Roberts

Last year a new client informed me that his daughter lived with him 90% of the time. We went through that multiple times and every time he informed me of this fact. After e-filed his ex-wife informs him she wanted the child dependent care credit so I need to amend the return for free because it was MY fault that I prepared the return wrong. I sent him a copy of his own emails with his words and his response "yes I said that but you should have known what I wanted." He had $5k withdrawn from his paycheck for dependent care so yeah, I should have known. He's no longer a client and when he wanted to return I reminded him of his proclamation of my being at fault and why I wasn't doing his return this year. Having everything recorded is a good idea.

SaraEA is doing it the way my state requires it. As Gail posted earlier: " If the estate is the legal owner of a decedent's residence" - that's where the STATE law comes into play. Who actually owns the property is determined by state law and not the IRS. In my state, beneficiary's are deemed the owner - not the estate so the sale by the home is for the benefit of the beneficiaries. You need to check your state law which can be rather difficult to get in my experience.

I agree with Pacun on the basis. If you buy a rental property and don't have an occupancy permit (usually the last thing you get to make it available for rent) - you aren't a landlord. You are considered to be developing your investment still.

edit: In MY state (and I believe this is a state issue), the estate can't take a capital loss on the sale of personal property. On every estate I've worked with the attorney has basically taken the position that the value of the residence at death is the net amount received as long as it's sold within 1 calendar year. That may not be correct in our state but that's what the attorney's have informed me. If they've owned it MORE than a year after death, they declare it investment property for speculation.

Why do you think any house that's in an estate automatically becomes investment property?

If they rented it multiple times during the year like that - I'd call it schedule C. They are in the personal property rental business. Plus I agree on the 5 years.

We have a weird quote system at our office and every time you click a button, the software refreshes. You click it 5x, it will bog down as it refreshes 5x before you can do anything else. My senior citizen co-worker is pretty computer illiterate so whenever it slows down a little I can hear him click click clicking away like that first photo. 2x per day after his clickathon he'll declare "my computer is locked up". yeah, no kidding? Doesn't matter how many times I tell him, he's that monkey clicking away.

I agree also.

I charge per hour with a 1 hour minimum but the time it takes can be reflective on many issues (like what the previous preparer charged). Charging by the form makes no sense to me since even a schedule C or E can be 5 minutes or 4 hours. I have clients who hand me a single Quickbooks print out and want a 1065 generated on a single rental property. It might be $200 normally but since they hand me 8 of them at one time, I charge $130 each and they take <30 minutes each. I'd suspect I'm in the $675 range like Rich but I couldn't really tell. Had a prospective client who had 30 rental properties and EVERYTHING was run through paper books. I told him $45 per property on his Schedule E and he about fell over dead. He found a EA who would do it for $600 and I about fell over dead.

Friend is starting a small business and the attorney who is doing the state regulatory paperwork suggested he be an S-corp WITHIN an LLC. Never heard of such a thing and couldn't understand why you'd want it but that's what he's doing. In our state, an LLC is very VERY cheap to operate. Seems the procedure when setting up the LLC is to elect to be taxed as a corporation. Then you file the Corporate election form to be taxed as an S-corp. Of course the friend has already asked if taking $100 in "income" is enough to satisfy the S-corp pay requirement. He's the first person to come up with that.

I don't agree. Client received a check this year for $9k and will receive one every year for 10 years on land she inherited in North Dakota for the right to drill for oil on her land sometime over those 10 years. With oil where it is, they aren't drilling yet. I'd never seen it before so I called the IRS and they declared box 3 or box 7 and line 21 were all correct. The company which fills out the 1099 does NOT determine how the income is taxed. (I think they said box 3 - maybe it was something else as an option) I've seen multiple instances where box 3 was the correct check but the producer of the form delivered it incorrectly with box 7.

I agree with Catherine 100%. If I do carpentry and electrical work for my brother-in-law to build part of his barn into an office - that is NOT my area of expertise and I do not hold myself out as a member of either of those professions. I'd report the amount he paid me - I would NOT report it as SE. There is entirely too little information to indicate this is anywhere close to being a W2 employee situation.

