Terry D EA

Here is some information from the NATP newsletter regarding the AMT Patch.

* * Congress Approves AMT Patch * *

Yesterday, the House approved the previously passed Senate version of the Tax Increase Prevention Act of 2007 (H.R. 3996). The president is expected to sign the bill. The Act provides for a one-year patch of the AMT for 2007 but does not offset the revenue cost with revenue raising provisions.

The AMT exemption amounts before phase-out for 2007 for individuals are:

- $66,250 for married individuals filing jointly and surviving spouses;

- $44,350 for unmarried individuals; and

- $33,125 for married individuals filing separately.

This is a temporary fix only. Without future Congressional action, the AMT exemption amounts for individuals in 2008 will revert to 2000 levels.

In addition, personal nonrefundable credits may offset AMT and regular tax. For tax years beginning in 2007, the combined total of the following credits is limited to the sum of: (1) regular tax liability reduced by the foreign tax credit, and (2) the AMT:

- Dependent care credit;

- Credit for the elderly and permanently and totally disabled;

- Mortgage credit;

- Child tax credit;

- Hope and Lifetime Learning credits;

- Adoption credit;

- Saver's credit;

- Nonbusiness energy property credit for energy-efficient improvements to a principal residence;

- Residential energy efficient property credit for photovoltaic, solar hot water, and fuel cell property added to a residence; and

- First-time D.C. homebuyer credit.

Again, absent future Congressional action, personal nonrefundable credits, with the exception of the child tax credit, adoption credit, and the saver's credit, can't exceed the excess of regular tax liability over tentative minimum tax in 2008.

The IRS has not commented on when they intend to begin processing tax returns. NATP has been told that the IRS will need seven weeks to program their systems to accept returns once the AMT patch is signed into law. This pushes back the start of filing season, and the IRS's readiness to accept returns, to early to mid-February. The IRS has indicated that they will post revised copies of the twelve tax forms impacted by the AMT legislation to www.irs.gov within 72 hours after the AMT patch is signed into law.

Deb,

My phone company calls it a distinctive ring pattern. I have had this for five or more years and works fine. One line two numbers and double rings when a fax is coming in. Cost 3.00 per month.

Terry D.

Oaky, I'll chime in here. ATX did not care if we shared the programs in the past. Again, I like the other posters, don't know CCH's position with this. However, ATX owned the software and not CCH at the time. Anyway, I have copies of the years you requested that have been updated by ATX to work with XP Pro. The only year I had any difficulty with was 2007. I ran that on a machine that had win2k and it worked fine. So, I'll go out on a limb here, e-mail me with your address and I'll send you copies of the disks.

Terry D.

The statement below comes right from the instructions for form 1040X. When did you amend the prior years? The last year to amend by 4/15/2007 was for tax year 2003 if that was the original date of the return. Remember, the clock doesn't start ticking until the date the original return was filed. The IRS is correct in their statement. They do not have to accept any claims for refunds or credits that fall outside the statute of limitations. You can amend a return any time you want but you cannot request a refund or credit after the 3 years.

By your statement below, you appear to understand this but by your post I am not sure what you are asking.

>>>>I have always understood that you could amend a return within 3 years after filed or after due date whichever is later. These amendments did not create a refund, only a reduction in tax due. The 1040X instructions also include the later of above or 2 years after tax was paid. Only the $7K from the 2006 refund has been paid toward the over $50K assessed<<<<<

File Form 1040X only after you have filed your original return. Generally, for a credit or refund, Form 1040X must be filed within 3 years after the date you filed the original return or within 2 years after the date you paid the tax, whichever is later. A return filed early is considered filed on the due date.

Terry D.

I have copies of ATX back to 1994. As Jainen had stated, there were compatability issues in some of the previous years. Some years the operating system is a problem as well. 1997 ATX was a problem and for me to use it, I had to load it on a 566 (Ithink) machine to get it to work. Send me an e-mail ([email protected]) with your phone number and we can discuss how to get the previous years to you. Don EA in upstate NY helped me with these but they had to be compatable with WinXP which I had to purchase from ATX anyway. Let me know

Terry D.

