Randall

Why, not just add the forms you need as need for what ever states you use...My case. I always install Michigan, then as needed add the additional forms, I never uninstall the program and re-add the states. Basically when you choose a new return and select the return, the program auto downloads what you need.

This is how I do it. I install two states, then add other forms when and if needed.

I thought I was cheap. I'm easy. I'd tell them it'll be more but I'm usually easy on these things. As others suggest, if they can organize the info for you, that'll help. I try to warn clients if there's a significant change, my fee will be higher. But going from $60 to $300 will be a shock to their system. You have to gauge it yourself.

The clergy worksheet in ATX is still in draft form waiting IRS approval. I've compared the draft to the worksheets in Pub 517 and I don't see any differences. Is it ok to attach these worksheets to Form 8453? Or do I need to wait for final approval. Return has not been efiled yet. And I know I need to send the 8453 within 3 days of acceptance of efiling. But do I have to wait on efiling the return until the worksheets are approved?

Suddenly, the created and modified dates are not showing up on a printed report, only a five digit number. The dates are visible on screen.

Any one else seeing this?

I am happy to answer questions or help anybody who asks for it in the clergy tax arena.

Mike

I got a call recently. He was on a mission in Africa. His church sent him two checks per month, one for his personal pay, the other for certain expenses incurred for the mission. He didn't receive a W-2 or 1099. He said the church made some tax payments for him with the 1040-ES.

I wasn't sure of all that was going on, so I told him to first contact his church to see how they handled things. I asked if he was ordained and he said no, just on some type of mission. I'm not sure the church is handling this correctly. I haven't heard back from him yet.

But as a heads up, how should the church be treating him in this type of case?

How close to FMV does the rent need to be before this kicks in? I have a couple who rent the other half of their two-family house to family members. Rent is _almost_ FMV -- basically, it _was_ when they first rented, and the landlords just haven't raised their rate very much because they are good tenants (aren't noisy, don't trash the place, keep an eye on the other side when the owners are away, etc). Seems there is a grey area between what most landlords do to keep desirable tenants and giving family a break. Any guidelines from anyone on where that line is?

Catherine

I don't have a cite, but I think there's a prevailing viewpoint that renting to a family member at about 20% below FMV is acceptable, the reasoning being that they will take better care of the property, etc. You might want to follow up some research on that angle.

I recently had the penalty for a distribution from a deceased IRA account. I filed form 5329 calculating the penalty, did not send payment and attached a request for waiver of the penalty due to reasonable cause. The IRS waved the penalty.

Thanks for all the comments.

Client has IRA account statments (one each for both spouses) for January 2009 showing distributions on 1/9/09. No 1099Rs for 2008. He says the checks received in Jan09 are for 2008 distribution. I seems he's 9 days late on his RMD. Do I calculate penalty on 5329 or does he just wait for the IRS to assess penalty. Is there a remedy? Can he get the penalty waived? Then if so, how is it reported? I'm thinking if he gets distribution in Dec09, he'll have a 1099R for 2009 showing total of two distributions.

Anyone have experience in something like this?

Cinetax,

The insurance company should have reported the basis on the 1099-R and the taxable amount should have been 0. If this is not on the 1099-R get the insurance company to correct it.

The $22,000 loss can be deducted on schedule A.

Good luck on getting the insurance company to issue a corrected 1099.

No to the second question, because this was not an IRA, it was just an insurance policy. The could not have used the money from their home sale to fund an IRA annuity, because that is way too much money to put in. Max for each of them would be $5000 that they could have put into an IRA in 2006. I think you need to read the paperwork on the annuity, because it does not make sense that they took their own money, bought an annuity, and then got a 1099R when they cashed it in. I think you need more info.

1099Rs are issued for annuity and life insurance distributions. Annuities can be IRA or Non-IRA. I agree with KC, that this would not be an IRA annuity because the client put a large lump sum into the annuity. The 1099R reports the distribution proceeds. The basis appears to be $80,000. Excess of basis is taxable as ordinary income (with 10% penalty if applicable). If proceeds are less than basis, I believe the loss is deductible but I don't have cites off the top of my head. Review the rules on this, but I believe the loss is deductible.

No on the rollover, like KC said.

You didn't hear? With the new ATX update, there was an addition of the W2 fairy. There was some concern that the forms were thinking of starting a revolt and leave ATX for good. ATX had to send in a peacemaker, but living quarters were sparse and they coaxed the fairy into joining their escapade. I guess the plan back fired, because the W2 fairy was doing all sorts of quirky things to annoy the creators. I'm surprised you didn't read about this? It's been all over the news lately..

wow.

It's been a long day! Is it 5PM yet?

And I did throw in a few fresh hampsters too.

This just got stranger. This morning, I rolled over another W2 client and it went into the 'Other' category on the Return Manager. Now I'm back into ATX and I see that the earlier W2 clients I worked on (plus the rollover this morning) are back under the W2 category, but the W2 clients I rolled over in between are under the 'Other' category. They've done a switcharoo.

