BulldogTom

Good call KC. It is not a real bother. He is not selling anything (yet?) and it may work out for us in the long run. If there are too many of these type of posts, then start putting them in the round file. Tom Lodi, CA

There is another way - similar to the others - if the two computers are networked. Create the file like Kyle said, export to it, and then on the new laptop, import from that file across the network. Tom Lodi, CA

Mel, Since your title was about retirement contributions, are you looking at an IRA contribution for the year? Is the company allowing you to continue to contribute a portion of your pay to the 401K during your "on call" employment period and just not matching your contributions? My take is you are still employed, so your wages are definately qualifying for either situation above, subject to all the normal rules. Here is a piece of advice. Take your 401K and roll it into a self directed IRA at the first opportunity. If you are happy with your company's financial provider, keep them, just roll the 401K to the IRA. There is no penalty or taxable transaction for doing this. When I was working for Del Monte, I left my 401K in the Merrill Lynch account because it was doing fine. Then I got a notice that the company changed the fund offerings and I was being "moved to comparable funds" in the Merrill Lynch family. I didn't think much of it, until I got my next quarterly statement and 60% of my money was gone. Like I said, even if you like the company that is offering your investment choices, you should still roll your 401K to an IRA. Tom Lodi, CA

Kyle, Nice to meet you. You should stalk the board here on a regular basis. Tell Kerry that no one is going to talk to him until he posts a picture of those beautiful kids of his (a result of his wife's looks, not his). Tom Lodi, CA

I was with Republic for 3 years. Nothing bad to say about them. Switched to SBBT last year. I had used them in my past software life and I really like them. I would not have a problem recommending either bank, but I prefer SBBT. I only do about a dozen bank products per year. Tom Lodi, CA

Hey Kerry, I think you are working at that new support network in Maine? Is that correct? How much will they charge me to have you do a little system maintenance and setup for the 2008 ATX software. Probably just an hour or so to make sure all the network connections are correct. My computers are running a little sluggish with 2007 (3 years old) and I don't want 2008 to be a problem. Send me a private message if you don't want to post here. Thanks man. Tom Lodi, CA

I am blushing profusely KC. Thank you for your kind words. Yes, I finished up my Masters Program. And the next time you are out here visiting your grandchildren, call me and we will go out to dinner again. If you are willing to drive up to Lodi, I will treat you to dinner. Tom Lodi, CA

Rick, That is a good question and I don't know the answer. I THINK that the intention of the law is one residence, one credit. That would be an ASSUMPTION, and you know what they say about those. Also, watch for the phase outs. If you client is making more than 75K (filing single) they start to phase out and it is gone at 95K. Heads up. Tom Lodi, CA

The first thing you need to see is the sales agreement. If there is no breakout of the sale of the equipment and the goodwill, then you will have to list all the equipment at FMV, and subtract from the sales price to get the amount of goodwill. Goodwill is a §197 or 195 (I forget which one) intangible asset amortized over 15 years. Obviously, your client wants as much asset cost as possible to depreciate and as little goodwill as possible. Get good estimates of the FMV of the used equipment. An outside estimate is better than the numbers the client will pull off the ceiling. Tom Lodi, CA

Your assumption is that I screwed up the payments. Wrong. I made every payment on time. I followed the CPA's written instructions. I showed them copies of every EFTPS payment and backed it up with the copy of the bank statements showing when the payments were deducted from the account. I know how to present the information to the CPA firm for the preparation of the tax return. Of course a CPA would never admit that one of their bretheren was wrong. That is the way that community opperates. Remember, these are the same guys who gave us Enron Accounting.

They forgot to complete the form to eliminate the penalty. All estimated taxes were paid on time.

>>What form was it, by the way?<< Form 5806 Underpayment of Estimated Tax by Corporations >>I take offense to that comment.<< I appologize.

The owner is going to call the partner.

