imjulier

Thanks Old Jack....this is extremely helpful. Julie

Hey- Anyone know the mileage rate to use on determining w-2 wages for personal use of automobile? I'm not sure if its the same as the reimbursement rate or not. Thanks, Julie

How about e-filing 1099s and uploading w-2s through SSA website....then no red forms at all needed.

Sorry- I was definitely thinking backwards....but it doesn't matter. See the link under my solo 401k question. The deadline to make contributions has passed since a tax return was filed instead of an extension.

Does anyone have a good reference to info on solo 401ks? I've been reading the pubs and need to determine the following: -Can 2 owners (husband and wife) in an s-corp even have solo 401ks? (my clients were already set up this way by previous accountant) -Can company make contributions without the employees making any contributions? Any help appreciated. Julie

It sounds like if the contribution was maxed out before that he has now over-contributed and needs to have some returned to him as taxable income.

Hey there- Just wondering if any on this board are registered as a reporting agent to be able to e-file 940/941s? Any feedback on what the issues are of going down this path? Reasons to do this or reasons not to? I'm just thinking about it because some of my clients are getting tired of sending these via certified mail. Any feedback is appreciated. Thanks, Julie

It is worth a call to the IRS at least. I've heard of them cutting bills in half for NPs. Also, I had a client that didn't pay on time and they dropped both penalties and interest for one period (quarter)just on our phone call. They indicated that there would be no relief for other periods without reasonable cause explained in a written letter so you may want to prepare the executive director for other notices to expect by understanding how many periods were paid late. Your notice probably applies to only one period. Good luck.

Not that KC is not THE guru, but I agree, it should work. Yipee, a tax break for not being allowed to marry.

I can't believe an estate would make it an unrelated sale so I agree with you. If you haven't already, look at instructions for form 5405 which refer you to pub 544 which is clear that if you are the executor or beneficiary of an estate, you are a related party. My interpretation. Julie

Clients make up what they want to hear. If his other CPA will do that, then let them take the tax return there....family or not!

I'm just starting to talk to a client about a situation they have and don't have all the relevant information yet but want to get some ideas from those of you on this board. Here's what I know. -Land purchased in 2006 and "development" of land began -"substantial" amounts (don't know what substantial is yet but I believe around $30K-40K) were spent to improve the land like sewer, water, electric, foundation, etc. -problems with entire development (client only owned their parcel of land) caused development to cease and legal action to begin -result of legal action is tearing out of foundation and re-starting on the building At the time, client was building to live in as main home. Since all the problems, client had to find another main home and now has a 2nd piece of property they are developing. Client paid a significant amount of taxes in 2006 and was told by another CPA that they can deduct all the expenses related to the development of the first piece of property which were costs incurred in 2006. I'm trying to figure out how to do this and only have 1 idea, which doesn't affect 2006 taxes: -Property now will in all likelihood become a rental. This makes the cost of the land and cost to develop and build a capitalizable cost (the basis to be depreciated over 27.5 years) which won't occur until the rental is ready....probably 2010. Is there something I'm not seeing or thinking about to use the costs in 2006? Thanks for any thoughts. Julie

I would just add that if owned jointly, the wife would have gotten a step up in basis on half the house. Then the gifted basis would be higher than if no step up. My 2 cents. Julie

I did this many years ago before the latest lending debacle so its not a new practice. I signed a letter without a second thought since the business had the money and it would not keep them from paying any liabilities. I think the intent is to know where the funds for closing are coming from in the event there will be another liability that could keep the homeowner from paying the mortgage. But what do I Know. I think I stated in my letter that I (or anyone) could not guarantee the on-going success of the business. If I were asked, I'd do it again. Julie

I'm sure I should know this, but is e-file still available for those returns filed late....after Oct. 15th?

I have a new S corp client (new to me, they've been in place since 2004), they have not been doing payroll thoguhout the year (filing 941s). The only way I can think to avoid penalties is by spreading the annual payroll over the 4th quarter months and pay 941 taxes each month (since they will exceed $2500). Is there any other way I'm not thinking of? Thanks for any input. Julie

Get a copy of the notice so you can see it. I had a client get a notice with amounts due for an 1120 S (IRS only identifies it as 1120) because the tax return was not filed timely (which in this case it was and the client even followed the client letter and has certified mail receipts to prove it). Amounts due were for penalties and interest..not taxes. But tell them they have to pay you for your previous work before even taking a look at this one. Julie

I do believe "zero" 941s are required.

Hey there- Here's a good off-season question for you glutons for punishment. Given that the LT Cap Gains rate may change after 2010, would you recommend doing an installment sale in 2009 or would you elect to not treat as installment sale because tax rate may change after 2 years (5 years of payments)? Also, if installment sale used, how are non-tangibles reported (goodwill amortized over 15 years with 8 years of amortization claimed)? Would the reporting be same as for equipment with recapture amounts taxed in current year at ordinary rates and gain spread over the installment period? Thanks much for any insight. Julie

Thanks to all who responded. I have been thinking about the seminar idea for a couple years but have yet to follow through. I'll let you know how it goes. Julie

Hey there- I'm just thinking about ways to move my practice from 80% individual/20% business to exactly the opposite. I'm struggling to figure out how to reach the small businesses with 1-10 employees and $500K - $5M in revenues. I'm thinking about putting together a letter introducing myself and then hand-delivering it to businesses in office buildings or office parks that don't take up the whole building (they are not a huge corporation). Does anyone have any other ideas or has anyone tried this to know if this ever yields any clients? Thanks, Julie

I have to admit that in my first year in business, I didn't know I could add the state taxes paid for the previous year to schedule A. I had a client that caught it because she pays all her state with her tax return to the tune of about $8,000. I then looked back through all my clients to see the impact. I only did 3 amendments because those were the big ones, all others had a less than $50 tax impact. But I had to do them for free and worry about the rest. Now, I check previous year tax retrun and input it myself. I would have thought that a competent review (or use of a checklist to check all the final figures, in case something was fat-fingered) of the tax return before calling it final would detect this. Makes me wonder what else might be wrong in your returns? Not trying to be mean either, just pointing out a flaw in your process. Julie

This is consistent with what my client was told by the employer. They told her that there was no difference to her US taxes since she works out of the country 9 months out of the year rather than 11 months. I filed US and CA taxes without making any adjustments for her neing out of the country. Thanks for responding. Julie

Africa is huge....I haven't checked on specifics with the client yet. I was just trying to figure out if it matters or if I should just claim all income as CA income.

I have a client who work for University of California but works in Africa. W-2 says wages are from CA. Should she be doing anything to file taxes in Africa (whatever that is like) and then taking foreighn tax credit? Just looking for some input as I'm not sure what the requirements might be in this sitaution. Thanks, Julie