Cathy

Karen, IRS was right in considering the $3,405 reported on Line 17 on the 1040 as investment income, thus over the allowable $2,900. As your client has already received a letter, I am assuming he filed at least 6 weeks ago. Forms and program updates are being made constantly as you well know. I just created a similar taxpayer's return and the software did the calculation correctly...no EIC. It's possible that ATX has since corrected the program glitch....just a thought. Cathy

Also, consider telling your client "I don't know, but I will research it" when you aren't sure. They appreciate that because most clients realize (and if not I tell them) that certain new situations (new to me) come up from time to time and rather say "no"......" let me get back to you after I do some research". Cathy

From IRS Pub 502" Special Education You can include in medical expenses fees you pay on a doctor's recommendation for a child's tutoring by a teacher who is specially trained and qualified to work with children who have learning disabilities caused by mental or physical impairments, including nervous system disorders. You can include in medical expenses the cost (tuition, meals, and lodging) of attending a school that furnishes special education to help a child to overcome learning disabilities. A doctor must recommend that the child attend the school. Overcoming the learning disabilities must be a principal reason for attending the school, and any ordinary education received must be incidental to the special education provided. Special education includes: Teaching Braille to a visually impaired person, Teaching lip reading to a hearing-impaired person, or Giving remedial language training to correct a condition caused by a birth defect. You cannot include in medical expenses the cost of sending a problem child to a school where the course of study and the disciplinary methods have a beneficial effect on the child's attitude if the availability of medical care in the school is not a principal reason for sending the student there.

No, Cathy...not any problems here. I just e-filed several returns without any problems! Cathy Ahhhhhh, shit...I think I just answered myself :wacko:

Just tried to send a couple of e-files...error when "receiving notices", then error when transmitting returns. The message for the rejects stated that nothing was wrong with the returns, to download updated program and try again then contact technical support. Program is up to date. E-filed other returns this am with no problem. Anyone else having similar problem? Thanks, Cathy

From EIC IRS pub... Disability Benefits If you retired on disability, benefits you receive under your employer's disability retirement plan are considered earned income until you reach minimum retirement age. Minimum retirement age generally is the earliest age at which you could have received a pension or annuity if you were not disabled. You must report your taxable disability payments on line 7 of either Form 1040 or Form 1040A until you reach minimum retirement age. Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension and are not considered earned income. Report taxable pension payments on Form 1040, lines 16a and 16b, or Form 1040A, lines 12a and 12b.

Julie, If one would draw a pension due to a disability, that pension income is treated as earned income until the minimum retirement age of that individual. Such income does count toward earned income for the EIC. Cathy

☺ ☻ ♥ ♦ ♣ ♠ • ◘ ○

Bonnie, I can't possibly understand why you should have been consulted ...you are ONLY their CPA!

