imjulier

Working on a return that is MFS (at cleint request...they don't care if MFS vs. MFJ is better) where one spouse claims to live in a community property state and the other does not. I see that I have to complete a form in ATX with income/tax payments for both the filer and spouse in order to be able to e-file. I am not filing the spouse's return and therefore, don't have that information. What are the implications of completing this form with the information I do have since I did prepare the w-2s and S corp return? I would be lacking other income information on the spouse. Thanks for any info. Julie

I really mean form 1099-S

Does the IRS match forms 1099s? I know taxpayer is supposed to report sale of personal residence on Sch D and then can show sec. 121 exclusion on same form but is this even necessary if taxpayer qualifies for the exclusion. The only way I think IRS can know this is if they can match 1099S. Thanks, Julie

Funny! I can see that one guy in Jakarta doing ALL the tax filings required in the entire U.S.

Does rental/investment property that is inherited get the same step up in basis as stocks and persoanl residence? I believe it would but am I missing anything? By the way, I've been browsing the ATXers communities and people there can be mean....as if you might be an idiot for asking a legitimate question. I'm glad we have this forum. Thanks, Julie

Thanks KC. I knew the facts you are mentioning but this is a lttle different for me since the client is the "child" on the UGMA account but is also an adult and has significant income. They were given this UGMA account about 25 years ago by an uncle who has since passed away. So, it was set up as an UGMA and they haven't done anything to change that over all these years. Its only $60 so I'll report it for IRS matching purposes. Julie

Client swears that they have not claimed the interest on their UGMA account for several years but that they don't receive notices from 1099 matching from IRS. Client is actually an adult and SSN on form is theirs. Doesn't this have to be reported? Thanks, Julie

K-1 basis tab should document this if you've been keeping up the basis calculation year-to-year. It doesn't have to be provided to the SH but I'd keep it in order to document the Sch D loss. Otherwise, I would agree with maribeth that its an off-the-record calculation and just keep notes on why you did what you did. Julie

Saint Martin in May. Here I come!

Is this the first year the corp is electing to be treated as an s-corp? And if so, is form 2553 required or was it already filed? Check the box for from 2553 appropriately rtowrds the top of the 1120S. If form 2553 required, I've always sent mine hardcopy becasue signatures are required. Then in 2nd year I e-file. By the way, are you signed up to e-file business returns? Julie

KC and Old Jack- Thanks for the input. I agree that s-corps can be memebrs of an LLC but that s-corps can not be the shareholders in another s-corp. I was going to communicate this to the client but they apparently couldn't wait 24 hours even for a definitive answer from me so went off and did whatever they wanted anyway. They set it up so the individuals are memebrs and we can then elect to be treated as an s corp. This is what I had suggested to them in order to keep all business and liability concerns seperate and advised that this was not my area of expertise so they should consult with an attorney if they really wanted the best answer. I guess they defaulted to what I suggested but whether or not this was the best answer, who knows? At least now we can proceed. Thanks for giving some input though....kinda chaps my hide when clients do this though. Julie

Thanks Margaret. That was helpful info. I'll have to become more familiar with Quickfinders. Is there a seperate one for individual and business? Any chnace this is part of my ATX Max package? I'm sure I can check with ATX. And yes, that sounds muddy but probably confirms my suspicion that they haven't talked to a qualified attorney. Thanks again, we'll see if anyone else throws in 2 cents. Julie

Hi- Of course clients try to get the rest of their year planned out when we are busy with last year! I have a client who is the sole SH in an s corp. He has a friend who is also the sole SH in his own s corp. They are in-process of forming a new LLC (in addition to keeping each of their individual s coprs)and want to know if their s-corps can be the SH in the new S corp. I think they can....any feedback? Also, are there any tax implications of them doing this? I tried to pass them off to an attorney and they said they had already talked to an attorney and he said to ask an accountant about the tax implications. I believe the attorney suggested to them that they should have the s-corps be the owners but this sounds like free advice from a friend to me since an attorney who does this kind of work would have known the answer about whether the s corps could be the SH. I've never had this scenario and just don't know anything about it except that I do prepare many s corp returns that pass thorugh to the 1040. How does the K-1 pass through to the s-corp? I looked in ATX to see if a K-1 input form could be added for any K-1s received by the s corp and this option doesn't exist. Any info. you can share would be helpful. Thanks, Julie

