Pacun

I do not transmit for other preparers because I believe if something is wrong with their returns, the ERO (ME) will be blamed. Let's say I trasmitted 500 returns, 400 that I prepared and 100 from another preparer. If all my returns are flawlessly and 20 returns from the other preparer are with mistakes, I bet that me efile record will not be straight. It is a good subject but since there is no law yet and it is not exactly aimed to the whole preparer community, that's why I said that we are doing like the immigration attorney. Of course I love when there is something to read on this forum. By all means please bring in any tax related matters to the table (I mean to the forum).

"But then you still need the three out of last five to get the (prorated) exclusion, subject to the same old exceptions." Isn't it 2 out of 5? If it is 2 out of 5, KC, please correct my subtitle.

Limit on exclusion of gain on sale of main home. Generally, gain from the sale of your main home is no longer excludable from income if it is allocable to periods after 2008 when neither you nor your spouse (or your former spouse) used the property as a main home. Does this mean that the rule that you must have lived in the house as your primary home for three years out of the last five years is no longer in effect?

I agree with KC, so far everything seems to be working OK. I expected more issues but I am glad everything is flowing. None of my clients have received any refunds yet but I think it is just a matter of time.

An immigration attorney has a local radio program and for the last 10 years, people have been calling asking if they will qualify for the Immigration reform, he replies, "let's wait for the recommendation to become law and the we will comment about it". I think the same answer could apply here if I understand the concern properly.

I mentioned the house being paid off because if the house is not paid off, most likely they will itemized. If the house is paid off and that's the only itemizable deduction they have, we could forget. I have a couple who own a house which is paid off. I always tell them, not to bother about bringing the amount of taxes they paid for the house. This year, it is different.

