program will not be able to respond. Anyone else experiencing this???

So if you retired from say a state govt job that provides health insurance at no cost to you in retirement , you can still take the Medicare Part B premium when you reach 65?

I think you still need to go to the link mentioned in the earlier response and open the link How To Register and use your social security number. After doing this, you can proceed to the registration page where you will be asked a series of questions. Most notably NY will ask if you prepared more than 10 NY returns in 2010, if you are a CPA or EA, and do you expect to file more than 10 returns in 2011. After all this, based on the info you gave here, you will likely not be required to register.

NYS preprarer registration is separate from the IRS. You will have a different ID number to report on the NY return. Go to http://www.tax.ny.gov/tp/reg/tpreg.htm. If you are a CPA or EA you will not have to pay the fee or obtain a number. But you still need to fill out the form, which includes a question on whether you are a CPA or EA.

I think it would be best to stay mum on the price paid for the program. I actually like ATX, having been with them (through thick and thin) for about 10 years. If other users of ATX on this board see that they paid a lot more than the prices quoted here, it could be reason enough for them to leave ATX - whether it be for price or because they did not think they were treated fairly. If this happens and ATX becomes a software company of the past, I will have to find some other software which I do not want to do. I am comfortable with the program and I enjoy using this board to find out what other users have contributed on the use of the program or on tax issues. So, IMHO keeping quiet on price is a better approach; and more importantly, ATX should be more consistent in pricing their software.

In the Return Manager, next to the Updates tab, is a new option called ePayment. I cannot find anything on this in the User Guide. If you click the tab, it launches you to what looks like an online merchant paying account. Anyone know what this is for - a way for us to take a payment from a client wanting to pay us by credit card? Is anyone using it? What do you think of it? What are the fees? I have just a few clients where I would be interested in taking a credit card payment; most of my clients pay by check or cash.

If the health insurance you have is a subsidized health plan maintained by your employer or your spouse's employer, then you cannot take the deduction. So the question is whether the union pays any part of the cost; and did you have a subsidized plan from your employer and was your husband eligible to participate in the plan.

We need something from the IRS.

Using the F1 key to obtain instructions for self employed health insurance deductions for the 1040, the intructions state "Medicare premiums cannot be used".

If you open that client's "NY EF Info" form and then select the tab "E-filed forms", you should see the IT-272 on the list of efiled forms.

If your clients have a Sch A, the Tuition and Fees form, or Educator Expense they cannot efile and the IRS says they also do not want returns mailed until the IRS gives the green light (in mid to late Feb). So opting out of efile will not get the returns procesed any sooner if any of these three situations apply to your clients.

If the archive disk that ATX sends out after Oct 15 has all the forms, why bother to download them all? If the disk does not have all the forms, then there is some merit to downlaoding all the forms.

Awesome. How do your clients send their info to you over the internet? Do they scan their documents and then send them to you? They aren't concerned about someone intercepting their records?

How do you go about setting up an internet based tax practice?

The issue is not with the state return. For the school tax exemption they need to provide a cpy of their Federal return.

IN NYS we have a STAR exemption that reduces their school taxes. Clients over 65 can have an enhanced (additional) STAR exemption. Individuals have to file for the enhanced STAR every year and must submit a copy of their tax return. Many towns want the tax return by March 1. It will be difficult to comply with that deadline this year.