ILLMAS

I have a new NP client and they fell behind on paying their payroll taxes on time, they are up to date now, but now they started receiving notices for penalties and interest. From what I am seeing, the NP always had money to cover payroll taxes on time, the new executive director just doesn't know why they were not paid. I regret telling the client that I would talk to the IRS or prepare a letter asking them to forgive either the penalty or interest, becuase now I am seeing they always had money. I have worked with other NP that when they don't have money, they don't pay their employees until some funding comes in and this wasn't the case with this NP. I would like for the NP client to see that I saved them some money, but another part of me is just saying pay it and don't make the same mistake again. What your thought? By the way, I like the new design of the site, great work!!

I heard about this last night, this really sucks for many hard working tax payers!! Many To Pay Back Obama Stimulus Tax Credit Taxpayers At Risk If With More Than One Job, Receive Social Security More than 15 million taxpayers could unexpectedly owe taxes when they file their federal returns next spring because the government was too generous with their new Making Work Pay tax credit. Taxpayers are at risk if they have more than one job, are married and both spouses work, or receive Social Security benefits while also earning taxable wages, according to a report Monday by the Treasury Department's inspector general for tax administration. The tax credit, which is supposed to pay individuals up to $400 and couples up to $800, was President Barack Obama's signature tax break in the massive stimulus package enacted in February. Most workers started receiving the credit through small increases in their paychecks in April. The tax credit was made available through new withholding tables issued by the Internal Revenue Service. The withholding tables, however do not take into account taxpayers with multiple jobs or married couples in which both people work. They also don't take into account Social Security recipients with jobs that provided taxable income. The Social Security Administration sent out $250 payments to more than 50 million retirees in the spring as part of the economic stimulus package. The payments were meant to provide a boost for people who didn't' qualify for the tax credit. However, they went to many retirees who also received the credit. Those retirees will have the $250 payment deducted from their tax credit -- but not until they file their tax returns next year, long after the money may have been spent. "While implementing a credit through reduced withholding is an effective way to provide economic stimulus evenly throughout the year, it is difficult to account for everyone's circumstances," said J. Russell George, the Treasury inspector general for tax administration. "More than 10 percent of all taxpayers who file individual tax returns for 2009 could owe additional taxes." The tax credit is also available for 2010. Russell said the problems will continue in 2010 if they are not resolved. The credit pays workers 6.2 percent of their earned income, up to a maximum of $400 for individuals and $800 for married couples who file jointly. Individuals making more than $95,000 and couples making more than $190,000 are ineligible. "Making Work Pay was designed to deliver much needed boosts to the paychecks of 95 percent of all working Americans," said Nayyera Haq, a Treasury Department spokeswoman. "Since enactment, more than 110 million families have benefited from as much as $60 in additional take home pay each month to put toward their family budgets, serving as a steady boost to spending and consumption." For many, the new tax tables will simply mean smaller-than-expected tax refunds next year. The average tax refund this year was about $2,800. The IRS, in a response to the audit, advised taxpayers to check their withholding throughout the year to make sure they don't get hit with an unexpected tax bill. "The withholding system must approximate the tax liability of tens of millions of Americans, and therefore, cannot be tailored precisely to fit every individual situation," Richard Byrd Jr., commissioner of the IRS' wage and investments division, wrote in the agency's response to the report.

Back in September a client of mine that is in Houston called to let me know they were going to cancel his business license because he didn't file a franchise tax return, I called Texas Comptroller of Public Accounts and they guided to file the return online, it was very straight forward and it's file instantly. No payment was due because it was the initial return. If I remember, you need the account # and setup a user, you can also file sales tax return via there webfile. Below is a link to their website: http://www.window.state.tx.us/taxinfo/taxforms/05-smart.html MAS

Thanks, I think her concern is that her employer gave her the stock a while ago, so her cost basis is zero unless it was report as income to her, which I doubt happen.

