Lion EA

My husband tracks dirt into my office. In fact, I shouldn't let my husband in my office! Although, I prepare our joint return for free, so is he a client? I have a bulletin board full of client pictures, such as the newly born tax deduction, and thank you notes -- but that's all business relationships. When I was being photographed for CCH's Partners quarterly magazine, the stylist had me bring in some personal pictures from elsewhere in the house because I had none in my office. I brought in the kids' graduation pictures which she placed on my desk for the photo shoot. Most audits I've heard about in recent years are letter audits and are concerned with things like mileage. My ex worked for a large company, part of the military-industrial complex. The military contracts required him to have a lock on his door due to his security clearance; however, the company allowed him only 3/4 walls due to his level within the company -- anyone could've climbed over the walls and not been stopped by a locked door. HR told him that he didn't qualify to have a plant in his office! So, they started bringing in things like silver tea services, fondue sets, empty brandy decanters/snifters, and other things that weren't specifically forbidden in the printed employees' manual. His boss was moved into a lovely paneled office but didn't have the level to merit paneling, so the paneling was removed.

Hopefully that auditor has retired by now!

I know, Gene, that was my thought when she told me about it during a TGIF. The auditor told her that employees on a company site can have personal touches as the company allows, but that the IRS does not allow any personal touches in an OIH for the SE. It was pretty tiny, so I guess she didn't lose much. She immediately set up in a larger room, keeping any personal touches out and doing personal correspondence, bills, etc., on a separate laptop in her other living areas. She was divorced by the time I met her with grown kids not living at home, so she had lots of flexibility in her small house. She took lots of pictures but also made sure her new OIH could pass a surprise visit from that or another really picky auditor, even though she lives in a little town in the boonies of CT that would probably be a waste of travel time of an auditor for her small business. She was undoubtedly my most compliant client, but she left me after a few years when her stockbroker started preparing taxes too.

I like the senior discounts. Going to the movies Sunday.

My own office has nothing "non-officey" in it. Even my closet is full of office supplies only. I did go through an audit for a couple who shared a room for their two separate businesses. One entered and turned right to his desk, computer, printer, bookcases, etc., and the other turned left to her desk, etc. We claimed almost half the space for each business. It was a very large room, over a generous two-car garage, the type of room that is usually a family room in a split level. They had shelves on the wall that contained the door, and those shelves held personal items; that's why we claimed "almost" half. They'd mapped out the room, separating the floor space they used to enter and to access those shelves and to hold those shelves. They'd taken pictures from all angles. I'd done some bookkeeping for one of them briefly to set her up in QB, so I saw the space myself and warned them that their personal use could disqualify their OIHs. The auditor was fine with the dimensions they used, saying that as long as they claimed only the area used regularly and exclusively for business that they qualified to take OIH deductions. That's only one auditor's opinion. I've had realtors that seem to be told just about anything from their companies re OIH. Two had been through audits before I knew them. One had a desk in her living room. Her pictures and diagrams survived her audit. The other had a desk and file cabinet in her finished basement along with her laundry area and storage and maybe her TV area. Again, her pictures and diagrams survived her audit. I had my doubts about regular and exclusive, but both had kept an audit file with their pictures and diagrams and no-change letters and handouts from the realty legal departments explaining how to qualify an OIH. They had more corporate handouts telling them what they could deduct than a Mary Kay salesperson! I've sent a couple of realtors away, though. A friend once lost her OIH in an audit when her pictures showed her screen saver was a picture of her granddaughter. By the time she became my client, she was thorough about keeping all personal items and activities out of her office. Then there's the apocryphal story I heard at Block about the pediatrician showing his OIH pictures during his audit. The IRS agent took out a magnifying glass and discovered that the medications in his mini-frig were for horses! Disqualified. How about if I buy one of those treadmill-desks?!

Your office does not have to be an entire room. You can have an exercise bike or washer/dryer or anything else at one end. Just measure the square footage that IS used regularly and exclusively for your OIH. Now, mixed use of your desk or computer or anything else in your "office area" is going to disqualify OIH. (When my kids visit, I make them use hubby's computer in the kids' old room and not my computer in my office.)

Thanx, folks! Like Eric, my clients are busy and sometimes don't find it a good use of their time to keep organized records or even gather/keep documents at all that they need only once/year. I can show them how much money they might save, but they know the value of their time. Especially if they began with a different preparer and never took depreciation or want to tell me SALY for utilities/insurance/etc., this new safe harbor may be a bigger deduction for them. And, safer than estimates! SInce it's a year-by-year choice, you can file quickly now for someone new and give them a list and a year to gather information. Buys us time to train our clients in what to keep for next year.