:read: Just discovered today what the "Peace of Mind" with HRB is all about. I pointed out to my new client that her 2006 preparer (HRB) had included several thousand dollars listed on Sch B for "XYZ Mortgage Co, Inc." as interest EARNED rather than report it on Sch A as interest PAID on her home loan. I also told her that HRB attached a Sch B to her return as her interest earned (as incorrectly calculated by HRB) was over the threshold amount of $1,500 thus requiring the SCH B. I gave her two options: 1. After things slowed down a bit, I would be happy to prepare the amended returns (Federal and State) at no charge, but it would possibly be after 4/15 or 2. She could take it back to HRB now and have them prepare the 1040X and amended State return to correct their error. I also advised her to ask for a refund of the preparation fee HRB charged for filing the SCH B. Client was furious about her case and several other foul ups she has heard coming from the local HBR office so she took her 2006 return back to HRB: Client: Your office made an error on my Sch B last year and I'd like to have it corrected. HRB: Lady reviews the return and says "Oh, yeah, Jane Doe prepared your return. She messed up a lot of returns last year. Just look at all of those folders stacked up on my desk. All from Jane Doe! She doesn't work here this year. Client: O'kay, when can you correct my return. HRB: We'll do it now, but I see you didn't sign the "Peace of Mind" form so we will have to charge you. Client: What are you talking about? HRB: Jane Doe didn't ask any of her customers if they wanted the "Peace of Mind". But that's not our fault. She doesn't work here any longer. If you had signed it and paid the extra $30, we would prepare the amendment for free. Client: Like H##L you are going to charge me for correcting your error! HRB: Well, let me call my manager.....She told me to go ahead and prepare the amended returns. Client: O'kay...I'll wait. HRB: O'kay...your amendments are ready...$98 please. Client: What the S##T are you telling me? I'm not paying you ANYTHING for you to correct YOUR error. HRB finally gave in and told her she could have her amended returns at no charge but they refused to refund her their charge for the Sch B. Client was told by HRB that she now OWES the IRS $50 and will get back a $120 refund on the State. While on the phone with the client, I told her to find the 1040X and read the last figure on the bottom of the right column....It was a $400+ refund. Client will drop of the amendments for me to lookover before she mails them. Evidently, they didn't know how to read the 1040X results. Moral of the story: We all need to charge $30 for the "Peace of Mind" guarantee so we can be compensated for the work we have to do if we make an error on a return. Stories from our local HRB.....Priceless!

Sorry, joan, but I think we can probably rank you and jainen BOTH as being on the high on the "responsible" list. Anyone capable of writing the above surely must be a legislator! :o

Guess great minds think alike, JohnH. I was also thinking it was jainen's fault!

I agree 100000% J.B. Please tell them EXACTLY as you told us. Maybe they would then get the point!

John, Yours is the EXACT approach I have already taken with several of my clients. I advised them to wait until April to mail the returns, small token payment (for the same reason as you have stated)....certified mail, return receipt requested. The rebate possibly will be credited to the balance due before the client receives the first balance due letter from IRS. Cathy

The rebate will also be automatically applied to the tp's outstanding balance.

Good question, John! I haven't been able to find the answer either in any of the IRS articles and have a couple of clients in that situation.

The following was taken from one of the IRS notices about the rebate....note the last paragraph. Exclusions Individuals who file Form 1040NR, 1040PR or 1040SS are not eligible for the stimulus payments. These returns are normally filed by Nonresident Aliens, residents of Puerto Rico and residents of the U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands (CNMI). Residents of U.S. possessions will be receiving their rebates directly from the possessions. Also ineligible are individuals who can be claimed as dependents on someone else’s return.

If claimed as a dependent on daughter's return, mother will not get the rebate. Had similar case yesterday. Daughter's tax difference was $800+....vs mother's $300 rebate. Daughter will give mother her "$300" out of her refund....at least she won't have to wait until May! Cathy

Thanks for your replies....I needed a good laugh this morning! Geeeez, I do hope all of you got some rest this weekend.

Yep...from Quickfinders: "Includes all components of a central heating, ventilating and air conditioning system not specifically identified elsewhere. HVAC systems that are installed not only to meet the temperture and humidity requirements of machinery, but are also installed for additional significant purposes, such as customer comfort and ventilation, are building components." Thus, 27.5 years for residential property. (Window a/c's are 5.)

