JohnH

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?

If I were her I'd forget you and just keep using Turbo Tax. :)

I like round numbers. I respond with an extension form, also in round numbers. That'll do until after Apr 15.

Was the executor or administrator need to file an inventory with the clerk of court (or whomever qualifies the administrator in your state)? The initial inventory isn't the final word, and it's often mistakenly valued very low, but it's at least one other source of contemporaneous info.

The following paragraphs from the current version of Pub 17 might also be informative with respect to the IRS position, although I've seen at least one interpretation of the last sentence which tries to conclude it doesn't apply to anyone with a PTIN (I thought the reasoning was more than a little fanciful): "Generally, anyone you pay to prepare, assist in preparing, or review your tax return must sign it and fill in the other blanks, including their Preparer Tax Identification Number (PTIN), in the paid preparer's area of your return. Many preparers are required to e-file the tax returns they prepare. They sign these e-filed returns using their tax preparation software. However, you can choose to have your return completed on paper if you prefer. In that case, the paid preparer can sign the paper return manually or use a rubber stamp or mechanical device. The preparer is personally responsible for affixing his or her signature to the return. If the preparer is self-employed (that is, not employed by any person or business to prepare the return), he or she should check the self-employed box in the Paid Preparer Use Only space on the return. The preparer must give you a copy of your return in addition to the copy filed with the IRS. If you prepare your own return, leave this area blank. If another person prepares your return and does not charge you, that person should not sign your return."

Also, what is it about my last comment that you don't understand?

No, it would not be a mistake. This isn't a question of concealment - it's a question of doing what one is required to do. We are required to sign any return we prepare for compensation as the "Paid Preparer". No compensation, no paid preparer.

Given the risks associated with filing any tax return, I think it's worth the trouble to paper file and omit the "Paid Preparer" info when the return is prepared at no charge.

I'm not always successful at remembering to do this, but I try to take note when kids reach age 15 or 16 and point out to the parents that they will lose the child tax credit in the next year or two. I usually explain it in terms of "if you have exactly the same income and deductions, and even though you can still claim him/her as a dependent, your tax liability will be $1,000 greater". If they have twins or for some other reason two kids born in the same year, it's almost mandatory to warn them. I'm pleasantly impressed with how many of them remember this when it happens. When I give them the bad news in the target year, they will usually tell me they remember me mentioning it to them, even if it initially slipped their mind in the interim.

Excellent point, and right on target.

This one's easy: "No need to apologize, and no need to postpone your trip either. As soon as I get your info I'll be preparing your extension. We can deal with this in May or June - no problem."

Maybe your client is a big fan of old music. http://www.youtube.com/watch?v=zW81_RZXZJI&feature=related

When in doubt, file a return. If for no other reason than to start the SOL clock running. And whether or not you find a cite which requires you to file or excuses filing, you can be sure the clients will receive a CP2000 in a couple of years if the gross sales amount exceeds the filing threshhold. Why wait until then, especially because you'll be answering the question "But why did you tell me I didntt have to file?" until you're blue in the face. Clients with that attitude are also more reluctant to pay, by the way. Some of them want to cling to the notion that you are somehow responsible for the notice even though you didn't charge them for the initial advice not to file.

I noticed that the program required a restart after this morning's update. Looks like the version is now 2011.3.6

I dont like the Idea of a May 15 filing date, especially since a simple step can already make the due date Oct 15.

It can be done, but it requires the aid of a short piece of string and a fish hook. (plus a visit to the Emergency Room)

Extensions begin in 9 days in my office. Everyone has been forewarned - no exceptions. A couple of folks whose brokers said they wouldnt getbtheir statement until March 15 are whining, but I just tell them there's nothing I can do about it. (that's a nice way of saying I'm not responsible for your brokers' laziness) Although I did tell one client that the gain/loss statement the broker sent them with a sticky note saying this would " help the tax guy get started " just doesn't cut it. He's just being creative in trying to pass the buck...

