ILLMAS

I get a lot spam from red gear, don't forget to add your number to the do not call list or simply tell them you are going to report them and to remove your number.

TP is a musician as a hobby, he sings and plays at bars on talent night and owns a derisable guitar. So someone back in 2009 paid him some money to loan him the guitar on/off for a couple of months. He is not in the business of renting equipment but the opportunity came up, can the amount he recieved be reported on line 21 as other income?

FYI Illinois had the longest ballot in the national, page & half of judges no one knows or heard of.

Great can you point me to where you read that, that is what I need. Thank you MAS

A school wants to give $25 gifts card to its student, there are about about 100 students, $25 to the student isn't much, but to the school, they rather not give out the $25 if it requires a gift tax return which I don't think is needed, or if there is threshold amount on gifts the IRS might have. Does somebody know where I can get information on this, I checked the IRS website but what I found is more like giving someone a large amount of money or a house. Thanks FYI school is not reconsidered a NFP, files a 1120S

I am thinking of scanning my files and saving them on the computer and shredding the paper returns onced scanned, does anybody know if this is acceptable or a hard copy is always required? Thanks MAS

I bought the gliem ea package used off craigslist, however the material was relevant up to 2009. I am going to start studying already to take the exam in mid December.

I am just wondering much do you charge (for those that offer payroll services)to process payroll, prepare 941's and year-end forms. I charge between 15 to 40 per payroll run, must of my clients are bi-weekly and between 40 to 90 for quarterly filings and 40 to 100 for year end fomrs (W-2, 940, etc...) I don't know if I am charging to much or too little, but about 80% of my clients call me the day payroll is due. I know paychexs charges a same day fee. MAS

A new TP came to see me, back in 2007 he formed a corporation to recieve payments as a real estate agent, now in 2010 he wants to do his tax corp tax return and elect to be sub-chapter S, if thought he can make the election the when he is ready to file a tax return. For 2007 and 2008 he recieved a check payable to his corp and he took it out, so now he is on the hook for corporate tax and tax the distribution he took on his 1040. He didn't pay himself as an employee, simply just took out the money. I was wondering if it would be possible for him to request for the 1099's to be amended and instead of paying the corp, paying him? Not breaking any laws of course. MAS

Thanks. I did mention about converting the it to a IRA, but once I asked the amount she wanted to withdrawal was very little 3K and she doesn't need the money until Feb 2011, finacial aid covers most of it, she only needs to pay $3,500 out of her pocket. I recommended for her to save from here to Feb, or to withdraw the money in 2011, then she has about a year to save for the tax and penalty. I did make her aware that her current loan against her 401K, the remaining balance is considered a early withdraw because she is no longer employed. So she is on the hook for 3K in 2010. She did ask me another question I was not able to answer her husband just recently finished his term in the arm forces, and wanted to know if the pension he was with the military can be rolled over to his current account, he works for UPS. I told her to have her husband ask the HR department.

TP left her job to focus 100% on school, she has now ran out of savings and would like to withdraw from her 401K to pay for her tuition. This is not considered hardship right? So she would be liable for the 10% penalty + federal and state tax if she does indeed take out the money. Has anyone else encounter a suituation like this or is aware that this might qualify as hardship Thanks MAS

I think the farmville postings might be automatic, a friend of mine past away over the summer and I was getting updates months after her passing. At first I was scared, but let's hope she is okay.

Amen to that!!!

No, no rollover, we called the broker to confirm if there was any rollover because TP didn't remember if he had returned some money back. And TP hasn't made any contributions in many years, for the last couple of years he has pretty much took out all his and his wife IRA to buy real estate.

1=early distribution

I had a TP go with someone else to finalize their tax return, he called me back to let me know the other tax preparer was able to reduce his liability by only making a certain portion of a IRA distribution taxable. TP took out about 210K (early distribution) form his IRA account, he had them withheld the 10% for the penalty, box 2a (Taxable Amount) is zero and box 2b is checked off (Taxable amount not determined). According to what I see, the total amount should be taxable, if there was an amount on box 2a, then the difference between box 1 and box 2a is what would be taxable. Can someone please let me know if this is possible, or what basis is used to determine what portion of the IRA is non-taxable, I am afraid that once the IRS sees the attached 1099-R will right away know 100% is taxable. Your thoughts?? Thanks

