JohnH

Don't know the answer to your question, but I sure wonder why someone would pay a $2,000 management fee when they can set up a SEP at no cost.

You should be getting an extension. You and your clients are entitled to it. I usually insist on filing extensions for any client who comes in after March 20. Last year I moved it to March 15 because of the stimulus mess, and this year I decided March 10 was a good cutoff date. Glad I did that because I came down with a bad case of bronchitis this week so things are backing up a bit. If you don't use extensions to control your work flow, you are cheating yourself out of valuable sleep & down time. I think it's much better to extend your hours but slow down your pace the last 4 weeks - this gives you valuable time to prioritize and be sure you don't overlook something important. I always tell my clients the last thing they want is an overworked, tired person handling this important task, so I'm not going to do that to them or to me. My recommendation is to file the extensions - and start doing it right now.

Why not tell them "This is what the IRS web site says, but everybody knows you can't depend on the government to keep its promises."

I think the brokerage houses intentionally create confusion. This info isn't usually that difficult to trace, IF every broker provides original cost basis. But they somehow omit that info when it counts the most, unless the client has dealt with them in-house for the entire transaction. It appears that when a client leaves, many brokerage houses like to take a parting shot at them by not providing basis info with the transfer. I also think they tend to bury basis info so the client has much more trouble figuring out their overall gain/loss performance over time. Their statements tend to give reliable info only on a year-to-year basis, not cumulative.

I like the "malicious" expense category - will have to remember that. With some clients, it's the "mysterious" expense category.

I'm relieved to hear that. I was beginning to think my software was "unique" in some manner, and that was not a comforting thought.

Here's a link to their ESA. Their paperwork says on page 8 that contributions are not tax deductible. http://www.timothyplan.com/Annuities/frame...s-education.htm Michigan allows deductions for contributions to Section 529 Plans, but not ESA's.

I file extensions on all 1120S returns, even those I've already completed. Too many ways things can go wrong.

If you don't file a return and it's later determined that one is due, there could be a penalty of $85 per month per shareholder with a maximum of 12 months. I don't see any exception in the rules for "no activity" returns when the corp still exists, and it would be very hard to explain a $1,020 penalty to the client. Not sure I'd want to take that chance.

That's odd. I just checked my NC Sales Tax Report for a client, which is filed monthly. I opened another report, renamed the tab, entered Jan for the month, closed the client, and reopened. The Jan tab still showed a Jan report and the Feb tab showed a Feb report. Either there's something different about the way the system handles the NC reports or there's been a change in the way the system handles the multiple tabs since you last tried it. (I also looked at the "Preferences" but couldn't spot anything that addresses this). I just print paper reports for my files and don't use the feature I described, but I was fairly sure it worked this way because it never automatically updates my 941's when I open them for a new quarter. Follow-up: Maybe mine works differently for some reason because I use Zillion Forms as a separate module.

You could also open the form repeatedly in the same client file. The software will prompt you to append the name of the second and successive forms, which would enable you to name each quarter separately. This will enable you to keep the separate quarters in the return manager for a given client.

Everyone is glad to be of help...

Here was an interesting discussion about the general issue. Looks like there's no clear guidance, but the issue leans strongly toward no deduction. http://taxprof.typepad.com/taxprof_blog/20...uctibility.html

(I borrowed this from a comment posted on a news article. It didn't give attribution so I don't know where it originated) New Element Discovered! Lawrence Livermore Laboratories has discovered the heaviest element yet known to science. The new element, Governmentium (symbol=Gv), has one neutron , 25 assistant neutrons, 88 deputy neutrons, and 198 assistant deputy neutrons, giving it an atomic mass of 312. These 312 particles are held together by forces called morons , which are surrounded by vast quantities of lepton-like particles called peons. Since Governmentium has no electrons, it is inert. However, it can be detected, because it impedes every reaction with which it comes into contact. A tiny amount of Governmentium can cause a reaction that would normally take less than a second, to take from 4 days to 4 years to complete. Governmentium has a normal half-life of 2 to 6 years. It does not decay, but instead undergoes a reorganization in which a portion of the assistant neutrons and deputy neutrons exchange places. In fact, Governmentium's mass will actually increase over time, since each reorganization will cause more morons to become neutrons, forming isodopes. This characteristic of moron promotion leads some scientists to believe that Governmentium is formed whenever morons reach a critical concentration. This hypothetical quantity is referred to as critical morass. When catalyzed with money, Governmentium becomes Administratium (symbol=Ad), an element that radiates just as much energy as Governmentium, since it has half as many peons but twice as many morons.