Client of mine called today to ask me if she can avoid paying taxes from sale of stocks because of hardship, I did a quick research on the IRS website and it seems it's only for some retirement plans. Based on what I found I told her no, sale of stock is subject to tax if there is a gain on the sale, then she tells me her co-worker sold some stock and used hardship to avoid paying tax. So I am asking to see if someone knows if hardship can be used for sale of stocks? Thanks

Something I don't understand about your client is why he decided to represent himself in the first place, did he ever call you and told you he was going to be audited or did you just find out recently? Another thing I find hard to believe is the auditor asking how you get paid, makes me wonder if your client had the return modified to qualify for a mortgage or some type of loan that he needed to show more income and the modified return is labeled as "Self-Prepared". Just a thought, client presented the modified return in your CPA folder or in the package you give your client and sees "Self-Prepared", then I would question the paid preparer bill. For your meeting just give the auditor the depreciation schedule and let him and your client talk, allow them to use your conference, incase auditor starts asking more questions, be honest and let him know there is no engagement between you and your client to represent him, thats all. Let your client dig himself out of the hole in got himself into.

TP sister's LLC did not submit it's annual report, so it was dissolve, now the LLC name is up for grabs, TP wants to open a new LLC witht the same name, then sell it back to the sister. The cost to reinstate the LLC would be around 2K vs 500 to create a new one, there is no FEIN# assocaited with this LLC, I recommended just to make it active again and pay the 2K, but he asked me to look into it to see if it's possible. So if anyone knows, I would greatly appreciate it, not looking into breaking any law here, TP see it as when someone buys your R/E taxes and then sell back at a profit.

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Thanks everyone, I did call this morning and placed the ordered + the 10%, they didn't know why no one called me to renew early, so they went ahead and gave me the discount because of that. I did mention to them that I received the 2008 expess answer book after the tax season, and the sales person was not surprised. I prefer the quickfinder anyway which I always order. MAS

Ok, what should be cost with the discount? Thanks MAS

This year I haven't heard from the people of ATX to renew, nor have I recieved any email or promo, I'm I the only who hasn't renewed for 2009? I probably missed out on the early bird discount :-(

You can setup a VPN router using your laptop, but you would have to setup it up every where you go, mind you the VPN requires LAN, so if you are at the coffee shop (wireless), your assistant won't have access. Sounds like Logmein or VNC is right for you, like I mention before only one person can work at a time. Something else to consider when using a laptop as your main source to run your business, laptops can break easily, can be stolen easily or are proned to water spills, sometimes they cannot be repaired or someone might have access to your clients SS# and other personal information. If I may recommend something inexpensive, you can buy a used business workstation for under $200 sometimes running windows xp professional and use it as a server, you don't need to buy a dedicated server that can cost over $500 + labor to set it up, there are a lot of "how to" on the internet, so you can setup a workstation+vpn yourself. Also, if you have an old computer at home, you can set it up as a server. You don't need a powerful computer with massive memory or hard drive, a 512MB of RAM and a minimun 80GB, your server is going to used only to store data, the applications will be run from your laptop. I believe there companies that can host your information for a monthly fee, it's secured, backed up daily so that might be another route for you. MAS

That's one solution exporting the return from the main computer to the laptop, however you will need to import back to the main computer for a couple of reasons (ERO #, e-file and the benefit of the server backup system). There are other ways to work from the laptops when out on the field, there are web-based programs like Logmein and VNC that allow you connect to your server remotely, the free version dosen't allow you to print when out on the field, if you send something to print, it will print at your office. If you purchase the program, it should allow you to print anywhere, just a little FYI, with the free or paid all you are doing is connecting to your computer thats in the office, so if someone uses that computer you cannot both work on it at the same time Second option is getting an exchange server (I think that the name?), it will allows you to log in to your office computer from any where, someone else can be using your computer and it won't affect you, the only know problems I have had with a system like this, is with Outlook, if you open an email when logged in from home, the next day return to your office and look for that important email, there is a chance it won't be there, there is some type of sync problem, but the last time I used an exchange server was in 2007, so maybe it's better now, I forgot to mention, a system like this is expensive to implement + to maintain. Third option is a VPN (Virtual Private Network), this type of network allows you to connect to your server securely to specific files or drives, any change that you make on your laptop is recorded on the server, it allows you to print when out on the field, cost is very low and no maintenance required. Hope this helps

Just wondering if someone knows of a software that out there specifically for a trucking business? I don't know much about how a trucking company operates, but a software that helps them keep track of hours, loads, mileage, fuel, trucks, repairs, dispatch etc..... 10-4

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TP has a house on the market and his mother just sold a property under a 1031 Exchange and has already identified 2 properties to purchases, they want to know if the mother can buy the son's house under the 1031? Does someone know if this can be done, without breaking any rules?

