JohnH

Yes Eric, they did make the switch in record time. Each side began blaming the other before the sequester was even discussed publicly.

Margaret, you make a great point with that post. This forum is more important to most of us than any software vendor's product. Thanks to Eric, it is most unique in that we aren't hostage to the whims of any vendor. Nobody can take down a post just because they don't like what's being said about their product. The glue that holds this forum together is the camraderie and the independence. I believe this year has proven the value of the independence more than ever. The predictions for ATX's future are all over the place, but truthfully none of us knows what the future holds for the software. Who knows? - next year ATX might be humming along and there could be huge problems with other vendors' products. Most of us had ATX in common until this year (with a few exceptions), and that likely will be less so next year. But we still need an independent forum. I haven't said much about this up to this point because I've tried to get out of the way while people worked out their immediate problems & got some work out the door. Since I'm no longer an ATX customer I can't be of any help in that area. But once things settle down, we should have a conversation about how to retain the broad appeal, keep people involved, and even bring others in. Maybe a slight change to the name of the forum or some other ideas will surface. (Assuming Eric is willing to continue doing the magnificent job he is doing). But thanks for bringing it up - we need to be thinking long term even while people are wrestling with the immediate problems.

And that, my friends, is exactly how they're going to try and convince us that sequestration is such a terrible thing.

Well Rita, he's creative. At least he didn't say he just dropped by to ask "How's it coming on my return?"

Once a high-level VP in a company for which I was selling told me they needed accurate sales projections from their sale reps. They would use this info to plan their production schedule for the upcoming YEAR. I replied that the sales rep in me said "Great, my projections will help inspire me to sell more so I can meet my quota!" Then I told him "But the business person in me says any factory manager who actually SCHEDULES production based on the wishful thinking of his sales department needs to be fired before things get out of hand." We didn't get along very well after that conversation, but it wasn't a problem for me because he lost his job not long afterward.

My experience with Drake has been identical to Joel's on all respects. The transition has been simple, and speed is fantastic. The concerns about switching from forms-based data entry are vastly overblown. Once I made the decision to switch, I also made a commitment to develop proficiency with Drake. It took a few days at most, and now for the most part I'm just refining & tweaking it to gain some marginal benefits in speed.

A couple of quick thoughts. You said the 401K withdrawal was added to capital, but then you mentioned loan repayments coming from the ongoing activities. Seems like the simplest way to handle this would have been to just classify the money as loans from the Shareholder to the corp, unless you're trying to increase basis in order to deduct losses on the personal return. I think this is the point that the young CPA is making, and I believe I agree with him. Money being repaid to the shareholder isn't income to him, it's a loan repayment or return of capital, as the case may be. But the business activities which generated the money available to repay the shareholder must come from profits. (The cash for repayment has to come from somewhere - unless additinal money is borrowed from outside sources, it has to come from profits). Since it's an S-corp, the profits will show up on his personal return via the K-1. (If the amounts are very large, this alsointroduces a "no salary/low salary" red flag scenario in an S-corp) On the other hand, if the business isn't generating profits, there will be no money available to repay the sharholder and this is all irrelevant. The only thing I can think of which might affect the net profit matter would be lingering depreciation on assets already paid for in a prior year. There might also be some unusual effects if the business reports on an accrual basis AND if there are huge differences year-over-year. But in many cases, once a business gets in trouble its actual bookkeeping results begin to more closely resemble a cash-basis taxpayer anyhow. There's no definitive rule that I'm aware of with NCESC in this situation. But if they draw a bead on him, this could be problematic. They have quite a bit of clout and you don't have many ways to fight them if they decide against your client, unless he's ready to pay big bucks for representation. Keep in mind that NC is under a cloud right now with respect to excess unemployment borrowings. Who knows when they might decide a crackdown may help reduce the debt. I'd be very careful in giving him advice on this issue.

Schedule C deduction. It fits the definition of "ordinary and necessary", and that's the threshhold he has to meet. It's not different than property tax paid on a business vehicle - the portion attibutable to business expense goes on schedule C and the rest on schedule A. He will have to prove the tithing requirement if he's ever audite, but it appears he's covered. If I were preparing the return, I might ask him for a copy of the written requirement for my files.

Lion: Perfect approach. That's how I've always done it as well - be proactive about extensions and you'll save yourself a lot of Apr 15 aggravation. I have been thinking Mar 10 for the cutoff date, bit you have me thinking about making it earlier as well.

Great news KC. Will keep praying for your continued recovery and return to full-out belly-laughing mode.

Tom: If you're going to do that, you may as well just use the IRS web site. At least you won't have to worry about it crashing. I've never known a pdf web fill-in form to malfunction. http://www.irs.gov/pub/irs-pdf/f1040es.pdf

I classify this in the "walking and chewing gum at the same time" category. Some people get it, some people don't. (or won't)

And we all make voluntary donations to help defray the cost of the forum. That's what the "Donations" button is up there to accomplish.

