MarkM

I should also add that my client called her advisor and he said that the 1099-R doesn't need to be corrected because the 5498 shows $20,000 in rollover contributions. I'm not sure if the IRS computers match the 5498s to the 1099-Rs. I can understand it from the perspective that the company where the IRA withdrawal came from doesn't know what the TP is doing with the money, so they would have to report it as taxable and as an early distribution. Has anyone ever dealt with this situation?

Client withdrew $20,000 from her IRA and deposited back into the same IRA within the 60-day window. The 1099-R from Fidelity shows the full $20,000 as taxable in box 2a and code 1 in box 7 (early withdrawal, 10% penalty applies). I've seen many 1099-Rs for direct rollovers ($0 in box 2a and code G in box 7), but I have never seen one for this type of rollover. Is the 1099 correct to show it like that? I am worried that if I show this as nontaxable, it will generate an IRS notice for the mismatch.

Never mind - I answered my own question.

Clients lived in prinicpal residence and claimed a home office deduction for about 10 years.They moved out of the house but still own it and converted it to a FT rental. I know the adjusted cost basis carries over to the rental but does the holding period? Or do we start a new 27.5 year holding period for the rental?

If a taxpayer's AGI is too high to deduct a rental loss, can the mortgage interest on the rental property go on Schedule A?

I am trying to get some information on employer health reimbursement plans for a small S-Corp. The S-Corp has one employee and that employee needs medical coverage (the owner of the S-Corp does not need health coverage). We are looking at two scenarios: 1) Employer payment plan - Basically the employee gets her own individual coverage and the corp reimburses her. This setup used to be deductible by the corp and non-taxable to the employee. But it is now my understanding that the amount must be taxed as wages to the employee and the employee can use those funds however he or she sees fit. It is also my understanding that this applies to ALL employers regardless of size, # of employees, form of ownership, etc. Is that correct? 2) Health Reimbursement Arrangement (HRA) - Employer sets funds aside to reimburse employees for medical expenses and is cannot be funded via salary reductions or a 125 plan. The rub on these under the ACA is that these arrangements will not meet the annual dollar limits or the preventative service requirements under the ACA. So my question is this: Does the HRA restriction apply to ALL employers or only those subject to the ACA (over 50 employees)? Thanks.

I totally whiffed and missed filing a 990 extension on 5/15/13 (for a 12/31 year-end). I mailed in a paper 8868 anyways on 5/17 and the organization got a letter saying the extension couldn't be accepted because it was postmarked after 5/15. Today I took a shot and e-filed a second extension (8868 Part II) and it was accepted. Will this eliminate a late-file penalty if the 990 is filed by 11/15?

I can't imagine doing 5 returns per day every day. I would absolutely lose my mind. I love what I do, but the part I like is meeting with clients, strategizing with them and solving their problems, not preparing returns. In fact, the actual process of preparing returns bores me to pieces. That's why having other people inputting the return data is important. Of course this is my full-time job and if I was doing returns on the side I would look at it differently.

Jack, that's amazing that you can handle 400 clients yourself. I am a one-man shop completely. Between 3/15 and 4/15 (I didn't do any 1040s before 3/15 because I was doing all corporate returns) I could only knock out 35 returns (and did about 50 extensions), and that was working my ass off. And even though I was able to bill $30K in that month it wasn't worth it. I was exhausted, cranky and barely saw my wife and kids. I am already lining up the pieces for next tax season. I'd much rather lose some of the revenue and hire 1-2 preparers to do the grunt work. Our time is best spent cultivating new business, not inputting data.

I have always bought Dells ever since I graduated from college. And while they have all been good computers, I am going with a homebuild for my next one. My problem is that the features I need - a quad-core processor, 8 GB RAM, a solid state drive, a high wattage power supply and a motherboard with USB 3.0 - all come bundled with many extra components that I don't need from Dell, HP, etc. And the price tags on those models are usually in the $1,800+ range. I can do my home build for less than half that The one thing you need to watch for is that you want to make sure your PC has an adequate power supply. This has always been an area where Dell skimps. That Dell that Deb mentioned above, while a very good PC, only has a 250W power supply. When running a motherboard with a quad-core processor, 8 GB RAM, Blue-Ray, etc., that's not enough power. As for other specifics, here is what I would recommend: - a quad-core or six-core processor (although it's unlikely that business apps can take advantage of more than four cores) - at least 8 GB of memory; I think at this point 12 GB or 16 GB is overkill as your programs likely won't see much of an increase from 8 to 12 to 16 at this time - a motherboard with at least four memory slots and at least 16 GB RAM capacity so you can run the 8 GB RAM on two 4 GB sticks and have room to add more RAM later - a solid state hard drive (SSD) - use the money you save on the memory with an SSD; your programs will absolutely fly - plenty of USB ports and some USB 3.0 ports - this is also where having a good power supply is essential Things I consider less important: - liquid cooling - unless you're overclocking your CPU (which you would basically only do for gaming), standard fan cooling should be fine - a fancy case - who cares; my case sits under my desk so what do I care what it looks like?(however, I suggest you get a full-size case and not a micro/mini case to allow for future expansion) - a Blu-Ray drive - I just don't see the need unless you watch a lot of Blu-Ray movies; I would go with the least expense DVD drive you can find; you can always upgrade later

I think what I'll end up doing is just installing the ATX programs and data files to the SSD. ATX is not my primary tax program so each year's folder only takes up about 1.5 GB of drive space. I agree with you about the programs on the SSD still having to access the data files on the non-SSD HD, but the most time consuming part of running software is generally loading it into memory. Once that is set, accessing the data is done fairly quickly whether the data is on the SSD or regular HD. By putting all my data files on a separate file server, the only programs I have running on it are Windows and whatever backup/imaging programs I am using (basically Carbonite, Second Copy and Acronis). As those programs can hog system resources, I like having them run on a PC with no other programs running (except Windows). That way they can run 24/7 and not affect the performances of the other programs I run on my primary workstation.