You could always print off what I wrote and show it to her - blame it on me. :)

I can understand the anxiety over possibly losing a friend, but let me make a suggestion. I've had to take this route a couple of times in the past few years. Tell her this is your understanding of the tax law, but you don't know everything and if she wants to take it to someone else it won't hurt your feelings. Her friendship is more important to you that having an unhappy client who has doubts about your advice. She may take it to someone who will give her the answer she wants to hear. If that happens and she comes back to see if you will reconsider, stand your ground. If she decides to have the other person prepare the return, then anything that happens is strictly between her and the other preparer. You;re off the hook professionally. She may consider what you've said and decide she trusts your judgement to do what's best for her even when the news isn't good. Regardless of the outcome, you've separated the business relationship from the friendship. Many of our clients are also personal friends, but there is a dividing line between business and personal. You've encountered a situation where this has to be acknowledged. What if she refuses to appreciate the integirty of your offer? Then I suggest that she's just using a facade of friendship to try and bully you into doing what she wants (regardless of the potential risk to you). That isn't a friend - that's a user.

I already have a couple of reservations about the client, based entirely on what has been posted about his disposition.

Doug - you could exclude it from her commissions retroactively. Just tell her it took a while to sort things out because Congress made last-minute changes at year end and you're allowed until Mar 15 to get everyhting right. Hey, that explanation has worked for every stock broker in the country. I think I'm going to implement a "toilet paper" fee for anyone who asks to use the restroom while getting their tax return done. And maybe a "soap fee" and a "hot air" fee for washing & drying their hands. Oh wait, I can't get away with the "hot air" fee - I'm already charging them for tax advice so that would be unethical double-billing.

Wish I hadn't made that last post - now I can't get the darn song out of my mind.

It looks like it may be an add-on that passes directly through tot the company without the preparer getting paid commission on it. Probably its intent is to function as an offset for compliance costs and/or potential fines/penalties. Or it could be the tax preparation equivalent of the song by Thenardier (the innkeeper) in Les MIserables: "Charge 'em for the lice, Extra for the mice, Two percent for looking in the mirror twice. Here a little slice, There a little cut, Three percent for sleeping with the window shut. When it comes to fixing prices There are many tricks he knows Does just what he pleases, All in bits and pieces... "

I think the $1,500 for the S-corp and both shareholders returns was too low. One of my biggest mistakes many years ago was charging too little for S-corp returns. I've long since corrected that error and my minimum is now $1.200 plus $100 per shareholder. That's just for preparation of the return and associated schedules - if there's write-up work involved, 941's, etc, then that's all extra. Preparation of personal returns is also extra - you can have two shareholders who have vastly different personal tax situations and it's best no to confuse that with the corporation. It's a separate entity - the only commonality is the pass-through of corporate income and other items. (I suppose a case could even be made for unequal distributions if the shareholders returns are vastly different but their fees are included in the S-corp fee, but that's probably a stretch. However, I'd hate to see an auditor holding up my invoice as evidence that the election had been terminated). There are a few situations where I may discount it a bit if the work is really, really simple, but even the heaviest discount won't drop below $900 base price for the 1120S, and that's a rarity. S-corp returns are deceptive in their simplicity. Sometimes it really is just a matter of dropping a few numbers onto the appropriate lines intially, but as Randall just pointed out, there are many other things to consider prior to, during, and after the preparation of the return. Not only do you have to consider these things, but you have to explain them to the client (over and over in most cases), and you have to track several of them as long as the corp exists. So I'm saying you should stay on the high side. If you want to discount down from the base fee for special reasons, then do that on the backside - after all the work is done. But keep that base fee in their faces so they won't be shocked if next year or the year after you have to say "no discount this year, and here is why...." This is your first year with them after initially refusing - what you do at this point will be the base line for everything you charge from here on out. Be sure it's in your favor.

Guess you could say all their savings went up in smoke... Or they got burned by the tax man... Or their plans are in ashes... Anybody got a match?