taxguy057

Those who worked and file as a dependent of another this year are really going to think they are getting screwed. I had a parent bring their information in today, along with their son's W-2. The son's employer did as they were told to do...cut the withholding by about $8 a week It came to almost $400 less in withholding. Problem is, the son does not get the $400 credit unless he claims his own exemption.

So, instead of getting the refund he was expecting, he owes $260. I can see it is going to take alot of explaining to parents. I also expect a lot of college kids doing their own tax return and seeing the results....will decide to go ahead and claim themselves. That means more parents with letters about July or August.. Or parent's who's efiles are rejected because of the kids having filed earlier and claimed themselves.

Makes you wonder if the great lawmakers in the sky even considered what a mess they were making when they passed this credit into law. Maybe they need a "reviewers exam" too! :blink:

Hey can anyone look at this and make sense out of it? Now in order for any of us to efile a return, we must be ERO's correct? So how are they going to tell if we are just sending a return somebody else did or actually prepared the return ourselves? We have to put our names and numbers on the returns. We're already registered and have PTIN's so why are we not exempt from this forthcoming fiasco....

Please read below from IRS website:

Will Electronic Return Originators (EROs) who only transmit tax returns and do not prepare returns be subject to the new review recommendations?

Although individuals who assist in the transmission of tax returns electronically are subject to other IRS rules and regulations currently, individuals who assist in the transmission of tax returns electronically, but do not prepare returns for compensation, are not the focus of the recommendations in the report.

I like that last hate about the music! Hey so what is JH going to do now since they used SBBT for all their banking products?

Wish they make a 1040 with all the trimmings that simple to put in! :D

One thing to keep in mind is that some states (MA for one) is NOT exempting that first $2400 from taxable income. I'm going to have to check flow-through numbers carefully, as I've seen plenty of instances with ATX over the years where numbers do NOT go where they're supposed to go.

Catherine

How can a state exempt themselves from federal rules? What would be their reasoning behind it?

Obviously it still applies for support so the question comes to who paid over half the mother's support. Her SSI, or the daughter? Obviously if the daughter only had $10k income that would be a hard sell. If the daughter had $50k income it wouldn't be hard to believe at all. There was a relevant discussion on the TTB forum recently.

http://www.thetaxbook.com/forums/showthread.php?t=13355&highlight=support

TP makes roughly $25000 yr but going to school too. I think she'll be ok! They live in a rural area so cost of living not crazy where they live. Thx for the link and the insight. Glad to see somebody else up burning the midnight oil! :lol:

I have a client who's mother stays with her and she(the client) supports her entirely(from what she's telling me), but the mother received $8088.00 in SSI last year. I know IRC 143 states "gross income of $3650 or more you cannot claim." Exception to the ceiling included SSI benefits, but still used in determining if went toward support. How do I decipher this to make it correct so they don't get one of those nasty black/white letters in the mail... :dunno:

Well, we were wondering about that...

I know right!! What's wrong with me??? :wacko:

I thought it was because we made you laugh!

That's it!!! :P

Yeah I see that.. the questions I was posting a couple weeks ago were from a 2005 exam. Alot has change since then....

I used the Gleim books and CD and thought they were GREAT preparation. Work on them enough, and you'll start to find the mistakes in the prep materials (they use former exam questions, complete with the original mistakes). That's when you'll know you're getting the hang of it.

I also really liked finding out that it was when I went back and re-visited a question that I got it wrong. That gave me the confidence to answer - move on; answer - move on, during the real test.

I passed all four sections (four back then; three now) first try. And a number of those sections were on types of returns that I had never yet done in "real life" (corporates, fiduciaries, etc).

Catherine

How deep does the test get into the corp returns? I've never done any and really don't foresee it anytime soon?

Thanks all! That's why I hang around you guys!! :P

First $2,400 of Unemployment Benefits Tax Free for 2009

IR-2009-29, March 26, 2009

WASHINGTON — All or part of unemployment benefits received in 2009 will be tax free for many unemployed workers, according to the Internal Revenue Service.

“This morning we learned that a record 5.6 million people were receiving unemployment benefits in the middle of March. This underscores the need for the relief provided by the American Recovery and Reinvestment Act, which includes making the first $2,400 of unemployment insurance exempt from tax,” said IRS Commissioner Doug Shulman. “I urge all unemployed workers to take this special tax break into account as they plan their tax withholding and quarterly estimated tax payments for the year. This change offers a helping hand to millions of Americans who are out of work and struggling to make ends meet.”

