kcjenkins

I totally agree with SCL on that one. Over all my many years in the business, over 90% of the self-prepared returns I reviewed showed the t/p had over-paid due to missing deductions and/or choosing the wrong option for treating a transaction, due to not understanding all their choices.

Eric, it's not the contents of the room that's the issue, it's the activities in the room that make it an 'office'. The books and dog bed do NOT disqualify it. The IRS rule is that you must use your home substantially and regularly to conduct business, to qualify for a home office deduction. 20 hours a week in there, and 100% of that time spent on freelance web development, would absolutely qualify.

Sure you are welcome. I did not realize you were out here, you never added your location to your profile, I'd love to meet you too.

Good records are always the best protection. Just hard to convince some clients it's worth the effort. Until AFTER the audit.

I'm game, Joan. You and Tom and Patty work out some dates that work for you, and then let me know. I'm pretty flexible time-wise.

OK, Tabby, but just one final thought, for those you don;t want to lose who don't do the internet, you could have a Mailbox etc, box AND have someone who you pay a small fee to collect the mail from there and deliver it to you, a couple of times a week. I used a similar system when I was staying with my husband in the hospital, although I did not have to get a new address. She brought my mail, then took my outgoing, etc.

Rita, you can come visit me out here, I'm only about an hour and a half from Tom!

The taxable portion on line 8.

Yeah, that's the important thing, the modern filings are so different in terms of how they process them, that the old ideas just don't play anymore. Used to be they were flooded with complex paper returns filed on 4/15 and so if they audited X% of those, it helped your odds. Today, with electronic returns, the way the pick has much less to do with WHEN it came in, and it's much easier for them to sort and choose based on the contents. Plus things like math errors, which used to be a significant indicator of an amature, are virtually nonexistent today.

You are welcome. Sometimes they just don't want to hear the truth, but we don't write the rules, we just work with them. So unless they work through an agency and the agency W-2s them, no way can you get away with 1099s for people working in your home. If they found someone who told them it was OK, you may get them back when that mistake bites them in the butt. If they do come back, be sure you add to their bill!

http://www.godtube.com/watch/?v=0E02FMNU&fb_action_ids=735486439816825&fb_action_types=og.likes

IRS Audit Rate Hits New Low The Internal Revenue Service is anticipating the chances of a tax return being audited to be the lowest in years. The IRS audited less than 1 percent of individual tax returns in 2013, the lowest rate since 2005, and the number of individual returns that will be audited this year will decline even further, IRS commissioner John Koskinen told theAssociated Press. Thanks to successive rounds of budget cuts at the hands of Congress, the IRS has been forced to cut back on its audits. “We keep going after the people who look like the worst of the bad guys,” Koskinen told the AP. “But there are going to be some people that we should catch, either in terms of collecting the revenue from them or prosecuting them, that we’re not going to catch.” Last year, the IRS audited just 0.9 percent of individuals who earned less than $200,000 a year, the lowest rate since 2005. The odds of being audited were more likely for high earners, but while 10.9 percent of individuals who earned $1 million or more were audited last year, that was the lowest proportion since 2010. An average of 0.6 percent of business tax returns were audited last year. The rate was much higher for large corporations, with approximately 16 percent of corporations with assets of over $10 million subjected to audits. To compensate in part for the cutbacks in budgets and manpower, the IRS is increasingly relying on technology to catch mismatches between the income that individuals report on their tax returns and the information reports that are filed by their employers, banks and other businesses. However, Koskinen would like to see Congress pass the Obama administration’s proposed increase in the IRS’s budget. According to the administration, the IRS takes in $6 for every $1 added to its enforcement budget. But with opposition to the IRS rampant in Congress in the aftermath of scandals tied to the so-called “targeting” of Tea Party groups, the agency is likely to endure another round of budget cuts next year.

