Pacun

What's amazing is (with all the advances in technology) that the IRS doesn't pull these returns for audits when HRB clearly labeled it as something not deductible. On the EA exams the IRS makes sure that you understand that Golf membership dues are not deductible even if you have your own business and you entertain clients on the Golf fields daily and talk about business while playing.

Maybe you did send it and the computer messed up. In any event, paper file at this point since it is too late to efile.

It was a joke. The supervising CPA or EA needs a PTIN.

Ask him to supervise himself since he is a CPA. If a person prepares a return superviced by a CPA or Enrolled Agent... he doesn't need a PTIN.

I agree it is personal.

NO. I just made up the ages. In reality the husband was 65 by the end of 2010 and the wife was 64.

You have to call ATX customer service and they will guide. I think they will assign a number to you and you will include that number when you export the return. It has been a while since I exported and sent one, so I don't remember. Share with us if you send it to customer service.

Only IRAs don't pay 10% penalty.

Only one president has ever entered the IRS building: John F. Kennedy . The event was so significant that IRS placed a plaque in the National Office commemorating the event. The plaque is on the third floor in the corridor near 12th Street, outside the Commissioners Conference Room. It is inscribed with the following words by Mortimer Caplin who was IRS commissioner at the time: On this site, on May 1, 1961, President John F. Kennedy spoke to Internal Revenue officials and became the first chief executive to visit this building. On that occasion, he said "I hope you will impress upon the agents of the Internal Revenue Service how much we are dependent upon them, on their courtesy, on their efficiency, on their integrity, on their fairness." In his memory, and with the resolve to fulfill his expectations, this plaque is respectfully dedicated. Mortimer M. Caplin May 1, 1964 ******** * ************ What tax situation have Jimmy Carter, Laura Bush, Barack Obama, Hillary and Bill Clinton in common? They all paid self-employment (SE) tax on their first book, perhaps unnecessarily. IRS' longstanding position is that "if an individual writes only one book as a sideline and never revises it, he would not be considered to be 'regularly engaged' in an occupation or profession and his royalties therefrom would not be considered net earnings from self-employment." Even when the book is revised, the Tax Court has held that only the royalties from the revised edition are subject to SE tax. The IRS position does not appear to be well known. Jimmy Carter paid self-employment tax on his first book, Why Not the Best? published in 1976. Hillary Clinton dedicated all earnings - over $1 million in total - from her 1994 first book, It Takes a Village, to charity. She paid tens of thousands of dollars of avoidable self-employment tax on the book royalties. Bill Clinton paid SE tax on his 2004 first book, My Life. as did First Lady Laura Bush on her 2008 first book, Read All About It! Barack Obama's 1995 first book, Dreams of My Fathers was republished in 2007, and he paid SE tax on it. Obama also paid SE tax on his second book, The Audacity of Hope, published in 2006. (All data are from publicly released tax returns, available at Tax History Project: Presidential Tax Returns.) Although Obama has written two books, an argument can be made that his second book, written eleven years after the first, should also be exempt from SE tax because an 11-year gap shows that he is not "regularly engaged" in book writing. That may not be a position that a president is prepared to take, but might be considered by lower-profile writers. These returns were all prepared by different CPAs. There may be good reason that SE tax was paid. However, given the existence of favorable revenue rulings and a favorable Tax Court opinion, one would think avoidance of SE tax on the first book which these celebrities wrote would meet a very high standard for a tax return position. The statute of limitations is still open on some of these returns. Perhaps the return preparers will consider filing amended returns claiming SE tax refunds. And if you as a preparer had a client remit SE tax on royalties from a first book, consider applying for a refund. ******************** WGST Radio talk-show host Neil Boortz started an argument by stating that golfers are not athletes. His definition of an athlete is one engaged in an activity which increases the heartbeat by at least 25%. One caller retorted, "According to your definition, anyone receiving a notice from IRS is an athlete." Sign at Executive Park Amoco: "A dime is really a dollar with all the taxes taken out." "Why waste time and money debating about the moment life begins in a fetus? Just ask the IRS when we can start deducting them." -- Letter to the Editor, Atlanta Constitution. Jerold Cohen, Chief Counsel for IRS, at the Southern States Conference of Certified Public Accountants held at the Atlanta Hilton: "IRS has a force of 1,000 lawyers. Someone once told me that any organization with that many lawyers must be up to no good."

Yes. I efiled this form and it was rejected. At first I got a very generic error message. The second time I got the same generic message. The third time I got an error message that it reads something like: "When you claim EIC without the EIC form, both taxpayers must be under 65." As you know, we have to fill out the EIC form in order for the credit to pop up. I don't understand what's going on.

