Dave T

Our church has used Power Church for a number of years and it works very well for tracking contributions.

It also has a number of other financial features but we use it primarily for donations. The posting source is the prenumbered offering envelopes we provide to our members.

Dave T

Thanks for the responses on this.

There was no reimbursement from the agency on this it was just a monthly stipend without the requirement of how the funds were spent.

The client didn't track expenses and so it isn't possbile to determine if they exceeded the stipend so I agree the $3,300 is all income and there is no charitable contribution.

Thanks again,

Dave T

Yes - that is correct. The 1099 came to my client as a stipend for housing the exchange student.

It was mentioned, and I admit I didn't know this, that a charitable contribution can be taken for this as well. Am I understanding this correctly?

Thanks to those that responded to this as I know I have another client coming later who did the same thing.

- Dave T

Clients had young woman from China stay with them while she attended high scholl in US. Upon graduation she stayed in US to attend Univ. of Wisconsin in fall of 2013.

The sponsoring agency provided clients with 1099-Misc. with box 7 filled in, Non-Employee Compensation for $ 3,300.

I've added this to line 21 as " Other Income". Clients don't track incremental food costs or other items so I'm wondering if there is any type of offset ( per deim allowance ) to this income and if so how would it be shown?

Thanks very much.

- Dave T

I’m probably not thinking clearly on this and wondering if someone might be able to shed some light on what I’m missing.

Parents take a distribution from their 529 plan (QTP) to pay for college expense for son.

Here is the breakdown on the 1099-Q Total Distribution $ 19,800. Earnings - $ 6,618 – Basis $ 13,182.

Here are the expenses – Room & Board - $ 9,215, Tuition, fees and books net of scholarships - $ 7,166= total expenses of $ 16,381.

I’ve calculated the tax free and taxable portions of the distribution as follows:

$ 6,618 x 16,381/19,800

• Tax Exempt $ 5,475
• Taxable 1,143

Where I’m getting hung up is whether they can still take the American Opp. Credit. I’m trying to follow the example in Publication 970 and this is how I’m figuring it:

Net Tuition, Fees and Books $ 7,166 less $ 4,000 allowable for computing credit = $ 3,166.. I believe I then need to again compute a taxable and non taxable portion as follows:

6,618 x 3,166/19,800

Tax Exempt – $ 1,059

Taxable 5,559

If my calculations are correct, and I’m not entirely sure at this point, they would probably be better off by not taking the credit.

I apologize for throwing a lot of numbers out there and also for being obtuse about this but I’m trying the best I can for this new client and help mitigate what is already a rather large amount due.

Thanks for your assistance.

Over the years that i've been with ATX I've particularly benefited from this board.

There is a wealth of knowledge out there and I've appreciated the wisdom and willingness ot others to share it.

That being said, there is one contributor we haven't heard from in a while and that is Jerome.

For those of you who have been here awhile as well I'm sure you miss his sage tax advice as well as his perspective on life in gerneral.

Any idea where he might be? Wondering if perhaps he went with one of the big firms.

Dave T

I have a new client coming this evening who has informed me that she took money from her 529 plan to help pay for son's college tuition.

I happened to mention this to my co-worker who also uses ATX and he said he'd had that situaiton this weekend but didn't see where there is an input screen for the 1099-Q. Should there be one?

I know this withdrawal can't be used in calculating Education Credits and also know I have to do a calculation to see if any of the withdrawal might be taxable but I just wondered if there is an input screen or not?

Thanks

Dave T

Ooops - forgot to spellcheck before submitting. Meant to say I had to rely on her for the verification.

Thanks

Pacun,

No I didn't interview parents nor did I prepare the returns. I had the client check with her parents to verify.

They (parents ) are in Montana and I'm in NY so I relied on her information.

Thanks

- Dave T

Don't know who is still reviewing the board but would like to get confirmation on an item if possible.

Young couple came to me to get taxes done but had to put them on extension as all info. wasn't avaialble at the time.

At any rate, the young woman is in graduate school and therefore has already completed her four year degree. While an undergrad her parents claimed as a dependent but for whatever reason did not take the AOC in all the four years they were entitled to. ( Again, not sure why ?)

I believe that even though the credit wasn't used, the fact that because she has completed four years of school she would not be entitled to the AOC. Am I correct in this.?

I feel bad for the couple as the husband is a part time youth pastor making very little money but is going to get hit with SE tax and I was hopng that the refundable portion of the AOC would mitigate that but it doesn't appear to be the case. I suppose the parents could amend their return to help them out but that's not my call.

Thank you.

Dave T

T/P has several 1099-DIV's with Foreigh Taxes paid totaling $ 966.00.

