mcb39

Is the school including her room and board in her 1099? That was the case with my student.

I also got the email today. I think there is somewhere that you have to sign up to receive emails; or refuse to receive them. I have also been with them since early Saber.

First of all, determine whether the daughter is in one of her first two years of college. Otherwise, the MW disaster credit is null. I slipped up on this one early on. Last year, the disaster credit was not limited. I had to give the student the Economic Recovery credit, which amounted to almost as much. Who is paying the tuition? Who is supporting the student and claiming the tuition credits? I don't believe that working for room and board qualifies the student to claim that she is supporting herself. (However, I have seen a student on an internship receive a W2 for $9210 in regular earnings and $11338 for housing., which was only for a few months. Now, there was a case of inflation and a company wanting a big writeoff at the expense of a very low income student.

I have been wasting time and brain power wrestling with that same question. I sure hope that is the right answer.

Did they itemize last year.? If standard deduction was greater than itemized deductions, they don't owe any tax on the refund.

Education credits always follow the exemption.

File an amendment for 2009 so she doesn't have to wait an entire year for her credit.

Print first before you create. Saves the step of having to re-create. It's actually a nice safety net because if you make the slightest change after creating, it will reject.

Hi Cath......you have my sympathy. I had that last week. This week is a croupy cough. Anyhow, I just finished a return for a new client. Last year, the preparer put on Line 21 Enron Litigation Settlement. This year she had some from Enron and some from AOL Time Warner. I put them both on Line 21 with the wording typed on the Line 21 Worksheet. (Enron Litigation Settlement; AOL Time Warner Litigation Settlement.) Hope this helps you. I never saw this before, but last year she went to a CPA, so I would think they would know how to do it.

Thank you for your comments, Jainen. Of course, we plan to proceed as advised. We will amend the 2008 return and I agree that we shouldn't have a problem with penalties. What I wanted was a clear-cut black and white answer and I feel that we got it and will prepare the returns properly. I was hoping that you would have something to say about this.

If either of them had worked at least part of the year, they would have been eligible for at least some of the Making Works Pay Credit. Unfortunate, but then I always think that students who work and are claimed by their parents lose out on that credit too. Makes you wonder how well thought out some of these things are.

We asked that same question.; mainly because the 2010 Master Tax Guide, paragraph 2177, page 690 states that ".....the distribution minus the aggregate amount of the owner's nondeductible IRA contributions, is taxed as ordinary income in the year the distribution is received. (Rev. Rul. 92-47)" They looked up that Revenue Ruling and said that it "meant" constructively received. That means that the IRA belonging to the deceased was closed and the monies were placed in an account somewhere and were available to the beneficiary whether he actually had it in his possession or not. Once we were told that we would have little chance of winning at audit, it hardly seemed sensible to take the chance. Financially this was a very disappointing conclusion for the taxpayer. He was quite high income last year; and very low income this year. Otherwise, we wouldn't have cared. In fact, he is so low income this year that without claiming this IRA in 2009 he loses his entire $1500 energy credit for the new windows he put in his house. He zeros out on tax before he gets to the credit. However, all lines have to be drawn somewhere. Speaking of which, does anyone know if the inability to use the entire energy credit in 09 will carry forward to 2010?

The client and I did set up a meeting this morning at the local IRS office. The resulting view taken by the IRS, taken from Pub 538, Page 14 is that the money was constructively received in 2008. "Income is constructively received when an amount is credited to your account or made available to you without restriction. You need not have possession of it." Just because the check and/or the 1099 got lost in the mail, or were mailed late has no bearing on the fact that my client had constructively received the money in Dec, 2008. Therefore, we will have to amend the 2008 return and include the money in income even though the check was not written or received until January, 09. It was the opinion of the agent with whom we spoke that this is a common audit issue and if we were to claim it in 09 and later be audited, we would most likely lose. So, there you have it. Thanks, Taxbilly, for the suggestion. The results are not cost effective for the client, but at least the air is cleared. As long as I had their attention, we cleared the air on a few other issues as well. The downside is that you cannot set up an appointment. You have to wait in line. My client went there and waited in line until he was getting close; then called me and I met him there. Very time consuming at this busy time of the year. I did think that some of you might like to know what the results were.

