Burke

I would not worry too much about the IRS coming back on you. I know its possible, but I have never had a situation where this scenario has happened, has anyone? Most of the time it is the child care provider who is threatening the client that if it is reported, they will stop caring for the child. I advise my clients who pay child care to take the deduction anyway. I do not believe they actively trace the deduction to the recipient's tax return like they do 1099's and now K-1's. At least, I have never been made aware of any case. Anyone ever experienced this? Perhaps on audit?

That is a good enough reason for me not to switch. Tks for helping me make up my mind. Could we interest Drake in modifying this approach? It would be nice if you had the choice to use either method.

The previous thread was getting way too long to add to it, so here is my related question. New client, did personal return. Other CPA did corp return and last quarter 941, where he added a large amt to salary based on distributions taken over the year. I am going to assume that these distributions did not include a reduction for the employee part of FICA (actually only Medicare since salary was over maximum for SS part). So that means the corp paid both parts of the tax when 941 was filed. The employee part should be treated as income for 2008, no? And it should probably have been reported on the 1st quarter 2008 941 as addl salary, no?

Send him a W-9 to cover yourself, pointing out to him the $50 fine for failure to provide.

You can do 4 K-1's for benes with "excess deductions on final termination of estate" only. Not everything will qualify. See instructions for 1041. Sophisticated software should take care of this for you. Goes on line 11, K-1.

Situation: Husband & Wife in a Rental Real Estate Partnership; Sold a rental property (owned by the Partnership)

1099-S has been issued in husband's SS# (obviously they didn't ask me before they filled out the W-9 information at closing)

Report it on their 1040 with nominee to the Partnership?

You know you are going to have to put it on the 1040 so it will match. So, yes.

Well, I made a note to myself to change my password since it is after the 1st of the month before I get caught again, and now I can't figure out how to get to the screen to do it. Before, mine just expired and the screen came up. When I went on the knowledge base, it just gave me instructions on how to change it for tax returns. Help!

I have a taxpayer who paid a lady a total of $1055 for 2007 to do some light housekeeping. No federal income taxes were withheld. My understanding is that if wages are less than $1500 that no W-2 or schedule H is required to be filed. It doesn't seem fair to me that the employee will have to report the income as self-employment income when the employer is willing to pay the ss and medicare. Is there some other way to do this or is there something I'm missing here..

The law says you don't have to, but there is nothing stopping your TP from issuing a W-2, and paying the FICA. If she withheld the employee's half, she will have to file. If not and she is paying it all, file Sche H on her 1040.

Thanks for the info and cite. Would have sent you a PM but don't know how. I know it is somewhere but I can't find it.

I ran it by MM and she thinks its the first $600. Have a question into the state tax dept, but no one is there until Tues. Will let you know what I find out.

To Virginia Preparers: (gailtaxed, etc?) Read Subtraction #24 in Form 760 and tell me what it means. Do you get to exclude first $600 of all winnings? Sum of all winnings individually under $600, even if aggregate for year is over $600? Nada if one-time winnings of $1,000? I am confused. I understand if total winnings for year were UNDER $600, you can exclude.

Just received a form email from ATX on another matter, and it indicates support hours from 8:00 - 10:00 M-F and 9:00 - 5:00 on Sat. I believe there was some discussion about no Sat hours, and I know I called a couple of weekends ago, and that is what the voicemail said. I called the number provided and she verified that these hours are correct. Also the email has this: "Bonus: ATX TIP of the DAY:ATX TV is on the air! See episodes featuring ATX software." What is this? I didn't see it until later.

look at pub 525, you take out the sales tax (you could have deducted) from the refund and report the differance as per example in pub 525 page 20 and 21 and 1040 instructions for line 10

It's not quite that simple. If your state refund is MORE than your previous year's state and local income tax DEDUCTION on Schedual A less the sales tax ded you could have taken, then you adjust the reportable taxable refund. This would not apply to everyone who itemized and got a state tax refund.

Have a police officer who does some security work in his spare time.

How do I get the 1099-MISC amount to "flow" to Schedule SE, since this amount

is subject to SE tax?

Booger, you can also access the SE worksheet and put this info there. It will flow thru to SE, and avoid Sche C if you don't need it (no expenses). Bunny hop from line 2. You may also have to enter income on Line 21 of 1040.

