Pacun

It is sad but you are right. For years, we have a preparer here who is busy all the time during tax season. He has about 6 people working for him and they make appointments all day and at night. There are appointments at 3AM. In any event, they have pre fabricated, dependent child care forms with daycares EFIN and everything ready to go. They also have non-cash contributions with items and prices ready to go to. IRS just send the refunds for these people. The State where I am are not that naive and they question a lot of returns prepared by these people. They do not sign the return but staple a business card on the folder. Yesterday I had a new client who is married and was filing as HH, he lives together with his wife and she is claimed as a dependent. Husband told me... "Let's see how we do with you"... "last year I went to a lady preparer and I fled her office". I said why? He said: "Well, I am the only one working and I only make $50K with a wife and one child, preparer told me that I had to pay MD. I have never paid MD so I grabbed my papers and went back to my previous preparer." He also said: "I always do the right thing and my returns are prepared properly. Last time I had a problem with the DC goverment and I went to talk to them. They gave me my refund quickly and they asked me where my returns were prepared. DC Government went ahead and collected the business card from my taxes for each year." I believe the DC government is paying attention to this preparer. During the interview he told that he and his wife (both present) had one child and got married in 2008. He told me that he worked as a bus-boy and his wife took care of the child and that's why she was his dependent. When I reviewed his previous return, I told him "you filed as HH and you should file as MFJ, you signed that your child went to this daycare center and that you paid them more than $3,000. This is the name of the child care, address and FEIN. You mentioned that you went to work all year to the same place and you are claiming mileage and meals. I asked, Does your employer provide lunch for you (even though it doesn't matter because he couldn't deduct any lunch)? He said, no. I said even if they don't give you any food, you cannot deduct it. I said, I have worked in a lot of restaurants in the past and ALL of them provide food. He said, "Well, I don't like their food, so I buy my own". At this point I knew I was not going to believe this taxpayer, but I went on. I prepared a test return and told him "you owe MD more than $1K and federal will refund you $3K. That's preparing the return as MFJ as it should be and with all credits and deductions based on your situation and the information you have provided". I said, if the IRS finds out all the problems with your 2009 return, you will have to pay back a lot of money plus interest and penalty. You should ament your return. Also, if the child care center finds out that you are stating that you paid them more than $3K in 2009, they could cause you some problem." I could tell that the husband wanted his papers back and I also noticed that the wife was worried. The wife asked me, could I be in trouble because of all the lies on that return? I said, "not really, you didn't sign the return, you were a dependent." If I prepare your return this year, you will have to sign and you will be responsible for this one, but you don't have to worry because I will prepare it correctly based on the ifo you provide. I gave his W-2 back and I said, please come back when you want to do the right thing and remember that the IRS might take a long time to check your return but once they do it, you could have to pay a lot of money back. I wished them luck and went back to work for remuneration.

You are correct but using another reasoning. For the parents, that wouldn't be a problem if the 19 daughter was a full time student AND she didn't provide more than 50% for her own support. Your are right, the 21 year old will have a problem because he couldn't claim her as dependent because she made too much money, period. This is true, regardless what percentage her income represents when compared to his income AND regardless if he supported her more than 50%. She made too much money to be claimed by anyone else other than her parent with the conditions stated above.

I usually input all numbers on the control box on ATX's W-2. This year, it is not letting me enter any spaces or hyphens. Did anyone notice that? ALSO, I had the same problem on Schedule C, Box E (business address). 1804 Belmont Rd. #205 was not allowed because it had spaces, it had a . and it had the # sign. I ended up typing 1804BelmontRd205 To me, this is very important. As you know, there is no way to fill out Box D on ATX unless you have the actual W-2 form infront of you. If the IRS want to make sure that preparers are not efiling with the last paycheck stub, they should enforce that employers use random numbers on box D. I believe most employers change this number year to year, which is very good.

