Kea

We "upgraded" to a 5th wheel trailer (RV) a couple of months ago and haven't had a chance to test it out yet. So, we'll be taking it out for a shakedown cruise. I can't wait!

2- My other clint is green card holder but he is a resident of England. Now he is settled in USA and receives pension income from England, taxes are withheld from this income . Do i have to report this income and where? Any help will be appreciated. I know a little bit more about the 2nd question. Since client has a green card, it doesn't matter if he lives in the US or not. His return is treated the same as for US citizens. All worldwide income is taxed by the US. So, in general, the pension income would be reported exactly the same as if it were a pension from a US company. He may be eligible for a credit for the taxes he paid to another country on Form 1116. The client will not be eligible for the foreign earned income credit for his pension (it's not considered "earned"). Which country did the withholding - US or England? However, you will need to check for tax treaties between the US and England to find out how to deal with this specific case. Hope that helps some.

I've sent the e-file the way I described. I may not have been right to have my clients pay 1/2 the FICA, but I'm pretty sure what I've filed will get the attention of the IRS. My clients were OK with it because they want to show IRS they are paying their fair share. I'd love to be a fly on the wall when the employer hears from them.

My total last year for TRX including shipping was $328.95. My practice is small - only about 80-90 clients. So price is very important to me. I, too, was getting ATX with 3 states and free e-file. The additional $3 per e-file (which I did learn about last summer) was a big deal for me, not to mention yanking our board in April. The 3 states usually worked pretty well for me, but last year I had 4. So instead of paying a huge fee to get for only 1 needed state, I did that one with paper and pencil. (OK, I did use a prior year demo that had all states to kinda cheat off of.) TRX is not quite as automated as ATX for some of the forms I don't use often. But for my small practice, the cost savings makes up for it. The coolest feature in TRX (that's not in ATX) is that when you type in the zip code it auto populates the city & state. I'll be happy to answer any TRX usage questions -- after next Tuesday (no, not "this" Tuesday). I'm still learning about some of its features.

Agree. This is my 1st year with TRX also. But I don't see why there would be a problem with depreciation and amortized points in the future. TRX does include good worksheets for both.

Client brought in W-2 -- it's about as "non-standard" as you can get. It's a 2008 form that has the 2008 crossed out and 2007 written under it. The whole thing is hand written. Employer did include an EIN (I wonder if it's valid?) I've included the W-2 and flagged it as non-standard. I've also included the 8919, but leaving the code section blank (none of them are appropriate). The employee portion of the Social Security and Medicare tax are calculated and added to the total tax for my client to pay. However, the $5500 is now double counted on line 7 of Form 1040. To take out the extra $5500, I've gone into the other entries for line 7 and included $-5500 on the line for household employees without a W-2. That causes an entry of HSH -5500 to appear on line 7. I've explained this on the preparer notes. I'm pretty sure this will generate IRS correspondence regardless. It's tempting to just enter the $5500 (as a positive) as Household income not on a W-2 (line 7 add-on) and disregard the W-2 and the 8919. That has the benefit of not charging my clients for the SS / Medicare tax. (But I do want IRS to know about the really funky W-2.) And it does have the significant problem that it is not true since the client did eventually receive the W-2. I somehow doubt that the employer sent it to IRS / SSA. Am I handling this correctly? Is it correct that my client should pay the employee portion of the SS / Medicare tax - or should IRS try to get both portions from the employer? Thanks

Yes. Very similar "drill down" to ATX. Uses + sign instead of bunny. I have to keep an eye on the depreciation and amortized points. Most other things rolled over fine from ATX.

Client if finally coming in today with their stuff. She has a contract that has the amount to be paid as an employee written in the employer's handwriting. However, the employer never signed the contract. (Several delays of "I'll sign it later", then "I won't sign it"). Employer refuses to correct W-2 or file Schedule H. She basically told my client "you can't do anything about it!" Anyway, I plan to use the Form 8919, but none of the codes seems to fit my client's situation. They did get a W-2, but there has been no determination by IRS. Do I just include reason for 8919 in Preparer Notes section? Thanks.