Thanks, I have that box checked off for the properties he owns, but there is a something odd with the AMT tax, client collects about 800K in rent, he has about 500K in expenses and about 165K in depreciation. His only source of income is from his properties, so he has about 131K in rental profits, ATX is calculating 52K for AMT and 10K for tax on 131K, so I there is definetly something wrong here. There has to be something that I didn't check off, can someone please help me. Thanks

Hello, I have TP that materially participates and is a real estate professional, I am having one of those days were nothing goes right, and I cannot find to check off Material Participation?? I transfered the info from Proseries 2007, so you can imagine I had to go asset by asset to make sure the accum. depre is correct.

Hello, I have TP who bought a couple of properties in 2008 (6 of them), out of the 6 of them, 1 he was able to rent in 2008 and the rest in 2009. He is considered a R/E professional, I don't remember the form or election to report expenses in the year placed in service, but he would benefit reporting the expenses in 2009, instead of 2008. Also, this is a partership (1065) return, can someone give the form number. Thanks

Thanks, I put the amounts on a worksheet, however I needed to put the credit amount on line 4 of the worksheet, things are now flowing propertly. MAS

TP just closed on his first home, I brought me the settlement statement and I am going to amend the 2008 income tax return, however ATX does not calculate the credit even if I have checked off the box for buying a home after 12/31/08 and before 12/01/09. Can someone tell me what I might be missing. Thanks MAS

Hello, I have a new client that needs a personal financial statement because he is SE, and the bank is requesting it for a loan he is applying. Here is my dilemma, first his name appears on title of a home he bought with wifes' sister and husband, but his name is not on the loan. They filed a quick claim deed just last year, TP has been making 1/2 of the mortgage payments for the last 15 years, he was not able to get on the loan 15yrs back because he was a non-resident and he had no SS#. Their bank cannot transfer the loan to him through a quick claim deed, the only way he can get his name on the loan is he the brother-in-law sells him the home, they agreed, so my client is buying the home for the balance of the remaining loan. My question is, should I include the home as part of his assets, even dough, his name does not appear on the loan??? TP asked if he qualified for the FTHBC, and I told him no because technically he has been an owner and been making mortgage payments for the last 15years. Your thoughts?

I have a client that is 1120S and each shareholder gets a K-1, they just recieved an IRS notice letting them know they have tax due??? Has anybody heard of this before on an 1120S? I don't want to call the IRS because this client has not paid me for the services since April :-( Thanks

Ok I have a new nonprofit client that came to me because they received a letter claiming they haven't filed AG-990 for the state of IL. NP has been working under a fiscal agent for quite some time already and in 2008 the applied to be a 501 c3 and didn't get approved until March of 2009. I have worked with a couple of NP in the past that become fiscal agents for other agencies not yet approved by the IRS, and usually they manage and report the agencies monies on their financial statements, audited financial statements and tax return. They usually report their assets and liabilities only, but with this NP client it seems they were operating on their own, they had their books and accounting, the fiscal agent only received monies from foundations under their name, then they would give a check to them. NP director inherited all this mess and no one is able to confirm if anything was reported under the fiscal agent books/tax return. So I just want to inform the client that if nothing was reported by the fiscal agent, they would have to report it, but I am not sure if I need to report the years (without 501 c3) on form 1120, since they didn't get approved until 2009? Thanks

A client of mine called me today with a non accounting or tax question, his question was if he can sue two former employees that went to work for another business like his, and prevent them from sharing his family recipes. I am not an attorney nor do I give any legal advice, but the only thing I can think of in his cause, he has no grounds, first he never discussed this with his employess, nor had them sign some type of document from sharing his family recipies with the competition. His main concern is to keep his family recipe a secret.Just wondering if someone has some experience an issue like this? Thanks