ILLMAS

Hello to all, just wondering if there is time left to amend a 2007 tax return? Client just recently filed 2007 and there was an inventory adjustment not recognized in 2007, I don,t want to make the adjustment in 2008 because it belongs in 2007 and I am currently working on 2008 right now. Anyone??

Here is a good reason as to why some large companies maintain a seperate account, but with 2 employees they should have any problems having one account: The principle reason for a business to have a separate special payroll checking account is for internal payroll control and management. “ Small businesses that employ people other than the owner or partners are required by the IRS to keep detailed payroll records.” If a business only has one account that includes payroll, expenses and income, it is much harder for management to keep track of how much money the company has. By keeping payroll accounts separate from operating and expense accounts a manager can see very easily how much the business has paid out to employees for payroll weekly, monthly and yearly. Employees are usually very sensitive when it comes to their pay, so a special account also helps a business to make sure the money is there to make timely and accurate payments to employees. (A business might overdraw an expense account, but by funding a payroll account separate, employees do not have to worry about their paycheck bouncing.) Another advantage of a separate payroll account is the ability for a manager to easily find errors, stolen checks and possible employee misuse of the account. Source: Unknown

The corporatin should charge a FMV interest rate, you can look up rates for personal loans online, then just accrue for interest income (on the C-Corp), paid or not you should still account for it on the books. So now, he owes the loan + interest, same if he borrowed from a bank. What if the owner decides at tax time not to repay this money but to have it as return of capital or dividends? Does he draw a salary from his business (acts a Sole-Proprietor)? If not, the IRS might make convert the loan, capital or dividends as wages and hit the business with payroll taxes.

See pub 502, maybe you can call it lodging instead of rental???? http://www.irs.gov/publications/p502/ar02.html#en_US_publink1000178972

The recession has hit everybody really hard.... My neighbor got a pre-declined credit card in the mail. CEO's are now playing miniature golf. Exxon-Mobil laid off 25 Congressmen, 16 Senators.... I saw a Mormon with only one wife. The bank returned my check marked "Insufficient Funds" I called them and asked if they meant me or them. McDonald's is selling the 1/4 ouncer. Angelina Jolie adopted a child from America . Parents in Beverly Hills fired their nannies and learned their children's names. My cousin had an exorcism but couldn't afford to pay for it, and they re-possessed her! A truckload of Americans was caught sneaking into Mexico . A picture is now only worth 200 words. The Treasure Island casino in Las Vegas is now managed by Somali pirates. And, finally.... I was so depressed last night thinking about the economy, wars, jobs, my savings, Social Security, retirement funds, etc., I called the Suicide Hotline and got a call center in Pakistan. When I told them I was suicidal, they got all excited, and asked if I could drive a truck.

1. Because he is a next day depositor, does he have to deposit for every paycheck he cuts outside his normal cycle, or is it OK for him to pick up all those small checks with his next payroll? If bi-weekly depositor (based on pay dates), then he needs to pay the payroll taxes the next day, so any payroll checks paid outside the normal payroll cycle would required to be paid (payroll liabilities) the next day. What happens if you just wait and pay with the normal payroll cycle deposits, well when you prepare the 941 sch B, if you compare deposits, you will notice that you didn't pay one and other one is over paid, the IRS will send you a notice for the one that was not paid and may charge penalties and interest. To avoid all this hassle, advice your client to make the checks in advance (in prior pay period) or to have employees wait until the next payroll cycle. 2. On his software, the Schedule B is showing those liabilities for the quarter on the day the checks were written. But the payments were made in the next quarter with the payments for the July 1 PR liabilities and coded to the 3rd Qtr in his online payment. Shouldn't those have been split out? How to fix if this is wrong? The liability is recognized when the check is written out, so if the check date was July 1, 2011 that is considered the 3rd quarter of 2011, so what they did is correct, now if you want to accrue for the days in June, you can do that, but it won't affect your liability deposit, it's still due the next day. Hope this help.

Speaking of cost, just wait to you start paying for CPE hours, and hopefully do don't need to fly to another state for CPE hours. This will be the killer and worst of all your CPE hours have to be tax related.

If the return was filed before April 18 2011, it should be in their system already, if your client just brought in their information because they were going to need it for banking purpose, then advice the bank and use the extension for 2010.

