JohnH

I have seen several sales of this type go well, and also one which went terrilbly wrong. The one which went wrong was instructive, because the sale was structured to take advantage of potential tax savings while leaving the seller exposed to some unlikely problems. Naturally, the unexpected happened and the seller wound up wishing they had focused on legal protections at the expense of saving a few tax dollars. (I came into the picture after the fact, and had nothing to do with the original arrangement) My advice is to focus on the legal aspects of the sale and be sure your interests are protected there in your initial planning. After that, look to the tax aspects for making adjustments, but be sure you dont sacrifice thousands of dollars of legal protection in order to save a few hundred dollars in taxes (or simply the timing of tax payments). You said in your orignal post that you are planning to meet with profesional advisers - smart move. Find a good lawyer and a qualified tax pro, then listen to their advice. Hopefully you've located people who have experience with this sort of transaction. Their services wont come cheap if they are good, but they will pay for themselves many times over.

New political term I just ran across today - Fauxcahontas. I like it.

http://www.dornc.com/publications/nonprofit2008.pdf See the bottom of page 3

Jack: I like your attitude about pricing. The only thing dumber than always buying from the lowest bidder is always trying to be the lowest bidder.

Yes, many thanks to everyone who takes the time to contribute here. This forum is a valuable business resource as well as an enjoyable place to visit when some mind-clearing is needed. Wishing everyone the best post- tax season, and hope it was profitale & rewarding for you. And thanks for the reminder to contribute - i just sent mine in. Eric, we really appreciate all you do to keep this fine resource in tip top shape.

Did you discuss fees? I'm thinking he's going to want a discount because "it's pretty much done - all you have to do is push the send button." Besides, you couldn't get it done on time so he did you a favor by letting you put it on extension. (Just trying to think like the client here for a minute)

Pretty much finished here. 51 extensions filed (and maybe 3 or 4 stragglers - they will be added to the list if they show up in the next couple of days). After reviewing extensions, I'll circle back and finish a few of those already on extension if I feel like it. Or just go home early the next couple of days, since they're just another day around my office. I'll always be grateful to the person who taught me years ago to begin filing those extensions AS THEY COME IN THE DOOR beginning mid-March. Especially this year, since a death in the family prevented me from working most of this weekend. Any of can have unexpected circumstances pop up - it's well worth the effort to hedge your bets with the extension. Best of luck to everyone still racing that clock. Hope everything goes according to schedule for you over the next couple of days.

I have several clients who will tell you that you don't have to pay income tax if you're over 75. I know they will say that because that's what they tell me every year.

I'm a softie too. I'll reduce the amount they pay down to anything they like - provided they understand it's their decision, not mine.

As far as the estimate is concerned, you could count all the income and none of the expenses (or else just the ones which are a definite "yes"), then tell him how much the tax will be based on that figure. If he wants to pay less it's his call, but at least you're putting the decision where it rightfully belongs.

Here's a good one when you feel like singing: http://www.youtube.com/watch?v=5TkuZ5oI9uY&feature=youtube_gdata_player

Isn't that always the case? I don't mind finding an error on a complicated return and then have to re-do it - that can happen so easily. But having to re-do a simple return because I omitted something silly is frustrating, even if it takes half the time to correct. Can't say I ALWAYS manage to do this, but as the deadline approaches I try to slow down the pace while lenghtening the hours. All the while keeping in mind it's important to get rest, and there still has to be some life balance. Otherwise it's easy to become resentful and that can too easliy spill over into a conversation with clients - never a good idea. Personally, I'm spending more time on extensions than actually completing returns for the next week or so. If all is handled correctly, "deadline day" is nothing but a final review of all extensions that have been filed - no actul return preparation unless I feel like doing one or two just to amuse myself.

Next to the ones who bring in the info with key parts missing, the other favorite group are those who call in Feb just to let you know they will be in to see you soon. Then when they show up with it in mid-to-late Mar and you tell them they're going in extension they reply "But I called you last month to let you know I was getting it together." Apparently some people think that letting you know they're working on their stuff equates to your beginning work on their return or at least getting it into the queue. Thanks for the call - I remember getting the message. Anyhow, here's your extension...