Do I have gremblins? Maybe I need some fresh hampsters in my CPU.

I think I figured it out. In the Return Manager, some clients type were listed as W2 and some were listed as W2/W2C. I manually added the slash W2C to the ones listed only as W2. Now all clients are listed on the left under the W2 category. That still doesn't answer why the two groups reversed themselves within the two categories, but oh well.

The W2 category is not showing in my return manager. It was earlier. My W2 type returns are now listed in the Other category. I rolled over a new W2 return and the W2 category reappeared with the new return listed under the W2 category. But the other W2 returns are still listed under Other.

Does anyone know how that might have happened? And can I fix it, move them back into the proper category? W2 is still listed as type under the Type column.

This just got stranger. This morning, I rolled over another W2 client and it went into the 'Other' category on the Return Manager. Now I'm back into ATX and I see that the earlier W2 clients I worked on (plus the rollover this morning) are back under the W2 category, but the W2 clients I rolled over in between are under the 'Other' category. They've done a switcharoo.

Do I have gremblins? Maybe I need some fresh hampsters in my CPU.

The W2 category is not showing in my return manager. It was earlier. My W2 type returns are now listed in the Other category. I rolled over a new W2 return and the W2 category reappeared with the new return listed under the W2 category. But the other W2 returns are still listed under Other.

Does anyone know how that might have happened? And can I fix it, move them back into the proper category? W2 is still listed as type under the Type column.

It's my shoulders also from tiling my head up to look thru my byfocals at the computer screen.

That's why I wear my contacts with reading glasses over them, even on the long days.

I had at least three rotating flash drives until someone mentioned how easy it is to have one stolen or lose it; and it can't be password protected.

I use encryption software on my desktop. It can also encrypt external hard drives and flash drives. The software license allows for this. But not addional computers such as a laptop. I use PGP for the encryption. Hopefully, if I lose a flashdrive or it's stolen, the info is protected.

If you're preparing both W-2s and 941/940, you can report to make the numbers the same. If you did not prepare these, you can prepare a corrected W-2 for the shareholder/employee to include the health insurance. One issue might be breaking it down on the quarterly 941s, but I've just added it on the 4th quarter 941. Then there's the local income tax. I just add to 4th quarter to make the total annual amount come out correctly.

I just do it on the individual return. Choose option for combining Fed and state.

Let me clarify. With a SEP, you are limited to contributing 25% of your wages. So, if you pay the shareholder $40,000, they can only contribute $10,000. I was wondering if there is any similar limitation with a SIMPLE. I believe jasdlm answered my question by stating that up to 100% of salary can be deferred, up to the annual limit. Thanks jasdlm for your response.

Julie

SEP limits are percentages. SIMPLE limits are dollar amounts. S Corp shareholder/employees W-2 compensation applies. So, yes, if the W-2 compensation is $10,000, they can contribute the $10,000 to a SIMPLE. Wages are still subject to FICA tax and local income tax (most localities). So (in this case), the shareholder/employee might have to put in money to cover the withholding taxes.

I use HP 2430. It's not on ATX's list but I had no problems last year. The old HP4 got to be just too slow.

I generally upgrade when I get a new computer. Currently running XP and Office 2003. I plan to get a new computer later this year. I'll go with Vista and Office 2007. I hate the changes and the annoying learning curve too but there will continue to be upgrades and I want to keep up as much as possible.

The "User Guide" is available for you if you go to "MyATX Support Center." When you get to "MyATX Support Center," click on the Knowledgebase/learning center tab and on the left you will see the 2008 User Guide listed.

Last year, I saved it on my desktop. Haven't done it yet this year but will soon.

Thanks to KC and John

Do some of you fill out Schedule L and Schedule M-1 even though it is not required if total receipts and total assets are below $250,000 according to Schedule B, line 8?

I do.

I'm running Vista with a 64 bit system. first, not knowing better, I should not have purchased a 64 bit system. But it appears, that that is what's needed in order to run 4 GB's of RAM.

now on to your question. I was able to reinstall my 2004 - 2007 ATX programs fine, but not my 2003 and earlier. not much of an issue. But funny thing happened when I woke up the next morning. The programs were there, but all the data was gone. Every morning, I would have to re-install all the tax returns from the prior year.

I called ATX, who told me that the prior year programs are not supported by Vista but did give me the following advice. In the control panel, under "User Accounts and Family Safety" you need to disable turn off the User Account Control.

I did this, and now everything runs nicely.

I just upgraded my computer to 4GB RAM. I'm running XP. I think the 64 bit machines allow you to go well above the 4GB RAM.

Are those with 64 bit machines (and Vista 64 bit) running the 2008 ATX ok? What about other programs such as QB and Peachtree? I'm planning to buy a new machine later in 2009. I'm not concerned with the older program versions as I will keep my current machine for old returns, etc. But I would like to get the top of the line 64 bit on the new machine and not have problems with software.

Ujpgrade to SP2 your machine will run better on all applications.

What about XP SP3?