I believe Bill is correct with his reponse. The only other advice I could give is to complete the 1120S-1 input worksheet. If you enter the figures from the K-1 the S-Corp gave you on the 1120SK-1 input worksheet, they will flow to the 8903. There aren't any pro-rated amounts to enter here. The S-Corp should have figured the deduction amounts.

Terry D.

I agree interesting reading. This is exactly why I am taking the EA exams. The taxpayer advocate in the Greensboro, NC office told me "you might as well take the exams and get it overwith", which leads me to believe that licensing tax preparers will become law soon. I also have a neighbor who is an IRS agent that has advised me to do the same. So, bone-up on the tax laws.

Has anyone taken any of the computer based exams through Thompson-Prometric? I am taking the individual exam tomorrow and was wondering. Any one interested should visit the IRS site for EA's to see the new rules, testing criteria, and scoring. As I read the FAQ's it appears we will be taking the test based on 2006 tax rules. I am still brushing-up on 2005 as well.

Terry D.

I found this article to be interesting. While I do not have alot of EIC clients, I have read several posts in the past regarding this topic.

http://ppc.thomson.com/sitecomposer2/Index...mp;mc_id=133463

I have had this happen with one of my clients who has hired illegals in the past (client didn't know SS not good). The IRS has sent the notices regarding the incorrect or invalid number but has only asked for verification and possible backup withholding from regular employees. The IRS has never disallowed any deduction for the expenses due to the bad number. BTW, an employer can register with the SS administration to verify social security numbers and names. However, according to the SS regulations, this cannot be used as a tool for hiring. You have to hire them first, then verify and attempt to correct the error. In the case of fraud, then termination is the answer.

Terry D.

I agree with all of the above statements and this board may very well present a better avenue for peer to peer reviews of tax preparation, accounting, write-up, as well as any other software that some one wants to know about due to the fact we are not in any particular companies back yard. I will be evaluating other software as well. Whie ATX has some quirks, I am sure other companies do as well. For the money, it is a good product. Closing down the community was a bad mistake because we lost the knowledge and helpfulness of all of our peers. Even those who were not congenial usually offered some of the best advice. It appears this board is rapidly expanding to that level and I for one am pleased.

Terry D.

Cat,

This situation can be quite confusing. When the Vet closed the business, the assets would be converted back to personal use to show disposition and his basis would be FMV which would probably be a taxable event as he can be taxed on the difference between his original cost basis minus any depreciation subtracted from FMV. That difference would be a taxable gain on form 4797 and included in his income. Now that he has converted the property to rental, yoju are right to include the income and expenses on Sch E. Remeber, rental income is not subject to SE tax. However, you should begin new depreciation of the assets using the FMV at the basis which may offset the taxable gain from the conversion. I did one of these on a S-Corp repo which was a PITA to figure out. If someone here has a better approach, then I would be interested as well.

BTW, how is good ole Youngstown? My home town is Warren and I must admit I am in no way sorry that I ever moved from that area. It has become economically depressed and I am sorry but it is not as beautiful as good ole NC. I hope I have helped you a little.

Terry D.

This is just another reason for me to stay away from Pro-Series.

Thanks to both of you for your replies. That was what I was looking for. I will relay the info to the preparer. Now I'm DONE!!

PS: Marilyn, he's a character!! Wanna take him for a couple of weeks?? lol

Eli,

Just to add to the others replies. The person who is appointed the personal representative is the person who would sign the return and complete form 1310. The probate court will determine who that person as you stated there was no will. It will probably be one of the parents.

BTW, thanks for the e-mial about this board. It is nice to see most of the atxers from the atx board here.

Terry D.

Thank You very much....

Marge

Marge,

I had the same idea that you have a couple of years ago. I closed the office store front, moved everything to my home where I thought I could pick and choose my clients and scale the business back. The picking and choosing did work but we still have new clients every year and the flow of human traffic in and out of my home is becoming a pain. The nice trade off is I am able to have dinner with my family and spend more time at home. Watch out when you say you want to cut it back a little, as it might not happen.

Terry D

Transmitted last return at 6:00 PM which was accepted and transmitted last extension (mine) at 9:30. So I guess this means I made it. I wil finish my extension today so it's off to the beach ( if I can find a warm one)

Terry D. :)