I have clients that never give me utilities and other expenses. I'll run the numbers, but they may be good candidates for this new method. Also, that client who comes in new and can't/won't pull old records to get to adjusted cost basis for depreciation on his new home office in the home he purchased 30 years ago might be a candidate. Or, the client that has refused to take OIH since he expects to sell and thinks he'll lose his exclusion. Lots of possibilities.

ProSystem fx pay per return to keep the price down, almost as low as what Proseries quoted me and a bit less than UltraTax and Lacerte.

Better load up on LOTS of popcorn while you wait for that to happen!

Well, that had me confused until I read this thread. I'd been responding to a NY issue, but it was moved to the Politics forum as I was editing! Thank you for the new forum, Eric. It's going to keep me from getting distracted while I still have lots of returns to do, and it's going to keep my blood pressure from rising. I like your new emoticon, too!

I vote for a Politics Forum.

Run out to your car after retrieving your documents from their fax machine.

You can fax at any time, calling to see when it's finally entered into the CAF unit. Then you can call re that client when and if the time arises. If you won't have that much lead time or they still haven't processed your POA: call your client, conference call the IRS into that call, have your client give verbal permission for the IRS and you to talk about his issues. Look for fax machines where you'll be, maybe a Staples or Kinko's or friendly, local realtor's office or your hotel or...

Extensions, extensions, extensions. You started a partnership? You moved to Singapore half-way through the year? You hired a Japanese national with a 3-year work visa? You need all five returns yesterday to refinance? You found more deductions for 2011? You didn't know you had $50,000 in interest during 2011? You want me to do your payroll starting 1 July, as in over three weeks ago? You have your dozens of K-1s now, including those you sold and partially sold and bought, so you expect to pick up your return today? You have your third correction of your 1099-B with 99 double-sided 8 point font pages, so you expect to pick up your return today? My clients are just as crazed, but I'm procrastinating more. I spent the beginning of July on Appalachia Service Project in Washington County, VA. We helped our daughter move a couple of weekends ago and attended her housewarming party last weekend (which is where I picked up the Singapore couple, cousin of her boyfriend). Maybe I'll actually get a few more returns complete before we leave for my husband's annual family reunion in July on the Cape.

What's the name of the medication you stopped? Gotta check my meds!

I'd love to see the first female president of our country in my lifetime! However, I think Hillary lacks honesty, so want someone OTHER than her in any office. But, Hillary has enough connections to mount a winning campaign, and I don't see any Republicans that could challenge her successfully.

Hey, Hillary never lived in NY before she ran...

My software salesperson told me to vacuum relentlessly, and my techie said the same. They have me vacuuming and dusting all electonics, around computer and fan vents, where ever static electricity could attract paper dust. For a few years, I was using paper a step up from the usual printer paper for me, thinking it protected my printers, and another step up for anything given to clients, such as their copy of their return. (My fastest printer was for returns, so I could have one type of paper in it for all paperwork going to clients and not have to change out paper types.) As prices went up and after realizing that very few clients noticed, I cut back to using only one type of paper. My last purchase I stepped down and just bought the cheaper multi-use paper for all printers like I used many years ago. So, all the Brothers that had such short life spans used only specific expensive laserjet paper. All the HPs, old and newer, have been using just cheaper multi-purpose paper -- even the one from 1987.

All my Brother printers (and a fax) died; they couldn't deal with paper dust and leaking Brother cartridges, so they clogged up or overheated or just stopped. None are left. All my HP printers (my oldest is a 4L from 1987) are still working and productive. I had one repair on the 4L to replace the rollers. They just won't die! But, I keep wanting faster printers. I have a color 2550n and a P2055dn which is fastest to print tax returns and a L7780 in my office. The 4L and other older HPs are in my home for personal use or near my husband's desk for his use with his professional organizations. He had used at least one in his classroom at a middle school until his retirement. Real workhorses. (Every Subaru I have ever owned is still on the road, too, including the 1986 wagon DL.)

HP printers are real work horses. Why don't you keep it for your next emergency? Or for when you expand? Or donate to your church or local school (no hassle of packing it up to ship)? Or give to that college kid who mows your lawn as payment (personal chores and not business so you don't get into barter expense!)?

I have always loved KC's Laugh of the Day. They have gotten me through many a tax appointment. And, as I'm aging fast myself, I loved Catherine's joke where the older person has a response ready (I often think of mine while driving home!). I liked that age and experience triumphed over youth. But, you can always skip the threads labeled Laugh of the Day.

I'm sorry for your loss, D.

Isn't there a prison in Oxnard, CA?

Green Stamps are gone?! Thank goodness Hostess cupcakes are returning...