David1980

My mistake. Unlike the exception for a home purchase, the medical exception does not include "individual retirement account" so should work just fine for a 401k. I agree with KC on that one. I wouldn't want to speak for other folks, but I believe the talk earlier in the thread regarding IRA vs 401k was in response to the OP and the home buyer exception. You kind of have to look at the exceptions individually. Some apply to qualified plans in general, some to IRA specifically, and at least one to qualified distributions not including IRA's.

The exception for a first time homebuyer states "individual retirement plan" not "a qualified retirement plan". http://www.law.cornell.edu/uscode/text/26/72 (F) Distributions from certain plans for first home purchases Distributions to an individual from an individual retirement plan which are qualified first-time homebuyer distributions (as defined in paragraph (8)). Distributions shall not be taken into account under the preceding sentence if such distributions are described in subparagraph (A), ©, (D), or (E) or to the extent paragraph (1) does not apply to such distributions by reason of subparagraph (B ).

I think if I asked the taxpayer, the taxpayer would be sure those were paid after tax and should be deducted. Just like when they get a 1099-R and know it's not supposed to be taxable because they already paid the tax. I don't put much faith in the taxpayer. I could try asking the employers but most of them are either big enough to make that painful or too small to know what the heck they reported - they let the tax person do it.

I think lines 4, 5, 18, and 19 of the 2441 will be where the interesting numbers are. On a quick test return I did in Tax Act, whichever spouse I issue the 1099-misc to is showing $0 on that line which is preventing any credit or exclusion of DCB from calculating. So Tax Act is adding in the DCB to line 7 and I'm also not getting a credit. Tax Act has a box "Earned income adjustment for student or disabled status" and if I enter an amount there for the spouse with no earned income it carries to both 4/18 or 5/19 (again, depending which spouse has no earned income).

Is the program not ATX? What program?

I know it is not all returns for deceased. I don't know what the determining factor is/what causes social security to lock it.

This would stop a lot of the identity theft returns, but they aren't doing it. As was indicated ERO method and you don't need it. Which is kind of sad - require just the taxpayer's date of birth match and a lot of identity theft goes away. Right now all they have to match is the SSN and 4 characters of the name. Of course, there's a lot of fraud out there that isn't identity theft as well. Preparers that specialize in that kind of tax return where the taxpayer willingly uses them. Perhaps the taxpayer doesn't realize what the preparer is actually doing to get the large refunds but I don't really feel like the taxpayer is that much a victim when they're intentionally going to someone who gets much larger refunds than other preparers. And when they get the IRS letter, well, they probably just claim identity theft too. Not sure what the fix on that is.

Not on list maybe?

https://faq.ssa.gov/link/portal/34011/34019/Article/1995/-ow%20do%20I%20change%20the%20name%20on%C2%A0a%20Social%20Security%20card? Name changes are handled through SSA so I doubt you'll find anything on the IRS website. RINGERS is correct, in the interim just use whatever the old one is.

Who cares when they start processing 1099s or W-2's though? If doing the taxes for the company issuing those forms you just want to make sure you submit them on time. It's not like the IRS does any matching between the 1040 and 1099's/W-2s at time of filing.

Yes, I suppose this is true as the original post does indicate the two days were the only gambling during the year. My gambling taxpayers don't always win enough to get W-2G every time they gamble so I was thinking there may have been other winnings outside the two dates, but it's quite clear in the scenario that it's only the two dates.

Should more than $27,000 be reported as income on the tax return? He had a couple nice jackpots. He probably had a few under $1,200 as well. He might have tried some table games too.

Definitely. I could see taxpayers suing the preparer for letting the data get stolen. Much how we're going to see class action lawsuits against Target over their breach.

Even someone who does choose to prepare EIC returns is going to end up turning away some taxpayers. If you suspect things are fishy and the taxpayer isn't willing or isn't able to provide anything to remove those suspicions you wouldn't very well be able to do the return. And really, that's the intent. Don't do the return.