The company I work for hires a CPA firm to prepare the corp tax return. Per the owner's instructions, all issues related to the tax return go through the CPA firm. After filing of last year's tax return, we get an FTB notice for underpayment of estimated taxes. FTB wants $1,100. I call the CPA firm and forward the notice. They tell me we should not have to pay and they will take care of it. The preparer of our return just left out the form on the return. Don't worry about it they tell me, it will be taken care of in no time. Six months later, it still is not fixed. FTB is still saying there is a penalty for underpayment. So what comes in the mail today ---- you are going to love this----- a bill from the CPA firm for $1,500 for their attempt at correcting the return they screwed up that resulted in an $1,100 penalty. I could never be a CPA. They have balls of steel and will steal from God or Satan. Tom Lodi, CA

Mel, Your opinion has value. Charge for it. If they want a yes or no, tell them you will write up an opinion for a fee. In the opinion, state the conflict. Make sure your employer knows what you are doing. Then cash the check. Tom Lodi, CA

Jainen brings up a point I had not considered at first. What is your relationship with the shareholders? Did the practice prepare the personal returns? If I was only engaged to prepare the corp tax return, I think I might consider "politely, very politely" informing the IRS auditor that those records are outside the range of documents that you have access to. Express your willingness to provide the detail of related party transactions from the general ledger, but I would really consider if I want to volunteer the shareholder's 1040's that are not "officially" under audit. This of course could lead to the auditor pulling all the 1040's for audit, so consider everything before you communicate anything to the IRS. This brings a whole new dimension to the scope, as you don't want to be representing the shareholders on their individual returns if you are not the preparer or don't have a good feeling for what is on those returns. And even if you are the preparer, it may not be a good idea to let the auditor go poking around in the shareholder's 1040's on an 1120 corp audit. I am just thinking out loud, but if there is any other issues on the 1040's not related to the corp, it might make the auditor more suspicious of the 1120. Think about this. Talk to your clients. Get a good strategy in place ahead of time. Protect yourself. Tom Lodi, CA

From the two items you listed, I would guess they are looking at employment issues to see if they are truly subcontractors. When you mention "product", I would immediately look at the inventory to see if that should have been in the COGS and not in the expense side of the financials. Unicap rules may be in effect. That is just the first things that popped into my mind. I think you will be working on this for a while. It should generate some good revenue for your practice. Get the POA and the engagement letter, and most importantly, get a retainer up front. You are going to be working nights on this. Tom Lodi, CA

You are right about keeping politics and taxes separate on the board. There is probably no one I respect more than Jainen when it comes to taxes, but there is also no one further from my political point of view than Jainen. I hope he knows how much I respect him, even though I don't agree with his politics 400% of the time. Tom Lodi, CA

I subscribe to Kiplinger tax letter. But I also get the PPC letter from the CPA firm that my day job company has engaged. I guess I am pretty lucky that I don't have to put out a lot of cash for updates. And this board is another resource. Tom Lodi, CA

As the tax season approaches, I am getting much more anxious this year than any other year in the past. Despite my normal CPE and an upcoming update seminar, I feel like this year's tax law changes are going to make this a more challenging year than ever before. It used to be that a client with a home and a mortgage just meant we needed to look at the 1098's for refinances and any points that were paid. Now, we wonder how many are losing their homes and which new law might or might not apply to them. I already had a client in for a consultation, and I nearly missed the fact that she had too much income to qualify for the new first time home buyers credit. With the expiration and extention of so many credits, I am having a hard time keeping up with what can and cannot be claimed in the upcoming year. Teachers credits expired and are extended, home energy credits are lost, but coming back NEXT year, AMT was patched again. I am really going to need all of you to help me out this year. I will also do all I can for each of you. Every one of you are appreciated. Lets keep our tax family strong in the upcoming year. It ain't gonna be easy, that is for sure. Tom Lodi, CA

Hey Eric, you missed the best candidate - Alan Keyes of the reform party. That is who I am voting for. How about some equal opportuntiy posting on your tag line for the "Best Black Candidate"? Tom Lodi, CA

Great to hear from you again Kerry. Post some pictures of the girls when you get a chance. Good luck at the new company. And don't be such a stranger. You are family here also. Tom Lodi, CA

If you ever decide to retire, please refer that client to me. I will be happy to take some racing time in a Ferrari in exchange for some tax prep work. Tom Lodi, CA

Like ed says - no harm no foul. No change to the tax, just change the date in the system and don't even tell the client. Tom Lodi, CA

I would say the minute he drives it for any purpose other than to take it from his business to a show and back, he is in danger on audit. If it is that classy of a bike, any auditor worth his salt is going to call it personal and make you prove it in front of a judge. Tom Lodi, CA