MontanaEA

See IRS Pub 550, pg 6 "Interest income on frozen deposits"

The $250 will be paid as a refund on the 1040 IF you fill out Sch M stating that the taxpayer did NOT receive $250 from SSA, Vet Ret, or RR Ret, AND "YES" that they have a public pension from a job not subject to SOC SEC tax.

Thank you, Jainen and MCB39 for speaking up to defend our president, our country, and the ideals of peace and honor. I wish these threads would be saved for another board, not the one I rely on for info on my tax software. It is impossible to ignore them, and they makes it difficult to key into the real reason we have this board. Those of us who support our president and wholeheartedly approve of the way he represents our country to the world, feel an obligation not to let all the criticism go unchallenged.

From the IRS Website: Election for Husband and Wife Unincorporated Businesses An unincorporated business jointly owned by a married couple is generally classified as a partnership for Federal tax purposes. For tax years beginning after December 31, 2006, the Small Business and Work Opportunity Tax Act of 2007 (Public Law 110-28) provides that a “qualified joint venture,” whose only members are a husband and a wife filing a joint return, can elect not to be treated as a partnership for Federal tax purposes. Reasons why a Husband and Wife might want to make the election not to be treated as a partnership Because a business jointly owned and operated by a married couple is generally treated as a partnership for Federal tax purposes, the spouses must comply with filing and record keeping requirements imposed on partnerships and their partners. Married co-owners failing to file properly as a partnership may have been reporting on a Schedule C in the name of one spouse, so that only one spouse received credit for social security and Medicare coverage purposes. The election permits certain married co-owners to avoid filing partnership returns, provided that each spouse separately reports a share of all of the businesses’ items of income, gain, loss, deduction, and credit. Under the election, both spouses will receive credit for social security and Medicare coverage purposes. Definition of a qualified joint venture A qualified joint venture is a joint venture that conducts a trade or business where (1) the only members of the joint venture are a husband and wife who file a joint return, (2) both spouses materially participate in the trade or business, and (3) both spouses elect not to be treated as a partnership. A qualified joint venture, for purposes of this provision, includes only businesses that are owned and operated by spouses as co-owners, and not in the name of a state law entity (including a general or limited partnership or limited liability company) (See below). Note also that mere joint ownership of property that is not a trade or business does not qualify for the election. The spouses must share the items of income, gain, loss, deduction, and credit in accordance with each spouse's interest in the business. The meaning of “material participation” is the same as under the passive activity loss rules in section 469(h) and the corresponding regulations (see Publication 925, Passive Activity and At-Risk Rules). Note that, except as provided in section 469©(7), rental real estate income or loss generally is passive under section 469, even if the material participation rules are satisfied, and filing as a qualified joint venture will not alter the character of passive income or loss. How to make the election to be treated as a qualified joint venture Spouses make the election on a jointly filed Form 1040 (PDF) by dividing all items of income, gain, loss, deduction, and credit between them in accordance with each spouse’s respective interest in the joint venture, and each spouse filing with the Form 1040 a separate Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship) (PDF) or Schedule F (Form 1040), Profit of Loss From Farming (PDF), and, if otherwise required, a separate Schedule SE (Form 1040), Self-Employment Tax (PDF). For example, to make the election for 2008, jointly file your 2008 Form 1040, with the required schedules (see below). The partnership terminates at the end of the taxable year immediately preceding the year the election takes effect. For information on how to report the business for the taxable year before the election is made, see Publication 541 on Partnerships and terminations. A business owned and operated by the spouses through a limited liability company does not qualify for the election Only businesses that are owned and operated by spouses as co-owners (and not in the name of a state law entity) qualify for the election. See Rev. Proc. 2002-69, 2002-2 C.B. 831, for special rules applicable to husband and wife state law entities in community property states. How to report Federal income tax as a qualified joint venture (including self-employment tax) Spouses electing qualified joint venture status are treated as sole proprietors for Federal tax purposes. The spouses must share the businesses’ items of income, gain, loss, deduction, and