I think they should be given W-2s as 'household employees, based on the situation as I understand it. UNLESS they are from a service that provides caregivers, like Visiting Angels, etc. What IRS says: You have a household employee if you hired someone to do household work and that worker is your employee. The worker is your employee if you can control not only what work is done, but how it is done. If the worker is your employee, it does not matter whether the work is full time or part time or that you hired the worker through an agency or from a list provided by an agency or association. It also does not matter whether you pay the worker on an hourly, daily, or weekly basis, or by the job. Household work is work done in or around your home by the following people. Babysitters Caretakers Cleaning people Domestic workers Drivers Health aides Housekeepers Maids Nannies Private nurses Yard workers Workers Who are Not Your Employees If only the worker can control how the work is done, the worker is not your employee but is self-employed. A self-employed worker usually provides his or her own tools and offers services to the general public in an independent business. A worker who performs child care services for you in his or her home generally is not your employee. If an agency provides the worker and controls what work is done and how it is done, the worker is not your employee.

The Internal Revenue Service has arranged to pay Microsoft extra money to continue to support its old Windows XP computers beyond the cutoff date that Microsoft has imposed for supporting the old operating system. Microsoft ended support for the operating system last week, sending out the final set of security patches for XP users. However, due to budget cuts, the IRS has not yet been able to upgrade approximately 58,000 of its 110,000 Windows desktop and laptop computers to Windows 7. The agency told the technology publicationComputerworld last week that it will be paying Microsoft less than $500,000 for continued support after the official phase-out as part of a $30 million migration to Windows 7. At a recent congressional hearing on the IRS’s budget, IRS commissioner John Koskinen was asked about the money it was spending. House Financial Services Committee Chairman Ander Crenshaw, R-Fla., challenged Koskinen about the extra costs the agency would be incurring. “Now we find out that you've been struggling to come up with $30 million to finish migrating to Windows 7, even though Microsoft announced in 2008 that it would stop supporting Windows XP past 2014,” said Crenshaw at the April 7 hearing. “I know you probably wish you'd already done that.” Koskinen agreed it was a high cost but added that it was necessary. “You’re exactly right,” he responded. “It’s been some time where people knew Windows XP was going to disappear. … Windows XP will no longer be serviced, so we are very concerned if we don’t complete that work we’re going to have an unstable environment in terms of security.” At the hearing, Koskinen initially seemed to agree with the $30 million figure for continuing Microsoft’s support for XP, noting that it would come out of the IRS’s enforcement budget. But the IRS later clarified to Computerworld that it would actually be paying less than $500,000 to Microsoft for continued support of the retired operating system, known as Custom Support. The rest of the $30 million will be used for buying new PCs when necessary and for labor costs to complete the migration to Windows 7. Koskinen also told the committee that the IRS had to put $300 million in technology improvements on hold because of budget cuts.

on the return, any form, actually.

You might consider getting a box at a private mailbox rental like Pakmail, the UPS Store, Mailboxes Etc, or even get a US Postal box. UPS & FedEx are not allowed to deliver to P.O Boxes. Mailbox stores allow UPS and FedEx to deliver to a private mailbox. Then tell all your clients you will be working by mail, fax or internet. Introduce them to PortalSafe, etc. You let them decide. http://amandajrose.hubpages.com/hub/Private-Post-Office-Box-Rental-More-Options-Than-Just-the-US-Post-Office http://hecville.hubpages.com/hub/Top-10-Reasons-to-Rent-a-Private-Mailbox

No, amounts paid for 'personal' purchases do not require a 1099. Just like if you hire a contractor to re roof your business, you must give him a 1099 but if you hire him to re roof your home you do not.

Anyone who wants to see our warrior Cat in action, go to the Politics forum and watch her video.

Darling, you have clearly been working too hard, for too long. When a 'quite day working" feels like a vacation, it's time for at least a couple of days of REAL vacation. At least a day at home, alone, doing nothing but resting and indulging yourself, long soak, decadent desert, phone turned off, etc. NOT CLEANING THE HOUSE, NO MATTER HOW MUCH IT NEEDS IT. [Yes, if the office is a wreck, I know the house probably is too.] Please take care of yourself. All those jobs will keep, you know. And you will be better able to do them after a little rest.

Sounds like you are taking too much responsibility on yourself for THE CLIENT'S procrastination. I vote for #2. Again I vote for 2. You should not file unless you know the client wants you to.

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