Under the American Recovery and Reinvestment Act, enacted last month, every person who receives unemployment benefits during 2009 is eligible to exclude the first $2,400 of these benefits when they file their tax return next year. For a married couple, the exclusion applies to each spouse, separately. Thus, if both spouses receive unemployment benefits during 2009, each may exclude from income the first $2,400 of benefits they receive.

The new law doesn’t affect the return taxpayers are filling out now. Unemployment benefits received in 2008 and prior years remain fully taxable.

Unemployed workers can choose to have income tax withheld from their unemployment benefit payments. Withholding on these payments is voluntary. However, choosing this option may help avoid a surprise year-end tax bill or a possible penalty for having paid too little tax during the year. Those who choose this option will have a flat 10 percent tax withheld from their benefits.

Unemployed workers who expect to receive more than $2,400 in benefits this year should consider having tax withheld from their benefit payments in excess of that amount. Those unemployed workers who have already chosen to have tax taken out of their benefits, should consider the $2,400 exclusion in determining whether to continue to have tax withheld.

Use Form W-4V, Voluntary Withholding Request, or the equivalent form provided by the payer to request withholding to begin or end. Form W-4V is also available on IRS.gov or by calling the IRS toll-free at 1-800-TAX-FORM (829-3676).

Thx Margaret your the best! so my question again will the program sort this out when we add a 1099-G to the return or need i do something xtra to claim the exemption?

at the same time he thinks its the whole benefit amount received? Doesn't sound right to me... Havent heard or seen that anywhere and if true it would be all over the news...Guess I need to look at the source... he said they work at HRB! :lol:

Anything special I have to do or does program automatically adjusts?

Had some one ask me today if I had heard about where the IRS was not going to tax unemployment benefits recieved last year. He couldn't cleary state what or how this was going to take place so told him I'll hit my blogger friends out there for some help. Me personally, I haven't heard anything such. Has anyone else maybe or is this just on somebody's "Don't Want To Pay Taxes Wish List?" :read:

I bought the books on Craigslist and locally, some guy bought them for his wife that was going to take the exam, but wife decided to take the CPA in California, instead of Illinois. These are the Gleim EA book, they sell for around $300. I am aiming to take Part I in Feb 2010 and the rest during the summer.

Thx!

Economic Recovery Payments

Recipients of social security benefits, railroad retirement benefits, or veterans’ benefits were eligible to receive a one-time Economic Recovery payment of $250 in 2009. The receipt of this payment will not be reported on the respective information forms (SSA-1099, RRB-1099, etc.) received by taxpayers. The IRS is not able to assist taxpayers with determining whether they received the payment or the amount. If this information is needed, the taxpayer must contact the agency that made the payment to them. The following phone numbers can be used for that purpose:

Social Security Administration - 800.772.1213.

Additional information is available on their website.

Railroad Retirement Board - 877.772.5772.

Additional information is available on their website.

Veterans Administration - 800.827.1000.

Why would the TP not know if they received pmt or not? Do they not get more in their monthly payment or a check mailed or something? I just received some tax info from a new client today and they both are retired and have 1099-SA so guess I need them to call huh? :scratch_head:

There was a thread on that recently, or maybe it was in the NATP weekly. In any event, if one spouse qualifies for the $8,000 FTHB and the other qualifies for the $6,500 version, they they qualify for neither.

That totally makes no sense at all... any idea on the logic behind that (if any b/c I knw we're talking about tax law here... LOL!)?

She doesn't qualify for the 8K first time home buyer.

She gets the 6.5k credit correct?

I am excited my EA review books came in today, bought them used dough, but are in mint conidition. Anybody else getting ready? I have not decided when to take the exam yet.

Thinking about it. Seen some old exams on irs site and looks real tough. so where do you get the books to study for it? :dunno:

I kinda like the auto updates because im so busy sometimes and I forget to go update until I try to send a return out and it gets rejected because I dont have the latest version running. So i like it automatically keeping me up on things so to speak! :blink:

Click on Return Manager and move the cursor to the mistake and correct it. No, it will not mess up efile.

preciate it!

Or go to Return Manager and "Rename" return:) Have a great night:)

Thx!

I spelled a client's name wrong originally and saved it so now showing misspelled in return manager.I went back and changed in return but still wrong in manager. Will this affect the efile or will it go by the name in the return? Can I change it anyway in the manager?? :scratch_head: