Cathy

Ken, My interaction is also more on a prsonal level with my clients. When I see that their refund/amount due is way different from the previous year, I print out the previous year comparison and highlight the areas where the differences occur. Sometimes I tell them that they owe DOUBLE what they actually owe, then when I tell them what they actually owe, they are so relieved! Works like a charm! Of course, we then plan their withholding/estimated payment changes so we don't have the same situation the next year while reminding them I'm here all year and they should feel free to call me BEFORE they make any retirement disbursements, etc....

Maybe I'm missing something....but "completely paperless" means if the clients enters his/her own pin #, then a signature is NOT required?

My 2 cents: Before I print the return (if the client isn't in my office), I create the e-file then print it. After printing, the return shows up in the rejected e-filed returns. I have a sticky note to "e-file" on clients folder after it's signed. I then go to the return and enter the current date, create the e-file again and then e-file it. I go back to the "rejected returns" before the lights go off each night to make sure I e-filed those that were ready. Started this practice after I neglected to e-file one of my returns last year. Works like a charm. On (not many) occasions, I have marked both the Federal and State reurn as "held".....and they both go to the "held" status so I'm not aware of what KC is talking about....????

Yikessssss! I almost forgot the new LA extension requirement. Just thought I'd pass this along to our LA preparers. From the Louisiana Department of Revenue website: Revised Statute 47:103 allows a six-month extension of time to file the individual income tax return to be granted on request. The extension request must be made before the state tax filing due date, which is May 15 for calendar year filers or the 15th day of the fifth month after the close of a fiscal year. In the past, taxpayers who were granted automatic federal extensions were allowed the same state income tax filing extension if a copy of the federal extension IRS Form 4868 was attached to the front of their state tax return. Beginning with the 2008 income tax year, taxpayers will be required to either request a specific state individual income tax filing extension or submit a copy of their Federal Application for Automatic Extension of Time To File U.S. Individual Income Tax Return on or before the May 15 due date. Copies of federal extensions attached to the tax return and received after the May 15 due date will not be accepted. Cathy

Tom, You shouldn't have any problems with IRS. You can always attach a statement with the return if you so desire. In looking at excess contributions, IRS says in the instructions to first look at your distribution(s) for qualified medical expenses during the year of the excess contribution. You deduct those distributions first before you calculate your excess contribution for the year. Inasfar as changing the code on the 1099-SA, it equates to telling the software that a rollover is shown as taxable income on the 1099-R where in reality, that is not the case at all. Sweet dreams! Cathy

RJM, Never, never, never ever ignore a distribution from an HSA....it causes more headaches in the long run. I have a questionaire I use each year and one of my clients flat out told me NO, she didn't have a distribution....she didn't have a retirement distribution either for that year. 2 years later, IRS sent her the bill for both items...the HSA distribution and the 401K distribution. She slipped up and told me that she knew about both but needed her refund to be for as much as possible. Charged her big time for the amendment......her refund for 2008 was docked for the difference in the tax liability.......now she'll have to wait on the excess taxes she ended up paying for her HSA distribution that was all for qualifying medical expenses.....silently I hope that amendment takes forever to process....enough is enough! Cathy

Tom, First, open a 1099-SA and a Form 8889. On the 1099-SA enter the distribution on line 1 and use the distribution code of 2. Form 8889 will then show the HSA distribution on 14a and the "excess" contribution withdrawn on line 14b....which cancels out the taxation of the distribution. The distribution MUST be shown on the tax return.....if not, IRS will send a bill for the taxes due + the penalty. In your case, your client definitely doesn't owe any taxes UNLESS the contribution was deducted from income on a W-2. In that case, you would use line 21 of the 1040 to report the HSA distribution as "other income" with "HSA" as the explanation. For anyone else who has the situation whereas the taxpayer had earnings on the contribution, the earnings would also be reported on line 21 of the 1040. Cathy

KC and Annie, Thanks for the info...client had no idea abut the outstanding student loan debt (do they ever know?) so we'll have a heads up for the 2009 tax year.'' Cathy

Per instructions: 8 weeks if form is being mailed separate from return.