... if a spouse dies and the stock was held joint, 1/2 of it gets the step up. the other 1/2 retains the original basis. ok that was the easy part now comes real estate One more complication. If they were in a community property state, and the stock was owned by the decedent or by both spouses, the whole basis gets stepped up. (Of course, if it was owned separately by the surviving spouse, no step up.)

Thanks. That's what I figured, but wanted to verify.

Client gave me a 1099-Misc with $6334 in box 1 rental from the local housing authority. I asked her what it was. She said she was trying to help her granddaughter afford a place to live. She is renting her a house she owns and the City is paying about 1/2 the rent under Section 8 subsidy. Do I treat this like any other rental? I'm not sure what the fair rental value is in her neighborhood, but I'm guessing if she's getting $1000 per month between granddaughter & City, it should be enough to qualify. Zillow shows house worth $163K. Thanks.

Thanks Don. It' my 1st year with TRX; there's always a learning curve with new software. I had called TRX about this and they assured me that carrying it to line 7 was correct because it was disability. They said nothing about the check boxes. I'm glad there are some TRX people on this board when these questions come up!

90 year-old client receives several 1099-Rs. One is coded "3" for disability and TRX-Pro (I changed software) is carrying amount to line 7 - Wages. Last year, ATX carried it to regular pension line. So, I read the IRS instructions (gee, I hate when that happens). Disability pensions are included in wages until recipient hits retirement age. So, is the 1099-R wrong and the 90 year-old should now be receiving pension income as code "7"? or is TRX wrong to put it on line 7 due to client's age? or is TRX correct (and ATX was wrong last year)? Thanks for your inputs.

I'm using TRX this season. It is not as full featured as ATX, but it does seem to have most stuff. I did find that there was no check box for making the election to treat a traded-in vehicle as taken out of service at time of trade-in. It had to be put on a preparer's notes page. A friend said she couldn't find the worksheet for lump-sum distributions for Social Security. You have to use the one in the instructions and input the results. But it does seem to have the forms and worksheets that I use the most. For the cost savings, I can live with doing a few things manually. And they don't have a community board.

Thanks so much!

Thanks, That does give me a place to start. I will check to see if there was a contract and / or paystubs. I kinda doubt there was, but I will ask the client. I'll ask the client to "remind" the employer to file a Schedule H with her return (I bet that goes over well) and then request a revised W-2. If there is no revised W-2, and I file as is, does this mean IRS will just go to the employer and request the employer and employee portions of FICA? My client should not be responsible for the employee portion? Thanks.

My post wasn't clear. When I referred to the "mother / employer", I meant the mother of the children my client was taking care of. She is not the client's mother. The employer said at first she would withhold. And, in a sense, she did, because my client did not get the full amount. The full amount of income should have been $6000, with $500 withheld. But the withholding never got turned in. Since it never got turned in, the employer did not include it on the W-2. Box 1 shows $5500 and 2-6 are $0. It's not on a 1099, so I won't show it on schedules C and SE (and this also would not be a good thing for my client). It is a W-2 with no SS / Medicare paid by either party. How does that now get paid, and by whom? I hope that clarifies the situation. Thanks

Client takes care of children in their house. Agreed at beginning that mother / employer would withhold taxes from her pay. She earned a total of $6000 with a total of $500 withheld. Actually paid a total of $5500. She worked there a few months - all in 2007. When she got her W-2, employer showed gross wages in box 1 of $5500 and $0 in boxes 2 - 6. I know there is a form for reporting when an employer issues a 1099 when you are really an employee. But here, the employer is indicating that she is an employee, but did not withhold any taxes. No taxes were sent to IRS / SS because employer decided that was too difficult and decided not to do it. How do you report this? Employer is still responsible for their portion? But what about employee portion? Employer was supposed to withhold but didn't. Any help or advice is appreciated. Thanks

Quickfinders specifies no self-employed insurance adjustment if self-employed individual or spouse is covered by subsidized policy. His wife is, but it's not subsidized for him. So I'm not sure if wife's premium being subsidized disqualifies him is he can't get subsidized policy through her. Gee, that still sounds confusing. Thanks.