suburban strip club owner was charged Thursday with criminal tax offenses seven years after Internal Revenue Service agents seized $12 million in cash he had stashed in a warehouse. Authorities began investigating Michael Wellek in 2000 after he had gone 11 years without filing a personal income tax return, according to the charges. Despite operating profitable "gentlemen's clubs" in Elk Grove Village, Harvey and Markham, Wellek told the IRS he never paid taxes from 1989 through 1999 because he didn't earn any income, authorities alleged. His attorney, Terry Ekl, said he anticipates that Wellek, 63, of Libertyville, will plead guilty to both counts he was charged with — obstructing the IRS in collecting taxes and filing a false tax return for 2000. Ekl said Wellek still owns the three clubs, Heavenly Bodies in Elk Grove Village, Skybox in Harvey and Cowboys in Markham. In 2003, IRS agents found bags holding $12 million in cash in an Elk Grove Village warehouse controlled by Wellek. Each bag was marked with a date and the name of the club from where the money had come. The seizure of the cash came to light in 2004 after Wellek filed a federal lawsuit seeking the return of the $12 million. U.S. District Judge Amy St. Eve turned down the request. Wellek later challenged the government's seizure of all $12 million, contending he owed less to the government, but St. Eve concluded that an IRS levy of more than $11 million was "appropriate under the circumstance." In court filings, prosecutors contended that the $12 million was the "fruits of the crime" and couldn't be used to pay taxes he owed the IRS. But a federal appellate court disagreed on that point. Prosecutors alleged that in 2000, Wellek made more than $2.1 million in income from two of the strip clubs but that he reported making only $115,769 to the IRS. When the IRS began investigating Wellek, he made false statements to federal agents, claiming he had no personal income from 1989 through 1999, authorities charged. In 2002, he underreported the gross receipts of the three clubs by at least $1.45 million. Wellek paid $3.1 million in taxes on the revenue from the clubs in 1999 but actually owed more, prosecutors said. Wellek was also slapped with a $1.2 million fine for fraud by the IRS in 2004. His challenge still is pending in U.S. Tax Court. If convicted, Wellek could face up to six years in prison, authorities said. A spinoff of the federal investigation led to charges against 15 individuals, including 14 former Chicago or suburban police officers, who didn't report income they earned moonlighting as security guards at Wellek's clubs. FYI I have never visited any of these establishment so I really don't know how these establishments can rack up so much money.

No no no, you don't hate Quickbooks you hate your client for not knowing how to use it. If QB is PROPERLY setup and your client knows what he is doing, you wouldn't have these problems. But I think just made you more money, because now you are going to charge your client for fixing his/her mess + the tax return preparation fees. Nothing is free in this world, hey I charge extra if I have add clients receipts. MAS

For the first time, I am not going to fill out Sch L (balance sheet) on a 1120, client only brought in income and expenses plus they are under 250K in assets. I always make sure the BS ties to my accounting record, but for once the hell with it.

TP recieved a notice: "Please provide a corrected Form W-2, Wage and Tax Statement to support the changes you are making to your income and withholding. You should request this corrected form showing your corrected ITIN from your employer." Is the IRS saying it's okay to use an ITIN for work? I amended TP tax return to reflect wages he earned under a different name and SS# that does not belong to him. TP is afraid his employer will not amend the W-2 to reflect the requested change. Any idea on how to resolve this issue? Thanks MAS

Ah they live on fantasy island, you should of said that since the beginning j/k. I see it this way, but it's only my opinion, don't quote me on this. I would exclude the FEMA money on thier tax return, however lets say the cost of rebuilding the bridge is going to cost them $100K and FEMA gave them $60K, I would just capitalize $40K and not the $100K, since FEMA gave them the $60K. Now for the old bridge, don't know if you were depreciating it in the past or if it's fully depreciated, but you are going to have the task of disposing of it on the books and tax return. MAS

Is it a loan? Is going to be repaid back?

To elect to have a NFP status you will need to re-apply for a new FEIN#, there you can elect the closing date of the fiscal year (06/30/10) and notify the IRS of a previously assigned FEIN#. But I think there is other things you need to look at first, you may need to contact the state and attorney general office in your state to see what is required. Having NFP status doesn't mean you are 100% Tax Exempt, for example the NFP will have to pay for sales tax. I am just wondering why not keep the current status if it's a homeonwers association? They are also tax exempt to a certain degree. MAS

In the past he did have an office (management office) in one of the buildings, but since 2008 he moved his office to his home.

TP has about 18 properties and out of the 18, 14 are within a 1 mile radius. His home is about 10 miles away from the properties, also if he is around the area he is always looking to buy more properties. What would be a good way to allocate the vehicle use amongst the 14 properties? I should I just create 1 fixed asset on 1 property and then allocate to the rest using a % on rent collected? FYI there is no mileage log. Thanks