Catherine

Hi Sara -- Massachusetts has some bizarre stuff on their returns. Make sure you have checked the "Nonresident" checkbox above Line 1 on the form. Line 3 will show TOTAL income. Line 5 should show Mass-sourced income. The jump-bunny will take you to the Line 5 worksheet, where you can check those figures. Lines 15a and 15b are adjustments for amounts paid to Soc Sec/Medi/Mass retirement; those likely WILL need to be adjusted. The only deduction there is for amounts tied to Mass-sourced income. Nonresidents shouldn't have any adjustment for rental deduction, nor should they have any Use Tax due. Hope this helps; if not re-post, send a private message, or even call me for a walk-through. Catherine

Clients formed an LLC in early 2011 for a livery service (will be taxed as partnership). There is one vehicle, purchased specifically for the business. Major partner who runs the business has personal miles as well as business miles on this car. How do I account for the personal miles? "Guaranteed payment to partner" at standard mileage rate? Apportion expenses by business use percentage? Some other form I haven't been able to find to show personal miles as income to the driving partner? TIA, Catherine

Thanks to all -- will go the letter with amended return route. Catherine

Thought of that, but there was no audit. Someone on another forum recommended trying to file an amended return. We may give it a try and see what (if anything) they do with it. If they won't take/accept/process it, he's really no worse off than right now.

Client came to me new last year for 2010 return; no problem with a pretty straightforward situation. Then he came back with questions on "what can be done" for 2008 and 2009 returns (much more complex returns). Brought with him CP2000 letters for each year's return -- one dated March 2010, the other dated February 2011 (nothing like being right on top of things, I guess). He is making payments. Talked to IRS with a POA and they say they sent the letters, but there is NO indication on file that he ever responded (agree/agree partially/disagree). However he did enter into a by-phone installment agreement. Looking over the 2008 & 2009 returns, they were done flat-out wrong. Big box "prep" place where whoever it was asked no questions and plugged in numbers wherever they saw fit. Client may well not owe the IRS (or at least, not nearly so much). I still need to go through the IRS "changes" on the CP2000 letters. However, before I spend several hours on this, I'd like to know his options. Since he never agreed to the CP2000 changes, will the IRS accept amended returns? Or, by making payments, has he tacitly accepted their changes so there is no sense taking the time to prepare and submit amendeds? (In other words, is he sunk and therefore it's not worth my time and fee before we even start looking?) TIA, Catherine

I just click the "completed" box - that gets them out of the way, too.

We had SO much snow last year that my husband had to go out in snowshoes and beat the piles down so that the snow blower had a place to put the new stuff. This year it's been close to nothing - almost all rain - except for the Halloween storm. I'm old enough now to have noticed that the year following heavy snow tends to be milder and rainy - with odd, out-of-season storms early and late (such as our Halloween storm this season, and snow in mid-MAY, 1979 - the year after the famous "Blizzard of '78").

Very likely -- to find out for sure, and how much, fill out the Social Security Benefits Worksheet. Should be in your software; else in The Tax Book (page 16-3), most likely QuickFinders, definitely on the IRS web site.

For the few 941's I do, I cannot be bothered to "jump through those hoops". My clients continue to get their 941's on paper, to mail in. Grrr. It's more nonsense than for e-filing W-2's, which have all the employee information on them! (Ditto for 1099s.) Just my 2 cents. YMMV.

I get (from WB Mason, but it's available elsewhere too) something called "Splox X-9". It's a Boise Paper product; 92 brightness 20# paper. The thing I really like about it is that it comes in a half-case size box with a sturdy handle on top, and opens to a stack of paper without being wrapped by ream. None of my printers will take a full ream in the trays, so I used to end up with ripped-open partial reams that didn't stack nicely with full reams. The half-case size is also light enough (with that handle) for me to pick up and move -- something I can't do with an entire case/carton of paper. Three of those see me through all my printing for the season -- and there's another advantage to me; no leftover partial cartons taking up huge amounts of floor space. Floor space of ONE ream; the boxes stack nicely, too.

Facebook and texting keeps me up to date with my girls, too. I buy a $5/month texting package that gives me way more texts than I use in a month. (Actually, went over ONE month when Gwen went on a two-day texting spree but the extra buck or so was worth it and still cheaper than the "unlimited" plan.) Great idea to shop around for cell service & will keep that in mind.

