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The commitment fee charged a corporation by the bank in establishing a letter of credit - is it amortizable or is it considered part of basis? The client is a land developer and was charged $8500 for this.

Client received $2,000 in insurance reimbursement for tools and small equipment stolen from locked shed. They spent $898 to replace items and decided not to replace certain items. There are several small equipment purchases on the depreciation schedule but hard to identify which are for stolen property. Do I "sell" one of the equipment assets for the difference and call it equal? I'm not sure how to report. The entity is an S Corp if that matters.

Several clients want the credit for purchasing energy saving light bulbs. I do not see this as part of the Residential Energy Credit. Am I missing something? TTB nor 1040express answers addresses light bulbs.

This client is already over limit for Suta. Not an issue. Thanks for the heads up though.

Thank you.

Per TTB, if cash wages are greater than $1600 for the year, withhold SS/Fica/Federal. If wages are greater than $1000 in any calendar quarter, then taxpayer must pay FUTA also. Hope this helps.

I am having a brain freeze. I have a more than 2% shareholder in an S corporation. The health insurance is paid through the business. I know the amount is added to box 1 of the W2. Question - is this amount subject to SS/Medicare?

I have had the exact same problem. I just haven't had time to check out why. If you figure anything out, please post here to help all of us.

I prepare WV returns regularly. There was no change in WV rule regarding Franchise taxes. It is an ATX problem. I have been removing the amount carried over for Retained Earnings and then the calculation is correct. The amounts should be on one line if they are an S corp and have always been one.

I'm going to try this one more time. I posted before but did not receive any helpful posts. Client has $2800 in General business creidts. They have $1500 in income tax. They also have 3 children qualifying for the child tax credit. ATX and child tax worksheet is applying child tax credit toward income tax which means they still have the $2800 in General Business credits to carryforward. Is this correct? I cannot find any documentation clarifying the order to apply these credits but Form 3800 page 2 does not allow them to use any of the $2800 carryforward. It would be helpful to use the general business credits up first and increase the Additional child tax credit so that there would be some reduction in the balance due. There is consideralbe SE tax for this client. They had a very good year and chose not to pay any estimates. Thanks for any guidance. I know we are all busy.

The IRS recognizes the scanned version of these forms as the original. The IRS specifically addressed this a couple years ago. I have been using this procedure for at least 3 years. I can't find the site right now though.

The copy you keep of the 8879 and related state schedule can now be digital - scanned in and kept on computer. I run a paperless office and backup the computer often.

Client paid $16,000 for dental expenses during year. There was no necessity for the dental work other than cosmetic. Are these expenses still deductible as medical? When I look at the list of cosmetic expenses not allowed, dental is not listed. What is your opinion?

This is probably quite simple. However, I need some help. Client is an LLC being taxed as a partnership. During 2007, the members all contributed to the 401K plan. These are voluntary deferred compensation. An employee would have box 1 of the W-2 reduced by that amount but would still pay SS and Fica on the deferred comp amount. The members are not employees. It does not seem right to increase the guranteed payments by the amount of deferred compensation. It also does not seem right that the full amount of deferred comp is a deduction to the partnership. Please help me here.

I'm confused also - that's why I posted this problem. ATX is calculating child tax credit of 1498 to offset all income tax. It is not allowing the 2800 in General Business Credits to be used. The client then qualifies for the remainder of the Child tax credit on Form 8812. My question is whether that is the correct order to use the credits. It appears per the schedules that ATX is correct but was hoping the client could use the Carryforward of General Business Credits to offset the 1498 in income tax and then still get the 3000 on the Form 8812. Yes, my client had 60,000 in SE income. They were advised to make estimates, but did not. Now, they are unhappy with the amount of taxes owed. They also received a 21,000 refund of prior year expense and did not tell me until 2008. Still, I am trying to educate this client. I beleive they will pay the 2008 estimates I have advised.

My client has a carryforward of a General Business Credit of $2800. They also have 3 children which qualifies for Child Tax Credit. The total tax before credits is 1498. They do have 9,000 in SE tax. The program is applying the Child tax credit first which leaves them with no tax therefore unable to use any of Genera Business Credit. Is this correct? Obviously, they need to use all the credits available to help offset such a large liability. I'm trying to help reduce the liability and utilize some of that carryforward. At this rate, the General business credit will expire and they will receive no benefit. Please help. The IRS instructions were not very useful.

I have a client that has a $2,800 carryover from tax year 2004. They have had no tax liability and this is still available. The number is showing on my Form 3800 however, it is not carrying over to Form 1040. Any ideas on what the problem could be? Any help is appreciated.

I have tried to receive acks this morning and get a message that there is a server error. Unable to receive acknowledgments. Try again and if this persists, contact ATX Technical support. Sigh!!! Is the server down or is this just me?

I have the same problem but instead of running the wizard, I uncheck and re check the box. It is a pain but it works. It will save time from running wizard on each client.

In the past, if there was uncollected SS and Medicare on a W2, the return was not able to be e filed. Does anyone know if these returns can be e filed this year? It seems like a simple item that should still be able to be e filed. I don't want to tell client it can be e filed and run them back to my office to explain it must be paper filed. Thanks for any guidance.

I have a multistate return. Client moved from PA to WV on 7/31/07. They earned $150 in interest after moving to WV. PA is picking this up as taxable income. I have tried everything to remove from PA return. It is taxable in WV. How should I be moving this off the PA return. I must be missing something simple but have been unable to locate it. Thanks for the help. I should have been done this return already.

I actually have a client that was a chaplain for the State of Maryland. Since the full $35,000 has been subject to SS, there is no need to complete the from SE. Line 21 then has a subtraction for the amount of the housing allowance as it is not subject to income tax. I also e filed this clients return. We had to use the form 8453 and send a copy of the letter to the IRS. I have done this for four years and have never heard from the IRS. It sounds like your letter is exactly like the one I see every year.

Taxpayer had an NOL for tax year 2006. Carryback was completed within appropriate time limits. The carryback to 2004 produced no tax benefit. All carryover then utilized for 2005. The IRS is notifying taxpayer that the numbers were incorrect. I can not find information specifically detailing how to complete the Schedule B of Form 1045. Seems like my client is losing here. Below are actual numbers. Which is correct? 2004 AGI - 14,759. Standard deduction - 9700 Personal exemptions - 6200 Taxable income -1141 These are the numbers on the original 2004 tax return. Obviosly there is no tax benefit from carrying anything back to that year. However, the IRS is calculating that the taxpayer is using $5059 of the NOL carryback for that year. That essentially means that the taxpayer is not receiving benefit of personal exemptions for that tax year. Is this correct? It makes a difference on the dollar amount available to be carried back to 2005. My client paid no income tax in 2004 why should part of the NOL be eaten up by that year? Thanks for any help.

I only prepare one of these every couple of years so please help me. I am preparing the decendant estate return. Interest was earned from time of death until end of first tax year. Also, there is some rental income and expenses. I understand this part. My question is realting to real estate taxes paid by the estate while the house is trying to be sold. This is not rental. It is sitting there vacant. It used to me the mother's personal residence. There are real estate taxes and utilities. Will these be added to basis when the property is finally sold? I just don't want to miss any deductions on this return. Also, the estate is going to pay the tax. Is there a need to send K-1's for this tax return as there were no distributions? Thanks for the guidance.

No, that's what mine all still say. Hopefully soon they will come.