Tax Prep by Deb

So I finally did it, I am switching to Drake for 2018 from ATX.  So far I'm figuring things out but have a couple of questions on depreciation.

I was wondering if one of you could explain the steps to input a new asset?  I struggled with this when I was doing one of their practice returns.  In ATX we would put the description date placed in service and use drop down to select class and the program took over from there.  Is this the same with Drake or do we have to tell it everything?  My first several attempts were a failure, but I finally did something to populate it but have no clue what I did.

Any help would be appreciated!

Well I just ordered drake after about 20 years with ATX.  There is going to be a learning curve  but there are features I really like.  I'm doing their practice returns and I was about to pull my hair out when I finally found a detail tab that fixed everything for me.  I'm looking forward to giving it a try.

One of my concerns is with security.  How do these services differ from just using email?

I recently moved and my new home office is much smaller than previous.  I have always had a separate fax machine and was able to set things up so that my office line and fax line were the same.  Never had a problem.  Since the move however I decided to use my Cannon all in one and everything works as it should however at times when I answer the phone and start talking about 30 seconds into the conversation the fax takes over.  Starts out as a hit and miss thing then goes to every call coming in.  Problem started when I bought a new phone system.  Trying a different phone system now but was wondering if I can't make it work what you might suggest for an e-fax service.  I am definitely not high volume but at times do fax several pages for clients.  

Any suggestions?

How difficult was it to set up the bitlocker?  I want to use it but I am so afraid of messing something up.

1 hour ago, NECPA in NEBRASKA said:

I could not even get to Windows because the AVG update corrupted my user profile. I just got the call that it is back up and running again. It took them longer than they expected because of Symantec encryption. I am ecstatic, because I was envisioning a new computer and restoring everything.

 

Been there and done that.  I loved Symantec, but to be honest I am scared of it.  I do plan on using the one that came with Windows 10 just as soon as I can get some help setting it up.

What operating system?  I had a problem with Windows 10 and Symantec.  I was literally locked out of the computer!  After several hundred dollars my tech guy was able to get me back but found that Symantec doesn't play good with Windows 10.

On 7/25/2018 at 11:32 PM, Max W said:

The State of California is so obsessed with taxes that it has three separate tax departments.  The Franchise Tax Board whose domain is income tax enforcement; the Board of Equalization that handles sales taxes; and the EDD, Employment Development Department, that takes care of collecting  UI and SDI payments.  Each is separate and independent of each other. 

As Deb says, the FTB is very tenacious, like a pit bull that won't let go.  I've had clients that have had to file returns as long as 23 years ago (there is now a SOL of 20 years).  other clients that moved out of CA to a non-tax state and were pursued there because the client had not severed all ties to CA, such as forgetting to have their name taken off the voter registration list, or having a PO Box in CA, or not being able to show proof of having their drivers license, or vehicle reg. in the new state. 

To assess some non-filed returns, the FTB makes up imaginary income numbers.  Sometimes the mortgage interest paid is mulitiplied by 4 and that becomes the income figure, which is then taxable.  Other times, they will take the average income of specific types of businesses, such contractors, insurance sales, etc., and base the assessment on some multiplier of that.   At least the IRS use real numbers for such purposes.

One good thing the FTB has done since the first of the year, is to adopt the IRS National Standards for living expenses in calculating collection potential.

 

 

 

Actually CA now has a 4th.  Board of equalization has been split in two.  It's a real mess!

7 hours ago, Yardley CPA said:

Does your client have all the data to file for those years?  I assume he does, based on your post.  Maybe it makes sense to call the IRS, explain the situation and see what they want first?  Maybe obtain transcripts from them also?

I had a client in a similar situation last year.  I had her call IRS and when they pulled up her record they told her she was clear as far as their record was concerned.  The state of California on the other hand wanted returns filed even though there was little owed.  California goes after every single penny whereas IRS is a little more lenient.

Thank you all!  That was the way I was leaning I just needed a little confirmation.  I really see nothing changed except the age, however he was a full time student for half the year and lived with my client for the entire year.

Ok, I have a client who has been divorced from her husband for several years.  Their divorce agreement allowed the husband (non Custodial Parent) the right to claim the dependent exemption every odd year.  I filed her head of household and took the EIC as the son lived with her for more than half the year and was a full time student.

Fast forward to 2017 and the child turned 19.  He lived with his mom (my client) for over half the year, and was a full time student for the first 5 months of the year.  My question is now that he is technically not a minor, can I still file her return that way.  She is almost positive that the dad claimed him as a dependent on his return, and he did support him for this year, however he lived with his mom and attended college for the first 5 months.

It's pretty clear that if he was under 18 it could be done this way, I'm just wondering if anything changed because he turned 19.  Any thoughts would be greatly appreciated.

Deb!

2 hours ago, JohnH said:

Wonder if they will like the tax reduction? 

I suspect many will fail to recognize it, especially if their refund is less than the prior year. That will take some explaining, but I suspect some tax preparers won't bother with the explanation.  Some won't explain because they're too busy;  others won't explain because they're politically biased. 

That's why this year when I met with my clients I gave them the heads up that their refund may not be any higher and warned them of the real possibility of it being less because of the change in withholding and tried my best to explain to them that they are receiving their refund now thru larger take home pay.  I know there is still going to be some that don't get it, but those are the same people you find explaining the same thing over and over to them.