Randall, that's pretty much the exact setup I am looking to do with my new system. I will have a SSD with two partitions: one for Win 7 and he other for my program files. I will put all my programs' data files on a separate server. It doesn't appear that we can split the ATX program file from its data, but I definitely want ATX to run on the SSD because it will speed up the program dramatically. I guess I will have to put the ATX program file AND the data on the SSD because I don't think there is another way to do it.

You should ALWAYS keep your data files segregated from your program and OS files whenever possible (either on separate drives or partitions). On my PC I run Windows on one drive and my program files on another. I use a second PC as my file server where all my data files are kept. The server PC is backed up continuously 24/7. The reason you separate the programs and data is that if you ever have a problem with Windows (that's a given) or with a program and need to reinstall, it won't affect any of your data. Almost all PC problems are program or Windows related, not data related. And sometimes the only way to fix a serious Windows problems is to do a clean reinstall which entails wiping your hard drive. I wipe my windows drive and do a clean reinstall every 2 years. It makes my system run like new. Your registry can become corrupted very quickly and your system will slow down. Wiping the hard drive will also prolong its life.

Can I run ATX on Windows XP Pro with the program file and data on separate partitions? I know ATX does not support workstation setups, but I am hoping I can at least partition the data. Thanks.

Whenever I try to to any action within ATX such as updating the program, creating an efile or exiting the program, Windows Installer pops up and begins installing QB. I can cancel the install process and then whatever action I was doing with ATX continues normally. This issue only happens with ATX and not any other programs on my computer. I know this is most likely a Windows/registry problem and not an ATX problem (I am running XP Pro with SP3), but I am wondering if anyone else has had an issue like this with ATX. Maybe a Windows guru on here can help! Thanks.

My client owns a shopping center. One of the tenants is expanding and discovered some non-hazardous material in the soil that they wanted removed. They told my client that they would not proceed with their expansion unless they split the removal costs. My client conceded and paid for half of the removal. I am trying to decide if this should be deducted or capitalized? The material in the soil was not a hazardous material as defined by the EPA, so IRC Sec 198 doesn't apply. Since the material wasn't required to be removed (i.e. anyone could have built on it but this particular tenant didn't wan't to), I don't think that the removal of the fill increased the value of the land. Could the removal of this fill be treated as a deductible expense under IRS Sec 162?

Well I already have a standalone scanner at my desk and we have a standalone copier in the office so an all-in-one is not necessary. But it seems like the standalone monochrome laser copier is becoming outdated. All the places I have looked (Staples, Costco, Best Buy, CompUSA, etc.) are all pushing the all-in-ones.

I am looking for a new printer. I want a monochrome laser, not an all-in-one and not an inkjet. I have learned my lesson with inexpensive laserjets. They might cost less upfront, but the toners have short lives and are pricey. The costs to operate far outweigh the lower purchase price. My prior printer was an HP 4. It was a true workhorse, but a little slow and now needs to be put out to pasture. But something in that mold is what I am looking for. Just curious as to what people are using and recommend.

Two ADP reps who I have never seen before show up at my office this morning wondering if they could sit and talk with me about their workers comp and 401(k) programs and if I had any clients that might be interested. I told them that if they think today is a good time to meet, then they either have no clue what we do or are too self-serving to care about what we do. It was so absurd I thought they might have been undercover agents or something. I told them to go s**k it (not in those exact words though).

For a partnership, does a copy of the 1065 need to be attached to the BPT EZ and NPT returns (they are being paper filed). Thanks.

I recreated and resubmitted the ones that were rejected with the above error, and now those 7004s are coming back with this rejection error: EFC11 ATX EFC Reject Seq: 0 ATX EFC Reject Federal E-File Extension is already accepted or pending acknowledgement. Normally the software won't let you recreate an eFile if it is pending or acknowledged status. Maybe the ATX Efile people are out boozing for St. Paddy's day and forgot to show up for work!

I am also getting crazy rejections on my MA Corp extensions. My 355-7004s have been coming back with: MEFMAF355-7004-4 Form 355-7004 The maximum number (2) of accepted corporate extensions Form 355-7004 has been reached. The maximum number (2) of accepted corporate extensions Form 355-7004 has been reached. Does this mean I can only eFile two MA corporate extensions with ATX? ATX says this is a "rejection by agency" error. There have been no other MA extensions filed for these corps.

All of my 7004s efiled today are getting rejected with: MEFUSX0000-5 XML Error The XML data has failed schema validation. The Submission Type information specified in the IRS Submission Manifest must match one of the submission type supported by the Modernized e-File system. The XML data has failed schema validation. I efiled a bunch of 7004s last week successfully. This error is just coming on today's extensions. My program and forms are up-to-date as well. Does anyone know what this is?

Tom, have you checked Southwest flying into Providence, RI or Manchester, NH? Providence is only about 45 minutes south of Boston (and only about 2 hours north of NYC) and a very easy airport to get around. Manchester is about 1 1/2 hours north of Boston and is also a small airport to get around.

I have an LLC client (partnership) that is located in Havertown but owns a commercial property in Philly. 2007 was their first year in existence. Do they have to file the BPT and/or NPT returns with the city? 2007 rental income was about $25,000 and there was no payroll, if those factors are relevant. (I practice in MA, that's why I am asking).