J R Sandoval EA

Does anyone have the federal id number and address of the retirement plan for Nestle employees; I have an old client who received a lump sum but has not been able to get the 1099R. We have called the plan but they do not give us any info because my client forgot his password and security questions answer. I have a copy of the check stub with the amount and the deductions.

Thanks in advance

Single client filed tax return using ITIN; software did not give her the credit but IRS changed her return and included the $400.00 in her refund. Has anything changed? Should she send it back?

401k early distributions used to purchase taxpayers first home is still subject to early distributions penalty, right?

This usually happens in the first day or two after you efile then the status appears.

J.R., I agree with you that he could report it in 2009, as long as it is clearly explained. My reasoning is that while he may have 'earned' it from work done in the prior years, his RIGHT to receive it was not determined until 2009. So he not only Received it in 2009, his right to receive it was not known until 2009.

Thanks all for your replies; I did report it in 2009 and am keeping copies of the check stub as well as the letter the employee received in 2009.

You say there is no change to withholdings, but is the $1500 reflected in changes to income on the W2c? If not, one must consider that the money received was already accounted for on the original W2s and no change to any tax return would occur. However, if the income figures have changed (via W2c) I would choose to amend both the 2007 & 2008 returns on the aspect that the money was earned in those years. I believe it is important to have the years align. The tax rates/tables for those years are not the same as in 2009.

It seems to me that when it was earned trumps when it was received. It has been many years (early `90s) since we encountered a similar situation. But I seem to recall working with an auditor at that time who had us amend.

That's exactly the issue; the wages were earned in 2007 and 2008 but were paid in 2009, and the employer did not include these back wages in the 2009 W2; instead he amended the 2007 and 2008 w2's. Withholdings were changed to soc sec and medicare only; no extra money was withheld for federal or state taxes.

We are talking about $1145.00 total; $445.00 for 2008 and the rest is 2007. Since most individual taxpayers use the cash method of accounting I do not see why would they be required to report the income in previous years as you suggest. I may be wrong. Any other suggestions?

Thanks

Client received last year back pay from 2007 and 2008; however, the employer corrected the W2s for 2007 and 2008 instead of just adding it to the 2009 W2. Since the taxpayer received this income in 2009, I believe that he should report it in 2009. I am thinking of just adding it to his 2009 tax return with a note explaining the situation. Any thoughts on this?

Thanks in advance for your comments.

The amount is about $1500.00 and employer withheld Soc security and medicare taxes.

I just spoke to the employer and was told that indeed they did not include that back pay in the 2009 W2, that they did amend the 2007 and 2008 W2's and sent them to the IRS. Since the taxpayer did not receive the income until 2009, I guess I will just add the income in line 21(Other income) with an explanation. Any thoughts on this?

Thanks

If the money was received in 2009, then I would think there would be a 2009 W-2.

Diane

There's a 2009 W2 for wages earned in 2009; however employee also received w2c's for 2007 and 2008 which include the back pay for those years. Since W2c's for 2007 and 2008 were issued, I am assuming that those back wages were not included in his 2009 W2; otherwise why issue w2c's for 2007 and 2008.

Are you sure? What did the W-2cs say?

taxbilly

Basically it is a W2c for each of those years showing "amounts previously" reported and "correct information". No changes to withholdings for federal or state taxes but soc sec and medicare were changed to reflect the "correct amounts'.

Client received last year back pay from 2007 and 2008; however, the employer corrected the W2s for 2007 and 2008 instead of just adding it to the 2009 W2. Since the taxpayer received this income in 2009, I believe that he should report it in 2009. I am thinking of just adding it to his 2009 tax return with a note explaining the situation. Any thoughts on this?

Thanks in advance for your comments.

The amount is about $1500.00 and employer withheld Soc security and medicare taxes.

Client has a valid social security number but spouse has ITIN. Do they qualify for "making work pay credit"? Pub 17 does not describe this situation.

Thanks in advance for your help.

