Sara EA

Our dentist's office is a sole proprietorship--not part of some national chain. There are two people working in the office. Yet when I call them there is a menu, "press 1 for appointments, press 2 for billing, press 3 for...." It's not like they have 16 different departments to route my call to. Grrrrrrr. Some of our clients have expressed surprise that when they call us a real person answers the phone. Sad.

NY and CT have long battled over who gets to tax the mega incomes of big shots who live in one state and work in the other. For remote workers, NY has a "for the convenience of the employer" test, meaning if you work for a NY firm from your home in another state, you can only avoid NY tax if your employer requires that you work from home. After this passed, CT instituted the same rule for residents of NY (but no other state). I have a client who works for a NY firm from his CT home for her convenience, so she's taxed in NY except paid time off, which is taxed in CT. No kidding.

You can always ask for more time to complete your response. IRS really does want to work with you, and I've never had them deny such a request. Of course that was when they still had employees....

To clarify Lee's post: "An eligible educational institution is a school offering higher education beyond high school. It is any college, university, trade school, or other post-secondary educational institution eligible to participate in a student aid program run by the U.S. Department of Education." IRS Pub 970 No gray area here.

How can this be tuition? For education credits, money must be paid to an accredited educational institution eligible to participate in gov't student loan programs. One can no longer deduct education expenses on Sch A and even if you could, they can't be for education leading to a new profession.

Hey, please don't beat up on engineers! We have two engineers in our immediate family. Both are very smart, work hard, are kind and caring and friendly. Sure they like some things exactly so, but they can give a little. I think that where the clash with taxes comes from is that in their wildly complicated math computations, there is only one right answer. Both of my relatives are civil engineers, and if that answer isn't right millions of dollars could be wasted or even worse, people could die. In the tax world, our most common answer is "it depends," which drives engineers off the wall. So be charitable, recognize where your engineers are coming from, and praise them for being smart enough to come to you.

Did your clients sell that first home in the intervening years? The credit owed is settled up at the sale. If sold for a loss, it's erased.

Trusts have to report on a calendar year. Are you talking about the Section 645 election to be treated as part of an estate?

One way of getting rid of such clients is to significantly raise their fees so they leave on their own. Beware, though, they may just pay it, but at least you'll be compensated for the aggravation. I had one jerk whose fees I raised by $500 each year for a couple of years. He started out at $800 and went to $1,800. He was on schedule for $2,300 when another accountant in the office took him over.

Definitely don't claim any loss without evidence. We had a client with a multi-million dollar loss that was used against gains on some of his other endeavors over the years. Boy was he upset when he had a huge gain and a huge tax bill. He still had that big loss in his mind and assumed he'd never have to pay taxes again.

As I understand it, water is not an allowable expense for a home office. (It is for home day cares and home-based hair salons.) The repair is not relevant to the business, just like having the pool cleaned is not.

I tell clients who owned original AT&T stock and now own 28 companies that themselves have had mergers and splits to never sell. Just let their kids inherit the stock to save us all a lot of trouble!

Immigrant tax reporting aside, this agreement violates the sanctity of the privacy bond between taxpayers and the IRS. We voluntarily give them our most private data and that of our household members and they lock it up so tightly that most of their own employees can't access it. In my Master's course I learned that IRS can share your data with NO ONE, the only exceptions being suspected terrorism and money laundering. We used to joke that you could list your occupation as Hit Man or Bank Robber and the IRS would keep it a secret. Breaking that bond can further dent the agency's tarnished image. ICE is demanding this disclosure to get immigrants' addresses. I think the tax return is not a good place to look. People move, have PO boxes, use someone else's address to get their mail because their own box is insecure, still use Mom's address because they're away at school or she always handles everything. I'm sure all of us have had a client or two who suddenly notices that the address we've been using for five years has the wrong street number of spelling.

The taxpayer's name of course goes on the name line. On the address line, I always put "c/o" and the fiduciary's name before the street: c/o Smith 123 Main St.

If you haven't raised prices in 10 years (what were you thinking?), you will have to do it gradually, although yours are so low you could start with 20%. I'll bet that some of your clients react with, "What took you so long?" Beware though; we had a client who came in every year with her check already made out so a price increase would be hard to impose. Different tiers for services with different pricing would be hard to keep track of. We use a client contact sheet to record all off-season encounters. Anything that requires extensive computations and/or takes more than a half hour gets charged. If there are just routine questions or whatever but a lot of them, price of tax prep goes up next year. Not many of us have the nerve to get rid of our PIA clients, but those who do seem to be unanimous in saying what a relief it is and why didn't they do it years ago. And it's better for our mental health to be the ones doing the firing instead of the clients firing us, as was the case for Judy. In her case, my hunch is the parents got annoyed and decided to go elsewhere, dragging the kids along. Those complex returns surely took a lot of time, so the silver lining is that she might just be able to go home earlier a few nights.