I'm with Gene. No extra charge for extensions because they're helping me keep the stress level down. Generally, I've been filing extensions since March 10 as they came in with their data. Saves rushing around as the deadline nears. Next week is going to be pretty much routine around here, no matter how many clients show up. Extensions generally don't take long to complete. The 17th is just another day for me - I generally come in late, spend some time reviewing extensions, and go home early to take my wife out to dinner on "deadline day".

Clients don't care how long you work. Yes, a few of them will express their appreciation for your dedication and stamina - a few will even tell you they admire your work ethic, etc, etc.. And some of them really mean it. But the majority don't care how long you work or how much harm you do to your health, just as long as they get THEiR return finished on THEIR time schedule. If they had any real concern, they'd get their info to you on time. Against that backdrop, each tax preparer has to decide one simple question - "Do I run my business, or do my clients?" It's a simple question, but it has enormous consequences. It determines whether YOU decide when you begin filing extensions, or do you plead with the clients to give you some relief when you realize you're over-committed. It dethermines whether you spend every waking moment at the computer, virtually abandoning family and social life during Jan - Apr. It determines whether you ignore your physical, mental, and/or spirtual life in pursuit of some other goal for 3-4 months. Presumably that goal is worth the sacrifice. I know some tax preparers love the adrenaline rush of working until all hours of the day & night and seeing that bank account grow extra fast during the tax season. Nothing wrong with that if that's where your priorities lie. But it should be your decision, not something forced onto you by the whims & quirky behavior of your clients. Personally, if I were not in the tax business, my tax preparer's work habits would be very important to me. The last person I'd want preparing my tax return is an overworked, dog-tired, stresed-out individual, possibly functioning with a martyr complex. I think my financial info deserves better and I wouldn't want to risk having that type of person anywhere near my return. Well, so much for my rant. You asked about current work status anyhow. I'm off to church now, and lunch with friends afterward. I did bring some work home with me and I may get to it this afternoon if the grandkids' ball games are called off due to rain. If not, I'll work on the returns tomorrow. Either way, there's no pressure because the extensions were filed back on March 10. (along with about 25 other extensions so far)

As a practical matter, I've always assumed the odds of winning are roughly the same whether you buy a ticket or whether you don't.

Yes, the only thing worse than not getting the client's info from the former preparer might be the prospect of GETTING the client's info from the former preparer. We've all had varying experiences in this regard, but I can only think of one or two times I picked up a client who was having a dispute with the former preparer when things turned out well. More often than not, I came to regret having picked them up as a client and it became obvious why the old relationship soured.

Whether the employer grossed it up or not, it is income to the employee - no different than income used to buy a motorcycle or boat or food. The income loses its identity once the employee receives the benefit. The employee can deduct mortgage interest and taxes in the same manner as for any second residence, but that's the only deduction I can think of.

I had an occasion to use the Roth IRA worksheet in ATX today, and it's very helpful when the client is in the phase-out range. Sure beats doing it using paper and pencil, and produces a nice report to hand to the client. Well-done ATX.

This ought to be interesting...

Congratulations Michael. And I agree with the remainder of your post - thanks to everyone for the great advice and general tone/tenor of the conversations on this forum.

I also handle payment to consignors as purchases, with no opening or ending inventory calculation for the consigned merchandise. Some consignment shops will also purchase ancillary merchandise for resale alongside their consigned merchandise (jewelry in a clothing consignment shop, for example), so there may be some inventory accounting for shop-owned merchandise. But I've always understood the consigned merchandise to be non-inventory until it's sold, then it simply flows directly through COGS via "Purchases". .

Same here KC. Prayers for both of you, and for wisdom for the medical professionals treating Don.

Half-empty or half-eaten? There's a big difference, you know. Although I might want to see the hands of the person who took the cookies out of the half-empty box.

I'm still not seeing the program take the adjustment to income on the NC D400 Line 52 & 53 when education credits are claimed on the Fed Form 8863. Is there a program choice that handles this automatically, or do we just have to remember to always make a manual adjustment?