Pacun

Let's say that your client owes 1K to the IRS and he will be paying $200 per month. Do you really need a payment plan or just make those payments until you finish? Will the IRS try to collect that $1K if you respond to their first letter with a $200 payment?

I would not work with this client but if you feel the need to work with him, ask him to get his bank statements from December 2005 until January 2007. When he brings that in, you can make a decision to amend or run away from this "nice, poor victim".

It is my understanding that PLRs are very expensive. Has any one requested one? How much did it cost? How long did it take? How much tax did you save? was it worth it? Any information and/or experience you might have on this topic is welcome.

Isn't this forum lovely!!!???. I asked this question about a month ago and JOHNH gave me good information about my problem and now KC put the icing on the cake!!! Thank you both.

No. Your clients have not filed and therefore you just need to file 1040. Remember that the IRS does not file for clients. In order to file you must file the main form (1040, etc) and that form must be signed by your clients. No matter how many letters or other forms you sign with the IRS, you still have NOT filed if no main form was signed.

That's right. I have never purchased early. I always wait until at least christmas.

Question: Fred is a very disruptive child. His parents have arranged for him to attend a military school to give him a more structured and disciplined learning environment. Is the school tuition deductible as a medical expense? Answer: No. You cannot include in medical expenses the cost of sending a troubled child to a school where the course of study and the disciplinary methods have a beneficial effect on the child's attitude if the availability of medical care in the school is not a principal reason for sending the student there. Utilizing the resources of the institution to alleviate the medical condition must be the principal reason for the child's presence there. Any ordinary education received must be incidental to the special education provided. You can include in medical expenses the cost (tuition, meals, and lodging) of attending a school that furnishes special education to help a child to overcome learning disabilities. A doctor must recommend that the child attend the school. Overcoming the learning disabilities must be a principal reason for attending the school, and any ordinary education received must be incidental to the special education provided. Special education includes: Teaching Braille to a visually impaired person; Teaching lip reading to a hearing-impaired person; or Giving remedial language training to correct a condition caused by a birth defect. In another example, the IRS ruled that the tuition paid by the taxpayer for his children to attend a private school was deductible as a medical expense. In this case, a physician diagnosed the children with severe dyslexia that handicapped their ability to learn. The private school provided a specialized education program designed to teach the children to deal with this learning handicap eventually permitting them to continue their education at a regular school. This was allowed as a medical expense under IRC Sec. 213 [Ltr. Rul. 200521003].

Thanks.

I got this yesterday. It seems you still have ten days to enter the contest. "We know you usually wait until later in the year to renew your ATX software for next season. So we wanted to give you a special reason to renew now. If you renew by June 30, 2007, you'll not only get 10% off on the price of your software, you'll also have a chance at winning up to $5,000 cash. That's because we're extending the deadline for entering our special contest until June 30. Renew by then, and you'll be eligible for one of three prizes--$5,000, $3,000 and $2,000." They include the names of the 3 winners from the previous contest.

Gene, I think more that 2 monitor is extravagant on our field. Just a thought.

Just make sure you do not depreciate your third or fourth monitor because you are crossing the ordinary and necessary line.

How can you rent something for rental income and not have schedule E? Let's say you do it for 10 years, other income is casual income and in this case it seems to me that it is profitable rental activity and therefore, rental income.

Yes. Only one mouse. This is the short answer to your question. In reality you can have as many mice as you want connected to your computer, but you only one cursor.

Are strike benefits included in earned income for purposes of the earned income tax credit? Yes, strike benefits are considered earned income for purposes of the earned income tax credit. Rev. Rul. 78-191 states that earned income includes strike benefits paid to union members who picketed even though the same benefits were paid members who didn't picket. SORRY I meant "Interesting tax question about earned income" as the title, it seems that we cannot edit titles.

I thought the whole thing was inheritance... but I guess you are right.

I think you are forgetting something important... Dead people do not give gifts.

A translator has an office that he rents from landlord. IT guy wants to rent a desk and assist clients 4 hours a week on premises. Translator will charge $200 per month for the rent of office space and desk. Translator files Schedule C and where will he report the $200 monthly he will get from IT guru? Sch E? Will translator get away with not paying SE taxes on this income? Keep in mind that translator will deduct full rent against his schedule C.

Your main concern here would be the FMV of the house at the time of death. If it was sold to a non related party then the selling price will be enough since the property was sold before the 6 months alternate valuation kicked in.

ERC, When preparing your own retur, anyone of us will tell you what exactly to do. You do not have to tells us the exact figures just ask. Also a lot of us will do your return for free, afterall you are not pay for your valuable service on this forum.

There is a similar post on Time donation but I want to start a new one. What's the rule on this situation? A teen ager makes a software program with FMV of $3,000. His out of pocket expenses are zero. He donates the program to a non-profit organization. At tax time, the teenager files schedule C and pays his share of SS, he is claimed as a dependent on his parents return, and he deposits $3,000 on his roth IRA. The IRS audits the return and says, you did not have earned income and we are going to refund your SE taxes that you paid but you have to take out the money from your Roth IRA. You are the preparer of the return. What is the answer you send to the IRS? To me, the teenager cannot file schedule C and none one can say... I choose to file schedule C on this situation because the rules prohibit you from doing it. For a moment forget that the teenager put money on the Roth IRA, that should not change the rule that prevents the teenager from filing schedule C. I know the IRS will be happy and never audits this return but I want to know the regulation. Thank you in advance for your responses and keep in mind that our intention is not to offend anyone on this forum, we are here to share and learn.

I have not moved to dual monitors because my computer is not that new. I am going to purchase one in December and I will install 2 monitors. Sometimes, as I answer to some post on this forum, I see the need for two monitors and I cannot imagine that I work with only one monitor. My best blessing has been efiling but now I will have to pay some money to ATX since they will only give 100 returns, I hope you (JohnH) will share this efiling feeling down the road.

You are right, they come to me and they said "John said that I will get a big refund" lol.

"We don't know that he would be worse off with just this income amount known. It would depend on his "Other" income...his itemized deductions, if he has enough to exceed the standard. If he exceeds the standard by a substantial amount, then the $2,000 becomes significant in reducing his "taxable income" and the $283 SE tax on the $2,000 would still give him a net savings of $1,717. Moreover, while we're talking about insignificant mileage amounts, the cost of the disk would be deductible. So without knowing ALL of his annual details, it would be difficult to answer his question, except to repeat that his services are NOT deductible." You are completely wrong and thinking like my clients... They think that if they donate $5000, the IRS will refund them $5,000. Sometimes they are married filing jointly and the $5,000 donation is the only itemized deduction they have. I tell them "the $5,000 donation will benefit you... ZERO". The only time you will benefit by reporting $2,000 on Schedule C and deducting $2,000 on donations on Schedule A is... if you need to increase your SE income for retirement plans or you need additional income in order to get SS credits. Keep in mind that your salary is increased by $2,000 and then it is reduced by $2,000... leaving you with the same taxable income at the federal level but you have to pay $283 on SE taxes.

If your client has to pay SE taxes on the donation, why bother?

"Suppose you design and build a lawnmower, or any such device and you donate it to some non-profit...is that not deductible as far as its FMV is concerned?" If I build a Lawnmower with my own efforts, I build the metal and the engine, paint it, test it, no FMV, my basis would be zero and no deduction.