Margaret CPA in OH

Sigh... Client wants to deduct the cost ($53) of the haircut she had to donate her hair to Pantene Beautiful Lengths. I say no because she received value of, well, $53 and her hair, like a blood donation is not deductible. Do I hear an 'amen' or an 'au contraire?'

Thanks for the replies and advice. The returns themselves, of course, wouldn't be signed, it would be the 8879 for him that concerned me. I will suggest changing the account name everywhere but it has been only about 10 weeks, still pretty raw for her. She will be happy to have the extra money - less a bump in my fee for splitting into 2 returns but she was already getting a discount. She will still come out ahead.

Client's husband died December 2015. Federal and state tax combined is lower by about $300 filing MFS. Is this possible when husband is deceased? If we efile, she can sign for him, can't she? All are refunds and would go to joint checking account. This year I am getting so many oddball client situations....

Thanks, Gail. The strange thing is that the daughter is sort of taking care of mom now, managing paperwork, driving her around, etc. It is possible, though, that daughter's assets are being conserved to support her after mom's passing, assuming that is the order. I hate to have to ask some of these questions but, as I explained to mom the other day, they are totally new clients to me so I have to ask a lot of questions to truly understand their tax situation and do the best job for them.

Hmm, a support statement - I see something like that in QF, costs of keeping up a home for the year. But the daughter will have paid for none of this per mom's list. Mom also pays daughter's credit card, gas, medical. So she will be more than 50% but not because the couldn't pay it. I do wonder what the daughter does with her income. I've never had clients faced with this sort of thing. Mom did provide a list of all she paid for her daughter, several hundred dollars, and it's likely that little or none of the daughter's sale proceeds were taken from the investments. I think I have to explain that the daughter had the resources and could have paid for her own support but chose not to do so. It may be indelicate to ask the approximate value of her assets. I'm wondering if it is a conscious choice to live off of mom but don't know enough of the details. This experience doesn't thrill me.

Judy, the mother is 77, the daughter is 56. I just know I will get major push back about this support issue but on paper mother has gross income of $35,000 vs daughter's gross income of $59,000. It's likely that no money was withdrawn, however. And there was some mention of selling something from late husband. Ugh! The former preparer retired and 'always did it that way.' The former preparer also claimed EIC for the mother last year and erred by omitting $1956 in the FWT so we will amend. There have been no recent tax returns done for the daughter so it is possible that her gross income, at least recently, was below the filing requirement. For 2015, whether or not she is claimed as a dependent there is no tax due. Mom, however, loses about $600 federal and state. I will ask for daughter's 2014 documents as mom's already needs amending and will see what we get. Unfortunately they are both very nice folks but very skittish and, of course, offer that they depend on preparers and don't know about all this stuff. Sigh...

That was my thought initially but if you look at the sequence of qualifications step-by-step, Step 3 mentions permanently and totally disabled at any age. She is so it says that the taxpayer can claim her as a dependent without proceeding to the income for a qualifying relative. I did prepare a return for her but she owes no taxes due to the loss.

Another first for me. New client claims adult daughter (56) who is permanently and totally disabled (I think something like ptsd, not physical). Client is surprised that daughter has to file this year but she received $49,000 in gross proceeds (loss with basis), $1769 dividends and $8279 in SS ($2611 now taxable). I've read dependency requirements and it seems that there is no income limitation to claim this daughter. They live together and client pays the bills. I just wonder about the support part and whether it even applies. Client has paid several hundred in medical bills plus has listed gas, cash, and credit card payments for daughter. Something just seems strange but I can't see how this is incorrect per requirements. Is this all good?

What a beautiful picture! That is love, pure and simple. I know all too well about the renal failure issue. Hydrated the gold kitty for nearly 2 years until he made it very loud and clear he wanted no more. Now my black and white Tribble is just entering that realm. But I am not giving up yet and she isn't either. Grieve as you need.

So sorry about your cat! It's always difficult to lose a pet; I've lost too many. You can tell from my avatar that my cats are very important in my personal and work life. The gold one is gone now, though. 18 years is a long time - you were lucky for that and so was your kitty.

Thanks! I usually assume that I am doing something wrong - well, it does happen

Hmm, I asked sort of the reverse issue, Medicaid to Marketplace with PTC, on the ACA forum. At last check over 30 views and no replies. At least I'm not alone but I still don't know how to complete 8962.

I gave this a shot. On the 1099R form I omitted the taxable amount on line 2a because you know it isn't correct. That put 5083 from the bottom of the form for the amount converted onto 15b with 6515 on 16a. On 5329 on the input I have on line 4 (Other early distributions not code 1,5 or S). On line 2 I put Other, code 12, and 5083. This created the amount subject to tax of 1432 and tax of 143. I think the documents would support this and don't know if you need to add an explanation for code 12. We'll see what others would do but I think this would work.

So sorry! I have printed without problems to pdf and to my HP laserjet since the last update. I hope you figure it out soon.

Thanks, Joan, but why only from 2007? Obviously I am missing something, well, obvious, just not to me!

Client was on Medicaid Jan-Mar then marketplace April-Dec. Sold rental property in September so is now way over the amount for Adv. PTC do has to repay. However, ATX gives me a message to not enter anything on Part ll lines 11-23 but the instructions state to so so as line 10 is No so continue to 12-23. It seems I cannot efile by following the instructions (as I interpret them). Suggestions?

