fredazcpa

Earnings from a S Corp are not subject to SE tax, that is why the shareholders, if they are "Working" in the Corp need to be taking a W2 wage and withholding and paying the employment taxes

this is the area that the IRS is looking into, because it is a way (right or wrong) to avoide paying Social Secuirty and Medicare taxes.

Got this from the official board

Q: What are the meanings of the Debt Indicator (DI) Codes on my clients’ IRS acknowledgments?

A: The IRS designed DI Codes specifically for Refund Anticipation Loans (RALs). The DI code is present in all IRS e-file acknowledgment files. The DI indicates whether the taxpayer owes a debt to the IRS or one of the agencies managed by the Financial Management System (FMS).

The debt indicator codes are N (None), I (IRS), F (FMS), and B (Both):

• N (None) – Indicates that no debt was found in either the FMS or IRS files

• I (IRS) – Indicates that a debt was found in the IRS files for this return

• F (FMS) – Indicates that a debt was found in the FMS files for this return

• B (Both) – Indicates that a debt was found in both the FMS and IRS files for this return

FMS debts are for past due student loans, child support, federal taxes, state taxes, or other governmental agency debts. If the taxpayer is expecting a refund, it may be offset if a debt is owed.

The debt indicator code may be shared with the taxpayer. The taxpayer should contact the IRS directly for an explanation. If you need to inquire about a debt indicator code, call toll-free (800) 304-3107, to find out with which agency the debt is listed.

Lion Now you bring poltics to tax law (LOL), your real questions is when does life beging accroding to IRS at least 9 months prior, therefore the use of 12 months on a new born, and before anyone jumps about those Oct thru Dec, yes I understand, its just that the IRS doesn't

turns out I had to match the number of months lived in home with the months alive, I had entered (because it rolled over) 12 months in home, when the mother had passed away in June, changed to 6 months went though fine, enfact have done another one and not had any trouble with it

Clients mother, whom he has been supporting and claiming as a dependent passed away

efiled return, got a reject for Date of Death informatin for a dependent is missing

in ATX where (if you can) enter that infromation, I see the box for the child without a SSN, or is this a return that will need to be paperfiled?

thanks for the help

One way to avoid that from happening, is to print the invoice out, and then delete it before you make the e-file record.

A few years back they had a survey asking for amounts billed, and I don't believe anyone gave it to them.

thank you for the heads up, that is none of their #$%^&* business. I will be billing, print out the bill, then delete from file before sending efile in.

client shuts down business mid year, gave equipment to landlord in exchange for canceling the lease and back rent for 14 months about 38K. The question is this a "sale" of the equipment, which then also be "rental Expense" (client also filing a final 1120S), if this is a sale then there is possible sec 179 recapture. They (shareholders) will be filing for BK when the taxes are done and any (if) refunds are in hand

and yes I am getting paid before anything walks out the door

thanks

Depends. Is the 1099-R 2007 or 2008?

http://www.relius.net/News/TechnicalUpdates.aspx?ID=434

taxbilly

It is 2008 1099R correcting a 2007 year

TP has a 1099 R with a Code P in box seven. with ATX the software does not tax the dollars ($8k), is this correct, in the past I have taxed the excess contributions return in the year rec'd or do we amended the year the excess is from, and is this is the case, what or how do we get the documents to match up

Thanks

Fred

this was sent to me

Economics

It is the month of August, on the shores of the Black Sea. It is raining, and the little town looks totally deserted. It is tough times, everybody is in debt, and everybody lives on credit.

Suddenly, a rich tourist comes to town.

He enters the only hotel, lays a 100 Euro note on the reception counter, and goes to inspect the rooms upstairs in order to pick one.

The hotel proprietor takes the 100 Euro note and runs to pay his debt to the butcher.

The Butcher takes the 100 Euro note, and runs to pay his debt to the pig grower.

The pig grower takes the 100 Euro note, and runs to pay his debt to the supplier of his feed and fuel.

The supplier of feed and fuel takes the 100 Euro note and runs to pay his debt to the town's prostitute that in these hard times, gave her "services" on credit.

The hooker runs to the hotel, and pays off her debt with the 100 Euro note to the hotel proprietor to pay for the rooms that she rented when she brought her clients there.

The hotel proprietor then lays the 100 Euro note back on the counter so that the rich tourist will not suspect anything.

At that moment, the rich tourist comes down after inspecting the rooms, and takes his 100 Euro note, after saying that he did not like any of the rooms, and leaves town.

No one earned anything. However, the whole town is now without debt, and looks to the future with a lot of optimism.

And that, ladies and gentlemen, is how the United States Government is currently doing business .

I'd vote for that guy!

I did and will again as long as he runs

has anyone, or does someone know if you can change an LLC to a non profit corporation?

thank you

fred

does the Foreign Earned Income Exclusion also reduce the income for a person who is providing services in a foreign country being paid by a foreign company?

Cleint tells me nothing has been reported for the two years we are doing 2007 and 2008, but for 2009 they will be getting a 1099 Misc?

