Pacun

I like to attend instructor led classes and I wonder if you have any suggestions. I want to learn how to prepare 1041s, trust returns, church returns, etc. I have been to classes provided by the Maryland Association of Accountants and Tax Preparers and others offered by the National Association of Tax Professionals and I wonder if you recommend any other schools. I used to take classes from HR block to prepare partnerships and schedule C but now those courses are not available to the public. As you know, once you take three classes with the same instructor, you know their jokes and their lies and they are no longer fun.

I agree with SaraEA that we should know our limitations but If you start doing returns and you limit yourself to do returns only that match your ability, you will never learn and you will never make a living out of this profession. I have noticed that the best is to have honest people as clients. When they come with a new additions to their return, don't let them go.... but rather adjust yourself to the new challenge and you will learn a lot from your research. That's what I do for my clients and since they already trust me, I tell them "Since this year, you have X item that is new on your return, I will need a couple more weeks to do some research because I want to make sure we start correctly with this new addition to your return. I will call you later on and ask you a few more questions". I was happy when the IRS was going to match skills with the kind of returns we could prepare. That was going to force us to take extra courses and pass new tests. That was the idea behind preparer's examination that thanks to the Love case is on hold. What do you think about my motto: "If my EA credentials, some how, authorize me to prepare American Airlines return, then the sky is the limit" I never understand (I am sorry if I sound harsh), why if someone has been preparing taxes for 10 or more years, he/she cannot pass the EA exam? I do want to hug those people.

How can you have a casualty loss if the business portion of the car was value at 0 dollars? If you have casualty loss, then you will have a gain for the same amount.

How much money will you client put in his pocket if you amend all those years? You will have to amend 4 years which might cost your new client some money. If I am not mistaken, you will be sending a check with the 2012 amendment and then the client will be charged interest. and/or penalty. I normally don't amend other's preparers work. I suggest them to go back and then I suggest them to come back next year to me and I will prepare their taxes correctly. I am usually busy and that's why I don't have time to amend.

Sara, I thought you were going to touch about the step up basis at the time of death or 6 months later. It might be a good idea to suggest to your client to keep records of the step up basis on the houses and depreciate accordingly if needed.

Let me give it a shot without any references. She must take the RMD regardless of employment status. She can put the money on a Roth IRA if she doesn't need it.

Thank you. So, as I said, I think the trust will file for at least 2 years.

Careful with this one. While the IRS cannot force your client to pay, a judge can force him to pay his share of all debts including the tax debt.

Keep the rule simple: For IRAs, the beneficiary also inherits the shoes. So he/she puts on the shoes of the dead and everything is like before. If the dead was 59.5 or more years old, no penalty. If the dead had basis, the person wearing his/her shoes gets the basis. Are we on agreement that the IRS received the money on the trust FEIN and the beneficiary of the trust can claim that withholding on his social security number?

Let's say that each cousin gets $14K, that will $28K. That's an amount that could be very close to the actual amount after taxes. Let's say that the TP is on the 33% bracket. 33% of $64K is about $22K. $64K minus $22K (taxes) = $42K minus 28K (given to the cousins) = $14K (the share for the TP). I haven't forgotten State taxes, but maybe the tax payer is on a lower bracket or lives in a state that doesn't pay state taxes. Without having the tax return(s) in front of you, you will not know exactly the effects but I would never give more than $14K, because $64K (or $44K if correctly split by aunt) could affect many items, such as "Obama care tax", child credit, EIC, standard deduction, AMT, scholarship for children, you name it....

I am glad you found your own answer. It seems simple: The trust received money and will need file its own taxes for that year. When filing, the trust will claim the 10% as money withheld and will also make a distribution and issue a K1 for the son (the beneficiary of the trust). The origin of the money the trust is distributing is irrelevant in this case to the son. The son will report his taxes as he does every year and will include the K1 on this taxes. Keep in mind that the trust will have to file its tax return again next year because it will have money to distribute (the refund from the IRS, if any) and again the son will (most likely) get a K1 from the trust. As for the penalty... you forgot a simple rule: The beneficiary of an IRA gets into the shoes of the dead. Meaning that if the dead was over 59.5 years old, no penalty.