By PAUL CAMPOS I'm not much of a basketball player. Middle-age, with a shaky set shot and a bad knee, I can't hold my own in a YMCA pickup game, let alone against more organized competition. But I could definitely beat LeBron James in a game of one-on-one. The game just needs to feature two special rules: It lasts until I score, and when I score, I win. We might have to play for a few days, and Mr. James's point total could well be creeping toward five figures before the contest ended, but eventually the gritty gutty competitor with a lunch-bucket work ethic (me) would subject the world's greatest basketball player to a humiliating defeat. The world's greatest nation seems bent on subjecting itself to a similarly humiliating defeat, by playing a game that could be called Terrorball. The first two rules of Terrorball are: (1) The game lasts as long as there are terrorists who want to harm Americans; and (2) If terrorists should manage to kill or injure or seriously frighten any of us, they win. Photo illustration by John Kuczala Read More Crunching the Risk Numbers These rules help explain the otherwise inexplicable wave of hysteria that has swept over our government in the wake of the failed attempt by a rather pathetic aspiring terrorist to blow up a plane on Christmas Day. For two weeks now, this mildly troubling but essentially minor incident has dominated headlines and airwaves, and sent politicians from the president on down scurrying to outdo each other with statements that such incidents are "unacceptable," and that all sorts of new and better procedures will be implemented to make sure nothing like this ever happens again. Meanwhile, millions of travelers are being subjected to increasingly pointless and invasive searches and the resultant delays, such as the one that practically shut down Newark Liberty International Airport last week, after a man accidentally walked through the wrong gate, or Tuesday's incident at a California airport, which closed for hours after a "potentially explosive substance" was found in a traveler's luggage. (It turned out to be honey.) As to the question of what the government should do rather than keep playing Terrorball, the answer is simple: stop treating Americans like idiots and cowards. It might be unrealistic to expect the average citizen to have a nuanced grasp of statistically based risk analysis, but there is nothing nuanced about two basic facts: (1) America is a country of 310 million people, in which thousands of horrible things happen every single day; and (2) The chances that one of those horrible things will be that you're subjected to a terrorist attack can, for all practical purposes, be calculated as zero. Consider that on this very day about 6,700 Americans will die. When confronted with this statistic almost everyone reverts to the mindset of the title character's acquaintances in Tolstoy's great novella "The Death of Ivan Ilyich," and indulges in the complacent thought that "it is he who is dead and not I." Consider then that around 1,900 of the Americans who die today will be less than 65, and that indeed about 140 will be children. Approximately 50 Americans will be murdered today, including several women killed by their husbands or boyfriends, and several children who will die from abuse and neglect. Around 85 of us will commit suicide, and another 120 will die in traffic accidents. No amount of statistical evidence, however, will make any difference to those who give themselves over to almost completely irrational fears. Such people, and there are apparently a lot of them in America right now, are in fact real victims of terrorism. They also make possible the current ascendancy of the politics of cowardice—the cynical exploitation of fear for political gain. Unfortunately, the politics of cowardice can also make it rational to spend otherwise irrational amounts of resources on further minimizing already minimal risks. Given the current climate of fear, any terrorist incident involving Islamic radicals generates huge social costs, so it may make more economic sense, in the short term, to spend X dollars to avoid 10 deaths caused by terrorism than it does to spend X dollars to avoid 1,000 ordinary homicides. Any long-term acceptance of such trade-offs hands terrorists the only real victory they can ever achieve. It's a remarkable fact that a nation founded, fought for, built by, and transformed through the extraordinary courage of figures such as George Washington, Susan B. Anthony and Martin Luther King Jr. now often seems reduced to a pitiful whimpering giant by a handful of mostly incompetent criminals, whose main weapons consist of scary-sounding Web sites and shoe- and underwear-concealed bombs that fail to detonate. Terrorball, in short, is made possible by a loss of the sense that cowardice is among the most disgusting and shameful of vices. I shudder to think what Washington, who as commander in chief of the Continental Army intentionally exposed himself to enemy fire to rally his poorly armed and badly outnumbered troops, would think of the spectacle of millions of Americans not merely tolerating but actually demanding that their government subject them to various indignities, in the false hope that the rituals of what has been called "security theater" will reduce the already infinitesimal risks we face from terrorism. Indeed, if one does not utter the magic word "terrorism," the notion that it is actually in the best interests of the country for the government to do everything possible to keep its citizens safe becomes self-evident nonsense. Consider again some of the things that will kill 6,700 Americans today. The country's homicide rate is approximately six times higher than that of most other developed nations; we have 15,000 more murders per year than we would if the rate were comparable to that of otherwise similar countries. Americans own around 200 million firearms, which is to say there are nearly as many privately owned guns as there are adults in the country. In addition, there are about 200,000 convicted murderers walking free in America today (there have been more than 600,000 murders in America over the past 30 years, and the average time served for the crime is about 12 years). Given these statistics, there is little doubt that banning private gun ownership and making life without parole mandatory for anyone convicted of murder would reduce the homicide rate in America significantly. It would almost surely make a major dent in the suicide rate as well: Half of the nation's 31,000 suicides involve a handgun. How many people would support taking both these steps, which together would save exponentially more lives than even a—obviously hypothetical—perfect terrorist-prevention system? Fortunately, very few. (Although I admit a depressingly large number might support automatic life without parole.) Or consider traffic accidents. All sorts of measures could be taken to reduce the current rate of automotive carnage from 120 fatalities a day—from lowering speed limits, to requiring mechanisms that make it impossible to start a car while drunk, to even more restrictive measures. Some of these measures may well be worth taking. But the point is that at present we seem to consider 43,000 traffic deaths per year an acceptable cost to pay for driving big fast cars. For obvious reasons, politicians and other policy makers generally avoid discussing what ought to be considered an "acceptable" number of traffic deaths, or murders, or suicides, let alone what constitutes an acceptable level of terrorism. Even alluding to such concepts would require treating voters as adults—something which at present seems to be considered little short of political suicide. Yet not treating Americans as adults has costs. For instance, it became the official policy of our federal government to try to make America "a drug-free nation" 25 years ago. After spending hundreds of billions of dollars and imprisoning millions of people, it's slowly beginning to become possible for some politicians to admit that fighting a necessarily endless drug war in pursuit of an impossible goal might be a bad idea. How long will it take to admit that an endless war on terror, dedicated to making America a terror-free nation, is equally nonsensical? What then is to be done? A little intelligence and a few drops of courage remind us that life is full of risk, and that of all the risks we confront in America every day, terrorism is a very minor one. Taking prudent steps to reasonably minimize the tiny threat we face from a few fanatic criminals need not grant them the attention they crave. Continuing to play Terrorball, on the other hand, guarantees that the terrorists will always win, since it places the bar for what counts as success for them practically on the groun... This is Pacun and let me say that —Paul Campos is a professor of law at the University of Colorado. I cut the article on purpose, but you can see the whole article at: http://online.wsj.com/article/SB10001424052748704130904574644651587677752.html

If you puchased a new car after February 16, 2009, and paid state or local taxes, your standard deduction becomes higher. The car price before taxes has to be less than $49,500. If you have a house that has been paid off and you paid more than $1000 in real estate taxes, your MFJ standard deduction becomes higher. So your MFJ standard deduction becomes ("standard deduction" plus "taxes paid for the car" plus 1,000) Let's say that you paid $3000 on real estate taxes and 5,000 on sales tax on your new car purchased in March 2009, your MFJ standard deduction would be $17,400. I included this new standard deduction on the warm up exercise. It seems that you can deduct all the taxes paid on the car. So if a car cost $49,000 and a state charges 100% of the cost in taxes (no such state), your MFJ standard deduction would be $60,400. After all that information, my question is: Is the sales taxes on new cars still in effect for 2010? Also, let's say that I have good credit and in December 2009, I put my beautiful signature on the paper and I drive away with a car without paying a penny. I still qualify for the new standard deduction even though I didn't pay anything in 2009, correct?

