Gail in Virginia

In Virginia, Medicaid sends out the 1095 whatever. But every state is probably on their own as to whether they do or they don't. I'm with Jack. Check the box.

Many of the problems I see with self-prepared returns are because the taxpayer knows so little that they don't know what they don't know and therefore don't attempt to look it up.

Instead of filing a tax return, wouldn't the answer be to file a stand-alone 5329 for the kids to report the excess contributions since they never should have been made? They would have to pay the tax for making the contributions, but then no tax for pulling them out and correcting the situation. Or maybe I am looking at this wrong.

If the interest was $86,000 that means the total cashed in had to be at least $172,000, unless the bonds had not matured. But still, there would have been some principal.

According to their instruction book for the WV state income tax, non-residents do not pay tax on gambling winnings except the lottery. So I think they will only pay Federal and VA tax on their winnings.

Don't Virginia's reciprocal agreements only apply to compensation? I'm pretty sure if this were income from a Sub-S or partnership, reciprocity would not apply. I don't know about gambling income.

I don't think that the letters sent or the Sch B contributions are actually matched up to deductions taken by tax payers, although I could be wrong. But the contributor intended to contribute in 2016, and presumably mailed the check in 2016 so he deducted the check in 2016. The non-profit received the money in 2017, so they recorded the revenue in 2017. I would not worry too much about the matching issue. Although if it does turn out that somebody gets an CP2000 or equivalent asking about this contribution, I would love for you to follow up and tell us.

That's how I read it at first but what it says is you DON'T qualify for the refundable portion if you are over 18 and under 24 and your earned income was less than 1/2 your support. Well, he is not under 24 any longer so 1C does not apply. Neither do 1a and 1b. So, he does qualify.

I just re-read the IRS Pub 970 section about requirements for refundable AOTC and I have changed my mind. Since he is 24 at the end of the year, then item 1 (a, b OR c) does not apply to him and it doesn't matter if 2 and 3 do. So I think that the parents can't claim him since he is 24, but he can qualify for the refundable credit. See copy below: You don't qualify for a refund if items 1 (a, b, or c), 2, and 3 below apply to you. You were: Under age 18 at the end of 2016, or Age 18 at the end of 2016 and your earned income (defined below) was less than one-half of your support (defined below), or Over age 18 and under age 24 at the end of 2016 and a full-time student (defined below) and your earned income (defined below) was less than one-half of your support (defined below). At least one of your parents was alive at the end of 2016. You are filing a return as single, head of household, qualifying widow(er), or married filing separately for 2016.

But did mom and dad provide a place to live for student? And groceries? Even though they cannot claim TP as a dependent, that does not necessarily mean that he provided over half of his own support. And if he did not provide over half of his own support, while he is entitled to the AOTC to the extent of tax due, TP would not be entitled to the refundable portion.

Numbers are our business, right?

To get the refundable portion of the AOTC, the student has to be able to state that they provided over half of their own support.

That is my plan but i am tired, its Friday, and I wanted to be sure there wasn't some rule that if you took the money out directly as the beneficiary of a deceased participant it was no longer a death benefit. Which doesn't make any sense to me, but the way this tax season is going a lot of things aren't making sense. Sleep deprivation, I think.....

No father was over 59 1/2. Distribution was made directly to the son as the beneficiary named on his father's account.

I have a client whose father died last year. The client took a distribution from the father's retirement account ( I think a 401K but I am not sure) because he was a beneficiary of the account. Fidelity coded the 1099R as 1, premature distribution. I asked the client to call them and get it changed to 4, Distribution due to Death. Fidelity apparently told him that 1 was correct because he was the beneficiary and was under 59 1/2. I wasn't party to this call, but I would have thought Fidelity would know better since they handle so many pension plans. They apparently told my client that he should have transferred the money first if he did not want to pay the penalty. Am I missing something here?

Some of my clients use that system too. The best also write their name, address, phone number, social security numbers and birth dates on the outside because i don't keep any information from one year to the next. They also bring back the copy of last year's tax return that I prepared for them in case I need to see that.

Elrod, I don't know how you always find such appropriate pictures/videos! Keep them coming! Please!

North Carolina has the same requirement. I am not willing to certify for my clients that they don't owe consumer use tax, so I ask them and explain some of the circumstances where they might have purchased something and not paid sales tax. So far, I have had only one customer who said they had purchased something and not paid tax through a catalog order. They pulled the amount off my ceiling and we went with it.

There are two different issues - contractor vs employee, and box 3 vs box 7. I understand Catherine's point - for example, I had a client who got a 1099 from the LTC insurance company for taking care of her mother. Normally, that type of work would result in SE tax BUT the taxpayer was not in that business - she only did the work because it was for her mother. This sounds similar - the taxpayer is not in the business of performing clerical tasks - she only did it because it was her sister in law, and she needed some short term help. However, if the taxpayer goes out and gets a job as a file clerk, secretary or receptionist I think it would be harder to make this argument.

A+ is a certification for computer technicians, N+ is for network certification, MCP is Microsoft Certified Professional, MCP+I is plus internet, and MSCE is either a Microsoft Certified Engineer or a Master of Science Civil Engineering. MCSE is probably more common - a Microsoft Certified Solutions Expert. Anyway that you look at it, that is an impressive list of credentials. BUT if I had that many certifications in IT, I would probably work in that field instead of being an unpaid auditor and data entry clerk for the IRS.

Done.

Thanks, Grace.

The ATX payroll software will generate the W2c. I did one the other day.

I like that idea better, Lion. That way they get ruptured ear drums, but I don't get a sore throat!

I read an article that H&R is experimenting with using Watson, the computer that competed successfully on Jeopardy, to prepare tax returns. I am thinking that the end is in sight.