imjulier

Hi there- Anyone know if the IRS can identify when an RMD was not taken other than self-reporting? Have a non-client (friend) who is thinking about just not reporting that they didn't take the RMD because the penalty is so high (50% according to her but I've never looked into it). I would never prepare someone's tax return that way once I knew what happened but she on her own of course can choose any action she wishes. Thanks for any info. Julie

Thanks to all for your input and information. It was one employee with an $800 bonus. I told them to use this as a learning experience and to do it right next year. Not perfect, but then what small business is. Again, thanks for the information. Julie

Tom- You confirmed what I was thinking. That is the response I gave to the client so we'll see if I ever hear about it again. Hopefully not! Julie

Thought I'd try and see if anyone here knows much about payroll. I don't which is why I generally don't do payroll and I recommend that all my clients use a payroll company becuase of the nuances/issues that arise when you don't do payroll all the time. However, clients do what they want. So client issued a bonus check in December through their QB payroll but instead of issuing it as a bonus chack and withholding 25% as you are supposed to, they issued it as if it was a regular payroll check and hardly anything was withheld. Now, they want to know if they should correct it because they just became aware that they should have withheld 25%. They only have one employee. I say no, its probably not worth the hassle but next year, do it right. They are questioning my judgment. Does anyone here want to give me your opinion? Thanks, Julie R

Thanks!!!! I hope to have many more as I'm only 46....but working out sure feels a lot harder than it used to. Julie

Its my guess they just aren't accepting them yet. I think they are only accepted from July 1-Aug 2. I sent one that was rejected and I'm going to re-try. Julie

Ouch! I know of at least 3 more clients of mine who would have had to close their businesses last year if we hadn't been able to cut their salaries and keep the employment taxes in the business to help make wages of employees.

Thanks jklcpa.... So, I've reviewed how to do this and read the 4797 instructions (I've sold assets before....just not those reported on the k-1)and from my example above, here's what I'm trying to figure out: This looks like a $19 loss, right? For recapture, have I even been given the reclaculated depr? Or is this something I have to figure out? Thanks again for any help. Julie

Still working on some K-1s that I'm just not sure how to handle. I have a statement for box 20, code L called disposition of assets with prior section 179 expense. An example of one of the items has dates purchased and sold of 6/30/02 and 6/1/09, sales price = $0, cost or other basis plus expense of sale = $175, depr allowed or allowable = $106, and section 179 expense dedn previously reported = $50. There are 5 dispostions like this which look kinda similar. I have no idea what to do with this. All I can think to do is to reclaim the section 179 on Sch E because depreciation and g/l may already be in box 1 and box 10. Any thoughts? Julie

Margaret- I don't think the issue is commissions being paid but more if the person will truely be an independent contractor. Refresh yourself on the rules for employee vs. independent contractor and talk to the owner. If truely a contractor, any pay would be reported on 1099 and if employee, I believe both wages and commissions are subject to employment taxes but I'm not positive on this one. My 2 cents that are probably only worth one. Julie

Thanks Joel and taxxcpa- Good information...I think I'll be following Joel's method since I'm not sure the k-1 represents roylaties (its an operating company) and its consistent with my first thought of putting it on pg 2 of E with a seperate entry. Thanks again for your input. Julie

Help! I have a client with a partnership K-1 for oil & gas....yuck. Box 20T provides a statement with depletion information. It says total percentage depletion is $3,515 (subject to 65% taxable income limitation). What is this 65% limit? Also, statement says that all of the depletion is in excess of basis. Does this make the depletion not allowable so no entry on the tax return? If allowed, how do I enter this in ATX? I'm thinking about using a seperate line on Sch E, pg. 2. Any help is greatly appreciated. Thanks, Julie

"yadda yadda blah blah SHUT UP BITCH!!!!" Catherine- Hilarious! I had an image of you as being so refined....just because of going by your full name. Catherine....not Cathy, not Cat or Kitty, but Catherine. It sounds so refined and elegant. Now my image is shattered... Julie

E-filing is REALLY easy....I can't imagine doing it any other way. But I do have a couple people each year who refuse e-file and insist on having hardcopy to mail in.....under new requirements, will I have to force them to e-file?

