Pacun

Why are you guys trying to fight the system... states are forcing tax preparers to efile. I do not tell people that the forms are not ready because I simply efile. It is easier, more convinient and secured.

If the employer has the wrong zip code on the W-2, go to http://maps.google.com and enter the correct zip code.

I think you are right because no one has mentioned the 11K floor when calculating the credit for the children. So any dependent kid related by blood under 17 will get $300. Thanks for your reply.

Also, kids means, kids that qualify for the child tax credit or additional child tax credit. So a couple that makes only $6000 and 3 kids under 17 would get only $600. Am I correct?

I am waiting for peer review but you should also check the tax treaty between the US and the other country.

"This is a reminder that Form 1040 Page 2, Form 982, Form 4136, Form 8835," I guess you didn't read carefully.

Sch C and Sch SE for $125K

Ajuroff, I understand your point. Yesterday I had a client, his W-2 was more than $100K in just 6 months (more than 180K with wife). Very nice and professional person but I could not do his taxes because something didn't click. He started by saying, "I do not want a big refund and just want what's right". "I come to you because you are the CPA and know how to do this"... I immediately replied, "I am not a CPA but I can prepare your taxes" (he had left his paper and I studied his case for 30 minutes). He moved from CT to VA in the middle of the year and left a house behind. He showed me that he finally sold his house and lost 20K, and started showing me other expenses in order to sell his house. I said "The loss on your primary residence is not deductible". He couldn't believe me (of course after I said I was not a CPA). He went on to show me that he made 4 trips back to CT and showed me hotel expenses. I said, "did your new employer asked you to go back to CT 4 times?" He said "no". I said, "it is not deductible". He said but that's part of relocation... I said those were personal trips. He said "I am going to look for someone who has dealt with relacation before... I said that's fine, but the only thing you can deduct is your very first trip from CT to VA including the moving of your belongings. So far he was in my office, then he asked me about the $1000 for child tax credit and I told him that because of his salary, it vanished... then he said "Have you heard about the check the IRS will send in the summer". I said your check will be Zero. I printed out a return without the moving expenses and babysitter and I said.. you will get a refund because both employers withheld social security taxes and you overpaid SS. I went on to say, why don't you check with other preparers and handed his papers. I have to admit, that when our clients start telling us "another preparer told me", it causes certain sensation on us. As professionals, we have to deal with our feelings.

"And here's my problem. Let's say client walks into your office and wants his taxes prepared. Gives you his w-2. TELLS you that the number on the w-2 is fake, just made up, shows you his social security card, and says this is my real one, use this. You look at the social number on the w-2 and discover it's your very own social security number. What would you do? I would have a problem with that." If I find out it is my own social security number, I would file his taxes right away before the IRS adds his salary to my salary. I let other professionals deal with the other problems. If someone comes to my office and saids, I am here illegally and every minute I am violating many U.S. laws, but I do not want to violate the IRS laws, can you file my taxes? I say yes... absolutely, that's what I am here for. As long as he doesn't try to get benefits that he doesn't deserve, I will file his taxes.

That's your right. You can refuse to prepare those returns. I go with what the IRS says. If the IRS says that we can apply for ITINs, I apply for ITINs. If the IRS says that dependents in Canada and Mexico can be claimed if you support them, I claim them. Again, you can refuse that 12 million + market. The big chains are not ignoring them and they advertise that they can request ITINs.

Just in case you didn't know, the mexican was correct. If he supports his parents and children, he can claim them if they live in Mexico or Canada. When he said that the other preparer could get a social security number, I think he meant ITIN. Also, maybe he became a permanent resident throw his wife and now his children will become permanent resident and get a social security. The fact that he worked with a fake social security, means nothing to IRS. Since he now has a valid social, he can file all prior years. Even without a social security number he could file his taxes, claim his parents and children if he support them and he applies for an ITIN for himself and all his dependents. For the record, $200 is a lot of money in mexico and in many latin american countries.

I heard on the radio a lot of commercials from the big chains saying "You don't have your W-2s yet? No problem, bring your last pay check stub and we prepare your taxes". (I guess they are not lying). On January, I got a lot of people with their pay check stubs. I said, you have to wait for your W-2. They told me "You don't need W-2s, you only need my last pay check stub". I had to explain the same thing over and over. I hate it!!!!

As I said before, you should file sch D and report the sale of the home for matching purposes. As you know the IRS has a copy of the 1099-A. I think your client will get a 1099-C for next tax year.

"The downside of being human is that we are flawed. Anybody who has never made a mistake stand up." I agree with you.

I am sorry to use your thread since I do not have an answer to your question. This is just a general comment. I do not go the extra mile, but I do not file returns when clients tell me that they are missing a W-2. I tell them to contact their employer and in the meantime, I request a W-2 transcript from the IRS. I inform them that we need to file an extension and wait for the real W-2 from the employer or the transcript from the IRS before we file.

I am not filing state.

I guess I do not go the extra mile for my clients. If a client doesn't have a W-2, I request a copy from the IRS and I file the state without any withholding. If my clients don't like it, too bad... I didn't lose their W-2. Most of the time it is the employee's problem because they didn't provide employers with the correct address. I think the employer is the only one that can provide a true copy of the W-2.

I did one today and I included both interest and taxes on both houses. My client told me, I pay for both mortgages and my parents pay only utilities. His salary was enough to cover both mortgages so I didn't see a problem.

Yes, as long as her home was the student's main home.

Yes. Child can claim mortgage interest for the house where he lives in on regular sch A. Are you sure he owns two houses or he let his parents use his good credit for the second house?

I thought box 5 checked YES, took care of your comment. We DO appreciate all your inputs, though!

"I would not bother to change anything. But then I don't mind other preparers criticizing me for not following the letter of what IRS wants and dictates. " When I review other preparers work, if I am not going to amend, I do not tell anything to the client about little mistakes that I find on the return. As a professional, we do not have to put down or criticize other preparer. Sooner or later, we make a mistake (some small some big) but we are just human beings. "Thanks to all for the support, I can rest tonite, I was getting sick thinking on what to tell him, after 20 years I feel like I know less and less." I also feel the same way, every year I learn something new and this forum is great!

I thought you were asking a question... I read your post slowly today and I understand what you are saying. The problem here is ONLY in VA and ONLY when ITINs or only adults are involved on the return AND there is tax liability on VA return. You are right, ITINs qualify for the low income credit and you have to do it manually. Thanks for sharing.

According to other experts (KC is an expert), if box 5 is checked yes, and the amount of line 4 is less than line 2, this is reported as a sale AND the IRS has a copy of this. You need to report it this year as a sale and next year you will report the debt forgiveness.

Maybe improvements on the rental made it to the 75K basis (which coincidentally was exactly the amount paid originally). Also find out when it was converted to rental (maybe in 2005, who knows). If what I am saying is correct, all years are correctly filed.