Thanks

Fred

form AZ 301 anyone know when it will be ready for efile? I can't even find it on the webpage to say when but it won't let me efile and says not approved for paper file . ITS MARCH 30th !! I have form version 13

Bcolleen:

I just did one this AM, the version number is 15, try getting an updated form from the web, if the auto doesn't to it, go directly to the ATX web site

Fred

yes I do put OR tax paid on line 12 and the bottom of the form shows the tax credit ..It just doesn't flow to the form page. The only income the AZ return has is sch D. I don't know it that makes a difference

I just did my test, with 240K in longterm gain, work just find. maybe send me the numbers and I can see if I can help

[email protected]

just let me know in the subject line

no wonder I am putting on weight

Question: Don't you pay the tax to AZ, but then get a credit for the tax paid to AZ on your OR return. We fill out a form WI OS for taxes paid to other state. WI claims all income also, but gets a credit from tax paid to other state - hence the OS form. Hope that helps.

Sara

I have had a lot of that this year - working on AZ return - but it is a part year resident so different. Good luck with yours.

When you fill out the 309 are you putting the OR tax on Part II Line 12, just did my test return, at that is what it took to get the credit for flow to page 1 line 29 and on line 30 you should see 309 in the first box, if not make sure it is there

this should do it for

Fred

No they full year residents of Oregon but had some bare land in AZ that they sold this year. Oregon taxes them on all income and AZ will tax them on the land sale. So I should get a credit for double tax. AZ instuctions say oregon can use the tax credit.

Then in that case you will not have the credit for AZ, but have the credit on Oregon taxes. When it is all said and done you should only be paying taxe once on the transaction, but in to states and it will work out to the higher rate IE AZ tax rate is 3% OR tax rate is 5%, the total tax will equal approx the 5% with 3% to AZ and 2% to OR.

That is how the CA works, the one I deal with most offten

CA gets the credit, the AZ pays the tax

Hope this helps.

Fred

any help from state of AZ

I am using the form 309 for other state tax paid on same income. the 309 fills out correctly but I can not get it to flow to the AZ 140NR line 30 I put the credit number in as 309 but no credit goes on line. I must be missing a check box or something. But can't find and don't want to override.

any help would be appreciated

Most of the time this only applies to full year residences, if your usuing the NR or PY then your allocating the income allready.

Form IT -2023 Part II (Non business Income and Deductions) line 4 Pension, annities IRA ATX software is putting in column A the total of Pennsion (206K) all but 15K the balance (191K) was rolled over.

also has 223K in W2 income of which 123K is from OH, the balance is from TX

letting the software to its thing, I wind up with OH tax of zero becasue of the allocation on Page 4 Sch D Line 63 through 65

This does not seem right, I must be doing somthing wrong?

thanks for the help

Fred

O to be self employed

Most of my clients are used to HRB where the preparers almost never put anyone on extension so they don't miss out on bonus money. And, most of my clients owe, so I have to do enough to calculate a reasonable amount to send in now. (Last year I worked a return with round numbers that seemed to have over 90% of her tax liability covered with w/h; unfortunately it was actually only 89.3% so she was very unhappy with me.) It's my clients that aren't understanding of my shorter than normal filing season this year. I just wish when they go around handing out extensions to brokerages and colleges or vote new tax laws in December so forms aren't ready when the filing season opens, that they would have to extend the filing season. Obviously, the government doesn't want to do that since they want to receive their revenues in the usual time frame. But, there should be consequences to our elected leaders; we shouldn't have to bear the brunt of our clients' wrath.

I wish I could rember the congress person, that on national TV the other morning, had the never to say that for 2009, they have until april 15, 2010 to change the laws. Just shows you how out of touch they are in Wasinghton DC.

I hear this over and over. Why do you need my social security statement? My last tax preparer never used it. My attorney said my social security is not taxable. I consulted with a CPA and he said my social security is exempt.

How do you guys handle this?

Karen

first off not all attorneys are tax attorney, yet they think they know it all. Next, not all CPA's do taxes, I have a CPA client, but he doesn't do taxes and doesn't want to , just works with the books of the company.

I just point out how the taxablity of social security is firgured out, then go on. If they do not like the answere, let them go on, when tax payer gets the letter from the IRS, the charge them full return price plus 50% to tell them the IRS is right.

Fred

In these two case I had, both TP transfered the stock to another broker in 2008, however they received a 1099-B Broker Proceeds, Barter and Exchange Transaction and if you look at the date of the transfer appears under box 1a "Date of Sale", logically one thinks they were sold, number one because it doesn't tell you it was a transfer or exchanged nowhere on the form. I guess these two particulary brokers don't give enough information to let the tax preparer know they were exchanged and like I mentioned earlier the client is even worst, doesn't know nothing about their account.

I promise next time I get another client that transfered or exchanged stocks and it is not clear on the 1099-B, I will put zero cost and calculate a gain :-) at no charge for Sch D.

Is the 1099B from the new broker dealer or the old one. Either way there was a sale that took place and you will need cost information

When I transfere accounts from another broker, you use an ACAT or account transfere, which is a in kind transfere. nothing is sold or bought. I do not make a cent off of the transaction. Some items that are held in brokerage accounts can only be transfere buy selling, but those are rare. This sounds like the new broker wanted to make some $$$ and sold the old stuff out for new stuff. Either that or the new broker does not what the H*** he/she is doing.

brokers like to use the word "exchange" instead of Sale, becasue clients know that they will be commissons and taxes due on sales, but not on "exchange".

Brokers that do not tell the client what is up, should not be in the buisness, or a client that does not understand what is happening should not be buying and selling in the market.