And, onward and upward (???) to payroll filings. I wonder how long it will take ATX to process acks for 941s given that I think there are still some ack issues out there from the 15th. Any one received anything on these yet? Thanks, Julie

Thanks taxtrio. I probably should have taken today off. Julie

You would think we'd all have this down by now but I am not able to find this answer in Express answers or US master tax guide. Does it matter who actually pays the education expenses for the Am Opp educ credit? Say child pays for education but parent still qualifies to claim student as dependent. I think the credit follows the exemption. Correct?

Moving on from filing to 2010 planning about 2 weeks too early in my opinion. Needing to know if clients can change from S corp to sole prop tax-free, same as going from sole prop to s-corp? I know they don't have any BIG (built in gains) tax issues becasue there is only a car in the business that they are going to "distribute" to the owner while its still an s-corp. Any knowledge, thoughts, ideas? Thanks, Julie

Off the top of my head, I think both would pass through to the business as taxable (in the form of revenue or offset to rent expense). Bottom line will balance out with less actual revenue received (if there really was business damage) and expenses in the form of moving the business or possibly increased rent. It makes sense to me that all this would roll together to show the actual results of the business income/expense. If there are other facts to consider, let us know. Julie

Interesting. Any chance the parents have gifted her the car even though its not in her name? I understand that no std mielage rate allowed since she doesn't own it but if its a gift....maybe. If not a gift, I would do actuals with business % applied(without depreciation....if she indeed paid the expenses and the parents didn't. If the parents paid everything...no go. I don't have any cites on this....just logically thinking about how I might handle the same situation. When I worked for a big corporation, I was never asked if I owned the car before I was reimbursed for business miles...when I was younger, my parents owned the car but I was reimbursed any way. Julie

Margaret- I have been through this in CO with a couple of contractors. CO allows s corp SH to collect unemployment as long as the s corp has been paying in to unemployment. Some states allow the SH to opt out of unemployment and if they choose that route, then no unemployment coverage when needed. Colorado does not interpret that a s corp SH may still be employed by the s corp even though there is no work. My thought is that the s corp may still be able to pay some wages to the SH even though there is no work. In fat times, save money and pay less in wages for those lean times when you have to do business development. However, CO doesn't see it this way so the s corp SH can collect unemployment. I don't fight it nor tell my s corp SH to collect or not collect unemployment since that is the state's decision. While I haven't collected unemployment in over 25 years, when I did, I was required to file reports with the unemployment office showing how many employers I had contacted and if I had earned anything in the period I was filing the report for (earnings reduced unemployment benefits). Clearly, this leaves room for anyone to report any information they want unless they get audited by the department of labor and employment. I believe reporting this accurately is an ethical decision that we all have to make. I suspect your clients are not reporting this accurately if its required at all. As a CPA, I don't think this impacts me at all unless I've told my client to do that....which I would never do. So, if they choose to collect unemployment and file the paperwork however they see fit, that is their decision. Unemployment income would just be reported on the federal and state returns of the individual as this is how its being received and how it will be reported on 1099G. Impact on the corporation is that their unemployment rate may go up and require them to pay more in unemployment taxes in the future....but probably not more than the benfit so I'm sure the SH won't worry about this. Julie

How about Sch C with reporting his expenses which should offset the income and therefore no SE tax. Julie

Oh, duh, scholarship. Didn't see that before. Sorry. Julie

I can't believe that the father would not benefit by a lot more than the $1,000 taxes owed since maybe he can claim the Am. Opp. credit and qualify for the refundable portion. But as stated above, look at the dependency rules and act accordingly. Julie

I wouldn't look like that....I'm not a middle- to old- age white guy! Julie