Pacun

You should capitalize the patent expenses.

I think you are leaving crucial information but based on what I understand, I think you can use 50% of the mortgage interest on Sch E and the other 50% on schedule A. Same is true for taxes. You should use 50% of the house insurance cost on Schedule E but nothing on Sch A, same is true for depreciation. Keep in mind that depreciation doesn't include land. For the utilities, you can also deduct the percentage of the rental on Sch E. For repairs ONLY affecting the rented portion, you deduct it 100% on Sch E. For expenses that are 100% on the personal use, nothing is deducted. "Can he go into a loss"? If he is the one collecting the rent and showing the room when vacant and doing other rental activities himself, yes (he could have a loss up to $25K). Can you modify the tile without affecting what you stated on the boby of your post? Can you take out the "ROOMMATE" word and nothing gets lost?

GraceNY, My answer is a yes, you can use a protion to claim education credit. But I would use a prorated portion of the scholarship to pay for each expense. You will have a little portion that will be taxable but you will have more than $7K to be used for the credit. If the student qualifies for the American Opportunity Credit, you only need $3K in expenses.

Ask the client if he took out two distributions or only one.

Report the sale with a non-deductible loss on schedule D. When the 1099-C shows up, then you use form 982 so that the taxpayer doesn't pay taxes on the debt cancelation, just as Jack said.

It is Crown Royal or Glen Leave it. Those are in the tax preparers' lingo in February, March and April.

If you pay a baby sitter $100 per week for 52 weeks and are using schedule H, do you have to pay SUTA and FUTA? Do you know when schedule wil be ready for efile?

Update the program and maybe roll over the returns, map a network drive on the workstation and run netsetup.exe as stated above.

Networked computers is one story, but stand alone computers should NOT be slow. I used to have an XP computer and everything was slow. 3 years ago, I bought a new computer with Windows 7 64 bit and this baby flies. Everything is so fast and what slow downs my computer system is the user. Elycole, if you computer is older than 4 years, it is time for you to upgrade. You will notice the difference and will be glad you upgraded. Of course if you pay less than $1200 for a desktop, chances are you are buying a home toy and NOT a production computer.

Between parents, the tie breaker rules are applied ONLY when both claim the child, correct?

Because you didn't discard it.

File married filing jointly and send 1040 with W-7 to Texas.

"My question is, how can he have a W-2?" The answer to this question is simple... You have to ask the client. (most likely he worked and therefore he got a W-2). I think you should rephrase your question. I am used to get this type of questions from my clients so I will answer your question in a bit. Answer to question 2. "Will he have problems with filling out the W-2 information needed to file and send the return since there's probably a SSN associated with the W-2?". No, the IRS is concerned about people filing their returns and reporting the income, even if that income comes from prostitution or drug dealing (Remember Al Capon). In this case, it comes from a real and legit job.. As you might know, there are about 12 millions peoples without a social security number in the US. I am pretty sure there are more than 12M. Who do you think supports these people? They support themselves by working. Their employer asks for a social security number and/or card and they provide 9 digits and that's why they end up with a W-2 with nine digits that resemble or IS a social security number. Our job as tax preparers is to file the return along with form W-7 and no one gets in trouble. Why do these people want to file their taxes if they are ilegals? Some of them because they were withheld too much and they will get a refund and some others because they don't want to violate the tax laws. This situation is similar to when you drive at 61 miles on a 55 miles zone. You are violating one law but you don't want to be drunk and driving at 61... or just the other way around.

The first thing you need to do is to fill out the EIC worksheet, then you need to fill out form 8867. The EIC worksheet is automatically opened if you click on line 64 of 1040.

What form should a corporation file in order to request a payment plan? Corporation owes about 16K for 2009.

Not such an animal. Babies need to be born on Dec 31 or before in order to be claimed.

I expense it on the year I pay for it. I am always late, so I never purchase two in the same year.

If the child lived the whole year with your client and your client provided more than 50% of the support, then and only then, that child can be claimed as a dependent. NO EIC.

Put them together.

SS Administration gives social security numbers to US Citizens, Legal Permanent Residents, people with Work Authization from DHS and to certain visa holders. EVERYONE that qualifies to get a social security card knows it. If they don't know it, they DON"T qualify and an ITIN request is in order. Yes, Itins start with a 9.

I doubt such animal exists. I was lucky to find EIN when the company posted their earnings or filing. Do a company search and check the tax forms available on line.

Nice catch Jack. The question is coming (most likely) from a taxpayer.

If you enter 0, you will kill the child tax credit. When you answer the questions for EIC, check that the child is not your qualifying child.

She is single with dependents and she doesn't qualify for EIC.

Client's W-2 shows box 1, 3, and 5 the exact same amount. Cafeteria benefits lists $2,100. Box 12a shows $3,200 with code W. Client received 1099SA (HSA) distribution for $3,182. Money was used for medical bills. Am I correct to assume that these forms will no increase my client's tax liability since the distrubution was very close to the contribution and it was used to pay for medical bills?