Pacun

Do you mean ITINs?

Codes are I for IRS F for other Federal debts including child support and B for both. They should be no surprise for someone who gets a B. Their refund will be reduced down to zero, oops, I meant to say up to zero.

Have you entered ss# and DOB for everybody?

Deb, support is no longer considered for the qualifying child test, as long as TP herself is not the qualifying child of someone else. Lucho, Adopted children, step children and their descendents qualify TP for HH. I said before that blood relationship should exist but adopted and step children and their descendents qualify TP for HH

Yes, they do qualify. You thought that our current president was smarter than our previous one, didn't you?

I think the codes are I for IRS, D for everything else and B for both.

Lucho, TP must be blood related to the dependent in order to qualify as HH.

If she is getting child support, she will qualify for everything. Also, if the boyfriend is gifting the money to her (let's say $10,000), she could be OK. You just need to ask more questions.

The casinos provide players with a card under their name. When you play on the computers (slot machines), every penny counts. On the tables, you have a dealer and a manager. You put your money down and your card. Dealear grabs your money and gives you chips. The card is given to the manager and he opens a tab for you based on your seat and name. On the tab, the manager writes down how much you started with. Every 15 or 20 minutes, the manager comes and checks how much you have on your chips and writes it down. If you run out of chips and put money on the table, the dealer or the player calls the manager and ask to write down the extra money. At this point the card is not needed because the manager has the tab with the card number and the name. When you color in, they write down how much you left with. These tabs are given to the office for record keeping and entered on a computer. If a player puts chips on his pocket, the dealer informs the manager discretely. They also keep track of how much you wager so that they can offer you rooms or dinners. Of course the IRS will take the casinos word because it is a very consistent record.

You are absolutely right, he is not organized but he is not dishonest. That's where I come in and explain that he should not be mixing the money. He is willing to pay anything I say. My point is that the previous preparer, didn't file or told him to file Maryland Personal Property Return, as a Domestic Limited Liability Company, with the fee.

I think if people are collecting Social Security Benefits, they might have gotten $250 already. If I were you, I would try one more time by substracting $250 per head that collected social security benefits. I do understand how hard it is to get this info from your clients.

Thank you Diane. With two little posts, you have helped me and have answered my question.

"I believe you are the one that's confused. Lion's and jainen's comments, in my opinion :~), are correct." Give me a good reason why you wouldn't deal with this client? He is reporting 100% and he doing everything correct, except that your colleague who filed his taxes, didn't file Personal Property Return, as a Domestic Limited Liability Company, with the fee. If he is mixing the money, he will not be covered by the LLC if a problem arises and I have told him that. Anyway he doesn't need any protection because he BROKE.

Wow, you and Jainen seem confused. The LLC and himself work for only one employer. That employer gives the LLC a 1099misc. There is no way he will under report income. That's not the issue here. The issue is that his prior preparer never filed anything for the LLC and I do believe it is required for MD for INFORMATION PURPOSES and a $300 yearly filing fee. I am waiting for Diane to confirm it since she is in MD. Schedule C has been filed properly in the past.

Lion, You are right. I will explain to him that since he doesn't have any wealth, he is protecting nothing by having the LLC. I will also wait for Diane to reply to my previous post and move from there. This is a new client and I am still deciding if I will be doing business with him.

If MD Administrative Release No. 25 is active, that will answer my question. I just tell my clients to keep the LLC separate and the consequences if they don't. If this person is not following that, my responsibility is that he reports all income. Since he only works for one company and he gets a 1099misc, I don't see a big issue.

