David1980

Wow, talk about failing to call your tax person before doing something... I'm not positive so I won't say anything for sure but it sure seems like they did that one wrong.

Unfortunately in order to file the return with the dependent you need to wait for the SSN. So they can file without and amend, file an extension if they don't have it by 4/15 (that would be insane though) or just wait it out.

You're right, old reject code. I usually assume something in all red is new but it just means they changed it. 1068 for 2007: (pub 1346) 1068 o Form 1040/1040A/104EZ – If Nontaxable Combat Pay Election (SEQ 1185) is significant, it must equal total nontaxable combat pay on Forms W-2. On Form W-2, nontaxable combat pay is the amount in Employer’s Use Amount (SEQ 0246, 0256, 0259, 0262, statement) when the corresponding Employer’s Use Code (SEQ 0242, 0252, 0257, 0260, statement) is “Q”. 1068 for 2008: (pub 1346) 1068 o Form 1040/1040A/1040EZ – If Nontaxable Combat Pay Election (SEQ 1185) is significant; it must equal total nontaxable combat pay on Forms W-2. On Form W-2, nontaxable combat pay is the amount in Employer’s Use Amount (SEQ 0246, 0256, 0259, 0262, statement) when corresponding Employer’s Use Code (SEQ 0242, 0252, 0257, 0260, statement) is “Q”. Looks like just formatting changes, but it must have triggered whatever system the IRS uses to highlight it red (indicates changes.) Also, while 1345-A is years out of date you can get the current reject codes in 1346. Here's a direct link. http://www.irs.gov/pub/irs-utl/ty08_pub_13..._attch_1_11.pdf

So you must be having an IRS reject code 1068. (Pub 1346) 1068 o Form 1040/1040A/1040EZ – If Nontaxable Combat Pay Election (SEQ 1185) is significant; it must equal total nontaxable combat pay on Forms W-2. On Form W-2, nontaxable combat pay is the amount in Employer’s Use Amount (SEQ 0246, 0256, 0259, 0262, statement) when corresponding Employer’s Use Code (SEQ 0242, 0252, 0257, 0260, statement) is “Q”. Field 1185 is just once per return so it's marking it as for the total return. Based on that description, you will not be able to efile a tax return electing it on only one W-2. At least, unless they change that reject. As far as it being allowed, yes. On a MFJ return both TP and SP can make that election separately. (Pub 596) Nontaxable combat pay. You can elect to include your nontaxable combat pay in earned income for the earned income credit. If you make the election, you must include in earned income all nontaxable combat pay you received. If you are filing a joint return and both you and your spouse received nontaxable combat pay, you can each make your own election. The amount of your nontaxable combat pay should be shown on your Form W-2 in box 12 with code Q. So then you've got a valid tax return that can't be filed electronically. Sucks... At any rate, TaxWise is not to blame here, other than perhaps they could have put in a validation to inform you the return couldn't be efiled. It is a new reject code this year so they may have just missed it. Now, as far as omitting the Q amount on the one W-2, I've done worse to get something through. The return is correct. It might generate a letter down the road but would be easily resolved with probably just a phone call to the IRS at that time. You could include the information in a preparer note on the return. That would get your return sent electronically though. Otherwise paper file or hold onto it and hope the IRS changes how that reject works to accommodate the election by only one spouse.

I usually rely on a reference book (the tax book) and the IRS website for most things. On the rare occasion I run into something in a "gray" area I'll do internet searches to see what the arguments are for/against certain positions before trying to interpret the tax code myself. You usually can't take those things at face value since a lot of what you'll find on an internet search is hair stylist tax advice, but sometimes you get pointed in the right direction. Forums are also great. Not just for current questions/answers, but historical archives of questions and answers. Often I'll find my answer in a forum thread that's a few years old but still the law hasn't changed since then.