credit. Therefore, the spouses must take into account the items in accordance with each spouse's interest in the business. The same allocation will apply for calculating self-employment tax if applicable, and may affect each spouse’s social security benefits. Each spouse must file a separate Schedule C (or Schedule F) to report profits and losses and, if otherwise required, a separate Schedule SE to report self-employment tax for each spouse. Spouses with a rental real estate business not otherwise subject to self-employment tax should enter "Exempt--QJV" on their Form 1040, line 58, and should not file Schedules SE, unless either or both spouses have other income subject to self-employment tax. If there are other net earnings from self-employment of $400 or more, the spouse(s) with the other net earnings from self-employment should file Schedule SE and enter "Exempt---QJV" and the amount of the net profit from the rental real estate business from Schedule C (or Schedule F) on the dotted line to the left of Schedule SE, line 3 (but not on Form 1040, line 58). Subtract that amount from the total of lines 1 and 2 and enter the result on line 3. Use the amount on line 3 to calculate self-employment tax that will be reported on Form 1040, line 58. In general, spouses do NOT need an Employer Identification Number (EIN) for the qualified joint venture Spouses electing qualified joint venture status are treated as sole proprietors for Federal tax purposes. Using the rules for sole proprietors, an EIN is not required for a sole proprietorship unless the sole proprietorship is required to file excise, employment, alcohol, tobacco, or firearms returns. If an EIN is required, the filing spouse should complete a Form SS-4 and request an EIN as a sole proprietor. What to do if the spouses already have an EIN for the partnership One spouse cannot continue to use that EIN for the qualified joint venture. The EIN must remain with the partnership (and be used by the partnership for any year in which the requirements of a qualified joint venture are not met). If you need EINs for the sole proprietorships, see above on EINs for sole proprietors. How to handle requests from the IRS for a partnership return from the spouses for tax years for which the election is in effect Once the election is made, if the spouses receive a notice from the IRS asking for a Form 1065 (PDF) for a year in which the spouses meet the requirements of a qualified joint venture, the spouses should contact the toll-free number that is shown on the notice and advise the telephone assistor that they reported the income on their jointly-filed individual income tax return as a qualified joint venture. Alternatively, the spouses can write to the address shown on the notice and provide the same information. If the spouses elect to be treated as a qualified joint venture, how do they report and pay Federal employment taxes? If the business has employees, either of the sole proprietor spouses may report and pay the employment taxes due on wages paid to the employees, using the EIN of that spouse’s sole proprietorship. If the business already filed Forms 941 or deposited or paid taxes for part of the year under the partnership's EIN, the spouse may be considered the “successor employer” of the employee for purposes of determining whether the wages have reached the social security and Federal unemployment wage base limits. See Publication 15 for more information on the successor employer rules. See above regarding the allocation of the deductions for income tax purposes. Duration that the election remains in effect Once the election is made, it can be revoked only with the permission of the IRS. However, the election technically remains in effect only for as long as the spouses filing as a qualified joint venture continue to meet the requirements for filing the election. If the spouses fail to meet the qualified joint venture requirements for a year, a new election will be necessary for any future year in which the spouses meet the requirements to be treated as a qualified joint venture. References/Related Topics * Husband and Wife Business * Partnerships Note: This page contains one or more references to the Internal Revenue Code (IRC), Treasury Regulations, court cases, or other official tax guidance. References to these legal authorities are included for the convenience of those who would like to read the technical reference material. To access the applicable IRC sections, Treasury Regulations, or other official tax guidance, visit the Tax Code, Regulations, and Official Guidance page. To access any Tax Court case opinions issued after September 24, 1995, visit the Opinions Search page of the United States Tax Court. Rate the Small Business and Self-Employed Web Site Page Last Reviewed or Updated: April 03, 2009

This is not correct. The economic substance doctrine is irrelevant to virtually all individual taxpayers. (Are you in the habit of setting up shell corporations to minimize your individual tax liability?) The good faith defense would otherwise remain applicable to tax issues that don't implicate that doctrine.

W

Bipartisan, Bicameral Legislation Aims to Simplify Home Office Tax Deduction to Better Assist American Small Businesses June 25, 2009 Washington, D.C - Today, U.S. Senators Olympia J. Snowe (R-Maine) and Kent Conrad (D-N.D.) along with U.S. Rep. Charles A. Gonzalez (D-Texas) announced the Home Office Tax Deduction Simplification and Improvement Act of 2009, bipartisan, bicameral legislation to establish an optional home office deduction to help ease the burden of the complex tax code on American small businesses. Under current law, a home office tax deduction can be utilized by qualified individuals who use a portion of their home as a principal place of business or as a space to meet with patients or clients.? Although recent research from the Small Business Administration (SBA) indicates roughly 53 percent of America’s small businesses are home-based, few of these firms actually take advantage of the tax incentive due to complex and rigid reporting regulations. ?The Home Office Tax Deduction Simplification and Improvement Act of 2009 would direct the Secretary of the Treasury to establish an optional, easy-to-use standard deduction to encourage greater use of the incentive. "With a morass of paperwork attributable to the home office deduction, the time-consuming process of navigating the tangled web of rules and regulations makes it unsurprising that so many small business owners forego the home office deduction," said Senator Snowe, Ranking Member of the Senate Committee on Small Business and Entrepreneurship.? "By simplifying this vital tax incentive, our bill will give small firms much needed relief from burdensome tax rules, which in turn, will allow them to focus their efforts on developing new, cutting-edge 21st century products and services and creating new jobs." "More than half of small businesses in the country are based in the home, but the?current home office deduction?rules are so complicated that many business owners take a pass.?It is our hope that we can help simplify this part of the tax code, and eventually see this deduction actually become a tool to promote the growth of more small businesses, and more jobs and economic activity,?in America," Senator Conrad said. "Home-based businesses are one of the fastest growing segments of our nation, providing jobs and nurturing our economy." said Rep. Gonzalez. "To maximize the job creation role that small businesses can play in our economy, they need the right tools, which we are helping to provide by simplifying the tax deduction regulations.? Our bill provides the provisions to help small businesses flourish. In this troubled economy, I encourage all those eligible to take advantage of this key incentive that will make a positive contribution to our economy by making the home deduction process easier for the nearly 53 percent of American small businesses run from home." In addition to instituting an optional home office tax deduction, the Home Office Tax Deduction Simplification and Improvement Act of 2009 would require the IRS to streamline its reporting requirements to clearly identify the portion of the deduction devoted to real estate taxes, mortgage interest, and depreciation in order to further reduce the burden on the taxpayer. ?The measure would also update the tax code to ease the burden of proof in claiming the deduction.? Specifically, it would allow the home office deduction to be taken if the taxpayer uses part of the home to meet or deal with clients regardless of whether the clients are physically present and allow for de minimis use of business space for personal activities so that taxpayers would not lose the ability to claim the deduction if they make a personal call or pay a bill online.? The Snowe-Conrad-Gonzalez initiative has garnered strong support from various stakeholders including: the National Federation of Independent Business (NFIB), the IRS National Taxpayer Advocate Service, and the U.S. Small Business Administration’s Office of Advocacy. -###-

I do the same as Julie and it works for me. I also have a column in my return manager next to the "completed" box where I track the status, by marking them "CK & COPY", "PU" (ready to pickup), "DONE" (e-file transmitted or paper file). The only thing I've found to be careful of is that sometimes, for reasons I do not understand, a return mysteriously marks itself "completed", so I've learned to use the completed returns filter in the client manager on a weekly basis to make sure that all the returns checked as "completed" are also designated as "DONE". Every once in a while I find one on the list that isn't!

Under the options tab, I clicked on preferences, then on all managers, then checked the box marked "hide returns marked complete....". It worked for me.

Also, there's a code on the asset entry for the 4562 for office in home. If you add it there, you have the advantage of having the 4562 in the return for the year new assets were added ( which is proper), and it carries it automatically to the 8829. IMO a better solution than using the improvement tab on the 8829.

I think this is great. The exemption of the first $7 million per couple, $3.5 million per individual, the reinstatement of the step-up in basis rules, and the prevention of the exemption reverting back to the old amount (was it $1 million?), as was scheduled for 2011 all seem fair and good ways to make the estate tax easier to plan for and less erratic in its provisions. I'm all for it!

