Terry D EA

Had this same thing this year. However, I have come to realize that some of this is used as a scam to defraud the IRS and get a whole lot of money back. My scenario, the female client told me she got married and had a baby. I asked about her husband and she said he already had his taxes done some place else and filed as HOH. She knew enough about filing statuses but didn't realize that because she told me the changes, I couldn't file the return the way she wanted. She in turn wanted to file for HOH and asked me what would have happened if she would have never told me she got married. I explained that I would have prepared the return, the route the IRS would take and advised her to bring her husband, the return that was prepared and allow me to amend the return before she got in trouble. She agreed, but that was two weeks ago. Hmmm, I wonder where she is? I have seen this happening more and more within the hispanic community in our area. Once the IRS begins collections, they flee to Mexico. I have lost several hispanic clients because of this practice which is okay with me. The other thing that happens is if they stay here, and after the IRS sends the "We're coming to get your stuff in 10 days" letter, they usually come back begging for help. I've even seen it where I get them all straight, don't see them again for 3 years and then they come back with the same mess again. Go figure? Terry D. Terry D.

I have a minister who has opted out of SS. This particular minister tells the church what the amount of his housing allowance is. As I read some of the IRS regs on this, the governing body of the church sets the housing allowance amount. Is this correct when the minister has opted out of SS? How does the housing allowance work when the minister has opted out of SS. I understand the housing allowance is to reduce the SE tax and has no affect on taxable income. Can you point me to some additional reading material. Thank you in advance for your expertise and help with this. Terry D.

You do not qualify for the credit if all of the following apply: 1. You received an economic stimulus payment of $300 ($600 if married filing joint). 2. Your 2008 tax on Form 1040 line 46 is $300 or less ($600 if married filing joint) 3. Your 2008 filing status is the same as your 2007 filing status 4. You do not have any qualifying children. I have a young client who meets all of the above except her taxable income in 2008 is more than 300.00. The worksheet is giving her an additional $300.00. The worksheet is confusing and I have read and re-read the information on this credit until my eyes have gone crossed. Am I correct when I read that her stimulus payment was less than $600.00 and because her tax liabitlity for 2008 is greater than $300.00, she gets the additional $300.00 credit? Terry D.

Yep, you hit it right on the head. Good luck on finding the cost basis and date of purchase. Alot of brokers expect their clients to keep up wih that information. Terry D.

I TOTALLY agree with each one of you. I would love it if ATX could find a way that would allow us to print the return organized the way we want instead of a default method. Sometimes it takes longer to check and uncheck the boxes then it does to complete the return. Cathering, unfortunately, I don't see any way of doing this. I've used this program since 1998 and have always considered the printing feature to be less than friendly. Terry D.

Kc you are right and I have known the correct answer all along I was just hoping for a loop hole of some sort that I may not be aware of. I do like how you stated to divorce my sympathy from the client. I usually do that without a problem. This one kind of got to me so I went out on a limb. My final decision is exactly as you have said. I had some folks from my church here and they were whining about having to pay and insisted that I might have made a misktake. I cannot make a mistake that they earned 10K in interest that is taxable. Hard to swallow but lack of planning on their part doesn't consititute any sympathy on my part. One more thing, I would never under any circumstances change any figures on anyone's tax related documents to help reduce their tax liability. Terry D.

taxbilly you are correct. I have calculated the credit manually and it is pretty clear cut and dry. I will advise my client of the repayment requirement that will begin with her tax return in 2010. Thanks to all Terry D.

I just read a shorter version of "The American Recovery and Reinvestment Act of 2009 - February 12, 2009", and it does state that the non-repayment portion and the increase in the credit apply to homes purchased after Jan 1, 2009. So, are my calculations correct? My client doesn't care about repayment if my calculations are right. Everything I have looked at says yes but I want to be sure before I transmit this return. Terry D.

Apparently legal custody of this child has changed and you say there is documented evidence of such. If the child lived with the appointed legal guardian more than 6 months of the year, then the child would be the dependent of the guardian to take the exemption. This would fall under the same label as a foster child as the original posts states there are legal documents in place. The child made under 3500.00. The mother cannot claim the child as she relinquished her custody. Jmho Terry D.

Maybe MaMallody will chime in here as he is an expert with clergy taxes. I have done a few and find it a little strange that all of this guys income has gone toward his housing allowance. I guess it would be possible if he is a part time pastor, which by the income you show, I hope he has another job somewhere. Sorry I am not of more help. Terry D.

Since the stimulus package has just passed, I have a client who can claim the credit for the first time homebuyer. She meets all of the requirement regarding the home purchase. 10% of the home = 7200, income less than 35k, qualifies for the full credit of 7200 which after I complete form 5405, the full amount of the credit flows to page 2 of the 1040. This credit appears to be fully refundable. If anyone else has eny experience with this, please check my calculations as I find it a little odd the whole amount of 7200 is refundable which gives her a 9k refund. Here is the good question. Since the bill just passed and it now states that this is indeed a credit and doesn't have to be repaid, would you advise the client of such at this time? The IRS says more information is coming and I am just a little uncomfortable with this whole thing. Thanks, Terry D.