MFJ return. Husband is 67 years old and wife is 63 years old. Husband collected $12K SS and wife's W-2 shows 6K of earned income. Do they qualify for EIC without a child?

I found this that might help you. "Al established a health savings account (HSA) in 2007. In 2009, he received Form 1099-SA reporting a $2,000 distribution. He used the distribution to cover $2,500 of qualified medical expenses his wife incurred in 2008. The medical expenses were not reimbursed by insurance, and they did not itemize in 2008. How is this distribution reported on their 2009 joint tax return? What are the tax consequences? Answer: The $2,000 distribution is reported in Part II of Form 8889 on Line 14a. Al’s unreimbursed qualified medical expenses of $2,500 are reported on Line 15. This includes the medical expenses his wife incurred in 2008 [§223(d)(2)(A)]. The entire distribution is nontaxable because it is less than Al’s unreimbursed qualified medical expenses. The 10% penalty does not apply because it only applies to the taxable portion of an HSA distribution [§223(f)(4)(A)]. Distributions from an HSA are excluded from income if made for any qualified medical expense of the account beneficiary, the account beneficiary's spouse and dependents (without regard to their status as eligible individuals). However, distributions made for expenses reimbursed by another health plan are not excludable from gross income, whether or not the other health plan is an HDHP. [Notice 2004-50, Q&A 36] In addition, a distribution from an HSA in the current year can be used to pay or reimburse expenses incurred in any prior year as long as the expenses were incurred after the HSA was established. Thus, there is no time limit on when the distribution must occur. However, to be excludable from the account beneficiary's gross income, he or she must keep records sufficient to later show that the distributions were exclusively to pay or reimburse qualified medical expenses, that the qualified medical expenses have not been previously paid or reimbursed from another source, and that the medical expenses have not been taken as an itemized deduction in any prior taxable year [Notice 2004-50, Q&A 39]."

Parent can claim her as dependent, claim EIC and education credit if applicable. If parent is not filing as MFJ, he/she might qualify to file as HH if he/she provided more than 50% of her support and maintained a home which was the main home for more than 6 months for the student.

you can always overwrite the entry.

It is sad but you are right. For years, we have a preparer here who is busy all the time during tax season. He has about 6 people working for him and they make appointments all day and at night. There are appointments at 3AM. In any event, they have pre fabricated, dependent child care forms with daycares EFIN and everything ready to go. They also have non-cash contributions with items and prices ready to go to. IRS just send the refunds for these people. The State where I am are not that naive and they question a lot of returns prepared by these people. They do not sign the return but staple a business card on the folder. Yesterday I had a new client who is married and was filing as HH, he lives together with his wife and she is claimed as a dependent. Husband told me... "Let's see how we do with you"... "last year I went to a lady preparer and I fled her office". I said why? He said: "Well, I am the only one working and I only make $50K with a wife and one child, preparer told me that I had to pay MD. I have never paid MD so I grabbed my papers and went back to my previous preparer." He also said: "I always do the right thing and my returns are prepared properly. Last time I had a problem with the DC goverment and I went to talk to them. They gave me my refund quickly and they asked me where my returns were prepared. DC Government went ahead and collected the business card from my taxes for each year." I believe the DC government is paying attention to this preparer. During the interview he told that he and his wife (both present) had one child and got married in 2008. He told me that he worked as a bus-boy and his wife took care of the child and that's why she was his dependent. When I reviewed his previous return, I told him "you filed as HH and you should file as MFJ, you signed that your child went to this daycare center and that you paid them more than $3,000. This is the name of the child care, address and FEIN. You mentioned that you went to work all year to the same place and you are claiming mileage and meals. I asked, Does your employer provide lunch for you (even though it doesn't matter because he couldn't deduct any lunch)? He said, no. I said even if they don't give you any food, you cannot deduct it. I said, I have worked in a lot of restaurants in the past and ALL of them provide food. He said, "Well, I don't like their food, so I buy my own". At this point I knew I was not going to believe this taxpayer, but I went on. I prepared a test return and told him "you owe MD more than $1K and federal will refund you $3K. That's preparing the return as MFJ as it should be and with all credits and deductions based on your situation and the information you have provided". I said, if the IRS finds out all the problems with your 2009 return, you will have to pay back a lot of money plus interest and penalty. You should ament your return. Also, if the child care center finds out that you are stating that you paid them more than $3K in 2009, they could cause you some problem." I could tell that the husband wanted his papers back and I also noticed that the wife was worried. The wife asked me, could I be in trouble because of all the lies on that return? I said, "not really, you didn't sign the return, you were a dependent." If I prepare your return this year, you will have to sign and you will be responsible for this one, but you don't have to worry because I will prepare it correctly based on the ifo you provide. I gave his W-2 back and I said, please come back when you want to do the right thing and remember that the IRS might take a long time to check your return but once they do it, you could have to pay a lot of money back. I wished them luck and went back to work for remuneration.