This is too true to be very funny.... The next time you hear a politician use the word 'billion' in a casual manner, think about whether you want the 'politicians' spendingYOUR tax money. A billion is a difficult number to comprehend, but one advertising agency did a good job of putting that figure into some perspective in one of its releases. A. A billion seconds ago it was 1959. B. A billion minutes ago Jesus was alive. C. A billion hours ago our ancestors were living in the Stone Age. D. A billion days ago no-one walked on the earth on two feet. E. A billion dollars ago was only 8 hours and 20 minutes, at the rate our government is spending it. While this thought is still fresh in our brain, let's take a look at New Orleans It' s amazing what you can learn with some simple division . . Louisiana Senator, Mary Landrieu (D), is presently asking the Congress for $250 BILLION to rebuild New Orleans . Interesting number, what does it mean? A. Well, if you are one of 484,674 residents of New Orleans (every man, woman, child), you each get $516,528. B. Or, if you have one of the 188,251 homes in New Orleans , your home gets $1,329,787. C. Or, if you are a family of four, your family gets $2,066,012. Washington, D.C .. HELLO!!! ... Are all your calculators broken?? Tax his land, Tax his wage, Tax his bed in which he lays. Tax his tractor, Tax his mule, Teach him taxes is the rule. Tax his cow, Tax his goat, Tax his pants, Tax his coat. Tax his ties, Tax his shirts, Tax his work, Tax his dirt. Tax his tobacco, Tax his drink, Tax him if he tries to think. Tax his booze, Tax his beers, If he cries, Tax his tears. Tax his bills, Tax his gas, Tax his notes, Tax his cash. Tax him good and let him know That after taxes, he has no dough. If he hollers, Tax him more, Tax hi m until he's good and sore. Tax his coffin, Tax his grave, Tax the sod in which he lays. Put these words upon his tomb, 'Taxes drove me to my doom!' And when he's gone, We won't relax, We'll still be after the inheritance TAX!! Accounts Receivable Tax Building Permit Tax CDL License Tax Cigarette Tax Corporate Income Tax Dog License Tax Federal Income Tax Federal Unemployment Tax (FUTA) Fishing License Tax Food License Tax Fuel Perm it Tax Gasoline Tax Hunting License Tax Inheritance Tax Inventory Tax IRS Interest Charges (tax on top of tax), IRS Penalties (tax on top of tax), Liquor Tax, Luxury Tax, Marriage License Tax, Medicare Tax, Property Tax, Real Estate Tax, Service charge taxes, Social Security Tax, Road Usage Tax (Truckers), Sales Taxes, Recrea tional Vehicle Tax, School Tax, State Income Tax, State Unemployment Tax (SUTA), Telephone Federal Excise Tax, Telephone Federal Universal Service Fe e Tax, Telephone Federal, State and Local Su rcharge Tax, Telephone Minimum Usage Su rcharge Tax, Telephone Recurring and Non-recurring Charges Tax, Telephone State and Local Tax, Telephone Usage Charge Tax, Utility Tax, Vehicle License Registration Tax, Vehicle Sales Tax, Watercraft Registration Tax, Well Permit Tax, Workers Compensation Tax. STILL THINK THIS IS FUNNY? Not one of these taxes existed 100 years ago, and our nation was the most prosperous in the world. We had absolutely no national debt, had the largest middle class in the world, and Mom stayed home to raise the kids. What happened? Can you spell 'politicians!' And I still have to 'press 1' for English. What the hell happened????? BIG GOVERNMENT "happened"

One of my client's also filed on 1/28 and accepted on 1/29...also got her deposit this morning (2/14/08). I was told the LA "Where's my Refund" site would not be online until 3/31. Seems at least the message was changed....I had complained that the message clients were receiving was their refund did not match the refund on the tax return. Don't know about other preparers, but I have talked to a couple of very rude DOR employees when inquiring about refunds....even had a couple of clients call me when they got the same rude attitude from the DOR employees. Hmmmm.....Required to e-file 30% of returns in 2008 increasing to 90% in a few years....website giving inaccurate information and rude reception from employees.....sounds like we need to bring this up to the E-File reps at the seminars this year....or maybe sooner if they don't get their act together within the next week. Cathy

No apology necessary, John. Thanks for posting the article! Cathy

P.S. I agree with your first assumption that something is wrong with the K-1 1065 worksheet. The program should have made the adjustment for you. Don't wait on a fix, however......the 2006 program works the same way! You go girl!

Denne, O'kay....I was able to fiddle with my program and got the same error as you. Evidently, you are making the sec 179 deduction of $230 on the SE itself. Instead, enter it on Line 14A of the K-1 worksheet (6,700 less 230 = 6470)...in other words, enter the 6,470 on the K-1 worksheet and then create the e-file...you'll get the correct amount of medicare taxes and no error. Cathy