Being an investment firm also, we routinely get people who receive checks in the name of their deceased parent as well as spouse. Any bank teller will deposit it if you just write For Deposit Only on the back of the check and fail to mention it. Had an "expert" client who kept telling me the bank refused repeatedly - I asked if he felt the need to mention it to the teller each time - well of course. Personally, I'd put it on his tax return and make a note of the situation on the return and in your records.

Yeah, I wonder if it isn't a lack of fraudulent returns with all the new security systems in place.

From the tax seminar I listened in on - there may be a huge push to tax the increase in cash value on life insurance policies as interest / dividends reinvested. The insurance industry has always paid a lot in campaign donations to make sure this doesn't happen but it's something both parties supposedly quietly support.

The current Republican tax plan is for individuals to get a $12,000 per person standard deduction. $24k per couple. The only thing that could go on the Schedule A is your mortgage interest and charitable deductions which in most of middle America doesn't get to $24k for a couple. State taxes, real estate taxes and medical would be waved as deductible items and in return the AMT is eliminated. That would make most seniors (just an estimate), ultra easy tax returns.

I have a client who produced an excel spreadsheet which will do his taxes exceptionally close to what any tax return will do. He spent a massive number of hours going through everything to produce. I have no clue why he comes to me and I assume he'll do it himself eventually. Unless your clients have something complicated like a trust / estate, business / farm, rental properties - the basic 1040 client is going away for good eventually. Anyone 45 or younger is computer savvy enough to do the basic return themselves. It's not a great business model to make a living doing tax returns for the dumbest 30% of the population. It works but they generally don't make enough to pay a large fee.

Offtopic - client received a 1099-C for a credit card writing off $4,500 in balance due. Client tells me initially they hadn't made a payment on it in years but he was getting ready to pay it ALL off. With the code given I told him it is highly unlikely they will ever ask for the money again and it's on his credit report as lost. Now all of a sudden he's obsessed that the credit card company has screwed up his credit rating. His not making payments for years isn't applicable?

Woops - I was wrong. It seems that your spouse is the automatic beneficiary of the balance and it is officially theirs. Even if it's in the spouses name on the 1099, I'd enter it as the client's name and SSN and make a note in the return as a paperwork error.

1.5 miles, 4 stop lights and it can take anywhere from 4-8 minutes. Really burns my britches when it's 8 minutes too. I drive it 2x per day each way because I go home for lunch. My grandfather was a farmer and when we were talking about our commutes one day he commented it took him 2 hours to commute some days. 30 minutes at the hardware store. 30 minutes at the coffee shop. 30 minutes at the grain elevator. 30 minutes back at the house tell my grandmother all the news and THEN he finally arrived at work. Longest mile ever.

Since those are city / state issues - you need to contact your local taxing authority for a set of rules. Had a client who gave yoga instruction as an independent contractor at a studio at night. Our state deemed that to be a sales tax applicable service even though it had been deemed exempt. Now they've reversed themselves yet again. They were even trying to get lawn care and day care to be a sales tax applicable event. Be aware - those things can change and what you thought was exempt - may not be. edit: if a restaurant has a note that says 15% gratuity applied to all groups of 8 or more (whatever the numbers), that's a sales tax applicable gratuity in my state.

Someone I had never heard of wanted to have an estimate on how much I would charge to do their tax return. I gave them a massively ballpark spread outlining that I didn't have the information required. They emailed me a copy of their basic information via a couple pdf files which I didn't trust. I ran it through several online scanners that found no problems. I started opening in Chrome (which is safer than most other options) and it had a link indicating I needed to open in Adobe software. I found a website that would test the link - yep. It was a virus attack website. Be VERY leery people. If they had emailed me on a busy day I might have just ran with it. Their first contact didn't have any attachments and they responded normally.

I've never heard of a SEP Roth. He'd have had to set it up that way from the beginning (if possible). You can't just declare a traditional IRA to be a Roth IRA after the fact.

Just wondering - who does CE DURING tax season?

That's generally my method but with the complex style and my software requiring at least 2 changes (so 12 becomes 23?), I have a print out taped to my laptop with my 2 tax software passwords. When they have to be so freakin complex PLUS they change so often, I'll never remember it and I take my laptop with me. Plus my software has a 15 minute kick out so that means I'm entering it 10x per day. Horrific system. The computer is encrypted so nobody is hacking into it. Literally to get into my tax software from boot up in the morning I have to enter 3 different passwords.