I agree that a lot of these things just don't make sense. The politicians push it as if it allows those who otherwise couldn't afford a home to buy one, but it totally fails at that because they need to be able to afford the home and bought the home before they are allowed the credit. It is "yet another tax benefit" for homeowners. I feel bad for my renting clients. They rarely get to itemize unless something tragic happens one year, they miss out on adding property tax to std deduction, now the home buyer's credit. My question in regards to this is why does the govt push home ownership so much? We obviously can't afford to have everyone in the country living in a nice private home, which is why apartments, condominiums, and so on exist. The only thing I can figure is if you own your home you're more likely to stick in one place rather than move around (I would think the economical argument would be a more mobile workforce is more efficient which supports the opposite view on this home thing). Some how the people passing these rules feel it's good for something for people to stay in one place? Maybe it creates stability of some kind. But I tell you, it does piss of my renters. :)

Military ... Combat pay... Just a thought, but is there anything in box 1 of that W-2?

Hard to figure out IRS rejects sometimes are an IRS glitch. Like the recent 0448's. However, IRS glitches happen in large numbers when they happen and usually a lot of other people get the same thing. Like everyone who had an IRA deduction getting rejected for being over age 70.5. If it's not an IRS reject and it's hard to figure out, it frequently ends up being software related. If it's simple data entry error that's usually easy to find.

If they wanted to they could just stop offering loans all together. Clearly that is not their objective here, they make their money off RALs. They make lots of money off RALs. If there wasn't a delay for improper amounts on the RRC they would keep doing them. The only thing the banks have said as far as I've seen is they will not do a RAL on it, and the reason is because of a high percentage of returns being filed with incorrect amounts. Clearly their motive is to not get stuck with a loan that should be 1-week and end up with it being much longer. I have not seen the banks claim that returns with proper amounts on line 70 will be delayed. Perhaps the hoax is that the banks claimed such a thing.

The initial source was the advisory board who had a conference with IRS. The advisory board members of course leaked out that information. Or misinformation as it's gotten all twisted. All they really know is if you put an incorrect amount on line 70 it'll be delayed, and sounds like a substantial delay. If you put a right amount it might not have any delay.

There is some good information here. http://www.irs.gov/newsroom/article/0,,id=187935,00.html "Q. Which home purchases qualify for the first-time homebuyer credit? A. Only the purchase of a main home located in the United States qualifies. You must buy the home after April 8, 2008, and before July 1, 2009. For a home that you construct, the purchase date is the first date you occupy the home." ... "If you make an eligible purchase in 2008, you claim the first-time homebuyer credit on your 2008 tax return. For an eligible purchase in 2009, you can choose to claim the credit on either your 2008 (or amended 2008 return) or 2009 return." So be sure to get your TP into that home by the end of June!

Yeah, I've always hated the 8867 auto-complete features... If the preparer is not supposed to actually ask those questions then the form shouldn't exist. Clearly since the form does exist the preparer should answer the questions. The truth shall set you free!

I also wouldn't base HOH off the W-2 income. I could earn a million bucks a year and put all of it in savings and live in the same household as someone else who actually claims HoH. That said, if it's a true 50/50 split you got two people filing single with kid in that situation. (Or mother claims both kids since she's parent to both.)

Yeah, worst case scenario would be doing the same thing they did last year and basing it off a 2008 income tax return. However it sounds to me like the withholding adjustment is getting pushed as the method this time which makes it completely transparent to the taxpayer and us, other than they will receive more money per paycheck for some period due to lower withholding.

I've seen CA state acks. Not with ATX though. So it's not the state.

I had to read that quote twice myself. It does say "with a member of the opposite sex" meaning hetero-marriage. I think the point was so long as it isn't same-sex he would not question it.

You know, I am a little skeptical about the email. I can't help it. Why isn't the president Doug posting something here like he has in the past, or on the TRX message forum.

