taxtoddnyc

I received the survey yesterday and completed it. At the end they ask you to give a percentage "rating" to each area of expertise... clearly, Prometric is using this survey to figure out what to include on the new preparer test, and how much weight to give each area. I think it's important, and am happy they're coming to us for our input. So if you've got the time I think it only benefits those who receive it to take the time to complete it... it really only take 15-20 minutes anyway. Just keep in mind while you're going through it to treat it like an opinion survey concerning what you'd like to be tested on starting this fall. Of course, any competent preparer would answer "very important" to every question, but think in degrees of relative importance as to what makes a good preparer, and it'll make it more relevant.

Client's e-file came back saying he was claimed as dependent. He's young, just out of school, earned too much and too old, so not eligible as dependent anymore, but I figured his folks claimed him out of habit. Turns out not... he spoke to them, and they say no. So now what... how do I find out whose return he's on? And what to do about it? Thanks for any advice...

I ran into this myself this evening. This was my first attempt to e-file a return with this deduction, so is the problem new with today's update? Is there any sense that this will revert so we'll be able to e-file this type of return soon? I'm telling my client that we might have to paper file. If we do, do I have to send in an explanation as to why we're not e-filing?

I signed up with Square last fall in anticipation of this season, and mentioned it in a post here several weeks ago. Haven't actually used it yet, but can't wait to see how it goes. It's certainly very reasonably priced, about the same as PayPal per transaction.

Thanks, Ray... that's great info!

Lion, The letter does not specify any clients by SSN. And good point...I would hope that they'll have some type of gov't ID. Diane, I have the same situation, as all my clients' files are on my computer, along with worksheets, notes, 8879's, etc. The letter states that after an interview to "determine your awareness of your responsibilities as a tax return preparer and your general compliance with the IRS' return preparer rules", and "your compliance with IRS e-file requirements", the examiner "will review a selected number of tax returns you prepared and the accompanying schedules and documentation". So, as galling as it will be to have a stranger sit down at my laptop, I guess that's how it'll be. They will also "review your software setup, your computer security procedures, and your overall compliance with the IRS' e-filing requirements". I work out of my apt., so can't exactly say I do much in the way of computer security, other than leave it at home. I'll re-post once I'm done with all this and let everyone know how it went...

Whoops, upon re-reading, I guess they're coming to see me. I was reading the letter as if they wanted me to go there, but it does say they'll be "visiting" me.

Well, I'm going to visit them at their offices here in Manhattan... hope it doesn't take 4-1/2 hours!

This is my first notice.

Got an invitation from the IRS today to make an appt. with them to "heighten awareness of preparer responsibilities and to ensure compliance with the IRS' tax return preparer requirements". They want to see "all relevant documents, including but not limited to worksheets, interview notes, correspondence, and a copy of the returns" for all tax forms prepared in 2010. Really?? I mean, I can do this, but honestly... at the start of tax season!!?? I sure had a lot more time to deal with this 3 months ago. Don't they realize what a disruption this is?

Margaret, The payment button is embedded with the email invoice that the client receives. They click it, which takes them to the payment page which is linked to my account. They can pay with PayPal if they have an account, or can use any major credit card. I had a couple of hundred clients use this last year and can't recall anyone having a problem, so it must be quite user-friendly on the client's end. Go to the PayPal website... there's tons more info there: look under "Business">"Products & Services">"Email Invoicing". (FYI: I do have a website, but have kept it pretty simple. If I decide someday to increase its functionality, perhaps then I'll include a payment button on the site.)

I started using PayPal last year, and it went very smoothly for me. I don't use a button, but simply email an invoice to each client... once you set up the invoice, it takes little extra effort. Never had to pay any fee for transferring funds to my checking account. This year I'm also trying a new service that David Pogue discussed in the NY Times. It's called Square, and for those with any Apple IOS or Android OS enabled devices, it's a pretty good deal. They send you a free card reader that plugs into the headphone jack. There are no monthly, startup, termination fees, or contracts. Only 2.75% + 15¢ for each swiped payment; 3.5% + 15¢ for each keyed-in payment. They accept all major cards. I can't vouch for it yet, but will be happy to report back toward the end of the season. Check out their very informative website: https://squareup.com/

Just to address some of the above questions/issues... as I mentioned, the NY wages on the W2 were about 1/2 of the Federal total. The OH wages are significantly less, likely reflecting only the weeks actually worked in Ohio during the tour. I wish I could say this situation is uncommon, but as I prepare a lot of performer's returns, what frequently occurs is the employee neglects to mention the residency change to the employer until well into the gig, (and heaven forbid they should actually look at their pay stubs to see where the taxes are going), so the blame for the error is usually on the employee due to simple ignorance. What apparently happened in this case is the employee informed management of the address change about 6 months into the year, thereby causing the NY withholding to cease. As for the residency issue, since he was working away from home the entire year, it's perhaps a little iffy to definitively state that he's an OH res., (though that's his permanent address). But there's little doubt that he's no longer a NY res., having given up his long-time abode in '08, (and as anyone who's ever had an apartment there for any length of time will know, is a very big step.. i.e. once you choose to leave, getting back in can be very difficult). In any case, I believe I'll file the NY return with $0 NY income, and deal with any consequences that come up. I'm sure the client will be able to provide ample proof of his OH residency if it's questioned, and I'l advise him to make sure his ducks are in a row on that issue. Many thanks for your advice and opinions... this forum seems always to fill in the gaps, and for that I'm very grateful.

Hey Folks, Could use an opinion or two on this. Client went on the road performing in late 2008, completely giving up his NYC apartment, and changing his residency to Ohio. He's still on the road, but the employer apparently didn't get the message on the address change and continued reporting nearly 1/2 his 2009 income to NY State (but not NY City) and of course continuing to withhold NY tax. Obviously the simple way to rectify this is to file the NY IT-203 with the reported income, let them have the tax due, and just take the credit on his OH return... but I'm concerned about what he'll lose on the difference in tax rates. Here what I'm wondering... would it be possible to file the NY return showing NO NY income, and get a full refund of the taxes withheld. Would this require a mail-in return with a written explanation? Any thoughts or experience concerning state income being mistakenly attributed is appreciated.

If it were me, I'd just forget about the very brief period of his NYC "stopover" (it would hardly even qualify as a "residency") and not even file in NY. From what you say, no earnings were reported to NY, so why complicate things? Also, (FYI) remember that NJ & PA have an agreement not to tax each others residents, so make sure he wasn't having NJ tax withheld during his period of PA residency. If he was, you'll have to file to get it back.