You are correct but using another reasoning. For the parents, that wouldn't be a problem if the 19 daughter was a full time student AND she didn't provide more than 50% for her own support. Your are right, the 21 year old will have a problem because he couldn't claim her as dependent because she made too much money, period. This is true, regardless what percentage her income represents when compared to his income AND regardless if he supported her more than 50%. She made too much money to be claimed by anyone else other than her parent with the conditions stated above.

I usually input all numbers on the control box on ATX's W-2. This year, it is not letting me enter any spaces or hyphens. Did anyone notice that? ALSO, I had the same problem on Schedule C, Box E (business address). 1804 Belmont Rd. #205 was not allowed because it had spaces, it had a . and it had the # sign. I ended up typing 1804BelmontRd205 To me, this is very important. As you know, there is no way to fill out Box D on ATX unless you have the actual W-2 form infront of you. If the IRS want to make sure that preparers are not efiling with the last paycheck stub, they should enforce that employers use random numbers on box D. I believe most employers change this number year to year, which is very good.

The parents can claim EIC for the 19 (if full time student), 13 and 7 year old as long as non of them provided more than 50% of their own support. This will be true even if the 21 year old child supported them. The 21 year old can claim EIC for all 3 siblings provided that he provided he provided more than 50% of his own support. Provided that the 19 old sibling is a full time student and non of the siblings provided more than 50% of their own support. This will hold true even if parents supported the children. If the 19 year old is not a full time student and if he provided more than 50% of his own support, he/she can claim the two little siblings and get EIC, AGAIN, provided that non of the little sibblings didn't provide more than 50% of their own support. For the 21 year old, you should make sure that non of his dependent siblings provided more than 50% for their own support and you should be able to see if he qualifies for HH. Remember that the 21 or 19 year old can claim HH ONLY if he provided more than 50% for any of the siblings and they kept the home which was the main home for the siblings. This is from the top of my head and I will be interested if someone has a different opinion.

I noticed that Jainen logged on yesterday but hasn't posted any comments. I was investigating if someone insulted him on his last posts but I didn't find anything. By the way this is a very nice post and I wanted to bring it to the top.

How about if they roll over to next year and next year you add form XXXX and you click print, it might not print form XXXX. I don't see this as nice feature even if rolled over.

Keep in mind that if you go with Tuition Deduction, you will have to wait until St. Valentine's day to file the return. So, it there is not much difference and clients want their refund (if any) soon, you should go with the other credit.

I am just giving you more information but MCB39 already answered your questions. Answer to question 2.- Let's say you and your wife earned 40K in 2010 and you have 3 kids, ages 12, 21 (who is full-time student), and 33 (who is permanently disabled) As long as none of them provide 50% to his her own support and live with you, you can claim them and claim EIC. This will be true even if 12 year old child supports both brothers but not more than 50% of his own support. Another example: This will also be true even if the 12 year old (or any of children) made $4 million while staring a movie, as long you put that money on the side for his college, retirement or simply have it under the mattres. I am hoping someone will be interested on this and comment. Answer to question 1.- a person who is eligible to be claimed as a dependent on another person’s return will have a 2010 standard deduction limited to the greater of $950 (the “minimum” standard deduction) or the taxpayer’s earned income plus $300, not to the exceed the normal maximum single standard deduction of $5,700). Example: Mavis Williams, age 17, is claimed as a dependent on her parent’s return. Her 2010 earnings consist of $1,200 interest and $400 wages from a paper route. Mavis’s 2010 standard deduction is $950 (the minimum standard deduction). Example: Assume the same facts as the previous example, except that Mavis has $980 itemized deductions in 2010. Mavis would itemize and deduct $980. Example: Assume the same facts as the previous example, except that Mavis’s paper route earnings were $1,300. In this case, the standard deduction would be $1,600 (the $1,300 earned income from the paper route plus $300). If paper route earnings were $5,980, the standard deduction would be limited to $5,700 (the maximum standard deduction for a single person in 2010).

Thank you. But If I wait until October to apply and if I get approved on December 20th, I will be required to take only 2 credit hours, correct? If I get approved on December 20th, do you know the deadline for me to comply with the 2 credit hours for 2011?

Thank you to all. We learn a lot here on this forum. Thank you Catherine, but I still have to send form 23 to the IRS and they will check my credit and my income tax filings. I think I am going to wait until October because if I do it now, I will be required to take clases every month. I will need 2 Continue education credits every month until my partical 3 years expire, correct?