Line 47 only shows $ 236 and when I try and figure where the number is coming from I can't find it.

There is a 1116 and a 1116 AMT but don't see the number on either.

I've noticed other times with Foreign tax from a 1099 that the amount flows directly to line 47 withour a 1116 at all.

Any thoughts?

Thanks

- Dave T

Amounts appear in Box 7

T/P's house three foreign students.

They receive 1099 Misc. from the three sponsoring agencies for almsot $ 8,000.

Not sure where to show this, Line 21 Other Income, Sch. E as rental, or even possbibly Sch C as they do this on a regular basis although not necessarily with a business intent.

T/P tracks mileage when taking them to appointments, etc.so I believe this would be an offset to the income but aagain not sure where to report.

Thanks

- Dave T

T/P is 56, unmarried, no children, receives 1099-R with distribution code '3' which is for disability. Amount received approx. $ 10,000.

In addittion he receives approx. $ 16,000 in SS.

What I find interesting is this - the pension, because it is disability, flows to line 7 - Wages, and thus he qualifies for $ 280.00 in EIC.

Just looks unusual but thats the way it flows when doing the EIC.

- Dave T

Coversation at lunch today began with discussing Joe Flacco's new contract and how much of a hit ( no pun intended ) he was taking in taxes.

The question then arose whether pro athletes pay state income tax to each state they play it ? Then, presuming that to be the case, do you actually have to play in the game to get taxed?

For example, a relief pitcher that comes in in the ninth inning to face one batter does he get taxed and someone who sits the bench the whole game not get taxed?

Just curious. Anyone have any pro athlete clients?

- Dave T

To Jack from Ohio

Thanks so much for the tip on the Submission ID rejection.

It worked just as you suggested and I'm grateful to you for the insight.

Thanks Again !!

- Dave T

Not sure if this should be submited on this forum or the other so I apologize in advance if it is the other.

Been very frustrated with a state return (NY) that I've submitted several times only to be rejected with the same error code and not getting much help from the ATX rejection report as to how to resolve.

The error code is 901 and says " The IRS submission ID referenced in the State submission manifest must be present in the e-file database."

The return was accepted promptly by the Feds so I'm in a quandry.

Any help would be much appreciated.

- Dave T

Thanks KC and Lion for the response.

This board continues be a great help and I appreciate all who participate.

- Dave T

Client is a student in Mass but resident of New York State and dependent of his parents in NY.

I believe he would be considered a Non-Resident in Mass and would file a return there for the money he made while in school. W-2 shows state as MA of course.

The problem I seem to be having is that his earnigs from Mass. are also transferring to his New York State return. Can he claim a credit on his Mass return for taxes paid to New York and if so where does it appear on the MA return?

Thanks very much.

- Dave T

Yes - normally the tithe would be a Sch. A deduction but in this situation as it is a requirement for his credentials so I think it is a business expense to offset Sch. C income.

The other portion of his tithe to his local church is a Sch. A deduciton.

T/P is a retired school district employee and also holds credentials as a minister.

His denomination requires that a percentage of his tithe be submiited to the denomination ( not just his local church ) in order to retain his credentials. This tithe is not just on his ministerial income but from all sources of income.

In 2012 he only had a few local speaking engagements so income form this was nominal but his tithe to the denomination was greater than this amount. I believe that this tithe is an ordinary and necessary expense and would be shown on his Sch. C but it just seems odd to me that this should generate a loss.

Any thoughts?

Thank you

- Dave T

I know the AOC is for the first four years of post secondary education but came across something that had me second guessing myself.

Student starts her Freshman year in 2008 and pays tiuition for first semester. In 2009 pays second semester Freshman and first semester Sophmore year etc. This patterrn continues through 2011 when she pays second semester Junior year and first semester Senior year. Then in 2012 pays second semester Senior year. Thus, even though it is for four year undergraduate degree there have been five payments if you will and therefore no credit for 2012 since she has already taken the credit in the four previous years.

Am I correct in this or am I msiing something?

Thank you

- Dave T

Aside from praying for wisdom ( and patience ), not sure what changed, but the return I submitted with two Ed. Credits that rejected twice, posted this morning. I hadn't made any changes to the return and there was no program update when I logged in this morning so I'm just thankful that it finally accepted.

Hopefully this will continue as I have another retrun with two AOC credits to submit.

Thanks for the responses.

Yes - I'm wondering if this is part of the issue. If there is more than one credit on the return an error message occurs.

I've submitted a return with only one individual on it and it went through fine.

Anyone else experienced this?

Thanks

- Dave T

Correction on previous post amount on line 1 is 4443 not 4453 as I mistakenly typed

Thanks