Roberts

Does your software even accept these codes? I can tell you that some don't take z codes in box 20 because they are informational only.

We've all met people who haven't filed for MANY years and should have been. I think we'd be shocked how many people don't file. The IRS only has so much money and they can't police everyone so they take their best guesses or pick off the low hanging fruit.

Lady delivered her tax info last Thursday. On Monday late afternoon she finally informs me what her IRA contribution will be for the year. Then declares she has to meet me today to pick up and go over the return because it just isn't convenient the rest of the week and she doesn't want to wait until next week. My spidey sense informs me she didn't like my response.

I've mentioned on here previously that I a client provides me Drake software for free (to use for his clients) and I pay for my subscription to OLTPRO. Well I had 3 returns I really had questions about so I ran them through both pieces of software. My biggest concern was whether K-1s would be handled properly by OLTPRO. First client makes income of over $900k per year - far more than half is distributed via 6 K-1s her company issues to her. After working them both up (in OLTPRO it's a 75 page tax return) the final result was a $4 difference in the tax paid. On Schedule A each software did things differently when it came to limitations due to income. Didn't spend the time figuring out which it more properly since it was so close but Drake appeared to be correct. Was shocked the K-1s were all handled exactly the same. Second client is rather small - a city pension, retired military pension and W2 for his job. I only ran it through both because it ticks me off how much tax he pays every year. Thought maybe I was doing something wrong. The 1040's came out the exact same. Drake ROYALLY screwed up the state return. In determining a limitation on a military pension deduction my state allows - it comes to a limitation percentage (both correct) and Drake multiplied it by an incorrect number. It would have cost the client over $300 in additional tax because of their error. I couldn't find a way to fix it. Lastly I ran a 1065 real estate return through both (did it back in February actually). Wondered if depreciation was handled correctly and they came out the exact same. Drake is nearly a 20 page return whereas OLTPRO generates a 15 page return. Drake has good letters - I don't use letters. Thought it was an interesting test.

Next thing you know they will expect a correct SSN and birthdate.

Just had a client call up and freak out that I missed 90% of his income on his return and I had screwed it all up. After a few minutes he admitted he was looking at a tiny 1041 we do for him - he wasn't even looking at the 1040. Every year he does something very similar to this. Last year he wanted me to argue with Fidelity that his wife's wash sale of a stock wasn't really a wash sale - even though it was a wash sale (turned out he didn't know what a wash sale was). Year before that he thought I should go through all of his wife's 1099 trades and verify that Fidelity had the right numbers - even though he knows I don't have ANY of the information. And she has about 200 trades every year (and reports a loss every year).

The property tax credit in my state also works for rent. A renter can get back $750. That client who hadn't filed in many years didn't qualify for any of this - made too much which is sort of hilarious considering she didn't think she made enough to file.

If I'm doing the work to determine they don't HAVE to file - I'm charging. Just because they are under the income threshold doesn't mean they don't have some other reason that requires them to file. As an example years ago I did the taxes of an old lady who was in a debt forgiveness program and had to prove she didn't have income of a certain amount - providing a copy of her tax return was required. so my answer: I'd charge and when they pick up - tell them that next year they may consider the fact that they do not meet the income threshold requiring them to file. This year I did the taxes for a lady - new client. Her husband was in a nursing home and they were forced to withdraw all of their retirement funds to get on Medicaid. In passing she mentioned they hadn't filed in 10 years because they didn't reach the income threshold - which she thought was $40k. Woops.

I believe you'd have a deductible expense on Schedule A line 23. If you received a form declaring it gambling winnings - then you deduct gambling losses.

Friends think I'm broke because we save so much. Since I was 22 years of age I've been 100% commission or similar salary structure (like anyone who is self employed). It makes you consider the risks to that income and the uncertainty of your income stream.

Told a client right before lunch that he owes $12k - threw a fit. Last year he owed $11k, made more money this year, didn't change his W4 or make estimated taxes like I told him to do last year when he threw a fit. I reminded him of all this and asked "did you think this was mysteriously going to get paid by someone else?" I doubt he comes back next year. How do you live in the mid-west, make $300k per year, have a healthy family and NOT save any money? He said they would be withdrawing the last of their retirement funds to pay taxes. Mind boggling for a 47 year old.