She does offer it regularly because she mentioned some kind of association or co-op that she rents it through. Schedule C could make sense if there is enough activity. I'm still not sure about Schedule E because I don't think of an RV as "real estate" - could be wrong. The main reason I was thinking about going with Line 21, was not because not as a "hobby" but as "rental of personal property" and take the expenses on 36. I will definitely check on the 14 day issue. Thanks everyone!

I've only just had an initial conversation to set up an appointment for Friday, so I don't have the details yet. It's not for profit (I would seriously doubt), so I wasn't going to use a Sch C. I considered the Sch E, but it isn't located at one fixed address. You take the trailer with you anywhere you want to go camping. While it may meet the conditions for deducting as a 2nd home mortgage, it may not if it doesn't have a commode. Some pop-ups are small enough not to. I don't know about hers yet. I'm just not sure it quite fits the definition on a rental house. Maybe? And Alpha, she's just north of Austin, TX. I'm with you, but I already have my own RV and it's scheduled to leave the area 4/19. Thanks.

New client called today. She wants someone to help with her taxes because Turbo Tax is asking too many questions about her RV rental. She rents out her pop-up travel trailer when she is not using it. The rental income goes on line 21, and I can deduct expenses on line 36. But in this case, I'm not sure what kind of expenses would qualify. Purchase price or interest? She uses it personally. Depreciation doesn't seem to be appropriate since she is not in the business of renting her pop-up. Maybe just some upkeep to make it presentable to potential renters? Repairs if a renter damages it? I just want to have a list of ideas to ask her about. Thanks.

My client is employed at a college, but not enough hours to qualify for insurance. He also tutors on the side. 1/3 of his income is from self-employment. His wife is employed and has subsidized insurance through her employer. However, if she adds him to her policy, they would have to pay the full (non-subsidized) price. He bought medical insurance on his own for himself. Is he eligible for the self-employed insurance adjustment? Does his wife having subsidized insurance for herself keep him from being eligible for the adjustment? If so, can he also claim dental insurance premiums? Thanks.

I had to wait on hold for a while at the start of the season - maybe 15 minutes to 1/2 hour. Now usually no wait time. They have separate phone menu selections for "software support" and "tax support." I found out the software support is just installation and that kind of thing. If you want to know how to do something in the software, that is "tax support." I've had mostly good response for support, but sometimes have gotten people that don't know what's going on. I guess that's true everywhere. Usually if the person doesn't know they will get you in contact with someone who does. They do tend to call back pretty quickly. Depending on the question, they can also transfer you to a CPA or to someone at OrrTax. Yes, they will answer tax law questions at no extra charge. (I haven't used that yet - I like this board for tax questions.) Overall, I would say service is pretty good, although I would not say perfect.

I switched to them this year. They use Orrtax's Intellitax and it IS forms based. The price is excellent and it includes e-file and all the states and business returns. It is not as complete / automated as ATX but I couldn't beat the price. You just need to make sure you are comfortable checking to make sure all the data flows to all the places you expect it to. Input is similar to ATX except instead on clicking on a bunny to drill down, you click on a plus sign. One feature I do like is inputting addresses. It skips over the city & state fields and takes you to the zip code. When you put in the zip, it fills in the city, state and county for you. For many of the text inputs, it limits the number of characters even if there is room for them to print. Also it saves the files by the SSN, so you can't have more than one return per social. You can't do "what ifs" without overwriting your current return (and remembering to not save it). If you do an amendment you can't save your pre-amendment version. Also it doesn't include certain elections such as for vehicle like kind exchanges. You have to include it on a preparers notes page. Another minor drawback is that you can't put in your own info in the return manager. I used ATX from 1999 - 2006. I changed mainly because of the increase in price for the 1040 with e-file. I have a small practice so that was a significant price increase for me. After reading the comments on this board I do not regret my decision to change. Another note. When you buy, they send you the previous few years software to evaluate. These previous versions are not compatible with Vista. 2007 is the first version that is.