Yup, it's all OK. If you have clients that you've not been giving EIC for the second child for a custodial parent get some amendments done and make your customers love you. In divorced or separated parent situations the custodial parent can *always* use the child for HOH, EIC, and Child & Dependent care expense. (And some other stuff, like medical expenses iirc. But those are the big 3.) The non-custodial parent with proper release of exemption from custodial parent can claim the exemption, child tax credit, and some other stuff (like education credits.) Note that these special rules are only available for divorced or separated parents.

Personally I find it totally unfair that you can only deduct $3,000 capital losses per year. (This is in regards to comments of "If you don't like the tax code why do you do tax prep.") I'll protest and scream and write my congressmen about it. But when I'm preparing returns I do not deduct more than $3,000 capital losses per year. The tax law is the tax law, it is what it is. That does not take anyone's rights away to suggest it needs changes. If nobody ever suggested changes it would never change.

And yet nobody has ever found a citation for a correct return. Tax Topic 308 is my favorite link when this comes up. http://www.irs.gov/taxtopics/tc308.html "If you are filing to claim an additional refund, wait until you have received your original refund (you may cash that check). To avoid penalty and interest, if you owe additional tax for a current year amended return, file Form 1040X and pay the tax by April 15 of the current year." Right there it answers both questions. How long to wait? Well if expecting an additional refund wait until you have received your original refund. The second part though indicates to file a 1040-X prior to 4/15. My guess is that if you go back long enough the "correct return" thing was the proper way to do it so anyone saying not to do an amended before 4/15 has probably been around a long time and has lots of tax experience. A good thing, but use the current guidelines for amending returns? :)

Can they afford that?

I actually choose to go with CrossLink this year. I used IntelliTax direct last year. IntelliTax had so many different packages that depending on who you knew and how long you were there and how many bank products you did, etc... You could get a decent price on the software direct. A lot of the old IntelliTax support now work for CrossLink so I'm dealing with the same people I used to deal with. Not a bad deal. Also much more similar to IntelliTax than TaxWise. I am learning workarounds for new issues. So far I haven't had any real hold times and they're got some crazy 24/7 support hours. So long as I do 200 bank products the software is free, I end up paying $4 per bank product "transmitter fee" but the efiling is free if not doing bank products. I'll probably post a review after season with the strengths/weaknesses/concerns. Unfortunately I don't know anyone selling CrossLink for $300 and think the 200 bank product thing is a 1-year only incentive for IntelliTax customers. Probably too late to get that anyway for new customers, so next year I'm looking at something like $1200 or $1300 (maybe less with early renewal). No forum for CrossLink though. I also get the impression there's not as many preparers using it, seems to be more small-scale. For example they don't even have their own business program and resell taxworks for that. As far as TRX, they got the shaft just like every other IntelliTax user. They're making the best of a bad situation and I commend them for it. My impression is the PIHB at CCH went through with the acquisition without really understanding what it would mean or how they were going to support that many new users who are learning new software right in tax season. Would have been better to waited til after season to make the switch so the customers could spend the summer learning TaxWise.

Thanks to all the grats. For sure, if I can pass it anyone can. (Just get a study book, read it, understand it, do the questions, and review weak areas from the questions.) For the last test I spent 1 day reading 6 chapters of the "wise guys" book and did about 2 hours of the flash cards that you get with that. The trick is finding the time. Right now there is no time. Come April it's time for vacation. After that there's procrastination. That ends in around October, at which point you're trying to catch up with all the new tax law changes.

Hmm, the 540 refers to page 14 of the instructions. Page 14 of the instructions says to complete the worksheet on page 58. The instructions only go to page 20. Last year the instructions went to page 60. Looks like CA is missing some form instructions there...

Aside from the ethical questions that's not a bad resolution. Stats continue to show that children of poor parents frequently grow up to be poor themself. It makes sense too, less healthy food, less prestigious schools, less family connections. If you eliminated the kids you would eliminate future generations of poor people and actually reduce the poverty percentage in the country. But the ethics...