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But will this prevent us from preparing returns? Will the forms be available and marked "not approved for efiling"? I just don't want to wait until mid-february to start preparing the returns. Also, if we are able to prepare and hold, can you imagine the efiing problems when they open the floodgates?

Will ATX software allow us to prepare the returns while we wait for the efile software to be updated? Issue Number: IR-2010-126 Inside This Issue -------------------------------------------------------------------------------- Tax Season Starts on Time for Most Taxpayers; Those Affected by Late Tax Breaks Can File in Mid- to Late February WASHINGTON — Following last week’s tax law changes, the Internal Revenue Service announced today (Dec 23) the upcoming tax season will start on time for most people, but taxpayers affected by three recently reinstated deductions need to wait until mid- to late February to file their individual tax returns. In addition, taxpayers who itemize deductions on Form 1040 Schedule A will need to wait until mid- to late February to file as well. The start of the 2011 filing season will begin in January for the majority of taxpayers. However, last week’s changes in the law mean that the IRS will need to reprogram its processing systems for three provisions that were extended in the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 that became law on Dec. 17. People claiming any of these three items — involving the state and local sales tax deduction, higher education tuition and fees deduction and educator expenses deduction as well as those taxpayers who itemize deductions on Form 1040 Schedule A — will need to wait to file their tax returns until tax processing systems are ready, which the IRS estimates will be in mid- to late February. “The majority of taxpayers will be able to fill out their tax returns and file them as they normally do,” said IRS Commissioner Doug Shulman. “We will do everything we can to minimize the impact of recent tax law changes on other taxpayers. The IRS will work through the holidays and into the New Year to get our systems reprogrammed and ensure taxpayers have a smooth tax season.” The IRS will announce a specific date in the near future when it can start processing tax returns impacted by the late tax law changes. In the interim, people in the affected categories can start working on their tax returns, but they should not submit their returns until IRS systems are ready to process the new tax law changes. The IRS urged taxpayers to use e-file instead of paper tax forms to minimize confusion over the recent tax changes and ensure accurate tax returns. Taxpayers will need to wait to file if they are within any of the following three categories: Taxpayers claiming itemized deductions on Schedule A. Itemized deductions include mortgage interest, charitable deductions, medical and dental expenses as well as state and local taxes. In addition, itemized deductions include the state and local general sales tax deduction extended in the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 enacted Dec. 17, which primarily benefits people living in areas without state and local income taxes and is claimed on Schedule A, Line 5. Because of late Congressional action to enact tax law changes, anyone who itemizes and files a Schedule A will need to wait to file until mid- to late February. Taxpayers claiming the Higher Education Tuition and Fees Deduction. This deduction for parents and students — covering up to $4,000 of tuition and fees paid to a post-secondary institution — is claimed on Form 8917. However, the IRS emphasized that there will be no delays for millions of parents and students who claim other education credits, including the American Opportunity Tax Credit and Lifetime Learning Credit. Taxpayers claiming the Educator Expense Deduction. This deduction is for kindergarten through grade 12 educators with out-of-pocket classroom expenses of up to $250. The educator expense deduction is claimed on Form 1040, Line 23, and Form 1040A, Line 16. For those falling into any of these three categories, the delay affects both paper filers and electronic filers. The IRS emphasized that e-file is the fastest, best way for those affected by the delay to get their refunds. Those who use tax-preparation software can easily download updates from their software provider. The IRS Free File program also will be updated. As part of this effort, the IRS will be working closely with the tax software industry and tax professional community to minimize delays and ensure a smooth tax season. Updated information will be posted on IRS.gov. This will include an updated copy of Schedule A as well as updated state and local sales tax tables. Several other forms used by relatively few taxpayers are also affected by the recent changes, and more details are available on IRS.gov. In addition, the IRS reminds employers about the new withholding tables released Friday for 2011. Employers should implement the 2011 withholding tables as soon as possible, but not later than Jan. 31, 2011. The IRS also reminds employers that Publication 15, (Circular E), Employer’s Tax Guide, containing the extensive wage bracket tables that some employers use, will be available on IRS.gov before year’s end.

Other than a computer, I am interested if anyone is using any other tool in their practice. For example, an ipad or other tablet for scheduling, PDF copies of IRS pubs, etc; the Livescribe pen to record notes and conversations; ereaders for IRS pubs; any particular software for scheduling, billing, etc.; scanners. I am sure there are others, I was just wondering what people have found to be helpful. Basically, anything you can suggest to help us out in our business. There are all sorts of resources, but what, if anything have you found that really helps the most?

I have a return with an office in the home, Form 8829, and linked to a Sch C. The first year, I filled out part III to come up with the depreciation. In subsequent years the client put on an addition or made other improvements that I entered on the 8829,line 41 by clicking the bunny and entering the info through the asset entry form, coded for Home Office. This showed up on line 41 and if you click the bunny it also gives you a nice summary of the additions/improvements. I can bring up all the detail on the additions/improvements, but where can I can find the details on the original entry showing the cumulative amount of depreciation taken on the house originally entered in Part III? Also,when I do a check return, I receive a warning that "Home improvement entered on asset entry but no Home asset is entered". I manually checked the math for Part III of the 8829 and line 13 on the Schedule C and eveything looks OK - calculated properly and no duplicates. Why the "warning"?

In prior years people have posted similar complaints, especially at about this time of year. The explanation that made the most sense is that ATX is a database program. The more clients you have rolled over and opened, the slower the program runs plus the more clients you work on without exiting compeletely out of ATX, the slower the program will run. You will also experience the problem if you are running on an older computer because of the slower processor and maybe your hard disk is getting full. I have not experienced the problem this year. Could be a new laptop with Windows 7 and 4 Gig of RAM and plenty of hard disk space. I run an antivirus program at boot up, but otherwise try to limit the number of other programs that open up when I start the computer. I want most of my computer resources available to do taxes.

I am still having a problem. The amount I enter on Sch H of the IT-249 is not flowing to either the IT-201 or the IT-201-ATT. I checked the "Cross Reference" for the IT-201-ATT Sect B Line 3 and it is the IT-249, Sect H, line 22, but the numbers are not the same; they are not flowing in accordance with the cross reference.

I only prepare a few MA returns but I know MA asks for the number of pages. I create the efile return, open the MA EF form, click the option at the bottom "Efiled Forms", print the page, count the pages for each form efiled, go back to the MA data sheet and enter the total number you counted as your page count, recereate the efile and send it. May not be the most efficient, but it works for me. Oh yeah, glad I do not live in MA and have to do this for every return. They also have a few other quirks about their returns, especially with SS and Mdcre for NR.

Client's NYS tax is $443. Long Term Care credit is $494. It seems the $51 of unused credit should flow to the IT-201-ATT line 23. This is a calculated field and is blank on this return. The 201 line 42 hows the full credit of $494. On the IT-249 I filled out Sch H to show the tax and a carryover to 2010 of the unused credit. Any of you NYer preparers have any idea what I am doing wrong? I hate to override.

I just received the offer from TRX, good until May 1. I am basically a one person operation with help only in assembling the copies that I mail back to my clients. If I was to switch, my main reason would be for a program that is more efficient (spend less time on a return) then ATX, and did not cost more than ATX. Anything that makes preparing a return easier and faster then the process I currently have with ATX will win me over. I am not criticizing ATX, but if there is something that makes the tax prep process faster, software that is more intuitive (no pun intended), then I am ready for the change. Less time to prepare a return, edit the letter, manage the database, data entry, mailing labels are all important to me. AND I would love to be able to keep the forms input that is so nice about ATX. I also have concerns with whether the program runs on Win 7; conversion of files to new software; and being able to run the program on 2 laptops and a desktop (stand alones ,not networked) - they are my backups, for the $299 price.

I have noticed in doing returns that every 1099-div for Manulife has foreign tax and it is paid to Canada. I believe the company is based in Canada and it is kind of interesting that people who use Manulife end up paying the Canadian tax. Never see this with Metlife, Prudential, etc. for similar type of financial instruments.