Married client sold house in 2008; house belonged to him and his daughter from a previous marriage. His current wife was not in the title. Based on the Q & A scenarios from the IRS web site, they do not qualify for the first time home buyer credit if they purchase a house this year. However, his realtor keeps telling him that his current wife qualifes for the credit because she has not owned a house in the last three years. Am I missing something in my interpretation of this scenario?

Thanks for your help.

I have a TP that got a corrected 1099, the difference is only $430, they reported $430 less on her 1099 originally, the difference does not have an impact on her tax return. It's it worth to amend the tax return to show an additional $430 or let the IRS make the correction?

The difference should have an impact on social security tax if income is subject to SS tax.

I find it difficult to believe that you have clients that don't give you certain information that is important to their return...

I have never heard of such a thing....

Just for the benefit of the group, I spoke to the Franchise Tax Board in California and the IRS and both agencies were very helpful; both said they had received the funds back from the bank. FTB said they were sending a paper check this week; IRS said they would send a paper check on May 1st. It is not bad after all as the returns were efiled on 3/31/09.

Thanks

J R Sandoval, EA

Those of you who have the experience with a direct deposit going into the wrong bank account what is the easiest way to solve the problem. Just wait until the bank returns the money and IRS sends a paper check or file a claim with the IRS;

Thanks

Okay . . . maybe I'm having a brain collapse. I would say that the 401(k) income is Kansas income (I assume it was from some sort of portable mutual fund based stock account). I would not consider it California source income. I usually think of 401(k)/IRA income as taxable in the State where the recipient lives when the withdrawal is taken.

Somebody please straighten me out, here.

I think you are right; retirement income if taxable is taxed in the state of residence when the funds are withdrawn; does Kansas charge an early withdrawal penalty? I cannot find any form or line for this?

Thanks again

What type of retirement plan is the 1099 from?

401K (early distribution)

Hello again. You only need to complete line 18 if your client owes compensating use tax (purchased items from outside the state on which he/she did not pay sales tax).

Not sure how old your client is . . . KS also gives an adjustment to FAGI for Qualified LTC insurance premiums. SS is exempt up to a certain income level (software calculates automatically if you are using ATX . . . modification to AGI shown on schedule S, page 1)

Client is in his early 40's; What about his 1099R; he received this money while living in Kansas and has Kansas withholdings, but it is money from his California job; California will charge him the early withdrawal penalty; is there anything I need to do in the Kansas return regarding this issue?

Thanks a million for all your help.

Hi, J R. You will do a Kansas Schedule S, page 2, to delineate the non-resident income. Kansas uses an apportionment (is that a word) method to calculate the percentage of State tax owed to Kansas. Let me know if you have other questions.

Do I have to include Kansas use tax or is this optional? K40, line 18.

Thanks again.

I have a California client who moved to Kansas in Aug 2008. All his income is from California as he did not work in Kansas at all in 2008. He has w2 income and 1099R early distributions all from California; I am doing a part year California and Part year Kansas resident returns; is there anything I should pay particular attention in the Kansas return? Client acquired a house in Kansas in Nov 2008. Thanks in advance for your help.

Is there a formula to prorate alimony and child support when spouse did not make the full payment? I think I read somewhere that in such cases money first goes to child support and then to alimony. Thanks in advance for your comments

Don't you think that the answer you get here would depend upon you telling us if this is a proprietorship, partnership, S-corp, or C-corp entity? How it is treated may depend upon the type of business.

Client is a sole proprietorship

Client lost his only janitorial account and closed his business last year; he had some equipment (fully depreciated) that he donated to a school and two vehicles also fully depreciated that he kept. Can any one tell me where to find in depth information to properly report this asset disposition?

Thanks

Is there any Drake user who can comment on Drake 1099 Misc efile? It is mentioned in the literature but I cannot find it in the program.

Thanks

Has anyone received corporate acknowledgments for California? I efiled a return on the 4 and still shows as validated by EFC.