How would you handle this?. Client received inheritance from deceased brother. Last year, 2008, he received and we reported several inherited IRAs. This year, 2009, on 01/19/09, he receives a check for approximately $39,000, apparently from an annuity. No 1099. We filed 2008 taxes without inclusion of annuity as there was no 1099 and he received the money in 09. Assumption was that 1099 would come this year. Wrong! Had to have client call Ins Co and ask for a 1099 because over $4000 in Fed taxes had been withheld (apparently). Client just received 1099, but is dated 2008. Do we have to amend a very complicated 2008 return and face possible penalties or can we include this in his 2009 very complicated return? Insurance Co will not assist any further (of course) and withholding amounts do not even agree. Also no state is withheld. At least the distribution code is correct at 4. Any ideas out there?

MANY years ago, when my husband first started his business and I had to learn how to do a Partnership return, I struggled through the self-taught course and managed to file the returns (with many errors, I am sure). However, I was unaware for several years that I was also supposed to be filing a Partnership for WI. When the fact finally hit me, I was sick to my stomach.. However, I started to file WI and never fessed up and was never chastised in any way. Just seemed like nobody cared, if they did catch it. However, as Old Jack says, I always reported the income or loss on the Partners' personal returns, which, in reality is what matters. Whether you pay the tax or not. In hindsight, it is amazing all of the things that we might have missed or did miss and never got caught. And, "ignorance is no excuse". Kind of scary when you think about it.

Jainen, as I have said before, I have learned more by reading between your lines than almost anywhere else. Just couldn't let you get away with this one. Just a friendly nudge.

I don't know of any way you can dodge SE taxes through the use of a Partnership. Everything flows through as SE income to the partners unless you are an inactive partner, and then, would not be considered self-employed anyway. Unreimbursed expenses, it is.

I am a sole proprietor LLC. Other than tax preparation and tax planning, I do bookkeeping, sales tax returns and some payroll throughout the year. WI is trying to force all businesses to file every kind of tax report online under a webpage called "My Tax Account". Very secure and very difficult to manage at first. However, now I have access to several clients' accounts as many of them do not have internet access or the knowledge to learn how to use the site. Under "My Tax Account" you can file sales and use tax, payroll tax and any other state taxes that you might owe.

WI is piggyback and it can be filed alone. Put at least $1 on the 1040 on Line 7. This will allow the e-file forms to work for you. When you create the e-file, choose state only. It will create and file just fine.

Just got one that was transmitted this morning.

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I did put up a really nice locked drop box last year which has helped some. Not only can they drop things off securely, but they can pick up things I leave for them as there is a large clip inside of the drop-down door. They are starting to get educated on the use of this box. I also do a lot of e-mail conferencing. Clients are very receptive to that. And....many of my clients I have never seen for years because they mail or fax everything to me and I mail it back to them. However, for some reason (could it be age?) the pressure hasn't seemed to lessen. Hubby says I have to learn to say "No"! Then he comes home and says that he just got me a new client. Go figure.

I don't know how I do it some days. This weekend I have left town and taken work along in order to get away from the phone and people who drop in without appts. Office in Home has advantages, but also many, many disadvantages. You all have some good ideas to offer. This year I am sending some of my PITA clients to a new gal who is just starting out and glad to get the business. Am also having her come in to help me play catchup. The "Are my taxes done yet?" calls are starting and that adds so much stress to the pressure cooker. Hope everyone has a happy and productive tax season.

I am also thankful for that link. I tried to find it but couldn't find this current version. Too many different scenarios on the mind these days. It gets hectic when the phone is ringing just when I am concentrating on some subject or other. Now the questions start as to how their returns are looking. From my view they are looking like they are on a pile on the floor and will be gotten to in the order in which they came in. (Some exceptions apply and I don't say any of that to the clients). Anyway, I have gone to the woods for the weekend and brought a lot of work along. Then, on Monday I am having another gal come in to help me out with data entry. She is also a preparer trying to get her business off the ground. Enough self-abuse for me, especially with two eye surgeries this year as well as the two that my husband had.

Just found out that when you update the program, it will fix it to give you a warning when you do a return check before you create the e-file. Now, they tell us.