Definitely look at Pub 559.

I'd say it's reported as a distribution, since they got the money.

<_< Well, now that we've got that out of our systems.....

Julie, You shouldn't need a sticky note. The ATX program will remember the address once it has been input.

But the unreimbursed partnership expenses are only deductible if it says they are in the partnership agreement.

LindaB, No, it shouldn't matter how much of the credit he already received. The operative thing is that he owes $X in income tax, less the $400 credit, and he has paid in $Y in withhold tax, therefore, the refund is $Z. Let's not make it more complicated than it needs to be.

JB, Here's how I believe it's supposed to work. Your taxpayer had $390 less in federal tax withheld. When he does his 2009 federal return, he will qualify for the $400 Make Work Pay Credit, which was made permanent as part of the Stimulus package. Therefore, since he already received $390 of it through payroll withholding, his net additional refund will only by $10. The idea was to get the money into his hands sooner rather than later.

But the phrase that some need to pay particular attention to is "you know what your intentions are when you start the thread". I think that's usually true, but the thread starter often tries to disavow their intentions with "Oh, it's about taxes, so it's OK. Never mind that I'm calling the Democrats or Obama a bunch of unprincipled, stupid, dirty rotten scum. I can't imagine why anyone might possibly be offended by that." I have no objection to debating tax principal after April 15, but right now it just gets my dander up to see so much misinformation put forth as the facts and I don't have the time to properly rebut so that a fair and balanced picture of the issues can be seen. I really find it a distraction on a board that I depend on as an aid to my practice during tax season, and I think there are far more appropriate places to have these kinds of blog discussions. Just my opinion.

Here is a cut and paste out of a sample disclosure policy that gives some citations: Your Tax Information is Confidential Tax returns and tax return information are confidential and may not be disclosed to federal or state agencies, or to federal or state employees, or to any third party, except as provided by law. Disclosure of tax return information to federal or state agencies or employees is governed by Internal Revenue Code Section 6103. A tax professional or tax return preparer who uses information from a tax return for any purpose other than to prepare a tax return, or who makes an unauthorized disclosure of return information, is subject to a $250 penalty for each disclosure, up to a maximum penalty of $10,000. If the action is undertaken knowingly or recklessly, the preparer may be subject to criminal penalties or fine up to $1,000, or up to a year in jail, or both, together with the cost of prosecution as provided for by the Internal Revenue Code Sections 6713 and 7216. Confidential tax return information includes the following elements: the taxpayer's identity, the nature, source or amount of income, payments, receipts, deductions, net worth, tax liability, deficiencies, closing agreements, and information regarding actual or possible investigation of a return.

Was this NOL from the decedent, or did the estate generate it?

Oh for Pete's sake! Here..... http://www.irs.gov/efile/article/0,,id=188390,00.html

I got an 1120 accepted. It took several days longer for the ack than 1040s do, but it went. So, I'm hoping my 1120s's will all go next week.

I had that erroneous $10/return being charged on all returns after I signed up for fee collect. ATX FINALLY owned up to the error, turned off the $10 charge (it was supposed to be for RAL's, not fee collect, and I was being charged $10 for ALL returns, not just the one and only fee collect return I processed). BUT, that was after HOURS and HOURS on hold to support during multiple phone calls. I really yelled at them about that - the very first support tech that I talked to should have been able to handle it! Other than that and all the spam email from ATX about RAL issues since I signed up for fee collect, things are running smoothly.

Yesterday, ATX told me to contact SBBT. After hours on hold, SBBT told me it was a fee for transmitting a state return, and would be charged on every state return, whether fee collect had been requested or not. Of course this makes absolutely no sense, but I could not get thru to anybody who knew anything or could correct the situation. After being passed around to three different extensions, then back to the first, then disconnected, I asked to be disenrolled from fee collect. SBBT told me to call ATX for that. I was on hold for an hour, gave up and went home. This morning, I am back on hold with ATX as I write this. I'll let you know how it turns out.