Margaret CPA in OH

I understand. Recall the $53 haircut issue I recently raised. Client cut her hair and rather than leaving it on the floor to be swept away, gave it to an organization for wigs. She had a definite benefit and would have cut her hair anyway. Group consensus was to let it go. I still feel a bit uneasy, though.

I just turned 70 Sunday and, frankly, prefer to be considered a woman. Kind of a respect thing to me... Meanwhile, good for you for continuing to practice your profession. That is inspiration. I am training for a marathon now, ran 18 miles last Saturday with 20 this coming Saturday. I do hope to inspire women and girls alike.

Hmmm, maybe had you hired a woman, things just might maybe have been different. The girl was surely aiming to please.

Thanks, that what I have discovered now also discovering that the options for full year and part year residents are not identical. My clients are shaking their heads thinking that they would file joint federal, husband single KY and wife single OH. Not even close! Now I have to keep track of which return is which with which adjustments to minimize total liability and not miss anything. Fun times. And the husband was trying to do this on Turbo Tax. At least they are higher income so I will bill accordingly. Thanks again to all for working through this with me.

My point - my husband is a neat desk freak and I am 180 degrees opposite. I have to have everything in reach and I do know what is in each pile. I've tried neatness and it just doesn't work for me. So glad to know I am not alone out here!

Dragons?

And I responded too soon. The link was for Form 740 which provides for 4 options for filing status. Clients are filing 740NP, part year which provides only 3 options. On rereading, again, those instructions, It appears to say that spouses may file jointly or separately regardless of federal filing status but, in my reading, it is completely optional. The question in my original post stands and I was and am looking for agreement that my interpretation is correct. Sort of like a comfort letter because it seems a bit strange to be able to choose status so freely.

Thank you. I did not find that.

Of course $79 does not cover the cost. You didn't ask and I didn't write the savings for combined federal and Ohio tax. Jack, you know quite well that MFS for OH often is a savings but filers must also file separately for federal purposes so the savings is combined, not independent. I must have been clear as mud that I was asking specifically and only about the KY requirement. I already know that answer for federal and OH. I just cannot find a definitive answer as to the requirement - or not - to file KY jointly or separately depending on the federal filing status. Sorry I asked and wasted your collective times.

The tax is lower based on calculations of percentage of joint deductions. It's only $79 but not nothing. I was just unable to see definitively whether KY filing is required to follow federal as does OH.

Clients were married October 2015. Husband moved to OH from KY in December. It seems for KY they are allowed to file separate even though federal is joint (as of now). OH requires same as federal. ATX provides comparison with federal and OH but now I need to determine KY liability. It seems that wife can/must file KY separately even without any KY income or deductions and as a full-year non-resident should owe no KY tax although husband would. Is this a correct assumption? I think it would benefit them combined with OH and federal MFS. Thanks!

The Lima regulations state that a resident is anyone domiciled there. Typically the taxing municipalities in Ohio withhold earnings tax from all employees working in the municipalities and require that residents file and pay tax as residents if they work elsewhere. If the student does not live (is domiciled) within the city, s/he would not be required to file. It's possible that the other jobs are technically outside the city limits or they just aren't withholding.

Have you read through the instructions for OH military personnel? Somehow in nearly 20 years of practice here, I've never had a military client. The OH return begins with federal AGI however so adjustments should be made from that. Did you put the S-corp income on line 1a of 1023 and deductions below? For 2015, there is a new IT1040 that taxes business income separately and uses Ohio Schedule IT BUS accessible from line 6 of OH IT1040. If I have time later, I'll try to reconstruct something such as your description.

My point of view is that the client derived a benefit from the haircut, that wasn't entirely altruistic. I could also be a bit jaded by the fact that there was $0 cash donated but $770 in, well, used clothing and household - with AGI of $200,000+ I know, unfair value judgment. With taxable income of about $175,000, there is no danger of being pushed into the 28% bracket. Then again, it IS worth $13!

