SFA

I may also insert a line that says, if I cannot complete their return by the 15th for any reason, they agree to having an extension filed on their behalf by our office.

I live out in the country and want to keep my clients separate from my personal life. I don't even have a Facebook page for that reason. I also have seven employees, and do not socialize with them outside of the office either. I do very little office work from home, except logging-in to my computer at work when necessary. When I first started, I worked from home while my kids were little. My husband was very happy when I moved the business out and he could just relax without having the extra traffic. It works for us.

I had a client tape a paper over a section of their handwritten spreadsheet. It said "do not lift off. there is nothing under here." So, I lifted the paper off. Yep, there was just scribble under it.

It's a tough situation when we already have the client documents in our office and have taken on the project. I think I will adjust next year's engagement letter to cover this situation. I will be adding a paragraph regarding incomplete returns in our office prior to 4-15. In that case, our letter will stipulate that at our discretion, we may (but are not obligated to) file an extension on their behalf. Any thoughts on this approach?

Speaking of rent. My landlord has not renewed my office lease. I must find another place and be completely out by May 31! Everything I am looking at will require a build-out of some sort, plus the base rents are higher. Argh! So, next year, I will be increasing my fees, but of course, it will probably all go to overhead. At first I was optimistic about the move, but now that I am tired and can't find the right place, I'm just frustrated, and dreading slamming and ram-jamming into being out AND in, within 45 days after the 15th. I just want to head for the beach and read a good book.

We interview and input client information using dual monitors, but they NEVER walk out with a return. After they leave the interview, we finish, assemble, scan, invoice, etc. behind the scenes. They return to pickup when called.

Thanks KC. I only wish Dad was still around. That's probably exactly what he said. I sure miss him.

Any single item or group of similar items over $5,000 need to have an appraisal. Your client had multiple receipts from multiple days? I don't try to manipulate my clients information or curtail their deductions if they are legitimate. However, I would ask them to review their donation slips and to make a more serious effort to reconstruct exactly what was included in each donation visit and give them thrift shop price guidelines to help them dial in to a more accurate (and honest) list of their donations. Perhaps they can organize their donations into separate group types, such as clothing, furniture, small appliances, kitchen supplies, etc. In this case, they are way too casual in plopping down a $6,500 figure and expecting you to not push back. They know better. My Dad always said, "Pigs get fat. Hogs get slaughtered." I think they both end up at the butcher shop, but I got his point.

I like both. Some returns I can coast along and others it's POP Quiz time. The other day, I had a client looking disinterested in his business return as we were going over it. I stopped and asked if he was OK. He was young and owed money and was unhappy with the results. So, I had him lean in and walked him through his return line by line. I told him I did my best to get him these results and wanted him to see what goes in to preparing his return. He didn't realize he needed to charge sales tax on his services for the past three years, because his other TWO accountants didn't tell him. He hadn't issued 1099's before either. Our cost was much higher too, but I didn't really care. He had no loyalty and has been drifting from accountant to accountant. After the pep talk, I said that was enough for today and he will need to reschedule to setup time to go over his sales tax issues. Like a good boy, he went out front and made his next appointment. That will be today. I wonder if he will show up.

I used to be more casual about sending extensions for the procrastinators, but now I am reluctant to send extensions for clients who are not communicating with me. We make calls to confirm that the client wants or needs an extension before filing. The extension also keeps the statute of limitations clock running on returns that perhaps the client wants to put behind them and would prefer that the look-back window closes asap. If another preparer has completed their returns on time, then we may be out of line to make the assumption that an extension is helpful to them. I've read that we may actually be setting ourselves up for liability if we automatically file extensions because the clients assume that the past history of filing extensions for them, sets the precedent that they can assume that we are responsible for filing them always.

Ken, you are a compassionate man. And clearly trying to help each one of your clients deal with tough situations, as we all are. This year I've had crying, complaining, whining, and thankfully a lot of laughing going on in our office. I too have had my Betty White moments this morning. But now that I've had my candy bar and coffee, I'm back.

