JohnH

Joel: I think you're overstating the penalty issue. The extension is valid even if nothing is paid. It purpose is to avoid the 5% per month FTF penalty for the first 5 months. The only remaining penalties are the 1/2 of 1% FTP penalty and the interest at about 8% APR, which will be due if paid after April 15 no matter how it's done. (Plus the estimated tax penalty, but again it's due whether or not an extension is filed). I use a figure of 1.25% per month to get a rough idea of the true cost of paying after April 15 - it usually comes out to be a little over the actual amount. Filing the 9465 in a case like this is out of the question - the fee for the 9465 alone is too high (it can range from $43 to $105). And IRS will usually grant 120 days to pay just by making a phone call. I only suggest the 9465 if the taxpayer owes a lot of money and needs more than 6 months to repay. Approval of a 9465 is usually automatic if the taxpayer is otherwise compliant, owes less than $10,000 total, and asks for 3 years or less to repay. In any event, the 9465 should never be used for short-term repayment situations.

I've never seen a preparer penalty assessed for failure to calculate a penalty or interest on a corp return. Is this something that is expected to start happening?

This raises an interesting question I've been pondering. Client owes about $1,000 on a MFJ return for 2007 and says he won't be able to pay it by Apr 15. Wants to file an extension to give him time to come up with the money. He knows there will be a FTP penalty and some interest, both totaling about $14/month, but of course the extension will avoid the $50/month FTF penalty. I'm advising him to go ahead & file the return with no payment (or a token payment if he is inclined to do so - I like the token payment because the canceled check is good evidence back-up that the return was processed). The FTP penalty & interest will still be the same ($14/month), but the balance will be paid off by his $1,200 rebate so he doesn't need to sweat trying to get the money together to pay the balance and then waiting 2-4 months for the rebate check to show up. Anybody disagree?

I do everything I can to keep my clients out of my office, so I gladly pay the postage to mail the return to them. It's already built into my fees and I wouldn't want to attract any attention by having a seaprate charge. I'll cover $3 - $5 in stamps to avoid having to tallk with them about their kids, the weather, the rebate, follow-up questions, etc. Not that I don't care about these things, but not at this time of year, please.

Can't say this is perfect, but it seems to be pretty reliable and the author keeps refining it as he gets feedback from tax preparers: http://www.chateaumezcal.com/2008-tax-rebate-calculator.htm

I guess it was inevitable that the answer to a question involving a nursing home and taxes would eventually involve the word "depends".

Not so fast there. I'm also voting with the majority, but the superdelegates haven't voted yet.

You all would have to start this string the week I turn 60. Guess I'm going to have to eat some of my words I've already posted on this subject here and on the TMI board.

Did we ever determine whether a deceased taxpayer will receive the rebate? For example, with tax liability on a joint return high enough to qualify for the $1,200 rebate, but one spouse is reported as having died in 2007, will the rebate be $600 or $1,200?

I've had a couple of occasions to do that on other forums, but as you say there's no way to delete a post that I'm aware of. I just edited everything out and entered "Post Deleted" in its place.

I voted yes, but I think they should also be expected to make a generous contribution toward erc's expenses of keeping this forum active. After all, they will be getting some pretty nice advertising aimed directly at a targeted & motivated group - a marketing person's dream audience.

I assume you'd report it in the same manner as the way a minister's w-2 is handled. Report the W-2 earnings on the apprpriate line of the 1040 and then attach a Schedule SE & calculate the S/E tax.

I don't think reconciling on the 2008 return will be a big problem - IRS iwll probably have an on-line lookup like they did the last time around. Of course, I also think that's chargeable time, so my client letter for next January will say something to the effect that "We will need to know how much you received in May-July 2008 for your tax rebate. If you don't furnish us this information there will be an additional charge for us to verify the amount with the IRS before preparing your return."

Has anybody posted this? If so, I apologize for the repetition. http://www.irs.ustreas.gov/newsroom/articl...=179095,00.html

I'm wondering whether it will be worth the time & trouble to prepare a return for a one-time client with virtually no prospect for a long-term relationship, when weighed against what we can reasonably charge for this service. I'm hoping VITA, TCE, and other organizations will gear up for this. If I can find a local contact I think I'll refer anyone who calls me to their services, unless they insist on paying the going rate. This is just off the top of my head, and I'd be intersted in hearing pros or cons from others on this forum.

I think the outfits would be totally appropriate if they changed the tax filing due date to Oct 31.

How far are you into the return? If not far, you might try deleting the client from the current year and starting agiain with a newly rolled over return.

Funny you should mention that. I had a problem getting the Asset Entry screen to let me enter some data today. This was on a client who already had some assets being depreciated and I just wanted to add a new asset. I clicked on a couple of the tabs at the bottom of the screen (Summary, Asset History, etc), then went back to the "Input" tab and it started behaving normally. I don't know why...

I voted in favor of a separate OT section. (Even though I can't remember how I responded when the questions was asked last time)

It is true that direct rebate checks will not be issued after 12/31/08, but there will still be rebate-related refunds issued on 2008 income tax returns for those who qualified for the rebate but failed to receive a check during 2008. (See the last paragraph at the bottom of page 4)

I believe I'd ask the client do they want to pay $120 to have me file the return that may not be needed, or do they want to wait a few weeks to find out if it's necessary to file? Either way, the $300 check won't be here until May or later, so why pay the upfront money if it isn't necessary? Another alternative, if it turns out that they don't get the payment automatically, might be to file a 2008 return in early 2009 and claim the unpaid credit at that time. This is a refundable credit and there will be people who are entitled to it but who don't receive their check in 2007 for a variety of reasons. Those people will be able to file a 2008 return reconciling that they did not receive the payment and it will then be paid to them on the basis of that 2008 return. (For what it's worth, I don't think people having only SS income will need to file in order to get their $300 per person. It should be fairly easy for IRS to wash out the SSA recipients who file a return and send a check to the remainder.)

The cheapskate employers probably never thought to ask for the SS# until after going to have their tax return prepared, because now "They've Got People".

I'm guessing the original question related to a MFJ return with total itemized deductions of about $11,000. (Or a Single with $5,850 or a HOH with $8,250).

Maybe the following info will answer some (but not all) of the questions about who gets what, and when . http://www.house.gov/jct/x-16-08.pdf (Focus on pages 3 - 6) It clearly puts to bed a few of the speculations about the nature of the payment, including: 1) It is clearly a rebate, based on income showing on the 2007 return. 2) It will not be added to income next year. 3) It will not be deducted from 2008 withholdings or added back to 2008 tax. However, we will need to ask clients if they received it and account for it on the 2008 return only because any entitled taxpayer who did not get a check will be able to claim an additional credit on their 2008 return - that seems fair. 4) They did anticipate that not everybody will file on Apr 15, and they did take that into account by stating that extension filers will get their checks after they file. 5) I'm not sure about the $300 credit per child, but it appears that it is also a true rebate and will not affect the 2008 child tax credit in any manner.

One way to do a quick assessment on this is to take a look at last year's itemized deductions and determine if they were just slightly greater than the standard deduction - high enough to make it worthwhile to itemize, but not high enough to produce a complete tax benefit from the state income tax deduction . I'm glad the software does this calculation for us.