Hi- I have a client that I prepared the federal and state (west virginia) tax retruns for 2008. Husband was in West Virginia for about 15days in 2008 because he was then deployed and sent to Iraq. Spouse and 3 kids were domiciled in W. Virginia. I filed MFJ for federal purposes and state purposes. Client owed about $2K in state taxes and got back all taxes plus some for federal. Client paid taxes and received a notice for penalties and interest. On calling the state to question the notice, whoever the client talked to told them they could amend their W. Virginia return and file as non-resident since they weren't in the state for more than 30 days and none of the income was earned there. Spouse had very little income but they did own several rental properties which sold at a profit with with a loss from the operating portion of the rental. All this to say that the client was a non-resident and spouse was resident and state instructions say that all income is therefore taxed in W. Virginia. Antone from W. Virginia know any different? I'm thinking this was an over-zealous tax agent who didn't know the whole story before giving my client tax advice. Thanks, Julie

Yep, found it after I had posted here. Makes sense that its deductible when paid since most taxpayers are cash basis.

I haven't had this before so just am not sure. Client has a reverse mortgage which they receive a statement for that includes interest amounts. Yet no 1098 for mortgage interest is issued. Is this interest deductible? Thanks, Julie

I don't know what the NP form is but the actual form to use is the 104 PN. This form is pretty self explanatory because it has a column for federal which will populate from the federal return and a column where you manually input the Colorado income. This then feeds into the CO 104. Both forms need to be open in the return. Like I said, I don't know what you are looking at because this seems pretty obvious if you have the right form. Try looking at the CO DOR website at http://www.colorado.gov/cs/Satellite/Revenue/REVX/1177017551287 . It says you have to file if you have CO source income....not a CO source loss. I'd be tempted to not even file based off this verbiage but you should decide. Hope this helps. Julie

Margaret- I now know what you mean. I started reading Pub 515 and the instructuions for form 1042s. The instructions do not address the simplest of payments for services. I did see in the instuctions though that withholding is required for personal services performed in the US. My situation is for services not performed in the US... I'm going to see if the client will continue to use this person and go from there but will skip reporting for 2009. Can't figure it out right now. my 2 cents. Julie

I looked at Margaret's earlier post but it doesn't suffice for this situation. Client is using a Canadian to perform some computer programming work on a contract basis. He doesn't enter the US for the work and all work is performed presumably from his home in Canada. I'm thinking I don't have to issue a 1099 to him bacuase the work isn't performed in the US. Any thoughts? Thanks, Julie

I have a client who moved a small s corp from WA to CO in 2009. They are staying in CO and need to have tax ids, etc. issued by state of CO. They will not be doing work in WA state again. How is this handled? Do I dissolve the corporation in WA and then re-set up in CO but keep same federal tax id? Any other ideas on how this is done? My fall-back may be to have the client have an attorney handle it. Thanks for any input. Julie

Thanks MAS and Karen- They were paid wages....49,000 in total. Karen, is the opt-out due by 1/15 for 2010....so 2009 opt-out was filed in January of 2009? Also, based on what you are describing, if no state unemployment was paid in 2009, full 940 taxes would still be due (the 6.2%)? They moved to CO mid-year which is why I have no idea what they did in WA. Thanks for your help. Julie

I have a client who has already filed their own 940 tax return. They are an s-corp, no employees but the husband & wife SH, opted out of paying state unemployment in WA. I'm in CO and you can't do that here but he claims that you can in WA. 940 filed says all wages they paid are exempt. I just read the instructions for 940 and don't see how this could be the case. I think they'd have to pay at the higher rate since no state unemployment payments were made. Which is right, exempt from FUTA or liable for FUTA at the higher rate? Thanks for any input. Julie

I'd wait and see if this gets corrected soon. I saw where someone else has the same problem but it makes no sense to me. Don't file a false return just to get thorugh the filters. My 2 cents but what do I know. Julie

941's, W-3, W-2, 1096 and 1099 MAS- 1096 and 1099 just e-file through ATX like any return...no need to do anything additional. W-2 and W-3 - look for the ATX payroll reporting guide on their website. It gives a good description. I think you need to register with the SSA to be able to upload W-2s. E-file is not provided by ATX as its through the SSA, not IRS. 94X - need to determine if you want to be an agent or get 10 digit PINs for your clients. Look this up on ATX as well. Hope this helps, Julie

Deb- If you are on ATX, look at their knowledge base as when I started doing this several years ago they had a pretty good guide on how to do all this. Also, I can't believe the SSA site is that difficult to figure out as I pretty blindly make my way through this each year. I can't help you until I start processing my own this way because I've got nothing to walk through the process with. For e-filing 941s you need to decide if you want to be a reporting agent which requires you to file for 5 digit PIN or if you want to apply for the companies you are filing for to have 10 digit PIN which also needs to be applied for. Hope this helps. Julie