How deep does the test get into the corp returns? I've never done any and really don't foresee it anytime soon? It is hard to tell. Since you already know the personal tax rules, you concentrate on the type of returns you don't prepare. Previous exams are very helpful. The problem is that they are not updated anymore. They used to publish them every year but since they computerized the exam, they don't publish them yearly anymore.

My clients, have cellular phones because they need it for work. I tell them that the IRS will not allow them to expense the full bill, but I have read somewhere that auditors will allow half of the cost of cell phone service. Let's say that you have an unlimited plan that costs you $80 monthly. In a year, the cost will be $960. Half of it will be $480. I don't think, the IRS will ask clients for detailed phone calls for 12 month from 2 years ago just to go through the business and personal calls. In any event, who will remember what calls were business or personal just by looking at numbers 2 years later. Let's say that the IRS checks the bills and realized that 40% were business calls. Then they will say, we are going to deduct $96 from your phone expenses.

Canada and the US have a tax treaty. Maybe you can issue a 1099misc to the canadian contractor and the contractor just has to pay taxes to Canada. Since your client is the employer, your client should ask his contractor to get an ITIN and then issue the 1099misc using that ITIN. This is outsourcing in its pure essense and there are a lot of companies doing it. Does anyone know about tax reporting requirement for companies that do outsourcing in countries where there is tax treaty?

Don, I found something for you. You could be right. Who qualifies for the credit? The buyer must have lived in the same principal residence for five consecutive years out of the past eight-year period prior to the date of purchase of a new principal residence. The home must have been the buyer's primary residence. A principal, or primary, residence is where you live for most of the year. In the case of a married couple, both spouses must have owned and lived in the same principal residence for five consecutive years out of the eight-year period, prior to the date of purchase of the new principal residence. Married couples would therefore be disqualified under these situations: One spouse meets the five-year test, but the other has lived in that same home for less than five years. Each spouse has owned a principal home separately and now the couple wants to buy a principal home together. However, a single person who buys a home using the credit and later marries does not have to repay it.

"Why would the TP not know if they received pmt or not?" Maybe because they are a little old and their memory is not as good as it used to be. Maybe because when we get money we spend and forget about it. Maybe because people tend to remember longer if they have to return some money back to the government and tend to forget if they receive some money from the government. Maybe because they (and their tax professional) expected that the Social Security Administration was going to report the amount of the credit on the regular SS form at the end of the year.

I am going to take the exams during the summer. I will do it the way I did with my drivers license writen test. I didn't study and I passed the first time in DC. Then, I went to VA and I passed it and I got my license. I went back to take it in DC and I failed. I was shocked because I knew all the driving rules in my country since it was part of my daily job. Does anyone know how long does it take to register with IRS? Let me say that I pass the tests in June 2010 and I submit the form to the IRS, when will I be an EA officially?

As I said before, she doesn't qualify for the 8K First time home buyer credit or any portion of it, period. If her husband used the old house as his main home for 5 years out of the last 8 years, then maybe she qualifies for the $6,500 credit if they file jointly. Depending on the state where they live in, the husband (even though he is not the owner of the house per se) might qualify for half of the credit if they file MFS.

I am not sure if I understand the question. If you buy items for resale, you don't issue 1099misc to providers. In any event, these suppliers don't have FEIN and they might not be interested in getting one. As I said before, maybe I do not understand the issue at hand.

She doesn't qualify for the 8K first time home buyer.

Two different animals. One is to efile 1099s that your client is going to issue to his contractors and the other is to file his taxes. When you create an efile, you cannot print or resave the file. If you do, then ATX will mark the efile file as rejected.

This is what I do. I select manual and then it tells me everything that it is available. I glance at my 3 states and 1040 (for curiosity). Then I hightlight them all and click on download. I have always done it this way and works for me.

What happens when you open the program with no clients opened and you pull down the menu and select update program?

How many rejected efiles are we talking about? If more than one, you are doing something wrong. Nothing wrong with the program. We all have efiled with no problems.

The lady who opened the daycare center on May 1, 2009 will get a refund of $4,423.00 for tax year 2009. If you have a different answer, please post all the entries on lines 47 though 67 and I will tell you what I have and we can start a nice exchange.

Exactly. That's why I didn't elaborate on my answer, but I tried to answer his direct question. At the end he might have a passive business loss after he recaptures.

It means that if you didn't have a second mortgage, the "sale" back to the bank didn't produce any gain or loss according to the bank. You still have to see your basis and use the FMV on the 1099a as the selling price.

Problem solved. Since the dependent has to younger that TP or disabled, YOU NEED the date of birth of the taxpayer. This is new this year. Since you didn't check that the child was permanent disabled, the program didn't give you EIC because it needed the date to calculate if the child was younger.