Thanks, Randall. At least now I think I can do that! Thanks again to all guiding me through this and special thanks to the client for bringing all those returns! Now if only I can understand what was done all those years ago...Another adventure!

Thanks again so much. I was quite surprised when, last evening, the wife showed up with return copies dating back to 1978! So now I get to wade through them from the first year filed and, hopefully! get a much better idea of the status. As the initial returns were self-prepared, though, it may be even more interesting and complicated. Thanks again ALL who responded! I feel far less lost than the first post even if the true answer isn't yet revealed. And I also wonder why, on the ATX data entry, nothing was shown taxable no matter what I did. Is the calculated taxable amount required to be entered into the regular 1099R box 2, taxable amount? I wouldn't have thought so but the programmers may have had a different idea!

Thanks for the ongoing help. Randall, why divide Box 3 by any number, let alone a guess at 'say 260'? The amount there is $1893 so doing your calculation yields $87.37 but what does that mean? As it has been since 1990, perhaps all is taxable except that I read "The contributory amounts paid of disabled employee annuitants under minimum retirement age are fully taxable and these annuitants cannot use the employee contribution amount.....However, once the disabled employee annuitant reaches minimum retirement age, the annuitant may use the employee contribution amount shown on Form RRB-1099-R to compute the nontaxable amount of his or her contributory amount paid." Ii simply do not know how to 'compute the non-taxable portion of his or her contributory amount paid' sad to say. This client reached that age in 2007 but I still don't understand why the annuitant may use the contribution amount... I don't think it practical to recalculate from 1990 as it would cost the client more than the tax due, I think (hey, I get the big bucks, right?). And chances are he paid tax on all at least until reaching retirement age. I just feel uncertain about the ATX calculation. No matter what I put in for the amount recovered after 1986 ($800 or $80,000), it still isn't taxable. With all this, I am assuming that nothing is input in the boxes for regular 1009R's as Box 1 Gross distribution and Box 2a Taxable amount, right? I selected the special type for RRB at the top, used those boxes that appeared and under the Pension and Annuity Dist Simplified Method: 1. Jan. 1, 1990; 2a $1893 (software pulled from above); 3a 42; 5a 12. Hmmm, maybe HRB could do it better. I've just never seen it before...

Thanks, Lynn, I am asking about the green section, blue is pretty clear. I'm not quite sure about using the Simplified Method as I don't know, nor do they, what, if any, method has been used previously. Boxes 4 and 7 are the same and I input in ATX just as it is shown. If I put in the starting date of the annuity as 1.1.90 (he says he retired 12.31.89), the amount in Box 3 autopopulates in the Plan cost at annuity start date. But I don't know, nor does he, the death benefit exclusion or if using the combined ages or the amounts previously recovered after 1986. Without those figures, the amount in Boxes 4 and 7 are not included as taxable. His prior returns show this as taxable but no calculations for Simplified or General Method can be found. I did call RRB and, after 45 minutes on hold, did not find them to be at all helpful. I even provided the SSN of the client. I was told to check with IRS or a tax preparer. I did get a reference to an online document but read pretty much what I have already stated above. Again, I don't want him to have to pay tax that he doesn't owe and it seems to me he may not. Without the data I said is missing, ATX is not calculating that it is taxable. So am I wrong or were others wrong?

A new client receives RRB-1099-R with which I am not so familiar. In trying to educate myself, I got further confused. He is a Vietnam Vet and had to retire at age 44. He is now 70. In trying to understand the amounts in Boxes 3, 4, and 7, I have read that when a disabled employee annuitant (he is) reaches minimum retirement age (he has, 62 with less than 30 years), the annuitant may use the employee contribution amount shown on the form to compute the nontaxable amount of the contributory amount paid. But I am going round and round trying to determine how to do that. He retired 12.21.89 so Pub. 575 says he could have chosen wither Simplified Method or General Rule. I've looked at several prior year's returns and they all seem to show 100% taxable although the employee contributions amount is higher than the contributory amount paid. Some earlier year forms actually showed the amount taxable in a labeled box but that stopped some years ago. I keep reading and reading and getting nowhere fast. I hate to have all taxable if it really isn't, I feel bad if earlier preparers did it incorrectly but I want to do it correctly. In ATX, I input the figures at the top matching the boxes on the form and it isn't taxable but I don't know the information to put at the bottom for Annuity Distributions because they don't know. The start date is known but not the amount recovered after 1986. Any help would be greatly appreciated. I've had clients with annuities before but all information was known and this is my first (and last, I hope!) RRB client. Thanks!

Yup, I can vouch for Catherine's scary weapons. I was very polite during my visit - and so was she. And her awards collection is awesome! I just run marathons and scuba dive...

Finally I got to talk with the help desk person who actually knew something. All is well now but it wasn't intuitive at all to find the efile record. In fact, I don't find much of any IRS or related websites intuitive. I mean, why does one first go to Application for this list?

Thanks, Randall. Now I am having access issues with e-services. I keep getting an Internal Server Error and have an incident number. When the help desk calls it seems I'm in the bathroom, getting the mail or otherwise unable to get to the phone. When I call back, I can only get first tier, they tell me they can't help and I have to wait for the next call. Grrrrrr....I used to really like e-services.

Thanks, as I noted above. I should have done the google first!