Don in Upstate NY

I should preface this by noting that I was an engineer in a previous life, so I notice things about the workings of a program that are interesting to me, but may not really matter to a full time tax preparer as long as everything work! TRX (OrrTax/Intellitax) is a database program, and uses the Microsoft SQL Server as its engine. It appears that all the computational rules (W2 box 1 flows to 1040 line 7) are contained as records in the database, as are all the error messages, diagnostics, etc. Updating is generally simply adding or changing records in the database. There have been 15 updates to the Federal 1040 program during the past season. This counts the first 'update', which is really the initial version of the 1040. Each update is about 5.5 Mbytes in size, and each update is comprehensive (i.e. if you were at Rev 7 you need only load Rev 15 to be up to date.) You must have Administrator privileges to update the program. The update process is a separate program which can be fully automatic (download and update when needed), semi-automatic (download and tell me when an update is ready), or manual (I'll check myself). The main program displays a splash screen the first time you use it after an update with a link to the detailed release notes for that update. State programs are loaded using the update process. The automatic process just updates the states that you have installed. I only had one problem this season with updates. In late January I had entered a return on my laptop that had educational credits. The Form 8863 accepted the data and calculated the credits, but of course could not be e-filed before the IRS date in February. The day that the IRS opened e-filing on the 8863 I was out of state, and attempted to update my laptop using the WiFi at the local library. I downloaded the update and attempted to install, but things went awry. (IIRC I was not in the Administrator mode.) The program would not run, giving a fatal error message that had no meaning to me. I called TRX support, got a prompt answer, and talked to a technical support person (as opposed to a tax support person.) After several unsuccessful attempts to work around the problem, I got the bad news - I would have to uninstall TRX and start from scratch. The uninstall/reinstall process went smoothly, except for the fact that I didn't have the original disk with me and had to download the original image from the web. Downloading a 230 MByte file on a WiFi shared with dozens of teen-agers doing their homework (or playing games) is a s-l-o-w process. TRX stores the program and the client and configuration data in separate directory structures, so uninstalling/reinstalling the programs leaves all your data intact. This time the update worked, and I was ready to e-file. (I couldn't, but that's another story.)

It's there. Start at Schedule A, line 10. Click on the "+" to get the Interest Paid worksheet. Go to line 9 - Points Amortized. Click on the "+" It asks you for the name of the lending institution and opens the worksheet shown here

That sorta makes sense, since TRX is only a reseller of the software, not the original manufacturer. Similarly, if you look at the NATP software survey, you'll see OrrTax listed but not TRX.

Yes. They are also reselling TaxWise this year. TaxWise is $699 and OrrTax is $299.

As far as New York, she must file a non-resident return (IT-203) if her Federal AGI is greater than her NY standard deduction. (This is not strictly true in all cases, but close enough.) If she is your dependent, her NY standard deduction is only $3,000. If she's on her own, it's $7,500. NY is one of those states that first calculates the tax assuming that all the earnings came from NY, and then takes the proportion of that tax corresponding to the proportion of the total income that was NY sourced. With such a low standard deduction for dependents, many students find that the owe NY tax even if they have no federal filing requirement.

Just the regular 2005 1040 (and the EIC form if he needs it.) No penalty for filing late as long as you get a refund. EIC if he qualifies - either has a qualifying child or is age 25 thru 64. No penalty. (Except perhaps his stimulus payment may be issued later than originally scheduled.)

My 2005 opens OK. Running XP SR2.

That's what I did last summer - converted my 2005 ATX returns to 2005 TRX, and then brought them forward to 2006 and redid the 2006 returns in TRX. Gave me a good learning session on TRX and also showed me where I had to beware of problems with TRX. (The only federal problem I uncovered was the incorrect handling of depreciation on a 2106 when subject to AMT.) My 2007 experience with TRX was positive - I'm going to renew.