I suspect until real punishment exists there will always be that sort of office. Whether it's the same people or not. How many years did it take for the IRS to take them down after they started working on it? And the punishment is what, they can't do taxes anymore? So, make big profits for many years filing fraudulent returns and then get punished by not being allowed to prepare returns? Like they would have been preparing returns if they couldn't do it fraudulently anyway? Whether the IRS audits clients of fraudulent preparers is a good question. Does the IRS notice when one ERO is submitting a bunch of bad returns and flag all the returns for review, or does it look at the taxpayers individually and they have no higher audit risk? I'd hope the former, but I fear not.

Personally, I'd probably file a return claiming a qualifying child other than son/daughter without seeing or keeping a copy of the birth certificate. If the taxpayer's explanation makes sense when I ask why they're claiming the kid and not the parent and things don't feel sketchy I'd go with it. Guess if I go through an EIC due diligence compliance audit I might get hit with $500 on that. Or not. Doubt I'll ever find out, I would hope the minority of my clients with EIC is small enough that they'd never waste their time auditing it. Do the per-taxpayer requirements change depending on what percentage of returns are affected? Say I file 500 returns and 5 of them include EIC and qualifying children other than son/daughter. Someone down the street does 500 returns and 400 of them include EIC and qualifying children other than son/daughter. Knowing nothing else, I'd assume the person down the street coached the taxpayers or sold them SSNs to use for dependents. Auditing the preparer for due diligence I would hope to see more than "I asked taxpayer why they are claiming the dependent instead of the parent and they said the dependent lives with them" in the notes for each of the 400 returns. If I were auditing the preparer, I would require higher due diligence of the one doing 400 returns in order to overcome my assumptions. I don't know if auditors are allowed to do that. If that's who the IRS is going after, I don't have my sympathy for them. I do wish the IRS would go for criminal charges of some kind instead of a $500/return penalty though. After all, the easy way to stay profitable with $500/return penalty is to charge more than $500/return.

I expect a lot of people will confuse the 8885 as something to do with ACA.

True for most in most years. The only expense they have is maybe a checkup. I'd worry about the unexpected though. Severe auto accident for example with $200,000 in medical bills could wipe out a lot of savings. The folks making $30k probably wouldn't care so much, bankruptcy being an option to avoid paying. Someone making $200k would hopefully have a lot more to lose in savings and not want the bankruptcy option. Personally, I don't advise my clients whether or not to purchase health insurance. The tax/consequence sure. But I'm not their financial adviser, I don't do financial work (as I always remind them when asked finance questions.)

Assuming all government employees count as welfare recipients for the 11 states, and assuming all welfare goes to households below the poverty line for the $168 value. Numbers that try to match the benefits to the number of people who actually receive them are lower per household on welfare received (because it spreads out to more households than just those in poverty).

Well, with a population of 300+ million I'd expect there to be "many" people in this country with yearly vacations to luxurious resorts and locations, houses 6-8,000 sqft, new cars, new cars for kids, lots of electronics, etc... My guess is in percentages it's a pretty small minority that lives in these 6-8,000 sqft houses with new cars and vacations. You can't exactly afford that on the median income even if you put $0 into savings. Those that make large incomes and don't save and then end up on social welfare programs, yeah... that could and probably should be avoided. I don't think it's very typical of the unemployed though. My guess is your average unemployed person not only doesn't live in a 6-8,000 sqft house but never has in their life and never will.

I'm not sure retraining is really the answer. Obviously if we want the unemployed folks to get jobs we need them to have skills that employers want. But like you said, the # of unemployed can be 100s of the # of open positions. If it's 100 people unemployed for every position and we retrain all 100 of those people to qualify for the job, we now have 100 qualified people to fill 1 job.

Yeah but getting the constitution updated has it's own problems.

Wouldn't that be a property tax, not an income tax? There's going to be a lot of people who pay more "tax" than their income. Consider any taxpayer that's had a NOL. That year they incurred the NOL they are still paying sales tax, property tax, etc... So their taxes would exceed their income and if you viewed it as an income tax would be greater than 100%.

Form 8606 is required for the 2nd half of the conversion?