YOU MAY NEED TO ADD THE FORM FROM THE FORMS LIST IF HE DIDNT HAVE IT LAST YEAR. SUE

Sue, do you realize you are "yelling" by typing in all caps?

The tax was coming in lower due to the federal deductions she has as well. In computing the MFS federal return, she would have to itemize if her spouse itemizes, so she was entitled to some deductions. I would assume that even though they are filing a joint return, that in creating this mock separate return I would be able to use itemized deductions for her portion of state taxes paid, etc and force it as itemized?

~Laura

In Virginia, if you itemize on federal, you must itemize on state. So yes, you should.

I think I got it. IF they had taken the state sales tax deduction then their state refund would have nothing to do with their Schedule A from the previous year. Thank you for making me think that through.

I told you I wasn't the brightest bulb in the box. lbb

I think you were right the first time. If you take sales tax, nothing to report the next year. If you take state taxes, then excess of refund over the standard deduction amount is taxable. I never heard of "taking the difference" between the sales tax amount and the state income tax amount. If that were the case, then everybody's taxable refund would be different from the actual amount received.

I think I got it. IF they had taken the state sales tax deduction then their state refund would have nothing to do with their Schedule A from the previous year. Thank you for making me think that through.

I told you I wasn't the brightest bulb in the box. lbb

I think you were right the first time. If you take sales tax, nothing to report the next year. If you take state taxes, then excess of refund over ID's is taxable. I never heard of "taking the difference."

It's my understanding that we cannot use the dependant until we have a SS#. You will have to either wait for the number or file without the dependant and amend later.

I had to do this year before last? for LA client due to Katrina destroying SS office. Filed w/out child, then when we finally got number (almost a year later) we amended for addl refund & CTC.

Thanks for the info. I cannot believe I could not find this when I looked. It was not the client letter I wished to customize, but I am saving your info. I have never liked the client letter, but will try customizing it it using these instructions and see what happens.

Is anyone familiar with this form?

I've clearly never seen this one before so I have to ask (maybe I'll seem naive). What is the ramification of how this form is completed? From reading the instructions, it appears that as long as the buyer and seller agree on an allocation, then all is good? is there something that I should be aware of or be looking out for?

(In my case, the seller seems to want to allocate a large portion to goodwill which is fine with the buyer (my client)).

Both buyer and seller are supposed to attach this form to their respective tax returns in the year of sale. They need to match. The seller wants to allocate a large portion to goodwill since that will be treated as long-term capital gains (Sche D) on his tax return. The buyer will treat it as a depreciable asset over 15 years. However, they should have had a written sale agreement of some kind (to cover both of them) which specifies this and the other allocations of the sale price, like values assigned to fixed assets, including any covenant not to compete, which is treated differently for tax purposes.

Is this feature gone from 2007 ATX? I cannot find it. How can we do it?

KC, you seem to have a contact at ATX. This message did not come to me. Can you advise them that a blanket email needs to go out IMMEDIATELY on the password situation.

I just want to share a bit of a response I got on a forms question, which I think might be welcome to a lot of us.

To answer your previous questions - Your ATX Forms Developers are still down in Ft. Pierce and our programming department is still up in Caribou.

We have already started planning the 2008 MAX enhancements

, and I'm pretty excited about some of the new possibilities on the table. We should have the big ATX 2008 enhancements scheduled and announced sometime next month.

If you ever a form suggestion, please use the Forms Pipeline as these are seen directly by myself and the other Tax Managers.

Thanks,

John Abel

ATX - Director of Tax Compliance

That Forms Pipeline, by the way, is almost a 'hidden feature', as to find it you go to the MySupport, click on Find a Form, and then look at the second paragraph for the little blue link called Request a Form. That is what he means. I don't know why it's not easier to find, or using that name, but hey, it really does work well.

IF you could into MySupport! That seems to be the problem right now for a whole lot of people!

I hate to bust your bubble, but I never log out either, yet every 45 days I have to resign in and that's when I'm hit you must change your password.

My question is, are you getting a prompt to change it? I didn't. Just couldn't get in. BTW, I don't ever logout either.