Got a call today from a lady who just wanted me to do her Schedule C; her husband doesn't want to pay for me to do Schedule D (he day-trades; it would be pricey). Told her sorry, don't do that in my practice. That did feel nice. There's another one (a brand-new referral) who has already caused me far more trouble than she'd be worth if I charged her 10x more. Since her return is 98% finished, I'll give her the boot afterward - she should have plenty of time to find a new sucker (um, preparer) before next year.

Jack -- here in the People's Republic of Massachusetts, any email that might have confidential data is _required_ to be encrypted. So I can't send anything to clients by email that isn't generic. I get lots of use out of my file share site... There is a program called PGP Encryption that will encrypt your hard drive and secure your email as well. Acrobat also works well and I bought my brand-new, fully-registerable copy of the one-prior version for very small money on eBay.

@bert73 -- Does that mean we can sign up with Square and use our _clients'_ smartphones to get paid? I do not have a smartphone and don't want one because of the additional data plan charge. I have a PayPal button on my site that 2 - 3 people per year take advantage of. I have a Square that was sent here - but never did anything about signing up since my phone doesn't send data. If I can use my clients' phones, I may investigate... Thanks, Catherine

In a profession where being able to hit what you are aiming at can be a matter of life or death for both you and your clients, I would say that target practice (unless he states it is personal, with those firearms) could also be considered business as well. Every firearm handles differently, feels differently, recoils differently, sights-in differently - and those differences are greater with the higher calibers needed to stop large predators. Hitting a moving target (like an angry bear) that must be hit in the right place (head!) with ONE shot (because there may well not be time for two!), requires excellent proficiency and familiarity with _whatever_ firearm he might have with him at the time. That would NOT be the time to have to remember "this one recoils fast up and left, so I need to hold a little down and right to hit center". His response must be automatic; therefore he must practice, with every firearm he takes out in the Maine woods.

Almost-congratulations, Joan!

The payments are labelled "Holiday Cheer" (and are only to vendors, not employees - read 'em the riot act about that topic a couple years ago - this is the first year I've seen bonuses to vendors). On the 1099 they go. Vendors can separate for themselves what goes on Sch C and what goes on Line 21. Thanks for confirming

Business client gave me their info for W-2s and 1099s. Several of the 1099 vendors got small ($25) end of year "thank you" gifts, NOT for services rendered. All other payments to these vendors were properly invoiced for whatever - cleaning, snow removal, plumbing repairs, etc. Should those small amounts be included in the 1099s in Box 7? I know the vendors have to report it as income, but wouldn't this be Line 21 "other income" rather than Schedule C self-employment income? TIA, Catherine

Congratulations, JB!! I'm still hoping to lose the last 10 pounds I gained when expecting Gwen (who is now a college freshman). Nothing seems to make a difference - including biking miles every day culminating in my Idaho trip a couple summers ago. Daily training for months and then the trip itself; didn't lose a pound. Sigh. Was in great shape, though! Haven't lost much of that although in winter I switch to contra dancing.

I will not be _filing_ those POA's unless they're needed -- and they will be for Tax Year 2011, for Income tax only. I simply have too many clients for whom access to a fax machine (or in some cases even a computer with a working printer!) is difficult. Last year there were several clients who had issues (NOT audits) that cropped up before the return was processed. 3rd party designee line is the -last- item they note, so if the return hasn't been fully processed, I am not YET the 3rd party designee; no one is. So I need POA to answer inquiries. This year with the new Schedule D and associated forms (8-whatever) I expect numerous letters that will be easier to answer if I can get hold of info on e-services. For that, I need POA. Simple enough. Audits etc. are certainly under a separate agreement.

@Joan -- have you been to your doctor? If you're happier, less stressed, and have work lined up, then the lack of energy isn't right. Keep us posted. Catherine

Massachusetts amended returns go best when you drown them in paper. If you send in the CA-6 alone (which is, as Jack notes, the amendment form -- for ALL Mass. returns), the first thing you'll get back is a notice asking for supporting documentation. I have always sent in the CA-6, followed by a new Form 1, marked across the top "As Amended" and with highlighter to call attention. I also append a copy of the original Form 1, marked and highlighted across the top "As Originally Filed". With all that paperwork, the amendment goes through smoothly. It also means that you can use the "changed" line items on the CA-6 just for the crucial items (of which one is always "total tax"). Catherine

Mine officially started a week ago, when the inquiry calls and "hey, this happened last year what will you need that's different" emails started coming in, and the businesses started sending info for W-2s and 1099s. I am -so- not ready for this.

This year I will be getting signed POA's from -all- my clients when I get initial paperwork from them. Several times this past year I've had clients get weird IRS letters before the returns were processed -- and all the "third party designee" boxes in the world count for NOTHING until the return is processed.