I was part of an IRS audit back in 2009 and here were the arguments: Company vehicle expenses for supervisors and other key employee who do not have a fiscal office to report to, was allowed 100%. Employees do not maintain a mileage log, all the cars and vans have the company logo. (Employees do take the vehicles home and visit different offices directly from home.) Auditors position: No change Officers vehicle expenses are being deducted 100% Auditor position: Since officers take the car home, that was not considered business use. Adjustment: 80% was allocated to business use and 20% to personal use, the amount from the 20% was not allowed and allocated as income to the shareholders 1040. Us: We did not agree with the auditors adjustment and suggested for the 20% to be reported as a constructive dividend and not as additional wages or other income. Client paid 15% tax on the dividends vs paying a high tax because their high income. Auditors position: Accepted our suggestion.

To be on the safe side, I would say YES, you do want to show the IRS that are more then 2 partners. I seen a return where the preparer put only 1 (100% owner) partner and right away the IRS sent them a letter saying it had to have more then 2 partners to be considered a partnership...... If I remember correctly, the IRS wanted for future returns to be reported on Sch-C.

Have you check to see if the financial statements retained earning=net assets match the 2009 tax return? Don't be surprised to find out they don't match, that is the first thing I check. Clients sometimes void cleared checks, enter checks in the wrong year or enter crazy journal entries that affect prior year retained earnings. MAS

Usually you don't pay FICA on unearned income, which is your case.

I did too, just haven't had a chance to go visit the site.

In certain cases the IRS is longer releasing refunds until the tax payer is up to date with their filings and the same goes for a payment plan.

Good question, I would say if it's a personal residence, NO because at the end the 1098 only shows interest, PMI and property taxes paid on the boxes, maybe on the back side it might show the payment history including late fees. For a business account I would say a YES for bank service charges because it's part of doing business. Now writing checks without funds, I think that's a bigger problem.

I would think his advertisement cost is the one-time cost of the sign, I have seen these signs before and they are reusable. In order for him to claim the discount as advertisement, he would need to issue a 1099. Plus he would have recognize 100% of the revenue including the discount, the 1099 will cover the advertisement cost. Roof $5000 Disc. -300 total. $4700 price He would report $5000 as revenue and the 300 as advertising expense, net = $4700

Thanks John, I always want to make it as easiest as possible for them to follow, don't want to give them more work LOL. I am referring to the IRS agents, not my clients.

I have a new client that had his/her tax return prepared somewhere else, supposely they didn't get a copy, so I requested a transcript from the IRS, when I amend a tax return I usually include "As originally filed" return, the 1040X and "As corrected" thing makes things easier for the IRS employees. Just wonder if I should include the copy of the transcript as the "As originally filed" or should I create a 1040 that matches transcripts figures and use it? Thanks

Good assumption, but I don't think illegal aliens are the only contractors that like to get paid in cash.

This question is for those that have bought a new computer with Windows 7, what is the best way to move ATX files to the new computer? Hear is what I was thinking of doing: Old computer 1. Make sure every year has the most recent updates. 2. Export all clients to an external hard drive, year by year New computer 1. Install ATX 2. Update every year first 3. Import all clients year by year 4. Input preparers information, I believe that doesn't transfer over 5. Test the system Does someone else have suggestion they would like to share. Thanks Marco

Why not just buy a laptop cooling platform like this one: http://www.costco.com/Browse/Product.aspx?Prodid=11471714&whse=BC&Ne=4000000&eCat=BC|84|1333|21392|76167&N=4025518&Mo=7&pos=0&No=7&Nr=P_CatalogName:BC&cat=76167&Ns=P_Price|1||P_SignDesc1&lang=en-US&Sp=C&ec=BC-EC19722-Cat21392&topnav= I would remove the battery to get more air into it, also make a backup of all your data.

Probably no here one here has heard blame the "Tax Preparer" or the "Accountant" right? Well why is it the tax preparer fault if the banks, mortgage brokers, loan officers and even real estate agents are coaching the clients on what the bank wants to see to get approved for the loan (at least in the past). Either 60 minutes or 20/20 had a bit on Countrywide Home Loan right after it went under and a top executive even said they had to sell loans no matter what, and basically they were instructing brokers to have clients tax return be prepared a certain way. Before going independent, we used to get random people showing up, "I made X amount of money and I have no expenses", later on as the mortgage crisis came to light it turned out that most banks were not verifying tax returns or even a CPA letter would simply due to get approved. I am glad you told your client you could not make the change, unfortunetly, the next tax preparer they approach will get a different story from them.

Here is a list of all the tax pro's in your state: http://www.google.com/search?q=il+tax+preparer&ie=UTF-8&oe=UTF-8&hl=en&client=safari

If you recently ordered a hair piece, you won't be getting it anytime soon, thanks to these guys: http://www.chicagotribune.com/news/local/breaking/chibrknews-hair-stolen-in-breakin-at-beauty-supply-firm-20110425,0,2188146.story

For me it will be the EA review & hoping to sit in for the exam in August 2011.