Diane, I found this on that site: Administrative Release No. 25 Subject: Income Tax Treatment of Limited Liability Companies Revised: September 2008 IV. Maryland Income Tax Treatment of LLCs A. In General Effective January 1, 1997, the IRS promulgated final regulations which significantly change the way some entities are classified for federal income tax purposes. These “check-the-box” regulations generally provide that an eligible entity with two or more members may elect to be classified as a corporation or a partnership. An eligible entity with a single member may elect to be classified as a corporation or to be “disregarded” (treated as not separate from its owner). Maryland follows these Federal regulations; therefore, the Maryland income tax treatment of an LLC depends on the classification of the entity at the federal level. If an LLC is classified as a partnership for federal income tax purposes, it will be treated as a partnership for Maryland income tax purposes and must file a Pass-Through Entity Income Tax Return (Form 510). If the LLC is classified as a C corporation for federal income tax purposes, Maryland will also tax the entity as a C corporation and it will be required to file a Corporation Income Tax Return (Form 500). Also, if an LLC has elected to be classified as a disregarded entity for federal income tax purposes, then the LLC will be treated as a disregarded entity for Maryland income tax purposes and will not have to file a separate Maryland income tax return. Instead, the profit or loss of that LLC will be reflected on the personal income tax return of the owner of the LLC. For example, if the owner is an individual, the income and loss of the LLC will be included on the individual’s Maryland income tax return. If the owner is a corporation, the LLC will be treated as a division of that corporation and the profit and loss of the LLC will be included on the corporation’s Maryland income tax return (Form 500).

Granny Coral, What Operating System is installed on your new computer? I have Windows 7 Pro 64bits but I have not transmitted yet. I have one ready but I was waiting until tomorrow. I wonder if I will have the same problem you are having.

Jainen, I was hoping you were going to say that the LLC was killed by his actions and therefore, no filing was required. When people come to my office, I ask them if they have a house, cars, inheritance coming, favorable law suits pending, etc. If this person had come to me, I would not have suggested an LLC because he doesn't need protection. His whole wealth are the cars. "Basically I think the guy is a fool to let someone else work construction under his name with such a goofy setup." Not really, he makes a little profit when he has the extra help and he issues a 1099misc to the other subcontractor (NOT employee).

ALL four have good answers. That's why I love this forum, THANK YOU. About a year ago, I read exactly what Jainen said but most preparers don't file LLC forms for MD. Maybe because $300 is a lot for (most of the time) nothing. The owner of this LLC works only for one drywall company and the LLC gets a 1099misc. The owner is a tenant and has 3 cars with FMV less than $15,000. When he gets extra work, he gets another subcontractor (to whom he issues a 1099misc) and they work together. For the next 3 years, owner believes his employment situation will not change. He is under a payment plan with the IRS and MD from last year's schedule C taxes. He has a two checking account, one for the LLC and a personal one. He told me that when he gets paid, sometimes he goes to a licor store to cash the check. Then, he splits the cash in three parts, one goes to his pocket, the other goes to the LLC checking and the other goes to his personal checking. Who in the right mind, will suggest to this person to register an LLC and pay $300 yearly! Please comment on any of the above. Let's say that he has had the LLC for five years and he decides to close it, do you think MD will force him to pay $300 for each year the LLC was active?

correct.

Not only that, if that person had 2 jobs, both employers are short and that tax liability will be higher. AND please don't make me start with the ones who had two jobs and they were short to begin with. Those tax payers will not be happy campers this year and that unhappiness is transmitted or blamed to the tax preparer.

I have a new computer and all I did was to install the program on the new computer, then I copied the database and backup folders from the old computer. Make sure your fire wall is not blocking anything.

I have a new client who is the only owner of an LLC in MD. Previous preparer filed sch C (using FEIN of LLC) and 1040. For MD, he filed only the regular personal forms. I have read that LLC has to file with the state where they are registered. I have dealt only with LLCs with two partners and I have filed for the LLC and distribute K1s to partners. Do I have to file with the IRS and/or the state (MD) for this pass-through disregarded entity or continue doing what the previous preparer did?

"A taxpayer may change an election to claim the standard deduction at any time before the period of limitations has expired. Sec. 63(e). Insofar as the record shows, petitioners have not sought to change their election to claim the standard deduction. In any event, on the record before us it would not appear advantageous for petitioners to do so." This is what I understand what the court said: Since you didn't itemized before 3 years, and because maybe with the extra $1,100.00 in itemized deductions, you still wouldn't beat the standard deduction, we are not going to allow you other losses, except that we are going to adjust your basis on the day you won. Your basis on your winning day was $900 and you won $2,000.