I've used it this year. It certainly isn't as comprehensive as ATX, but it gets the job done in most cases. In some areas it's actually superior to ATX because it isn't spreadsheet based. That means things like client letters, EIN and zip-code databases, etc. are easier to implement and work better. As to the price, you can pay more if you care to. The software sold by TRX (the $299 vendor) is simply a rebranded version of OrrTax. You can buy OrrTax directly thru their salesmen who can no doubt give you various discounts off the much higher list prices.

Correct. Currently the IRS "drains" (gathers submissions from all transmitters) 1040 forms three times a day, but only once a day for extensions. Then starting next Wednesday they drop to once a day for 1040s and three per week for extensions. See http://www.irs.gov/taxpros/providers/artic...d=97448,00.html

Goodness no! Not even close. There are even some fairly common NY forms in the IT-201 personal series that they don't support. But e-filing is running smoothly today.

No noticeable delay in filing or getting acknowledgments today on the TRX site.

They are a reseller of OrrTax aka IntelliTax. I've used them this season with no problems.

OK - let me ask some questions ... Did they live on the farm as their principle residence? How much was it worth when they inherited it from her mother?

How about the procedure used when a 1099-MISC doesn't properly reflect income? Line 21 (item 1) Rent received as nominee $ 4,000 Line 21 (item 2) Rent paid to actual landlord ( $4,000 )

Actually, they ADDED an option. The old form always resulted in a check if you were due a refund. The new form gives you the option of direct deposit.

I just got my phone call. I hadn't renewed for 2007 due to the price increase ("Oh, you must have had one of our low-end products"). She offered me three years of MAX for the price of one. Yep. Pay the current price for MAX (I didn't ask) and she would send me 2006, 2007 and 2008 when it comes out! Whoop-de-do.

Elaborating on Booger's answer, the reason for this strange W2 is usually a retirement benefit that is taxable to the retiree, such as a pre-paid legal plan or employer provided life insurance over $50K, that remains in place after retirement. The value is treated as a taxable wage, but since no money actually goes to the retiree there is no possibility of actual withholding. So the codes M and N are used in box 12 indicate the Unpaid Tax. A less common cause of UT is a waiter/waitress who reports tips to the employer which are properly shown in box 7 of the W-2, but makes so little in actual wages that the employer cannot withhold enough FICA and Medicare. These Unpaid Tax amounts are also shown in box 12 using codes A and B.

Next year when the kid files on his own, won't he ALSO get the stimulus payment since he didn't get it this year?

I got the ATX version of the "buy one get two" postcard yesterday. I got the ATX version of the "buy one get two" postcard yesterday. [i repeated that because I got two postcards.]

More like unfamiliarity with new software. On the TRX 1099-R input form there are two check boxes right next to the Box 7 input area, labeled "Disability". Pressing F1 for Help gives the message ... Mandatory Retirement Age: Mark this checkbox if the recipient is at mandatory retirement age or older. If this checkbox and the one above for Minimum Retirement Age are NOT marked, the taxable amount will carry as wages to the main form. Check them both and the disability pension goes to line 16 as it should.

I think that technically you can file a return without a signed 8879 if you use the self-select PIN (requires entry of the client's birthday and last year's AGI or PIN), AND the client actually enters the PIN on your keyboard. Why anyone would file such a return without some evidence that the client actually approved it is beyond me.

I think you may be wrong. Pub 17, page 233 talks of amending a return to get the EIC after a valid SSN is received.

Responding to myself, I just found such an animal at HSBC Bank today. It's a "World Allocator Structured CD". Costs $10,000 (and up), and matures in seven years at a value dependent on the growth of the S&P500, the DJ Euro Stoxx 50, and the Nikkei 250. No cap on the upside, guaranteed return of 0% on the downside, and taxable at an OID rate of 3.75% in the years prior to maturity. A guaranteed minimum return of 0% beats a lot of my equity investments.

Sort of funny that a bond would be bought for $1,000 and "mature" for $3,487. That isn't the way it usually works for bonds sold with significant OID. The face value (value at maturity) is generally a nice round number (like $1,000 or $10,000) while the purchase price reflects the discount and is like $234.57.