Pacun

Are you sure sch C is not required? Open up sch SE and see what you can do.

Your only hope is to have the kid come to your office and file for him. If his income permits, she will qualify for HH, if not, she won't. Make sure you have him sign a clause stating "this is all the income received in 2007". Keep in mind that only the tax payer is the one who knows how much he/she made. Also, you are required to get the information from the taxpayer NOT from parents, specially when you are not talking about a little kid.

If he does not qualify for lifetime learning, he can use Sch A with the 2% floor. (Provided it was required to maintain his job qualifications).

He is not required to file. No need to file extension... unless you want to bring his UK income which for sure is excluded from US tax based on tax treaty.

Other benefits. State returns are approved very late for paper filing but are approved for efiling as soon as tax season starts. The future is efiling Saves trees.

This is the rule for filing a form in DC Who must file a Form D-30? Generally, an unincorporated business, with gross income over $12,000, must file a D-30 (whether or not it has net income). This includes any business carrying on or engaging in any trade, business, or commercial activity in DC and receiving income from DC sources. • T o determine if you need to file, please note that gross income includes revenue from all DC sources after deducting the cost of goods sold, but before taking expenses and other deductions allowed when calculating net income. • T he act of carrying on or engaging in a trade or business in DC is determined by the nature and extent of the unincorporated business’ activities in DC conducted by: its owners; members; or through employees, consultants, agents or other representatives. An unincorporated business with gross income in DC of over $12,000 from any of the activities listed below, must also file a D-30 return. • Rental of real or tangible personal property; or • Leasing of real or tangible personal property; or • A ny other similar arrangement. It also reads... When do you not have to file Form D-30? • It is a trade, business or professional organization where: - 80 percent of its gross income comes from personal services actually rendered by owners or members of the business; and - Capital is not a material income-producing factor. T he 80 percent requirement is met if the activities of your employees, consultants and agents have or are presumed to have produced gross income for the business in an amount at least equal to the gross amount paid them. The 80 percent test is not satisfied if the amount paid these persons exceeded 20 percent of the business’ gross income. If this test is not met, the business is not exempt from DC taxes and must file a return. Now, I have a couple of questions: I am a preparer and make $20K yearly, do I have to file? (Sole Proprietorship, Fed Sch C filer) How about a lawyer who makes $250K? (Sole proprietorship, Fed Sch C filer) How about someone that rents out a room for $1100 monthly? (rent collected in 2007 is $13,200)

Then it is deductible as long as they don't have more than $100K in equity debt.

Pull down the menu and select personal and the loss will become personal and it will not be transferred and carried over.

Yes, you need to file gift tax return for and report the gain on schedule D (but I think you basis will be brought up if you file 709). Your client will not pay taxes because of the credit. Why do you want to postpone the filing of gift tax return if you have a huge long term gain on the dispossal of real state?

Hold down both keys then press the down arrow key.

All of you, go to your partners computer and press and hold down Alternate and control then press the down arrow key. Become a hero by fixing it when you press and hold down Alternate and control then press the up arrow key. I guess some one has been playing that joke on Deb since it is not the first time that happened.

press and hold down Alternate and control then press the up arrow key.

Thank you for your reply. Someone said on this board that if you rent part of your house, rental losses are not allowed on line 17.

Taxbilly is correct and I would like to add that next year, you have to manually enter the amounts for the extra refunds since ATX will only pick up the previous year. Also you need to make calculations if itemized deductions are barely higher than federal standard deduction for the delayed year.

Client owns a house and rents out the basement. Rent income is less than expenses and depreciation and it becomes a loss. Client also has a K-1 from a partnership where she woks. Prior preparer (CPA) did not file sch SE because rent losses were $4,000 and K-1 showed $4,200 on guaranteed payments for worked done as partnership member. Should I amend? This year guaranteed payments are $5,000 and rent losses are $6,000, I understand that I should not report $1,000 in losses because he lives in the house. Do I override 1040 to avoid the losses being transferred or is there a check mark that I can do on Sch E or somewhere? This is not a Real Estate partnership as stated by mistake on the title.

I am not replying directly but I would like to share this with you since it is related. I do a lot of returns for VA, DC, and MD. In April 2005, my friend who lived and worked in VA came to have his 2004 taxes prepared. He said he was moving in a week and he didn't want to have his refund mailed to his address, so he asked me to use his friend's address in MD. Last summer he got a letter from MD stating that he owed more than 2K in taxes for 2004. On the MD tax bill it was stated that he filed Federal taxes using a MD address and he didn't file MD taxes. Since MD and VA have reciprocal agreements, we only sent a VA certified return to MD and they were happy. Sometimes, you file MFJ on Federal and MFS on the states based on where each spouse resided during the tax year.

Client owns a house and rents out the basement. Rent income is less than expenses and depreciation and it becomes a loss. Client also has a K-1 from a partnership where she woks. Prior preparer (CPA) did not file sch SE because rent losses were $4,000 and K-1 showed $4,200 on guaranteed payments for worked done as partnership member. Should I amend? This year guaranteed payments are $5,000 and rent losses are $6,000, I understand that I should not report $1,000 in losses because he lives in the house. Do I override 1040 to avoid the losses being transferred or is there a check mark that I can do on Sch E or somewhere? This is not a Real Estate partnership as stated by mistake on the title.

Cathy, I saw your answer. If someone makes only 5K, would that make more sense to do a Roth IRA? Going back to the original question... 20% doesn't seem to be the percentage, I think it is something like 44% up to a maximum of $220K income.

You need to find the basis for the house, report any losses (long or short term) on Sch D and debt cancellation on line 21.

If the entry is on box 2, you do not need to send W-2-G to IRS.

ANOTHER (sometimes ignored) catch is that you are considered "covered by a retirement plan at work". So be careful if your client makes a bunch of money. That's also true for you Cathy.

Can you check the paper copies and see if in fact you reported it? If the IRS claims you didn't, then a 1040X will solve your problem and since it will match what the IRS is saying, no extra tax will be owed.

Let's be honest. Big chain preparers at the front line are people that just "graduated". In July 2007, they had no idea about taxes, they took a course and passed, then they get hire in January. Perception is very important and that's why they are in business.

Well, those $20K are actually deductible because he is getting a loan for that. Maybe other transactions like that are deductible. Let's say I have a house and I need to pay $20K on mortgage interest and I go and get cash advances from my credit cards, I still deduct the mortgage interest. I think it is the same.

Nice conclusion but I still didn't understand. Cientax... It is my understanding that as long as both TPs have valid social security, file 1040, etc., they will get the stimulus refund and they also will get $300 per head on the dependents that qualify. In this case, it is my understanding that TPs will get $600-$1200 for themselves and they will get $900 for the 3 children if they were under 17 on DECEMBER 31, 2007. Am I correct?