imjulier

I hadn't heard of it but it makes sense. I automatically charge all clients a 1/2 hour for meeting time and phone calls before I've even started on the return. And anyone who wants to come in and have me "consult" with them so they know how to self-prepare I charge $65. Just like HRB, I can't afford to have my time wasted either. Julie

Thanks for your responses. I had already tried the suggestions and just wasn't getting it. Instead of fat-fingering something in the return, I fat-fingered it on my calculator. Ends up big tax refund is due to 2008 being the first year out of several with capital losses rather than gains and smaller dividends and interest. Taxpayers excess w-2 withholdings were covering the tax on these in previous years. I guess a big refund may be a bright spot in this economy. Julie

Hey there- I have a client who is getting a big tax refund ($2K+) when they usually owe money (a little bit). Generally, Ican explain it by looking at amounts withheld from W-2s in previous and current year or something else. Also, I checked capital gains and how those are different between years (and with different tax rates) but still can't explain it. Has anyone else had this problem? This client doesn't take "I let me software claculate it" as an answer. Thanks, Julie

I would take the expenses and allow the Sch C loss to offset other income. But it warrants a discussion with the taxpayer if this is really a business or is it a hobby. Profit motive is the main indicator and with a w-2 job it will start to look like a hobby after several years of losses. But not all businesses make a profit so check how much time the client spends in the business and act accordingly. Just my 2 cents. Julie

How about amending 2007? I'm not sure how this was done to not have the IRS assess the additional penalty anyway and send a notice....or maybe enough time hasn't passed for the 2007 notices yet. Julie

Hi there- I am just working on figuring out how the basis works in S corps. What happens with loss carryovers when there is no basis? Is this then used to reduce basis in future years when income is generated? Also, I know shareholders aren't allowed to take distributions in excess of basis but can they still claim the loss that passes through on the K-1? Thanks for sharing, I've seen a few people on this board interetsed in starting to do S corp returns so maybe this will help others as well. Julie

I had this 2 years ago and completed the taxpayer's return as if the SS# was theirs.....meaning I didn't change anything in the W-2 input form. I then told them to have the employer issue a corrected W-2. The employer must have done that since we didn't receive a tax notice. Julie

I do just split it manually in ATX....but you're right, there may be a better way. Julie

Yes, sounds like Sch C to me

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I too agree with the learn by doing principle but have found that to really serve my clients, I need to know accounting. No doing it "part-way" by passing up the schedules you don't understand. Many of my clients do their own quickbooks but I then adjust for the things that non-accountants don't understand. Think depreciation, interest expense, and outstanding liabilities just to name a few. Without doing the balance sheet, no one could ever support that the tax return is right because there's no balanced set of books. If no quickbooks, then do the accounting by hand or in an excel sheet which is easy if you do know accounting. I was taught to do the accounting (bookkeeping) first and then the tax return is easy....because its based off this. And after 8 years I agree with that approach. Just my 2 cents. Julie R

How about the dental? Is it treated the same way for S corp shareholders? I've always done the Health Insurance as necessary but not the dental. Thanks, Julie R

Let me clarify. With a SEP, you are limited to contributing 25% of your wages. So, if you pay the shareholder $40,000, they can only contribute $10,000. I was wondering if there is any similar limitation with a SIMPLE. I believe jasdlm answered my question by stating that up to 100% of salary can be deferred, up to the annual limit. Thanks jasdlm for your response. Julie

Hey there- Thanks to KC, I know the limits for contributing to a SIMPLE are $11,000 (or 14,000 if over 50). Anyone know if there is a percentage of wages limitation for the S corp shareholders? Thanks. Julie R

I've got the same. I generally update every day until about mid-February when the program updates seem to slow down. Is this the best approach? I'm not sure. Julie R

I remember this now but I'll probably forget it by the time I start working with individuals in February. I'm sure I'll see several questions/reminders about it by then though on both this and the ATX boards. Julie R

Thanks for the input. I kinda knew this and its how I've done it in the past....but couldn't remember how I arrived at this so just needed to make sure. Julie R

Hey there- Quick question if anyone knows the answer. For a single person s-corp I know the SEP contribution is reported as an expense on page 1 of the 1120 S. My question is whether the 941 and W-2 should reflect this....like is this considered "wages" to the Shareholder not subject to withholding but subject to FICA and Medicare? Thanks for the input in advance. Julie

Anyone doing it for fun or as a favor shouldn't be getting paid. If they are getting paid, they are a paid preparer. I know, it sounds redundant. Julie R

I would not find this feature very beneficial either. I generally find that taxpayers who haven't filed in past years didn't do it because they didn't have the information. And guess what. They still don't have the information so I still can't do their return. Julie R

John H - I really like this idea.

Yes, but the client will want to do it anyway so I'm looking for other ways to convince them.

Hey there- Are there any other rules besides the hobby loss which would prevent someone from taking Sch. C loss to reduce overall income. I have a client where Husband and wife both make good money but tjhey want to creat a loss (with a photography business no less). Of course it sounds like a hobby but are there any other rules I'm not thinking about? Thanks for any input. Julie

Hey there- I did a search but didn't find a string that helped me out too much here and need to know if I am on the right path. Client received restricted stock award in 2007 that vested in 2008. On the date vested, the value of the stock was $283K. The company sold some of the shares to cover $88K in taxes. Statement and paystub says that taxable income is $283K. So, the $283K will end up as wages on his W-2, right? And, this $283K will be the basis going forward, right? The amount sold to pay taxes will be shown on schedule D with no G/L as the stock neither increased or decreased in value from the time he received the stock to the time sold for taxes (this was all done in one transaction on the same day)? Also, I believe he still owns all the stock not used to pay taxes so he will pay a huge chunk of taxes in 2008 on ordinary income reported as wages for the stock award, and when sold, may generate a loss or gain depending on how stock value has moved. If a loss, he'll be limited to claiming $3,000 per year unless he can use it to offset other gains. Bottom line is pay big taxes in 2008 and not reap rewards until some future date. Sound right? I appreciate any feedback....just want to make sure I "get it". Thanks, Julie

Hey there- Is there a way to get an extension beyond sept 15th for S corps? What is it? All I've seen is that if you are filing late to attch an explanation to the tax return. Thanks, Julie