Client is being hit with $3000 of AMT. Client is 62, disabled and received sick pay and social security. Client repaid $35,000 of sick pay and received about the same amount in retro payments from SS in 2009 for prior years. She is able to take a Misc Ded for the repayment. I also recalculated her taxes for the prior years SS payments included in 2009 income, but this was not to her advantage. I do not understand why there should be an AMT because in prior years the client paid Federal taxes on the sick pay. Now she has to include the amounts SS is giving her for those same amounts, even though she repaid them to the company who paid her the sick leave. Sure, she gets the misc ded for the amounts repaid, but it does not avoid the AMT because of the income she has to report (SS plus this years sick pay). Seems like she is being taxed twice. Is this just an AMT thing or can she take a credit elsewhere for the repaid sick pay or is there something else to consider?

I have had no problems efiling until today. I had 3 returns rejected for rejection code 767 - 3rd party designee info incorrect. I believe that on the 1040 it is the section between line 76 and the signature block. The returns have the "Yes" box checked off and "preparer" entered as the designee. A PIN should not be required but it seems like this is what the IRS is looking for in that section. Anyone else experiencing this problem?

Mine is working OK, BUT I have noticed a quirk with the W-2. Program carries over the info from last year's W-2, but the state box is blank. Picked up on it when I noticed the State return refund/amount owed varied tremendously from the prior year. Only the last W-2 in the client's records have the blank entry, and not all of them; but today there were 2. What's up with this?

I am having a similar problem with "page" print ever since I downloaded a program update this morning. Mostly with the Client Letter. But eventually mine will print and the problem is intermittent. I am running Win 7.

I also use the two pocket folders that I bought last weeek for one cent at Staples. I geenrally use blue, but will also use purple or green. RED is a no-no. I use my Dymo label maker (love it) for new clients or for a label I do not have pre-printed; and Avery sheets for pre-tax sesaon printing.

RE: One big possible downside to the Reset: if you die the month after you reset, you have lost everything you collected before the reset - question is, do you feel lucky?

Since a garage is part of a house, and the only mention on irs.gov is that a principal residence is your main home, it looks to me like they can claim the credit for the personal use % of the garage (75% is business use). Any other thoughts or IRS guidance anyone has found on this subject?

Client plans to install energy efficient windows into a detached garage and barn. I know the windows must go into the principal residence to qualify for the credit. Question is whether the detached garage and barn are considered part of the principal residence.

Not sure if I have enough info to answer, but NY offers either a credit OR an itemized deduction. The credit is only available to individauls who were full year residents, so I think your client will not qualify for the credit. The itemized deduction is available to part year residents. Goto form IT-272 and at the end click itemized deuction.

Can an item such as health insurance that is part of the cafeteria plan, paid by the employee but excluded from taxable wages, still be deducted on Sch A?

IT-203-B, Schedule A is necessary only if you do not know how much was earned in NY. If the individual's income is from wages reported on the W-2 as being from NY, you do not need Sch A. If the W-2 gives you the amount earned in NY, proceed as follows: For NY, open form IT-203. Click on the "allocation worksheet". In column C or D, depending on the client's status, enter the amount received for work in NY.

Client's has her own business - Sch C. No W-2 income. Has a SIMPLE plan through a broker who charged $2000 to manage the account. Not sure if other non-IRA funds are in the account. Investment fees are reported on Sch A, but the client takes the standard deduction so the deduction for the fee is "lost". Can anyone tell me if there is any possibility of claiming investment fees on Sch C for that portion that is for the SIMPLE plan? I saw something in the Pubs about being able to claim a "fiduciary" fee.

You will probably use columns B and D on the allocation worksheet. Fill out line 73 on the IT-203. FYI, It-112-R would not apply in this situation if he is not a resident of NY.

Tried the sugggestion - still no luck. I must be missing something. I wish they allowed an override.

I am trying to prepare only one of the 4 payment vouchers for a 1040-es. In prior years you could override and enter the amount to be paid. This year the program brings up a "Jump to" message. But the jump to does not seem to offer an option to enter an amount. Can anyone tell me how to enter an amount onto a voucher when only one voucher is being filled out?