The parents can claim EIC for the 19 (if full time student), 13 and 7 year old as long as non of them provided more than 50% of their own support. This will be true even if the 21 year old child supported them. The 21 year old can claim EIC for all 3 siblings provided that he provided he provided more than 50% of his own support. Provided that the 19 old sibling is a full time student and non of the siblings provided more than 50% of their own support. This will hold true even if parents supported the children. If the 19 year old is not a full time student and if he provided more than 50% of his own support, he/she can claim the two little siblings and get EIC, AGAIN, provided that non of the little sibblings didn't provide more than 50% of their own support. For the 21 year old, you should make sure that non of his dependent siblings provided more than 50% for their own support and you should be able to see if he qualifies for HH. Remember that the 21 or 19 year old can claim HH ONLY if he provided more than 50% for any of the siblings and they kept the home which was the main home for the siblings. This is from the top of my head and I will be interested if someone has a different opinion.

I noticed that Jainen logged on yesterday but hasn't posted any comments. I was investigating if someone insulted him on his last posts but I didn't find anything. By the way this is a very nice post and I wanted to bring it to the top.

How about if they roll over to next year and next year you add form XXXX and you click print, it might not print form XXXX. I don't see this as nice feature even if rolled over.

Keep in mind that if you go with Tuition Deduction, you will have to wait until St. Valentine's day to file the return. So, it there is not much difference and clients want their refund (if any) soon, you should go with the other credit.

I am just giving you more information but MCB39 already answered your questions. Answer to question 2.- Let's say you and your wife earned 40K in 2010 and you have 3 kids, ages 12, 21 (who is full-time student), and 33 (who is permanently disabled) As long as none of them provide 50% to his her own support and live with you, you can claim them and claim EIC. This will be true even if 12 year old child supports both brothers but not more than 50% of his own support. Another example: This will also be true even if the 12 year old (or any of children) made $4 million while staring a movie, as long you put that money on the side for his college, retirement or simply have it under the mattres. I am hoping someone will be interested on this and comment. Answer to question 1.- a person who is eligible to be claimed as a dependent on another person’s return will have a 2010 standard deduction limited to the greater of $950 (the “minimum” standard deduction) or the taxpayer’s earned income plus $300, not to the exceed the normal maximum single standard deduction of $5,700). Example: Mavis Williams, age 17, is claimed as a dependent on her parent’s return. Her 2010 earnings consist of $1,200 interest and $400 wages from a paper route. Mavis’s 2010 standard deduction is $950 (the minimum standard deduction). Example: Assume the same facts as the previous example, except that Mavis has $980 itemized deductions in 2010. Mavis would itemize and deduct $980. Example: Assume the same facts as the previous example, except that Mavis’s paper route earnings were $1,300. In this case, the standard deduction would be $1,600 (the $1,300 earned income from the paper route plus $300). If paper route earnings were $5,980, the standard deduction would be limited to $5,700 (the maximum standard deduction for a single person in 2010).

Thank you. But If I wait until October to apply and if I get approved on December 20th, I will be required to take only 2 credit hours, correct? If I get approved on December 20th, do you know the deadline for me to comply with the 2 credit hours for 2011?

Thank you to all. We learn a lot here on this forum. Thank you Catherine, but I still have to send form 23 to the IRS and they will check my credit and my income tax filings. I think I am going to wait until October because if I do it now, I will be required to take clases every month. I will need 2 Continue education credits every month until my partical 3 years expire, correct?

Go to the payment tab on the 1040 EF Info form and read it carefully. There is also a consent to disclose debit card tab next to payment which I believe is new. Since you are the first one paying (my early clients get refunds or pay by mail), please keep us informed.

I don't think this is possible. Maybe if you use a template, but not all your returns will match the template. Since we are e-filing everything, when we invoke form 8879, we need it to print, but the program doesn’t select it automatically for printing. ALSO, form 8867 is not printed automatically and I normally write the due diligence questions on that form and ask clients to sign it. We could ask ATX to change the settings for us. For example, Sch D will not print if it is not required for paper filing. You have to select it manually on the form tabs (not the printing menu) if you want to print when only a portion of the form is filled out. With e-filing, it should print automatically since it is for client's records.

Sch C is correct since they are providing a service.