Sigh... Client wants to deduct the cost ($53) of the haircut she had to donate her hair to Pantene Beautiful Lengths. I say no because she received value of, well, $53 and her hair, like a blood donation is not deductible. Do I hear an 'amen' or an 'au contraire?'

Thanks for the replies and advice. The returns themselves, of course, wouldn't be signed, it would be the 8879 for him that concerned me. I will suggest changing the account name everywhere but it has been only about 10 weeks, still pretty raw for her. She will be happy to have the extra money - less a bump in my fee for splitting into 2 returns but she was already getting a discount. She will still come out ahead.

Client's husband died December 2015. Federal and state tax combined is lower by about $300 filing MFS. Is this possible when husband is deceased? If we efile, she can sign for him, can't she? All are refunds and would go to joint checking account. This year I am getting so many oddball client situations....

Thanks, Gail. The strange thing is that the daughter is sort of taking care of mom now, managing paperwork, driving her around, etc. It is possible, though, that daughter's assets are being conserved to support her after mom's passing, assuming that is the order. I hate to have to ask some of these questions but, as I explained to mom the other day, they are totally new clients to me so I have to ask a lot of questions to truly understand their tax situation and do the best job for them.

Hmm, a support statement - I see something like that in QF, costs of keeping up a home for the year. But the daughter will have paid for none of this per mom's list. Mom also pays daughter's credit card, gas, medical. So she will be more than 50% but not because the couldn't pay it. I do wonder what the daughter does with her income. I've never had clients faced with this sort of thing. Mom did provide a list of all she paid for her daughter, several hundred dollars, and it's likely that little or none of the daughter's sale proceeds were taken from the investments. I think I have to explain that the daughter had the resources and could have paid for her own support but chose not to do so. It may be indelicate to ask the approximate value of her assets. I'm wondering if it is a conscious choice to live off of mom but don't know enough of the details. This experience doesn't thrill me.

Judy, the mother is 77, the daughter is 56. I just know I will get major push back about this support issue but on paper mother has gross income of $35,000 vs daughter's gross income of $59,000. It's likely that no money was withdrawn, however. And there was some mention of selling something from late husband. Ugh! The former preparer retired and 'always did it that way.' The former preparer also claimed EIC for the mother last year and erred by omitting $1956 in the FWT so we will amend. There have been no recent tax returns done for the daughter so it is possible that her gross income, at least recently, was below the filing requirement. For 2015, whether or not she is claimed as a dependent there is no tax due. Mom, however, loses about $600 federal and state. I will ask for daughter's 2014 documents as mom's already needs amending and will see what we get. Unfortunately they are both very nice folks but very skittish and, of course, offer that they depend on preparers and don't know about all this stuff. Sigh...

That was my thought initially but if you look at the sequence of qualifications step-by-step, Step 3 mentions permanently and totally disabled at any age. She is so it says that the taxpayer can claim her as a dependent without proceeding to the income for a qualifying relative. I did prepare a return for her but she owes no taxes due to the loss.

Another first for me. New client claims adult daughter (56) who is permanently and totally disabled (I think something like ptsd, not physical). Client is surprised that daughter has to file this year but she received $49,000 in gross proceeds (loss with basis), $1769 dividends and $8279 in SS ($2611 now taxable). I've read dependency requirements and it seems that there is no income limitation to claim this daughter. They live together and client pays the bills. I just wonder about the support part and whether it even applies. Client has paid several hundred in medical bills plus has listed gas, cash, and credit card payments for daughter. Something just seems strange but I can't see how this is incorrect per requirements. Is this all good?

What a beautiful picture! That is love, pure and simple. I know all too well about the renal failure issue. Hydrated the gold kitty for nearly 2 years until he made it very loud and clear he wanted no more. Now my black and white Tribble is just entering that realm. But I am not giving up yet and she isn't either. Grieve as you need.

So sorry about your cat! It's always difficult to lose a pet; I've lost too many. You can tell from my avatar that my cats are very important in my personal and work life. The gold one is gone now, though. 18 years is a long time - you were lucky for that and so was your kitty.

Thanks! I usually assume that I am doing something wrong - well, it does happen