Just curious. You say you have 220 returns backed up on the shelf and you're waiting for the conversion. Are NONE of those 220 returns simple enough for you to populate the return manually and complete them? Seems like that would be more productive than just waiting around. Plus you'd begin to get familiar with the look and feel of the new software - one step closer to software transparency.

---> If it smells funny, it's usually bad......CYA <--- We know what a correct answer is, or we know the only possible range of correct answers, for 90% of the questions we ask. So we have the advantage of consciously or subconsciously detecting visual clues when a person answers truthfully. That's one of the most important pieces of information you can gain about a person. As you observe how they behave when they're being truthful, your intuition will be more likely to warn you when they're being devious, even if you aren't consciously aware of the reason at times. It doesn't take long in this business to begin picking up on subtle clues. Sometimes it's a client who won't make eye contact at important points in the conversation. Or we ask them a simple question and they begin asking us questions in response, rather than give a direct truthful answer. Sometimes it's the way they sit in their chair or maybe how their eyebrows move. How they hold their shoulders or what they do with their hands. Hundreds of possibilities. I'm convinced that I've made a few mistakes when I followed my intuition, so I know it isn't perfect. But I know that virtually every time I failed to follow it, I later regretted that decision. The facts alone are enough to send this client packing, whether you do it diplomatically or undiplomatically. But it's clear you also feel uneasy for reasons you haven't stated or you may not even be aware of. Your intuition is usually more than just a "hunch". You should follow it.

Another good choice is Tax-Print. I just discovered it this year while stalling to see which direction ATX was headed. It cost $39 also, but that includes ability to laser print the W-2's and 1099's. It prints all the allowable forms in black & white, plus it will drop the data onto pre-printed red forms for the 1099 Copy A and 1096. Another very nice feature is that it prints the Uni-Form layout for W-2's, which is always my preference. It has a very simple "Import" function from Excel, so you have all the control you need. They allow you to download and try it for free, then pay to remove a watermark if you like it. So I entered & printed a couple of my simple clients and inspected the output before putting any money into it. When I paid, it removed the watermark from the test entries and I was doing billable work within 10 minutes. The program has limited reporting capabilities and its "Find" feature doesn't work well, but since you can pair it with Excel you can easily overcome that limitation. http://www.tax-print.com/

Yeah, that low-intensity break-even return would become very interesting if her actual income were closer to $20 - $30K.

By suggesting the 1099-Misc, you're trying to forge a compromise that has more downside potential for you than upside. She has already all but told you she's inclined to game the system. Your suggestion could be interpreted as a recommendation on how to make it work. The bartender probably isn't dumb enough to actually cooperate, but what if he did? Do you really want to be seen in hindsight as a participant if it blows up?

I'll bet she can refine that $22K estimate right down to the penny if the preparer will just let her see the screen while preparing the return.

She gave you her business card. You should return the favor by giving her HRB's business card.

At the rate he's going, he will be eligible for EIC in another year or two. No sense giving him a lecture, especially since he didn't ask. Of course, the only thing worse than irresponsible clients are irresponsible clients who ask for advice. You know you're wasting your breath.

You could check box 5 on Form 8948 and attach it to the paper return. Maybe enter "1040" for the form number. At the moment you'd be telling the truth. Or better, check box 6c and enter an explanation that the software has issues which are unresolvable at your location after repeated attempts to rectify the problem (or something along those lines.)

I'm not focusing exclusively on ATX, although they are a big part of the question since this is primarily an ATX forum. But I think this question reaches a little farther than a single vendor. Part of my reason for starting this thread is thinking about the marketing angle and how it might affect those who do renew early. My guess is that many software providers may be shocked at the fall-off in early renewers next year. They won't really know if this is due to committed customers simply delaying, or the more serious issue of prior customers bolting to other vendors. (they will have anecdotal info from their sales dept, but smart sales departments who find themselves in this position always paint the worst possible picture for management). Consequently, the marketing people will be inclined to ramp up the discount or sweeten the deal in order to induce more people to sign up. So if you plan to renew early next time around, it might be wise to pass up the first offer and see if your vendor ups the ante in some meaningful way. Personally I still think it's a bad idea, but if I were going to opt for the early sign-up I'd be inclined to wait out the first round.

I'm just curious how many on this forum have changed their attitudes about prepaying for tax software. And I'm curious about what effect this might have on the software vendors' marketing efforts & business model as well. Having dealt with 4-5 software vendors over the past 10-15 years, I've always refused to take everybody's prepayment discount. I delay purchasing until the product is ready (or close to being so). The subject comes up on this forum and others from time-to-time, and I've always maintained that it isn't worth saving what's essentially the price of 1 or 2 tax returns in exchange for being locked into an unproven product. It's unwise business practice, especially for the small shops who can't economically justify signing up for a secondary vendor. (The big shops have no excuse as far as I'm concerned) Whatever else happens during the remainder of this tax season with whomever you have chosen as your vendor, would anybody on this forum seriously consider being tethered to ANY vendor this coming Aug-Sep for the upcoming year?

Would that be classified as a Vaticinal Settlement?