It was boggling my mind why people were wanting this also. I don't keep a paper copy of ANYTHING. Literally my entire office could get packed up and moved with my laptop - a zip drive and one box of files the size of a copy paper box (cost basis information). And I agree with the giving of the $75 back. If they need it so badly that they ask for it back - good luck to them. When they come back later with questions - good luck to them. I absolutely hate those tear away forms and I hate stapled, double sided 1099s. I RARELY if ever look at old forms - the info I need is almost always on last years return.

My deposit slips don't have my corporate name on them. I've never had a teller require the corporate name on them in over 10 years until the current one employed by my bank. About 1/2 the time she declares the deposit slip is in violation of the rules and I must write the corporate name on the deposit slip. The other 1/2 of the time she ignores it also.The other 2+ dozen tellers over the years all just ignored it. One even commented how nice and clean the deposit slip was.

I think the client does have a reasonable argument to say this is alimony. If the judge ordered the client to pay after tax income dollars to his ex to recoop her for lost taxable income. That's alimony and she should pay the tax on the income - not him. I think your client has a viable argument.

It would most certainly not cover mine. Seems several states including KY allow you to file federal MFJ and state MFS.

He wrote a check? Does that mean the pension has already annuitized and he paid that out of his monthly payment from the pension? Or did he pay this instead of changing his future payments? I think if the pension has already annuitized and payments are being made, it's possible this could be deemed alimony for tax purposes. If that's the case - check with the attorney. If the pension hasn't started making payments - it's a property distribution due to divorce and non-taxable.

From my experience, if the names are similar and you write "For Deposit Only" on the back, the bank will never notice. Had a client who went to the bank teller to ask how to cash it - the bank came up with 2 pages of instructions that would have cost in legal fees more then the amount of the check. I told them to write the For Deposit Only and go through the drive-through or ATM and do NOT try and cash it directly. Zero problems.

That's what I would do and make notes of it for your records. If you are like me, in 2 years if the IRS sends them a letter, you won't remember any of this.

Yes, that's right. Here is the wording: On January 1, 2015 your business enters into a 3-year lease for an auto with a fair market value of $51,500. Your annual payments are $7,188. For 2015 the business can only deduct $7,137 ($7,188 less $51, from the table above). (For 2015, you can only deduct $7,076, $7,188 less $112.) If the car is used less than 100% for business, you cannot deduct any lease payments related to the nonbusiness portion. But you also reduce the annual inclusion amount by the personal usage. For example, if the car above were used only 70% for business in 2015, you could only deduct $4,996. Prorate amounts for vehicles first leased after January 1 of the year. Note. Most tax preparation software will make the adjustment when you enter the lease inclusion amount for the year.

The counties around me where I'd do taxes have all been given until May 16th to file and pay taxes this year because of storms we had around New Years. VERY few clients have heard this news so it'll be interesting to see if anyone cares. Several people who owed taxes were thankful to hear it.

Yes, a 1041 needs to be produced every year that assets are in the trust from here on out. Even after the spouse dies, the trust could go on for years. I do 1041's for about 10 different trusts where the child is the recipient but they only get the income every year - the interesting thing is that some of those children are in their 60's now. You have to do a 1041 because they are no longer her assets - they are the assets of the trust.

I would notify the client of the error and inform the client of any potential for penalties and interest which may occur. Most likely the client wouldn't actually get penalties since it isn't their error but they could get interest assessed for underpayment. Document you notified them thusly. What line of the 1041 did they claim these deductions? 12? 15? If this all bothers the client, figure out their additional income which SHOULD have been applied to the return and make an adjustment to the 1040 return and note it as an undocumented 1099.

Completely unrelated - did a 1041 for a client today and enter their fed tax exempt interest income on their state return that is actually state taxable as I'm supposed to do. Got me wondering, what are the odds they actually enter that on their state 1040? It's a single beneficiary 1041 so they get the entire return. One of those - hmmmmmm -not my problem moments. Got me wondering how often stuff like that gets ignored. Also got me wondering that without an audit, how does the state figure out the portion of the $x in tax exempt income on the 1099-Int which is actually state taxable? It takes a while to go through the 1099 and figure that out sometimes. Oh well! off to exercise.

How did the software know the issue location of the 1099? The address of the company is a dummy entry that isn't used by the software.

Reminds me of the line on the return - what is your occupation? If any of my clients have the correct occupation I'd be rather surprised - except those listing "retired".