Catherine

Gift tax return needed for a client who gave his son $$ towards a house down payment. He also paid off the son's student loans - directly TO the lenders, not the son. One loan was in his (dad's name); the other one was in son's name. Do those amounts count towards gift? I know that education costs paid directly to a school do NOT count towards the annual gift exclusion, but seem to remember that loans DO count. But what if the loan is in dad's name? Seems like he just paid his own loan off in that instance. TIA! (Side note: why to the gnarly questions *always* come up in the last week?!?!)

Might I recommend you folks all look at Drake, once we get past 4/18 and the dust settles.

We have already polled our clients and will be filing extensions on Monday. I always do them a week early, and then go back to cranking out returns. Every year there are a goodly number of folks who get put on extension but then file on time. And every year, there are folks whose returns are ready for pickup, who end upon extension because they can't get here in time or don't mail back their 8879's in time. I finished up this week by doing the payroll tax filings for March and Q1 for my business and the one remaining in-house payroll client. Everyone else is on online do-it-for-me payroll. That has been great. Money shows up, and all I do is download quarterly reports and occasionally adjust a w-4 or add a new employee or inactivate a newly-former employee.

All my Ass estimated payment coupons are printing with 4/18 - and that makes sense. That *is* the first business day after the 15th. (Good grief - something about taxes making sense?!?! It can't be! -And it isn't. It's not the taxes that make sense; it's merely the calendar. Phew!)

I have mainly found that, for the bonds that I *could* amortize, I almost never have full information to do it with! For the ones I *must* amortize, there is still, too frequently, that same issue. So I fudge those with excel spreadsheet linear adjustments (kind of treating it like straight line amortization). But if I don't have to, I'd rather not - a bleepity-bleep pain-in-the-patootie at best, and an impossible pitp far too often.

Patriot's Day, April 17th. Returns due 4/18. Extension payments also due the 18th; no one home at MassDOR on Saturday the 15th!

Household employees don't have a 941 filing so there might be a small penalty for late-filing a W-2. All the taxes (federal) are paid on Sch H with the 1040. However, there might be state tax and unemployment taxes that could have late-filing and late-paying penalties. In Mass., those tend to be about 1/2 of 1% of the tax due, per month, and therefore usually in the annoying but not hurtful category.

Also, if the parents have not exceeded the income limits for claiming AOTC, take a look at using some of the 529 distribution as *taxable* income in order to get the credit. And correct for basis (assuming parents funded the plan)! You can take a small income tax hit of a couple hundred bucks in trade for a larger credit.

You can't go wrong with the classics. I thought the original was from HL Mencken.

It's my very FIRST Schedule F, ever! Not many farms in Mass., and this one actually is in OK. My first OK return, too.

Yes, the out of pocket amount qualifies for SEHI. But only that portion.

One point to note is that in such cases the nanny is usually NOT happy to have to report the extra income. Get the client on an employee payroll asap. Paychex SurePayroll has a nice online service for this, for small money. I do some in-house and they are annoying - especially because household employees (and their employers!) tend to be lax about reporting time IN but then want to be paid instantly.

Client inherited 1/3 share in deceased parents' farm. Paperwork includes $144 paid BY USTreasury and copy is labelled "US DOA farm support" - anyone have a clue where I report this? Or where to go looking? Have tried IRS web site and TTB with no luck.

Best phrase I ever heard for this was "ladies of negotiable affection" in one of the Diskworld books by the late (great) Sir Terry Pratchett.

powers of attorney....

Plus the kid will be un-employable. Are the parents prepared to support him his entire life?

My first thought on seeing the topic header was "don't we all have clients with trust issues?" But that' s not the type in question. Standard accounting answer is "it depends." If they are people hired through an agency, they are most definitely NOT employees. If they are people (like LPN's, say) who hire themselves out to many clients - again, not employees but rather contract workers. If they are direct hires, it might make make the most sense to put them in as household employees on Sch H and have the trust reimburse the t/p for all costs. Keep in mind that disbursements of corpus (if allowed by the trust document) are not income.... Many times income has to be distributed first, but sometimes it is left to the discretion of the trustee.

What a WONDERFUL story, Judy! Sometimes the Spirit moves us and we don't know why until later - but are SO glad then that we listened.

@Terry D - very glad to hear that you are happy with Drake! I don't use their Secure File Pro, simply because I have a secure file portal that came with my web site, pre-dated my switch to Drake, and already had all my clients' accounts. But I do the same: Gruntworx-indexed pdf on one screen, working return on the other... no papers (well, way fewer) on the desk.

That happened to me some years ago. First indication was a call from Crate & Barrel, wanting my current address to send my final paycheck to. Huh? Turns out a Kathryn with same surname and same *year* (but *not* month or day) of birth had her information mixed in with mine at all three agencies. And she had filed a bankruptcy in Texas about two years earlier.... I wrote to all the agencies with all the information, and they fixed the mess. Fortunately that was not ID theft; just sloppy data entry.

I look up the filing requirements per state, and how much tax was withheld on client's behalf. If filing threshold is met, we file. If refund of overpaid tax sufficient to pay my fee, we file. If tax owed is more than a couple of bucks, we file.

Sympathies, @Terry D - this is the *last* thing you need this time of year! I had some clients a couple years ago for whom I filed an extension because we were waiting for information from somewhere. Two months later went to file the return, and could not because someone else had used one of the ssn's for themselves. I'd file the IRS ID Theft form (14049? - whatever it's number is) pronto. You would want that protection regardless. However - before you file it - log in to e-services and download any reports you can get your hands on. One problem with the IRS ID Theft form filing is that it cuts of a POA's ability to get reports. Incredibly stupid, when you think about it - but that's ham-handed bureaucracy for you.

At this time of year I set up an email auto-respond, saying something on the order of "If you have sent your papers, we are working on your returns, in the order of receipt. However, if we take the time to respond to everyone who emails for a status report, no one's returns will get completed. We are doing our best, but refuse to rush or do sloppy work merely to meet the April deadline. Have patience with us, and we will be in touch with any questions or to inform you that all is ready."

Former client emailed, asking if I still had something or other (from tax year 2009). I responded that since they still owed a balance for that tax year, with late fees now adding up to $200+, I couldn't even start to look. I can't tell you how many times I have dunned them over the past few years. Well, of *course* she pleaded ignorance (uh huh, sure) - but then she went to PayPal and paid!! So then I checked my file backups, found what she needed, and sent it off. Well, that was lovely!

But check and make sure there were no contributions for tax or pension-y items in France. Then you can exclude.