BulldogTom

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 Then congress repealed part of those rules.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has a box at the top and asks if you are required to file 1099's? But the Spidell update book says the 1099 rules were repealed.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

Last year there was an article I read that the IRS would allow preparers to deduct their fees from the client's refund without going through a bank. Has anyone heard anything about this recently? Thanks Tom Lodi, CA

LMAO. That is a keeper. Tom Lodi, CA

Do not let the deadline for filing pass by. There is NO GOING BACK after the date has passed. Your client needs to file the tax court petition on time. The case will automatically be referred back to audit for resolution. You should file your POA and make sure you are getting all the correspondence that is going to your client. Call the IRS and get documentation into their hands right away for the claimed deductions. They will be happy to talk to you, but once the time has run to petition the tax court, you won't get anywhere at all. The information that you rely on is the Code, regulations, and tax court cases. You need to specify where the commissioner has erred in his application of the tax law and show the evidence that backs up your claim. Good luck. Your client needs help, desperately. You should be there for them. If you are uncomfortable with handling this case, engage a seasoned professional who has done this before to walk you through it. It is money well spent on your education. Tom Lodi, CA

Bonnie, are you saying you are not a back seat driver? Somehow I just don't believe you. Congratulations to your son on this accomplishment. Tom Lodi, CA

Seminar for my day job. All week. It is nice to get away from the office, but I think I am getting ready to go home, and I still have 2 days of classes to go. Staying at the Gaylord Texan in Grapevine. Tom Lodi, cA

On line 21, I think you could list the last three in the other section of the entry page. There are some blue boxes there. ATX should then print "see statement" on line 21. That should get you through the e-file barrier. Tom Lodi, CA

KC. I am praying for you and yours. I am in Dallas and everything is about tornadoes and thunderstorms. The damage on the TV is incredible. May God keep you safe. Tom Lodi, CA (Dallas this week)

And the escrow company might have put it on a Form 592B instead of a 593. This is just another way the Republik of Kalifornia borrows money from taxpayers without paying interest. Tom Lodi, cA

Unless the Due Date of the 2007 return was 4/18, I think your client is SOL. The statute is 3 years from the due date of the return. I don't think you get the extended due date on a claim for refund. I think it had to be postmarked by 4.15.11 Maybe someone more enlightened than I could chime in, but I think the statute has run. Tom Lodi, CA