Anyone know approximately how long it takes for Form 8379 to process. Return was e-filed and refund is being held. Mailing the 8379 today. Thanks! Cathy

Rita, Your 20 year old's gesture sounds awful suspicious to me....I'd be afraid something is up with him/her! :scratch_head:

joanmcq is correct. Taxable with penalty if no other exception applies. What I stated was merely an example of a reason a company can use to let an employee make an early withdrawal from a 401k. RC....I have been known to answer myself a time or two...but normally not until April. :spaz:

Possibly you read that a withdrawal can be made from a 401(k) if a homeowner was facing foreclosure? That's one of the few technical reasons an active employee can make a withdrawal.

Client has been receiving workers' comp benefits for a job related injury, of course. He settled with the WC company in 2007. Applied for Social Security Disability and was ruled disabled. Client has never received a check of any sort from SS to date. He did receive, however, a 1099SSA for 2008 showing approx. $9,000 in taxable benefits for 2008. It further shows a "Medicare Part B" premium of $82.60. I'm assuming that in Dec of 2008, he became eligible for Medicare after the normal 2 year wait for an under age retiree. Clients was billed for the $82.60 and continues to get bills for 2009 for his Medicare Part B premium. The SSA-1099 also indicates a "workers' compensation offset" of $8917.40 ($82.60 + 8917.40 = $9000). Again, client has never received the first check from social security since all of this began.....wondering if anyone has ever seen this before????? Can't figure out why soc. sec. reported $9,000 is reported as taxable social security earnings!!!!????!!!! I've never had a case such as this for 40 years. Thanks in advance for any thoughts or input! Cathy

New stimulus law passed in February increased total credit to $8,000 on homes purchased 1-1-09 thru 12-31-09. The aforementioned tax credit can be claimed on taxpayers' 2008 returns and still have the no pay back provision unlike taxpayers who bought after 4-8-08 and before 1-01-09. Someone correct me if I am wrong, please. Ain't taxes fun?

cred65, Haven't had the occasion to review the credit app docs for a S Corp, however, it's pretty much standard in Louisiana for taxpayers to sign one of these requests when completing paperwork for home loans.

Trnr395, You are correct....the below quote from IRS.gov was the original dates, which have now been extended to 12-31-09, of course. From IRS.gov: Q: When would I have had to buy a new home? A: Only purchases of a main home located in the United States qualify, and the home must have been purchased after April 8, 2008, and before July 1, 2009. For a home you construct, the purchase date is the date you first occupy the home.

jasdlm, The Snoopy cartoon is hard to beat.....clients love it!

Thanks taxxcpa, That one will go up on my office wall right next to one where Snoopy is writing to IRS asking them to remove his name from their mailing list!

The more I charge, the more referrals I get....go figure! Live in a very rural area. Over the years, I have found that tax preparation fees are not the reason clients leave....unless the fees are too low which makes some clients feel uneasy about the knowledge and confidence the preparer has in his/her work. I have several who prepare their own taxes each year but come back to me the next year and I end up filing amended returns to straighten out the mess they caused. Out of state returns are $95 per out of state return this year. There is a lot of extra work that goes with them...plus additional costs for filing copies of the out of state returns with the home state to take the credit paid to the other state(s). My Dad told me years ago that the more I charge people, the more respect I would receive from them. Truer words were never spoken!

Go to the instructions for 2441, page 3 and read the "TIP"......if you pay expenses for the second child...doesn't matter how much, then the full $6,000 can be used. Did the taxpayer incur any expenses AT ALL for the second child...possibly after school care for even one day? Cathy

I agree with KC. And be careful if you e-file the return using the client's new address. One of my clients who moved from Texas to Louisiana one year still had her bank account through Regions in Texas. Her refunds were delayed as her address on her returns indicated Louisiana (she had income from both Louisiana and Texas) and was kicked out of Regions system as a Louisiana address using a Texas routing number did not fly....just another throught. She still has her Texas routing number so we continue to have her checks mailed to her rather than direct deposited. Cathy

mcb, I hope taxpayers who bought those homes in 2008 will scream loudly....possible correction to the bill at a later date, I hope. This is what you get when legislators vote for a bill 1,071 pages long when they haven't even read it. Cathy

Did you see Huckabee tonight....he came up with a name for the new stimulus bill: Congressional Relief Action Program He basically said everyone is going to get their belly full of congress and beat the Congressional Relief Action Program out of them!"

Thanks Chowdahead, Just found 1-800-304-3107....working at home at the moment and got the number off the FMS web site. Cathy