lsowers

I have my first client where I have to worry about the domestic production activities deduction. It is an S Corp whose activity is engineering with 1 shareholder. Looking at last year's return (not done by me), they provided the DPGR and W2 wages on Sch K and K-1. The instructions make me think that more should be provided to the shareholder (he self-prepares his personal). Am I supposed to provide the deductions directly allocable to DPGR? If so, since all of the S corp's receipts are from engineering, would the deductions include all of them (no pro-rata)? Do the W2 wages include the secretary or just the engineer? If anyone could help with this I would appreciation it. I have been trying to study this on my own, but I don't think the instructions for S Corps are too clear on this matter. Thanks, Lori

The employer is based out of NC, we're in FL. He took the job in another town here in FL.

Jainen, I don't think he is told a definite date, just that it will last a few months.

I have a field examiner coming in for an audit on a C Corp client. The client is incarcerated and all I have to go on is the records his wife found for me. The auditor is asking for proof of sub contract labor, rent, and gross receipts. The client always gave me a hand-written P&L and balance sheet to use for tax prep. Now that I have the box, there is no formal record-keeping system, just bank stmts, canceled checks, and receipts. After going through the checks to verify the labor numbers, it looks to me like the tax return figure is overstated (in a bad way) by a material amount. I cannot find backup for 1/2 of the rent amount also. My question to those that have been involved in an audit before is - do I let the auditor discover this on his own or should I be upfront about what I have found so far. I cannot reach the client, obviously, to ask questions. His wife can only see him once a week for a limited time and only phone him once a week for 15 minutes. She had nothing to do with the corp and knows nothing about the records. Could someone please advise me as to how to proceed given the situation? Thanks

Client had started job at end of 9/2007 out of town. Job was to be temporary(less than a year) so we took travel and living employee expenses. It ended in 6/08. Then in 8/08 he got called back and this time it ended in 12/08. Now apparently they called him back again this week and is still being told it is temporary. Due to these circumstances, can we continue to claim the travel and living expenses in 2008 and possibly 2009?. Thanks, Lori Sowers, CPA

CFS Tax Tools has an occupational deduction form for law enforcement. BTW - haircuts are not deductible - the IRS considers them personal in nature and preparers have been shut down by promoting that deduction.

Go to http://ssa.gov/bso/bsowelcome.htm You will need to apply for an ID on this SSA website. This will be the ID you will use on the employer info screen. You can use the same ID for all clients. I used it last year (haven't efiled any yet this year) and it worked great.

I know a lot of localities don't have this, but our county's tax collector has a search on their site where we can look up RE taxes paid. Maybe worth finding out if your localities have the same. It saves me from waiting for the client to call back.

No, it doesn't go on the W2.

I always fill in the L and M-1. I find doing so is also a good error check. I tend to agree with OldJack, I think IRS is more likely to look closer at a return that does NOT have that info filled in. I think it's an accountant thing, you know, everything must balance.

I just called to order and was told it was back-ordered and not yet available. She told me to call back in early December to order the pub.

You can deduct unreimbursed partner expenses on Sch E pg2. Just make sure they pass the smell test for deductibility.

That's what I tried to tell the guy that is going around doing this, but he disagreed with me and said that is the way he has always done it. He is a medical insurance billing guy and I don't think he has any business incorporating in the first place. I was just looking for justification of my point. Thank you.

I am just looking for someone to justify my position or if I'm wrong, let me know. Is it ok to get an EIN from the IRS before the entity is incorporated with the state? I was taught the corporation must be accepted by the state before an EIN was assigned. Is there something in writing stating so? Thanks

Just checked the ATX site. It does say 11:00, but if you look at the drain times, there is a drain at 6:00pm. If there is a 6pm drain, I don't see how it would be late. I am still waiting on 3 8879s, so hopefully they will be timely.

I think I put the deduction in the Section 179 field on asset entry when I had to do it.

Yes, I loaded it yesterday (9/4) morning. First, it took a very long time. Then, I could not get my computer to reboot normally. I had to reboot in safe mode, then I was able to restore it to my restore point I created before I started the update. I have not researched why this happened, it may be because I did not turn off my anti-virus. I will wait a week or two and try again. Maybe there will be more updates by then. If anyone tries it, I highly recommend you make a restore point before you start.

Year 1 return needs to include a Form 8824 (like kind exchange) and a Sch D if there was any gain from the transaction. Year 2 needs the Sch D.

Don't know if you can still get a pc with XP installed. I have a laptop with Vista and a desktop with XP. They share a wireless internet connection via a router and I can share files between the two. I have not had any problems. The set up was a little bit of a pain since the OS were different, but once set up there have been no issues.

I know this is just a technicality, but the IRS has a form W-10 that is for child care. Most child care facilities where I am do provide a letter each January with the amounts paid.

I also took the old EA test and used Gleim and passed first time. I used Gleim again for the computerized CPA exam and was really happy with it. Passed 2 parts first time, 2 parts second time. I think their system is great and very affordable.

I may be wrong, but I remember reading that stimulus payments will not be sent from amended returns. You may have to wait until the 2008 return is filed. I would check the faq on irs.gov.

Thanks Erc, I have used Firefox for years. Downloaded this new version and noticed a great increase in speed.

Took EA exam quite a few years ago. Used Gleim. I used them for my CPA exam prep (which was computerized). Very happy with them and the cost was reasonable. They probably have self-study for the computerized EA. www.gleim.com

Just an update to this. I just saw on the Sams Club website where they sell software (Versacheck) and blank check stock that works with QuickBooks for $30-$35. This will allow a QB user to use blank check stock instead of pre-printed checks. May be a viable work around if someone wants to use QB and hesitates because of the check printing restriction.