Richcpaman

Business or Hobby? Personally, and on a rant, I think most of this is economic slavery. Your client got a 1099 for $1,500 and paid for $1,200 worth of "stuff" both for display and to sell to her clients. So, she netted $300, and probably spent 60-75 hours on parties, organizing, mailing, visiting, calling, etc, so that about $4 an hour... But that is ignoring all the other expenses... A family friend sells the baskets, and turns a minor profit every year. Selling about $75-90k each year. But its real work. Its not a hobby. But the profit is elusive... Rich

Mr. Pencil, If that happens to be the case, and that appears to be a very narrow reading of the publications from the IRS, which are not always in agreement or in favor of the taxpayer. Congress changed the rules and the new presumption is that if you have no other place of business, then it is presumed that you have a home office. Maybe not exclusive and regularly, so no OIH Deductions can be taken, but, then where do you start taking travel expenses? Your home. Now, if you have no fixed address, like an RV that you drive around in, then you may be stuck and out of luck. But she has a fixed address, and she travels to clients home to host the parties, thereby O&N travel.

That $12k for the "Match" in a 401K seems kind of high for a 401K plan on 60K in gross salary. I am not the expert on 401k's in that respect. If its a single owner and spouse plan, maybe so. Rich

JB: Why can't she deduct her mileage? She does have an office in her home, that is the presumption now. She may not be able to claim OIH because of the exclusive use rules, but she would still get O&N miles after that. And Cell phone? Not all, but something, and probably not much. I understand many of those direct sellers are milking the tax deductions and deducting the world, and blowing up the Amway fraud (Please notice that the "owners" have renounced their citizenship and moved to island nations... dirtbags...) made a lot of sense. But she is entitled to O&N and mileage. Rich

Mir: The $12k that was deducted from the employee's pay is subject to Fica and MC tax. The employer must match this. As for the $12k employer contribution to the plan, there is no FICA and MC tax. What was the gross payroll check?

Rita (s): If my phone rings while I am in the office with a client. I ignore it. I have an answering machine. I tell my clients they are paying me to pay attention to THEM during this time. I would expect the same courtesy. BTW, nobody quibbles TWICE. If my wife calls me twice in a row, I say excuse me, and answer it, but otherwise, I am with my clients.... You can insert your billing rate in your answer.... And I have a chair that I can lean back in, and even nap, if I need too... Rich I would expect the same courtesy .

Then I would have sent him a bill for the consultation.... And it would not have been for $4. Rich

I just look at them, while on the phone, and tell them: "I am getting paid $150 an hour whether you are on the phone or not" And then I lean back. Rich

Tabby: The court decree of their divorce carries no weight with the IRS. The IRS sets the rules to who can claim who. And "Court decree" is NOT in that language. Rich

Me too... I like the .05 size with HB Lead. And the At-A-Glance weekly appointment book! Rich

I could have too much fun with this, but I won't. Your best defense is to do as Jack says, and do them ALL, or the other direction, and do none. IN the middle of the road gets you crushed. I don't do that many EIC returns, so I do what I have to do with the 8867. And the one preparer who neighbor was a preparer and got hit with $8k in fines? Probably had three or four times that in problems, but they only nicked for the easy ones.... Rich

I have a series of numbers on my ceiling, and I ask them to "pick one!" Rich

Actually... it could be treated this way, sort of like "Intern" pay at Hospitals and Colleges. You are making some money, but its for the education. Rich

Terry: I think you answered your question. All you have to do is ask the T/P how much they paid for internet. She is operating remotely for this hospital. (The hospital does not have to send 1099's till Feb 28th, they can delete the Info before efiling on the 28th....) She gets paid a wage for doing this work, and then they reimburse for her reasonable, allowable home office expenses. Like Internet. The W-2 is taxed, and then the reimbursements are not taxed if reasonable and allowable. Unless they are for more than the allowable amount then that should be in the W-2. Many employers are lazy, and they will 1099 many deductible, allowable expense reimbursements. Like they did here... If push comes to shove, put the $$ on a Sch C, then show expenses that are reasonable to offset them. Rich

And this is the reason I think the IRS should slow down ALL refunds. The bad guys KNOW the system can't keep up, so they file. The IRS has contracted with some data aggregators to start spot checking information on returns, so that they can confirm that maybe the return is bogus. They need to ramp this process up. And then hopefully, stop some of this fraud. An extra week or so from filing to refund will not hurt anyone. Prior to Efiling, you could wait 6-8 weeks for your check. Now it is down to a week to 10 days? But the fraud is over 4-5 Billon a year? Yeah, we can slow things down... Rich

I client just called me. Worked FOR a major firm. Laid off in Nov 2012. Paid COBRA in 2013 to former employer. Former employer sent her a W-2 with no wages in Box 1, 3 o4 5. Only Box 12 Code DD for $4,400 in COBRA she paid to employer.. Wow. Maybe its what they should be doing. But just wow. Rich

Somehow, I am not surprised. Rich

Lion: The trust will be paying all those expenses. The first son is 18, and moving out of state to college in September. The trust will have the cash to pay any and all living expenses of this son. The plan is also to have this son involved with the management and operation of the assets in the trust. That is why there would be a W-2 for $10k. Then the trust would pay other amounts for college, living expenses, etc on behalf of this son. According to Mr Pencil, even if the parents are NOT claiming the child, the child is still subject to the Kiddie tax till age 24? Rich

Not trying to short the FAFSA Just wondering if the order changes, if the trust pays the expenses. Since the parents are not. Rich

Had a client call me. Makes good money every year, greater than $300k. Has two kids, one is going to college in September. Each child has a trust. That trust has no liquid assets, but that is going to change. (Big sale for cash..and then convert into a income property of +$50k a year.) If the trust pays a salary to the child, say, $10k, and then the trust pays the child's college expenses and other support, say, $30k a year, then the child can not be claimed by the parents, because the trust is paying all the bills correct? Would the child then be subject to the Kiddie tax? I can find out some of the pieces, but no a comprehensive example. Thoughts? Rich

Doesn't mean your in the wrong business, a church does not have to be a 501©3 It is covered by the first amendment. But, if the church wants to do some other things, then they usually set up a 501©3 to do those things... Soup Kitchen, etc. Rich

Tom: You and me both... Most want the avoid the tax completely on "disability".. Rich

Code DD is for the amounts that the EMPLOYER paid for the employee's health insurance. Rich

FTM: Understand something: Until you OWN the site, they are not and never will be "YOUR" Threads. Sorry. Your "First Amendment" rights end at the end of your voice, or your ability to write your own paper. And this paper, as well as the ATX Official site is owned by somebody else. I am involved with other online forums and in an official capacity. KC and Judy are being nice to you. I would have you kicked out, either on a temp basis or permanently for posting actions that question moderation. Rich

David: *How* do you *know* they can get to other appointments during the day? That is a presumption on our part. *None* of my clients tell me when they can come in and see me. *I* set the appointments, and *I* will reschedule to something that may be more conveinent to the clients. But those times are still within the times I am willing to meet with them. I learned along time ago that folks are going to do what they think they can get away with, And one of those things is forcing you into a 9 pm on Friday night appointment if you let them. My little ol' ladies don't want to drive at night. So they get daytime appointments. My younger clients want weekends, or evenings, I just work with them, but I set up the times I am available, and if that doesn't work for them, then maybe they need someone else, or they can mail it in... Rich