miatax

I have a client who is on extension. He owes around $8,500 for 2009. Last year, his divorce settlement asked him to come up with a given sum of money. His credit got ruined from his x-wife. He had to withdraw everything from his retirement account to pay what he owed on the divorce. Due to that, he owes an early withdrawal penalty on his 2009 1040 and that jumped him up to a much higher tax bracket as well. At the end he owes $8,500 to IRS which he doesn't have as the divorce cleaned him out. He does have a job but still has debt from the divorce. Would you recommend an offer in compromise? I have never done one of these before.

Hello. Has anyone here registered through Efast to file 5500s?

Not yet.

No acknowledgments yet. I'll feel more at ease when they come through.

FYI.. The general sales tax tables that ATX uses includes only the state sales tax % automatically, however it does not include the local tax % based on zip code where taxpayer lives. The preparer has to manually input that percentage in. I figured this out using the sales tax calculator per the IRS website. Whatever it may be, at the end you may save your clients a little more money - for those you have on extension at this point.

Found where it goes.... Never mind.

Last return I'm working on... Client purchased a new boat in 2009. I thought the Sales Tax was deductible in addition to the general sales tax option. Please confirm and where do I enter this? Also, if a large portion of the boat was financed, is the whole sales tax (limited to the sales tax % in our state, Florida) deductible in 2009? Thanks!

Thanks Margaret. You're right. I'm not thinking straight and I was just choosing the filing box and manually choosing the additional worksheets / schedules.

I waste too much time when printing the returns out regarding which additional worksheets / statements to print along with the return. Is there a way for ATX to automatically print those additional worksheets based on what was used per the return? If I choose all then the return includes all zero and unnecessary forms.

I don't know if for my few returns / extensions, I should just print and go to the post office!

I have a friend / client whom I just finished prepping his 1040. He went through a bad divorce in 2009 and had to pull funds from his retirement account to satisfy the divorce settlement (which increased his AGI)in addition to $3,000 in canceled debt and $1,500 from a 1099Q. He got 20% withheld from the distribution (with a dist code 1) but bottom line, he still owes $8,700 based on his numbers. The problem is for 2009 he had a few less Sch A items and the distribution caused his total AGI to go up. He is making ends meet with all of his payments and to top it off now he has an $8,700 bill from Uncle Sam. Am I missing anything new in the law relating to taking money out (penalty free) from a retirement account to satisfy divorce settlements? There are no alimony payments for reduction of AGI. I am trying to see if there is anything else that may help and I would feel terrible if I missed something. He doesn't qualify for making work pay credit either because of his out of the ordinary AGI. :-(

Does anyone know the procedure for filing the 5500s electronically through ATX? I think there is a separate registration process but was curious if anyone had gone through this already. Thanks.

I called IRS E-Services and according to the rep, all of these 4 were accepted. The rep told me to call the tax software company to see how I can get the ack confirmations. As of now, they still all show 'rejected by agency'. I'm on hold with ATX now.

JKL.. Thanks for responding. This is so frustrating.

I transmitted all 4 at the same time but I never selected anywhere to submit as a batch. Now that I printed out the acknowledgment histories, I am noticing that the DCN number on these returns are all the same. I am also noticing that I filed two more extensions on 3/15/10 and they were accepted. I definitely know that on 3/15/10, the others still showed as 'transmitted to agency', so it's not right that the ACK Status date on these 4 now show 3/13/10.