Ken, in this forum, certainly we cannot know the details when only presented with a short paragraph of a particular client's issues. So your comment that others are "passing judgement" when we are simply stating our opinions, points of view, or any other type of remarks, is condescending. How about that for "passing judgement." The world is not vanilla. And political correctness is tiresome.

"It's not alimony if they agree it's not alimony." Walks like a duck. Talks like a duck. It must be a duck! Alimony is Alimony. There are tax laws that define the income tax treatment of these payments. So now divorce lawyers have the authority to write tax law? I wonder.

"She works a low-paying part time job and does some Sch C 1099-MISc work on the side" Why does she work a "low-paying" part time job? Perhaps she is comfortable and doesn't need to work full-time? That would be nice.

I remember her sad story from last year's tax season. Think of them as roommates. He pays all the bills, she lives there rent free, except for the amount she pays in annual taxes because of this arrangement. Maybe she has some other "responsibilities." Who knows. Really, who cares. She has made her choice. She may enjoy the attention and time that you and others invest in commiserating with her about her miserable husband. Move on. My guess is, she'll be back next year, with the same sad story.

Future Olympians!

Yesterday, my second client of the year, came in to tell me her divorce was final, and that the agreement states that her Alimony payments will not be included in her income, and former spouse will not deduct the alimony on his return. That's over $26,000 that will not affect the calculation for EIC or other refundable credits. PLUS she will receive over $13,00 in child support for one child, and with interest rates low on her CD's, her investment income will fall under the threshold. So attorneys are now writing tax law in divorce court. Rock, Paper, Scissors! I have a problem with this.

Clients often play dumb for many reasons. Do not under estimate the power of this technique. If they are in business or have rentals, then in our office, their feet are held to the fire, to participate in finding the reason for large discrepancies. I have learned the hard way. Consider all possible reasons why a client does not keep better records. Perhaps they like that you will bless them with "the fudge factor" solution. The possibility of embezzlement should not be dismissed.

Sometimes we enter a "summary" total for each category shown on the 1099-B statement if there are over 10 transactions. Then send in the 8453 with a copy of the 1099-B report from the brokerage house. For the program to calculate correctly, we need to differentiate ST from LT. This year however, we are permitted to enter the summary totals directly onto Schedule D in the highlighted "blue" fields for 1099-B transactions reported to the IRS that report cost basis to the IRS. When doing this, the instructions say that we do not need to send F8453 to the IRS for that group. However, if you summarize the transactions that cost basis is not reported to the IRS, then you will need to enter your summary separately as ST and LT, then send the detail attached to F8453.

I was wondering about Mr. Pencil today as well. Since I don't go to the political forum, I assumed he was active there. OR . . . When I see a technical answer that I agree with, I don't add to the thread. Maybe Mr. Pencil is doing the same. We must all be coming up with perfect and correct answers and so he has nothing to add! We should test him . . . Mr. Pencil, where are you?

I'm taking one right now.

Agreed Michaelmars, but I know in this case, the "higher" bracket will not generate enough $$$ to offset the refundable credits.

So the alimony payments are "under the table." That's just great. Actually, I don't have a problem with that part. However, I do have a problem that this strategy may increase refundable credits, which comes from the rest of us taxpayers.

Yes, you are right Terry, alimony is not earned income, but EIC worksheet A, asks for the amount from 1040 line 38, which does affect the calculation. Jack, I agree with you as well, but when I "googled" alimony, there are enough quick references where the parties are agreeing to not adjust for--or include--alimony on the respective ex-spouses returns. And then there is the refundable "additional child tax credit" in play as well. Yes, Jack, this is a "stinky" situation!

Here is my client's situation: Client divorced in 2013. Prior to divorce the court separation agreement specified that no spousal support shall be taxable income to client. After divorce, the payments continue and have been reclassified as Alimony. Her attorney says the alimony payments continue as non taxable, because both parties mutually agreed to this stipulation. (I am pressing her to show me the documentation.) If this turns out to be true, then she receives approx. $1,700 in refundable tax credits (EIC & add'l child tax credit) only because of this "agreement." Can the divorce court write tax law? Can refundable tax credits be manipulated this way? Alimony is Alimony--with all the tax rules associated with it--Or is it? This doesn't smell right to me.