I love it! Another option would be to at least give us until Tax Freedom Day - that's the first day of the year you begin earning money for yourself. Up until that point everything you've earned goes to pay your cumulative tax burden for the year. Depending upon what state you live in, that date can be as late as May 7 or 8. Of course, if you move to Sweden or Norway, it doesn't arrive until the end of July. I hope we aren't headed in that direction in the US.

Kerry: I don't agree with your subtitle ("Im not as smart as I thought..."). A person is at their smartest when they know they need help and they follow through by asking for it.

How much for asking the SAME #*^%* QUESTION they've asked, every year, for the past 10 years? "Why can't I write off my gas receipts AND my mileage?" "Why can't I claim my car as an office since I work out of it all the time?" "Why do I have to keep a mileage log? My brother in law doesn't keep one." Sometimes it's tempting to adopt the billing practices of Thernardier, 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"

Speaking of plans, keep in mind the old military axiom - "No battle plan ever survives initial contact with the enemy."

If you work with Excel, it's easy enough to design a simple spreadsheet to allocate the income & expenses. It would probably take 10-15 minutes to design one to mirror the relevant lines on the Schedule C, then save the template for future use. One thing I'd do is insert a field to calculate the percentage on each line, just in case you needed to depart from the 50% for a particular line in a given situation. Most of these split C's would only have 10-15 entries, so transferring the info from the spreadsheet to the individual C's wouldn't be much of a hassle. Obviously not as handy as cheking a box, but since that isn't an option it's time to solve the problem another way.

Add NC to the list. Nobody bothered to prepare for a cash shortfall (guess our finance people don't read the newspapers & didn't know tax revenues would decline), so now they're saying tax refunds will be "delayed a little bit".

CHAIRS!?! What are you doing with chairs? If you put these things in your office, people will think they're supposed to SIT in them! Buy an old park bench - the type with the wooden strips running left-to right and the downward taper on the front that makes you feel like you're sliding off when you sit forward. Then break out one or two slats in the middle so people are forced to sit near up the front edge with their legs spread to maintain their balance. Short wooden church pews with the straight backs work pretty well too, but just remember to remove the cushions. But if you have to work with chairs, stack the tax files so high that they look like they're about to fall over. That will prevent some enterprising client from picking up the stack and trying to balance it in their lap while they sit in the chair. Just be prepared to explain why one or two of them can't deduct their hernia operation because it doesn't put them over the 7.5% threshhold.

Tom: Yes, you are reading it correctly. Everyone is a monthly depositor except those who have been notified that they must deposit more frequently based on the "lookback" period. The $2,500 per quarter exception is an out if the employer meets that test, but they have to track whether they are likely to exceed it by the end of the quarter - if they do go over then the penalty applies retroactively. If your client uses payroll software, then it will give her the correct tax deposit amount each month. She just needs to follow through and make the deposit. It's a nuisance, but it's either that or deal with the penalty monster. If she is doing payrolls manually, she can run an estimate of the FTD each month and deposit that amount. In this case I recommend that they round up by $50-$100 or more each month and then adjust the third FTD to the actual remaining amount due in the final month when they prepare the 941. There's no penalty for over-depositing and the cushion helps keep them out of penalty territory.

I saw this completely differently and I think it's a great idea. The clients who keep their mileage records and contributions written on my ceiling won't have to squint as hard since the info will be closer to their eyes. I'm starting work on the project tomorrow.

It will help some people, but for others it will be nothing more than smoke & mirrors followed by a bill at the end of the show.

I know. It's all so confusing sometimes, isn't it?