Gail in Virginia

If mom gets audited by VEC, they will look at all 1099NEC payments and want an explanation of why they should not be considered an employee. I think with these facts they would reclass him as an employee and accordingly want tax, interest and possibly penalties. Not sure, however, since he acquired a truck - if he purchased the truck and it is in his name, that might help as far as being a contractor. Especially if he is trying to get other clients. Showing bills from him to her, or a contract, or business cards, might all help.

If you were going to report it on a 1099MISC, which box would you use? I think what it is closest to is an account reimbursable for an employee, although it is not exactly that since they are not an employee. But if you are reimbursing the exact amount of the expense or less, I would not think it would qualify as income and would therefore not be reportable on a 1099MISC. I would retain a copy of the bill or other calculation of interest and penalty with the payment information to explain why you did not report it as income. I could be wrong too - that has been known to happen.

I had never heard of this and had to google it to see exactly what a USB pet rock was. Now I know. What will they think of next?

Even on a couple who are still married, and still filing joint, I have had problems with this. If spouse makes the estimates using their IRS account, the estimates are credit to their social security number and may not be credited on the joint return. What a broken system!

I think it is the same year - they want to show that they made millions and yet they want to pay -0- in income tax. They are convinced that is what rich people do and if we were just "good" enough at our jobs to find them those same loopholes, they could make money without paying taxes.

15 months is all that he got? That seems light for such blatant, intentional fraud.

It sounds to me like the contractor's portion of the proceeds would include the liens that were paid off rather than treating them as an expense of the sale. So your client would report the sale proceeds that he received, and if the 1099S was issued solely in his/her name would report a nominee amount to the contractor of the proceeds that the contractor received either in the form of cash or as payment of liens against the contractor. Not sure I am stating that clearly.

For such a small potential filing requirement, and that far back, I agree.

I am thinking that their percentage went up because people have decided that it is a waste of time to try to contact them so they got fewer calls.

I know that at least in the past, Virginia was adamant that if you were a US citizen then you had to have a US domicile even if you were "permanently" living abroad. No amount of explanation would convince them. I don't know if that has changed, and I don't know if they apply the same rules to permanent residents or non-residents. My case was a young woman living in England and using her parent's address in Virginia for her federal return. She had no income from the US and filed a return in Great Britain, but because Virginia was where she last lived before moving overseas they considered this her domicile and insisted on a Virginia return.

I keep seeing headlines in the local papers about SRO issues in the county - referring to School Resource Officers but my brain immediately thinks standing room only, which makes some of the headlines incomprehensible.

I don't think you can supersede an extension, but the taxpayer can make a direct payment through the IRS website for last year so that the funds will count as paid for the extension.

Thanks, Margaret. I was able to download the forms I need, and I am emailing the office with the questions that I have. The link to the site was most helpful!

What information does the client need to take to the local tax office to get the return done for free? Do they all do that? I have a client that has moved to Cochocton OH, and I have no idea how to do his city tax return. He picked up a city tax information sheet but no mention in that of due date (I assume same as federal from what it says about federal extension, but not sure) or of RITA or of any way to file electronically. Nor did he pick up any forms. I will try to go online this weekend for research, but this makes my head hurt to think about this and if he can just take a copy of his federal return to them and pay them money, I think that would be wonderful from my point of view.

I love the Why are you still standing here wine! That is my favorite so far.

I would be drunk as a lord!

She may have used banks that are located in both NZ and USA, and that had accounts that treated her as a US account holder that would not require reporting? Maybe she never had $10,000 in her name on one day while they were living in NZ, at least not in NZ accounts. I would look to see if there is currently any kind of amnesty program also.

Are all military pensions paid by DFAS? I have a client who receives a pension from OPM as a surviving spouse. Her husband was retired from the Navy after 20 years, and then worked at the VA. I would guess that this pension covers both periods of service, but how can I tell? And does it qualify for the Virginia exclusion?

I think technically if you amend a return before the due date, it is considered a superseded return rather than amended. Practically, you don't need to wait and it would look the same, from what I understand.

I love this! Thanks for sharing it!

Personally, I think the aid is correct because I don't think the members of the Guard are considered members of the United States Armed forces. They are part of the Virginia National Guard. And I think if they receive a pension it would be from a state agency and not DFAS. So I suspect that the state will not have any problem identifying those who are federally retired from those who are state retirees. But the devil is in the details, so who knows? If the department of taxation cannot answer the question, I don't see how they can program their computers to identify anyone who takes the deduction in error.

I think this benefit is specific to members of the US Armed Forces. Aren't the National Guard state forces? I have had a few retired service members, but not anyone from the Guard yet so I am not really sure.

I think this a fascinating discussion. Social security is not considered gross income for purposes of the qualifying relative tests if I remember correctly, so I am not sure whether it would count for this purpose or not. I would have expected that this particular rule was for spouses who lived together rather than those who had been apart for the entire year, unless the reason they were apart was something like a nursing home situation where the spouse could not sign the return because of a lack of competence. But I don't know.

In that case, the improvements were not previously used in trade or business, and would have to be depreciated based on the FMV, would they not? And would that FMV be determined by how much they increased or decreased the value of the house since, I assume, they are an integral part of the house and not stand alone improvements?

From what I recall, I would think the depreciable basis would be the lesser of the adjusted basis in the house (cost + improvements - previous depreciation) or the fair market value at the time placed in service. Not sure about the depreciable life. My guess would be that would also start over if FMV is less than adjusted basis.