Do the taxes correctly. Nail your client with the tax for the distribution and also nail him/her with gift tax if she gives money to the cousins and the amount is more than $14K. Or negotiate with the cousins to get $14K each tax free and let your client pay the taxes on the $64K.

I only update when I open the program and there is an update. Or I update from within the programs. I barely read emails and if they contain links, I really think about that email before I click on the link. My rule is: If I will sleep well after refusing to click on a link, I don't click it.

I wonder if the Clinton's qualify for the business use of their home based on exclusivity. If they have 4 businesses (at least) author(s), speaking and consulting, it will be very hard for them to use their home portion exclusively for that one business that takes the deduction.

Well... the IRS really cares about materiality if we are talking about $100 each year, the IRS will not care what year you include it in. So, let me ask a stupid question again: How much money are we talking about?

This is just from the top of my head. Are we sure that it must be reported in the year received? Or the IRS says, it is OK to reported it in the year received if your employer doesn't allocate it in the years earned? OK. You send back the client to the government... good luck with that. Or you "correctly" report the money in the year received then the client receives two letters for the two years that the client received a W2-C and didn't report it. Good luck with that too. Let me ask another stupid question... how much money are we talking about? Are we talking about 3K which means 1K per year or what amount? I love when accountants consider materiality as important.

Let's see the materiality of the issue. How much money are we talking about? $200 bucks (one hundred each) or how much?

Maybe I am wrong but I deal with the documents at hand. If I get a W-2C, I amend. If I audit every document that comes to my desk, I would ask each client to bring a copy of all paychecks, copies of the timecards and then make sure that the W-2 is correct. I trust the W-2 to be correct and I prepare taxes based on that. In this case, what's wrong with charging the client for amending the returns? If they own penalty for underpayment, then I have a good excuse to convince the IRS to have the penalty abated. Sometimes we have to limit our scope and deal with the documents at hand. If we don't limit our scope, we might be jumping to other disciplines such as law.

When I open ATX 2013, I see no clients on "return management", but if I move to efile manager, I have all the returns that were efiled and I can work on them. I can manipulate all returns that were efiled but I cannot open a 1040X because I cannot open "return manager" When I first start the program, I see "return manager" but not even one return is show. When I go to "efile manager", I see all returns that were efile, but when I click back "return manager", the program "needs to be closed". So far I have not had an issue because I can do a lot with it, except that now, a client received a letter from the state stating that "an amended return was filed with the IRS and you didn't amend with the state". Client amended the return because he was using an ITIN and when he got his social security number, he was the last person to get EIC credit by amending before the IRS closed that window. Before calling ATX, I wonder if you have a solution.

I got the same letter about a year ago. It is not that the providers fail to report the CPE hours for you, it is that the IRS looses them. I took my classes on line so I had all the certificates and they reinstated me after I sent them the certificates of completion. There must be a record that the coordinator can give you or something else to send to the IRS.

If the father left the house before June 30th, last year and the children stayed with her maintained that house and was the main home for their children, she qualifies for HH regardless what the Judge says.

Correct. Users will get infected and hacked then the server will be exposed.

Maybe you have also omitted that you forgot to enter her date of birth on ATX. The program will calculate the penalty correctly if you enter her date of birth AND she was not 59.5 years old at the time of the withdrawal.

We assumed the withdrawal was in 2015 because you omitted 2012. As you know the year of withdrawal is very important in this situation. Since you omitted that information, maybe you also omitted that she was over 59.5 years old when she withdrew the money.

I think the program is correct because the conversion took place in 2010. If the IRS or Congress gave you a chance to pay taxes in a delayed manner, it doesn't change the date of the conversion.