Is it me or are the ACKS coming considerably quicker this year? I transmitted a PITA client name reject for the third time at 5:00 PM today and just received an acceptance on at 8:50PM. Thought that was grest and then a client called and wanted to know why he hasn't received his refund yet and couldn't understand why it didn't come in ten days. First off- client needs to learn how to count, only been 8 days. Next question, client - It should be here Monday right? Me- Don't know the light in my crystal ball just burned out. Geez, what do they expect? Terry D.

When we had to mail in the signed 8453 forms, many times I received nasty grams threatening to kick me out of the e-file program because I (the stupid one) put more than one form in the envelope and the mail room crew apparently couldn't figure out what to do with the extra forms behind the first one. Now who was messing with who? I'd love to stick it to them but I'd like to watch while they got it as well. I like the glue in the bottom of the envelope thing. he he he! Great post Anarchrist. Terry D. :lol:

All of the replies have been interesting. However, I do agree the most with taxtro that it is a schedule C and I have to find the answers to the questions each of you has asked. I am not sure if she does this in her home or the folks she baby sits for. I do know for certian that she is not a household employee. The income was from 5 different people. The question will be what she provides for the children when she is watching them. Now, keep her in your prayers. When I spoke with her this evening, she was very upset because her son was being life flighted to Duke and we agreed to put this on the back burner for now. Owing money to the IRS isn't something she wants to hear right now. Thanks to all of you. Terry D.

Okay now I am confused a little more. If this is not a corp then how did goodwill ever come into the picture? Under your scenario, if goodwill was indeed sold on an installment sale and defaulted, I believe the defaulted amount would have to be recognized somewhere. Goodwill has no physical substance at all and is an intangible. I am under the understanding for Goodwill to be part of the sale of a company, it could only be taken when an entire company has been acquired by another company. Sounds to me like the simpliest way to handle this is if the disposition was recorded on the assets when they were sold and when your client re-claimed the assets from the repossession, he would report the FMV of the equipment minus the loss on the repo which would return either a loss or gain. His cost on the books is the FMV. I hope I am helping and not adding further confusion. Terry D.

I like the hobby income idea. No I did not use the per-diem for meals and snacks and I do have to talk to my client regarding any expenses. some good suggestions though. I want to see what others suggest before I proceed. Thanks, Terry D.

Okay, looked again and NOW!!! I see what you are talking about. Yes we were talking about the same form. I did see the County drop down but did not scroll far enough down. Found it and thanks for all of your help. Terry D.

I tried one more thing. I overrode the school code field and put in 99999 and still asks for the same thing. Terry D.

Thanks but I already have that box checked and still it is asking for the school code and district name. I unchecked it and checked it and still the same. I will update and try again. Any other ideas are appreciated. Terry D.

I am pretty sure I know the answer but money received for baby sitting is considered Sch C income correct? Client baby sits for friends for a total of 2900.00. No 1099's no daycare, but client is honest enough to report the income. So, Sch C with self employment correct??? I am just hoping there is a loop hole as this person is 42 years old, single, no kids, struggling like crazy and this self-employment pushes her out of the EIC by 150.00 and causes a balance due. Again just grasping at straws here. Is there any chance this could be considered other income on form 1040 line 21? Terry D.

Sorry, but I have to agree with Jainen, I thought it was answered quite clearly. Terry D.

May not have anything to do with it but, do both PC's have the same version of the software? If they don't then one of them may not calculate the forms properly. Don't know if this helps but just a thought. Terry D.

I did one of these a few years ago and will take a look at the paper work. It may take me some time as this is in an archieved client file that is put away and not readily accessible. The Goodwill should have been the only thing on the installment plan. The equipment should be listed separately which you said you knew about. Calculating the reposession is probably where you are getting confused. Once the default took place, the FMV of the equipment needs to be determined to return the equipment to the original owner which would be his basis in the equipment which could result in a gain. He can then donate the equipment back to the company (I am assuming this is a corporation) which would be his basis and the corporation could begin depreciating the equipment using the FMV at the time of transfer as cost. Alot of legal stuff here and I hope your client is seeking legal advice as these things can become quite complicated. Company names may have to change, re-organization, new articles of Incorporation etc. The one I was involved in, I worked with the attorney for 3 to 4 months, new name, new books, and a whole lot of work. Terry D.

Have a client who worked part time in PA and NC is their state of residence. The PA e-file is asking for the school district name and code. How do you input this when the return is marked non-resident???? They don't live in any school district in PA. Any help is appreciated. Terry D.

Yes, you can deduct it as a 179 expense or just list it as supplies on teh Sch C. Terry D.