I think they could claim both houses for personal use and deduct interest and taxes. One a primary home (where they live) and the secondary where the mother lives. There are only 3 ways to treat the house where the mother lives: 1.- Personal use, 2.- Rental property, 3.- Investment property. Based on the facts, I think it will qualify only for personal use. Think about this: If FMV of rent for the house where the mother lives was $1000 per month and the mother paid only $900 per month to his son. If son wanted to try that property as a rental property and take depreciation, the IRS will say "NO". That's personal use because it is below FMV and you are related parties.

I passed part 3 of the EA exam today. I went to a conference and a lady came to talk to us about how she passed the exams. She said that she took the easiest one first which was Part 3 (representation). Then she took Part 1, (individuals) and then part 2 (corporations). I thought she was right but after taking all exams, I will suggest you to stick to the order of the exams (Part 1, 2, 3). I got several questions from part 1 and part 2 on Exam number 3 today. I am pretty sure that I would have failed this exam if I only studied the representation portion of it. Because I prepare very few business returns, I think the hardest exam is Part 2 (corporations).

I only use the first and the last CD. I use the first CD to install the program on my work work computer and then I do all updates on the internet. I use the last/archive CD if I need to install on another computer later on. I thought that each CD has a full blown ATX program with updates and I have always been affraid to install over my working version of ATX.

Good info KC. I looked at Pub 463 and I looked on the temporary job assignment for the word INTENT and I couldn't find it. Interesting enough, the word INTENT is not used at all on Pub 463. This is close enough for your point: If Kari's client realistically expects that he will work one year or less in NC, he can deduct expenses. Since he was there for 5-6 for tax year 2010 and until today he realistically expects to go back to Atlanta before a year, I think it is safe to take the deductions. Next year you will have reality and the only question will be: When did you come back from NC? or Are you still working in NC? If the answer makes the temporary job assigment longer than a year, no more deductions for 2011 but he doesn't need to amend 2010.

try to install and see if you have a repair option. Repair option should not mess up your data but it is always a good idea to have it backed up.

He is talking about a temporary job location which doesn't apply in his case. When your employer moves you to a temporary job location for a year or less, you can take deductions. I think he doesn't qualify for either moving expenses or temporary job location. If he goes to different work sites, he might qualify for some mileage.

If the client's parents are living with your client, that's not a problem because 1.- he made more than $10K, 2.- is older than 19 and most likely he is not a full time student. As a result, he will not be a qualifying child for them. If parents are providing food, it will be considered a gift and parents will have to file a gift tax return if needed. As long as the children live with the father and he is not claiming HH, he should be OK for EIC. I think my reasoning is correct even if the parents of the mother are living and providing for mother and children. The children will be qualifying children of the father and the mother could be a qualifying child of her parents. Since they are not filing a joint return, even though the mother is a qualifying child of her parents, I think he is OK with EIC and doesn't need to claim girlfriend as dependent.

"The Regulations require that the tax preparer complete and retain an eligibility checklist (or alternative eligibility record) and the computation worksheet (or alternative computation record), as well as a record of how the information was obtained in the records (including the name of the person furnishing the information). This information must be retained for each client claiming an earned income tax credit." What are you keeping in order to comply with the due diligence requirements? Do you have your own documents or what worksheets are you keeping? Are you printing them or you are keeping a soft copy with the return?

I was reading the efiling regulations and it reads it is illegal to pileup returns before efile starts, I haven't done that. Anyways, I got a some clients yesterday and I haven't transmitted them. I am waiting for the bugs to be found on the first returns. In any event, it doesn't matter is you efiled friday on tomorrow, the refund will be processed on the same date.

"This creates an added step now in e-file processing, resulting in less effeciency." Not really, it is just the same click. Instead of clicking on Piggyback Ohio, you will click on Ohio. "I, too, missed that memo! What about states like Ohio that begin with federal AGI? They have always been piggyback" More than 50% (I want to be very conservative) of the states start with federal AGI and that will not change.

On the server, go to preferences and click on preparer manager and select none on both boxes. I am not sure if that will help but it doesn't hurt to try. Close and open ATX from server.