BulldogTom

OK, I will give you that I need to read the instructions, and now I will because I did not get the quick answer I was hoping for here. But I need to take exception to your post my friend. If I am using federal income to calculate the tax, and SS income is included in that amount, and then I apply a percentage factor to the resulting tax, I am still paying tax, even if only a percentage, on SS, which is not taxable income in the state of WI. There has to be a way to pull the SS out. Let me give you an example. Say I have 17K in taxable SS and 3K in gambling winnings. My income for federal purposes is 20K. My ratio is 15%. My std deduction and exemption is roughly 7,500. My taxable income is now 12,500. Say tax on that is 1,000. My ratio is 15%, so I pay 150 in tax. That is not proper, because the SS is not supposed to be taxable at all, so I only have 3K in WI income, and with my std deduction and exemption, I have 0 taxable income, and therefore 15% of 0 is 0. Unless WI taxes SS benefits of non-residents, and not the benefits of residents, I need to adjust the SS benefits out of the federal income before the WI tax rate is applied to that income. Tom Lodi, CA

Taxpayer has no liability in CA. He is retired, SS and a small pension, and this win at the casino are all of his income. CA credit for taxes paid to another state is non-refundable, so he gets no credit for paying the tax in WI. So I am putting in the WI Non Resident Return, and it says that SS is not taxable to WI, but when it is calculating the tax, it is taking Federal AGI, which includes SS, figuring tax on that amount in WI, and then calculating a percentage of that tax based on the ratio of Federal Income to WI income. How do I get the SS Income removed from the Fed AGI so it is not taxed for WI purposes? I could really use some help on this. Tom Lodi, CA

Client was visiting WI and won a jackpot at a casino for 5K. Client is a CA resident. Does WI require a tax return for these gambling winnings? Any help is appreciated. Tom Lodi, CA

No credits, no issues like that (yet?). Just a kid who goes to a foreign country and decided to get married.

I think the answer is paper file, but I thought I would ask first. Taxpayer has been oversees teaching for 2+ years. Recently married a foreigner while abroad. Needs to file his tax return. Spouse does not have SS#. How do I file this thing? Filing status is MFS There is no income from the spouse. The taxpayer makes almost nothing and it is excluded anyway. Have the spouse name - but she does not have a SS#. Can't E-file if she has no ID number. Am I going to have to fill out a W7 for her and mail the return in? Thanks for any hint on how to make this less painful. Tom Lodi, CA

Terry, my apologies. I have not done a military return in a very long time, and I blew that one. Just looked up the pub 1032 and you are correct. They file a 540 NR and the income includes 1/2 of military pay because the spouse stayed in CA. Sorry, and thanks for educating me. Tom Lodi, CA

I don't go to myATX unless I have to. So I am blissfully ignorant of the problem and I hope to remain so. If KC was around, she would agree with the "blissfully ignorant" part. Tom Lodi, CA

CA taxes all worldwide income of its residents. The taxpayer and the spouse are CA domiciled, that means CA residents. CA 540. Not a CA540NR. All income goes on the return, regardless of where earned.

Above 5000 = auditor? Congrats Joan, but you did not need the ttitle from Eric to be a master in my book

it is fixed now.

Just sent a return to fed and CA. CA rejected within 2 hours with a code of ERC: 1040CA571. The explanation was that the federal forms were not in numerical order. Never saw that one before, and I have no way of putting the return in order, ATX does that when we create the return. Anyone seen this reject code before and know what it is referring to? I resent the return and will see what comes back. It was a simple return - HOH EIC and 8812. Tom Lodi, CA

I love the pampered chef items. They have the best can opener (manual) and the best apple corer/slicer. I have seen there cooking stones for baking cookies, but I was not impressed. I think a non-stick cookie sheet is still better than the stones, but alot of people like them. As for the tax return, I have not done one, but I would treat it like Avon or tupperware or any other home sales business. If they have inventory to show at their parties, then they have inventory. Having inventory also means they have to have a place to store the inventory (which is one of the valid reasons to have an office in the home). And if they have an office in the home, then they have mileage from the office to everywhere they go for their business. Good mileage logs are nice to have, but if you have not trained your client about that yet, then you can use the sales logs to figure out where the parties were and google or mapquest the route for the miles. Don't sweat it, it is a fairly simple sch. c if your client is willing to listen to you. Tom Lodi, CA

OK, I am confused. Can someone straighten me out? The rules used to be that unless a rental activity rose to the level of a business, they were not required to issue 1099's for services. If they rose to the level of a business, then all the 1099 rules that applied to a business applied to them. Then they changed it so that all rental activities were a business for the purposes of 1099 reporting, meaning issue 1099's for services in excess of $600. Not for goods. Not to corps. Then they passed the healthcare law, and it was anyone you pay over $600 including products and corporations. Then congress repealed part of those rules. What is left for landlords who don't rise to the level of a business? The form Sch. E has a box at the top and asks if you are required to file 1099's? But the Spidell update book says the 1099 rules were repealed. I think Spidell is wrong, but they have been a very good source of info for us for a very long time. Anyone have a definitive answer? Thanks, Tom Lodi, CA

