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In case anyone searches for "bankruptcy" in future as it relates to the hardship exemptions, in answer to the original post and #7 in the second quote above, from this page on the Marketplace, the 4th bullet down in the first section says this: "To figure out if the bankruptcy happened within the past 6 months, count back from the day you’ll sign your hardship exemption application."

Congratulations on a long and rewarding career. I hope you enjoy retirement because you've earned it. Your posts always lighted my day, so please do visit here from time to time.

Inside Higher Ed.com was recommended from two of my friends that are univ faculty

I use QuickBooks. I use Drake's CWU only for the payroll filings and 1099s, and then only as "on the fly", meaning that I enter amounts directly on the forms.

Here's that article Gail mentioned that was in the NY Times several weeks ago if anyone would like to read it. I remembered it also and asked one of my college professor friends to help me find it again.

He should file the return regardless so that it starts the SOL.

I apologize to everyone including Jack for my rude post.

LOL It's not real. It's posted by SnickersBrand© and labeled as comedy on Youtube, the same Snickers© that has the current commercial starring the Brady Bunch.

Taxable. There's no need to shout at anyone here that is trying to help you or answer your question. Your original post did not state the entire basis for the lawsuit. If you were *that* sure, why did you even ask?!?!?!?! Do you shout at your clients too? Sheesh!

Jack's post stated that his client's settlement is a result of litigation with a previous employer. At this point we (on here) don't know what caused the lost wages, but if it is an employment-related lawsuit, then the compensatory damages are going to be taxable. If it's related to an injury sustained on the job, then it wouldn't be taxable. That's why I said I'd agree with him for the moment, but that he needs to read the documents and talk with the attorney.

http://www.irs.gov/pub/irs-pdf/p4345.pdf

Haha, Jack. At first I thought it was because I was agreeing with you, and then I saw your bolded item. Yeah, some attorneys are pretty bad with the taxation issues, especially those that are the litigators. Worse one was an attorney handling a divorce that had never heard of a QDRO, I kid you not, and was about to cause a huge tax bill until I stopped her. She was so bad that I had to tell her that if she didn't know how to structure that portion of the settlement properly, then she needed to let the opposing side's attorney draw up that portion of the settlement because the amount had already been agreed on. Most of the attorneys I work with now are for the business clients that specialize in estate and financial planning and business taxation, a couple of them also CPAs that worked in the industry, so they're very good.

I'm going to agree with Jack for the moment until he gets a copy of the settlement to see exactly what it was for, or until he gets something formally in writing that states exactly why this settlement isn't taxable. If a settlement is related to an employment-related lawsuit and is for lost wages, that is compensatory damages treated like wages and is taxable. Jack states that the other portion of the settlement is for punitive damages, and that would also be taxable and reported on line 21. Jack, get the documents and speak with the attorney, get something in writing. Over the years I've worked with attorneys that have been wrong about the taxation of settlements.

She should have had a business meeting with someone, documented it, and shared a piece of that candy. /s

Eric, is there anything that will be lost that should be printed out or copied to a file such as our private messages?

Eric, whatever is most convenient for you works for me.

Adding to Jack's list... not pay any other benefits like health insurance or matching contributions to retirement plans, and not have a higher unemployment rate if they decide to fire the person I'll agree with Jack on breaking state law by not having the person listed as an employee for w/c insurance, but the company isn't saving in that area because the insurance auditor will ask for the payts to independent contractors too. And if it works like here in DE, a single person owning their own business without employees does not have to purchase w/c insurance on themselves so the company they are working for would end up with a higher premium because of this.

Yes, if the average rental is 7 days or less. You have to know the days rented and how many tenants there were. Many vacation rentals fall into this category and are not reported properly.

The couple's ages would only be a factor if they had no qualifying children. If they DID have qualifying children and still met the other tests, then they could still have claimed the EIC. But I agree with you, the EIC is gone for them.

JJS, I too am guilty of undercharging on some, mostly because I have very long-term clients and it is a mistake to not raise prices each year to keep up with what the competition is doing or allow the fixed expenses to become a larger share of the revenues coming in. I didn't raise my prices the year the economy fell apart, and so each year I have that shortfall as I raise by a percentage of the prior year, where if I hadn't skipped that year's increase each year after that would have been higher. I raised prices by 10% over last year, and I may do that same again this year. We can only shave so much off the expenses instead of raising revenues. I've shaved everything considerably. I know that I could take on more work, and I've started asking clients for referrals. I never take price shoppers and almost never accept people that call from the phone book. If you have some balkers at your price increases, you could offer them an after-the-fact discount if they refer new business. It could be small, like $10, but it will help your practice grow and will help to replace any that leave over your raising prices. I doubt you'll have many leave though.

You are correct that the grandparents must have a qualifying child to take the EIC, that is unless their own income is so incredibly low that they'd qualify for the credit without a child. To be a qualifying child, they must meet the age, relationship, cannot file a joint return, no one else is claiming, AND must have lived with the taxpayer for more than 1/2 of the tax year. Did the grandchildren live with this couple for more than 1/2 of 2014? Or are you saying that you were misled and these grandchildren never lived with the couple, that the couple only supported them financially while they lived elsewhere?

That's why the deductions are limited to only the sq ft of the one room being rented, and further limited to not allow any loss, all because the owner is also living in the property.

The boyfriend wasn't renting the second room, the boyfriend was living in the first bedroom with the owner. The square footage of the home that was rented, in this case its the second bedroom, is compared to the total sq ft of the home and that is the portion of the home that can be depreciated. That is also the % that is used to allocate the other indirect expenses related to the rental. Because this condo is also used as the owners personal residence, there is an additional limitation that says that the expenses are limited to rental income. In other words, because owner lives there, she can not create a rental loss. As far as the first bedroom, she can't deduct any depreciation or expenses based on that room's area because she is using it as her personal space also. I don't know how I feel about the $12000 from the boyfriend yet. If she is really calling it rent and it a set amount of $1,000 each month, then yes, it would be rental income. If she let him move in with her and the $12000 figure is his tally of paying some of their living expenses that they share, where he might go buy the groceries, etc, then maybe it isn't rent.

I know this isn't what you asked, but I'll put it out here anyway. I would worry about those low-end, lower priced programs and the support behind them also. Which ATX product have you been using? ATX Max? Honestly, Max packs a lot into that program for ~ $1,300 and I'd stick with that if you like it and it works well for you. You could try a trial of Drake's software to see how it handles those 990s. I've never done one with their software, so I can't say how easily it handles those. Drake will probably do what you want for slightly less if you purchase before the end of May, but there will be a learning curve, and not everyone likes it or is willing to put in the time to learn it and adapt after having used forms-based software. You would have to give it a decent trial run to see if it would be a good fit for your practice and the types of returns you prepare. If you raise your fee by $10 per return you'll have more than covered the purchase price covered for either of those programs. If I recall correctly, ATX was raising their base rate 10% per year before the early discount. If clients question the small increase, you tell them that your software increases 10% each year. You should be raising your rates each year anyway.

By doing that, you're still using paypal and have the protections that it offers, you just don't have an account with them.