You will have to do a policy allocation that he and mom can agree on the % and then he will have to pay back his portion of the allocated subsidy because he is insured through his employer.  You will have to refigure moms and have to decide if you will have to amend.  Not an easy thing to do.  I have had this for the last two years.

Ouch!  Saw my mother fly off backwards off of the treadmill in my office and smacked herself good on the head right into my filing cabinet.  Saw the whole thing in slow motion.  Nothing broke just bruised all over.  I told her if not carefull I will be accused of elder abuse which is way far from the truth, as I would do anything for her.  Since then she has taken several more tumbles, which has us both a bit scared.  We recently moved from our longtime home town to a big city and in the last 4 months she has tumbled twice.  Again nothing broke just bruised and scraped and hurt ego but hopefully this is the last for this year.

Take care and definitely go get checked out!  You are far more i,important than your roof!

12 minutes ago, Jack from Ohio said:

I am receiving messages from Catherine and Crank.  I will send you a message, see if you can reply.

Oops I never got your pm just saw this and replied.

I am replying.  Would like to know what.you do to secure clients data

1 hour ago, Jack from Ohio said:

I just sent you a message.  See if you can reply.

Jack I also tried to PM you and got the message that you can't receive messages.

My computer did it all by itself and I have had zero problems so far.  This is the only update that I haven't had an issue with.  The first Creator update last year messed my computer up really bad, when it finally did install my print command is all wacky on certain programs.  I have to find the offending file in the task manager and shut it down then it will work great until I close ATX and open it up again.  Only problem is with ATX and my browser windows.  This problem hasn't gotten any worse with subsequent updates, but it hasn't got any better either.

The portal is a way to safely exchange information.  Yes it works in both directions.  It also allows you to send for example a news letter to everyone you have set up on the portal at one time.  When I got set up I was a given a very brief tutorial and help in getting it set up however there are many videos available that I'm sure we teach me more of what's available I just haven' had time to watch them.   My move came on 1/27/18 so my only concern at that time was giving my clients an easy way to send me their stuff so I set it up on the fly.  I hope after the dust settles to dig into it deeper and see what else I can do with it.  There are options to  customize it and I would like to check that out as well.  You cannot sign thru it.  The clint would have to printout the signature pages, sign it and then upload it back, but it's not that difficult.  My clients who used it loved it.  It's very similar to financing or refinancing a mortgage.  When we bought our home in November everything was done thru a portal, I loved it!

Started with this year and I love it.  The only con would be no provsion for electronic signature.  Client still has to print out, sign and upload back.

Cost is a bit expensive, it's around $550 but I moved to another city right at the start of tax season and honestly feel those I got to use it I will keep inspite of the move.  Compared to my mailing costs this year due to the move I can see where I could recoup the cost easily if I can get more to use it.  In fact if I could get more to use it I wouldn' have to commute 2 1/2 Yes each way so I would recoup the cost rapidly.  Going to really push it this next year locking my price for all who do and raising for all who still want me to come to them.  Hopefully that would move more.

Works well with all file formats but for some reason if someone sent me a word document I couldn' open it.   Other than that it is a matter of either scanning or taking a picture then uploading it.  Real simple to use.

Gail is correct.  Answer the question that you are allocating the policy and put his allocation at zero.

The SMLLC 568 can be efiled.  I just did one and it was accepted.  What you have to do though if you are sending it as a separate file, make sure you have a 1040 efile in the mix.  My three times got rejected, called ATX support and this is what they had me do and it worked like a charm.

Just tried to e-file my first ever California form 568 for a SMLLC for a client and it rejected for the following reason:  Your State submission does not match the latest published FTB Schema or is not well formed. You must contact your software provider to resolve this error.

/CA-Return/CA-ReturnData

Value: File Name: (submission number, I deleted for security reasons). Line Number: 1. Position: 11532. Reason: The 'softwareId' attribute is invalid - The value '' is invalid according to its datatype 'http://www.irs.gov/efile:SoftwareIdType' - The Pattern constraint failed.

Anybody no what to do about this?  Is it something I've done wrong?

12 hours ago, BulldogTom said:

I think you are correct.... but ....this is where it gets murky for me.  

If (BIG IF) the son is under 26 and the coverage offered by the son's employer is not affordable, then I think the parents have the "right" to put him on their policy.   But then I think his income needs to be included in the PTC calculation.   How does that play with him not being on the return?   Not sure.  Like I said, it is murky.

Just like a child who is graduating college this year, but was not a full time student for the spring semester because he only needed two classes to graduate.   So he was not a full time student for the parents to claim on the tax return, but they want to put him on the insurance plan until he graduates, but they qualify for the subsidy and they don't have a clue how much junior, who is technically their dependent, will make when he graduates and gets a job, if he gets a job, and if that job offers coverage.   Because it is a full year calculation, I don't have a clue how to answer that client.

I bet this does not help a bit....sorry.

Tom
Modesto, CA

Would agree with most accept he took his employers insurance and was included on his parents with the advance credit calculated on the full policy.  So he would be ineligible for the credit.

I have a family that I prepare all members of the families tax returns.  Mom and dad went to market place to get insurance and had a family policy of 4 on it.  The problem is one of the kids is not a dependent on their return and in addition works for a company that provides health insurance for him.  Am I wrong in saying that because he already has coverage that he is not entitled to the subsidy for the portion of his policy under his parents of which he not a dependent?