Not what I wanted to hear, but thanks to both of you.

quit picking on the ed credits! My oldest just finished his first semester. I was working on my own return today and was very happy to see the credit. I have 7 more year to collect on that credit. Leave it alone! Tom Lodi, CA

To all of you who are fluent in Church issues, and in CA payroll. I know that in CA you have to pay an exempt employee 200% of the minimum wage. Are church employees exempt from this rule? What if their duties are only part time? Can they be paid once a month? Here is the scenario. Our church has 3 employees. All are paid a salary once per month for their services. Employee 1 is the secretary and she comes in 3 days per week for 4 hours each day. Employee 2 is the custodian who is given freedom on when to come in, but generally works one day per week. Employee three is the treasurer who comes in 1 day per week generally, and works a little more on the quarterlies, year end, w2's, etc. None of these employees earn 200% of the minimum wage. Is the church OK under CA law? Thanks Tom Lodi, CA

I like Depreciation Calculator from Cellutionware Software. It is like $400 to get it and it cost about $190 per year for upgrades and support. Kinda weird that they only talk to you via email. No phone calls. I have used that software for about 15 years and it is good stuff. Prints out reports that look just like CCH printed them out. Book, Tax, State, and AMT calcs. Groups and locations. I really like the product, and I think it is a steal fro the price and what it does. But it does not run on a network, and they have no plans to make it do so. Hope this helps. Tom Lodi, CA

Hey Eli, Wishing you and yours a very Merry Christmas. Tom

I am deleting my prior post. Tom Lodi, CA

At my day job, we have been offered an opportunity to expand into Texas. Our company was there years ago before I was on staff. Is anyone an expert on Texas Business and Payroll taxes? I am just looking for a place to start. I assume that there will be a business registration of some kind. Since there is no state income tax, there is no withholding, but that does not mean there are not state level PR taxes. Any help is appreciated. I will be surfing the State of Texas websites for the next couple of days. Tom Lodi, CA

I have a client (mfj) under audit for gambling winnings in 2009. Their documentation is a little on the light side, but there is enough to reasonably reconstruct the facts. We fully expect the client to go to tax court because the correspondence audit is not going well. The wife had a gambling problem and it is her SS# that the winnings are under. They filed MFJ for 2009. The wife died on Tuesday. I am totally blown away by this very unexpected death. These were friends before they were clients and she is not much older than my wife. Her daughter attends my church youth group with my kids. How does the spouse continue on to Tax Court when the Notice of Deficiency arrives? This is a new one on me and I really don't have a clue how to proceed from here. Does the surviving spouse sign everything and attach a copy of the death certificate? Can he testify to what his wife would have testified to had she lived? Can they even proceed without her? I had a very clear strategy in mind for this case, but it depended on the wife testifying about her gambling problem, which she was willing to do. I need to come up with a new strategy, but as I said, the documentation is a little light. They don't have any money, and I am not sure they have enough to pay for the funeral, let alone taxes on phantom gambling winnings. Any thoughts would be appreciated. Tom Lodi, CA

Medlin is correct on the CA issues. Client cannot hold terminated employee checks till payday. Immediate payment if you fire them, 3 days if they quit. They made the payment on July 5, not 6. That was a typo. "Every other Monday" is the next business day for the "every other Friday" pay date, and every pay date is a 100K liability. They have the money to pay. Client just pulled out from a major payroll processor and brought the payroll in house. Never did the PR taxes. This is the first 941 and the PR manager is not the best at PR, let alone taxes. They have a really good payroll person in house for processing the checks. They are happy with that part but struggling to get the taxes. They just thought the software would spit it out for them. But the numbers are not coming out to their deposits. In playing with their software a little bit, it appears the tax deposit reports can be run on Check Date or Period End Date, and the client has not been consistent in the dates that they have chosen. I think that is what is causing the biggest part of the issue. Thanks for putting me on the right track. Found some more info in the Circular E. Appreciate the help. Tom Lodi, CA

Looking for some direction please. Potential client is a next day depositor. Bi-weekly payroll liabilities in excess of 100K. 500+ employees. Pays his taxes every other Monday. Last Payroll of the quarter was on June 17th. Next PR was on July 1. From June 18th to June 30, he cut several manual checks for terminated employees and miscellaneous reasons. Totals about 4K in liabilities. Paid those taxes when he deposited on July 6th (next business day) with his regular PR. Here are the questions: 1. Because he is a next day depositor, does he have to deposit for every paycheck he cuts outside his normal cycle, or is it OK for him to pick up all those small checks with his next payroll? 2. On his software, the Schedule B is showing those liabilities for the quarter on the day the checks were written. But the payments were made in the next quarter with the payments for the July 1 PR liabilities and coded to the 3rd Qtr in his online payment. Shouldn't those have been split out? How to fix if this is wrong? Thanks for your assistance. Let me know if the facts are not clear? Tom Lodi, CA

Thank you Billy. I was all over in Circular E and Pub 15B and could not find it. Never thought to look at the instructions for W2. Duh. Tom Lodi, CA

Our company started offering education assistance to employees. Are these payments required to be reported on the W2? Is it a box 14 entry? Thanks. Tom Lodi, CA