Jack from Ohio

My post was NOT about the benefits or non-benefits of incorporating. I have that question all figured out. My question was about the ability to assign personal income to the S-Corp.

The other firm was asked and they would not say. "Let us help you incorporate and we will take care of it for you."

So this is an acceptable practice with the IRS? Assigning income to the S-Corp by claiming it on Sched C then backing it out? They will not tell the directors about payroll, reasonable wages, etc. I just wanted to hear other opinions.

We have some Mary Kay directors that are being pressured to incorporate (S-Corp to "save tax") by some of their fellow directors on advice from another tax firm that proclaims that they have the all knowing answer. Here is the situation: Mary Kay issues 1099-MISC for all prizes, awards and commissions. The amount is reported in box 7. The 1099 is issued to the name of the Director and using her SS#. Mary Kay will not issue the 1099 to anyone but the Director/consultant. Said firm states: "Just because Mary Kay says they can't pay your commissions or send the 1099-misc to anyone other than you, doesn't mean that WE can't assign the commissions, sales and any other revenue to a corporation for IRS income tax purposes. We have had incorporated directors for decades. Some have been audited over the years but never for being a corporation, only for reviewing deductions on the tax return." The director in this example has been a sole prop for 15 years. Annual profit of $25K - $50K for the last 10 years or so. This firm seems to insist that incorporating can save them money by reducing tax. Our recommendations have always been that with income in that range, the expenses of incorporating, additional tax forms, payroll expense etc. far outweigh any (if any) tax savings after paying a "reasonable" salary to the owner. My question is: Can the 1099 income be "assigned" to the S-Corp instead of their personal return. If so, how would you go about reporting it?

Have you looked close at the new "due diligence" documentation requirements for the new 8867? Very invasive and seems to indicate that we are responsible for all answers. Just read it closely and you will see what I mean.

Does this act impact tax/calendar year 2017, or does the relief stop on Dec. 31, 2016? The legaleze in the legislation is a bit confusing. This is an important piece of information for planning.

I renewed last fall and did not have to do anything except mark the box that I had sufficient CPE credits. I renewed online.

Just keep all your documents. Problem solved.

This is exactly the reason I do NOT use any cloud based file storage or retrieval. PERIOD.

I was right. I knew there would be an extension of the due date. What is the purpose of a "set in stone" due date? IRS deadlines are a total joke. This extension ability totally eliminates the purpose of having an early deadline. SMH The automatic extension (if available) is 30 days from the original due date. If you receive an automatic extension, you may request one additional extension of not more than 30 days by submitting a second Form 8809 before the end of the first extension period (see Line 5, later). Only one extension of time to file Form W-2 is available. Requests for additional extensions of time to file information returns, and requests for extensions of time to file Form W-2, are not automatically granted. Generally, such requests are granted only where it is shown that extenuating circumstances prevented filing by the due date of the return (determined with regard to the automatic extension, if applicable). Note: The automatic extension of time to file and any approved requests for additional time will only extend the due date for filing the information returns with the IRS. It does not extend the due date for furnishing statements to recipients.

Only if the original party defaults. That creates an entirely different situation. This is not the situation the OP was describing.

You should replace the battery with the computer running. Otherwise, CMOS information, important for startup etc,, will be lost. There will be no issue changing it while the computer is running.

Also, turn off the computer. Then remove each memory stick and reinstall. Remove each PCI card and reinstall. Remove all data cables from all drives and reinstall. Blue screen is most typically a hardware issue. Microscopic corrosion on terminals can be the cause. Reseating all the connections will break up the microscopic corrosion. If blue screens continue to show up, it is time for a new system.

Even a signed form like you show does NOT relieve you of your requirements for due diligence documentation. We are now responsible for the accuracy of the information on the tax return, despite what the taxpayer may or may not say or sign.

I charge $20 for an additional copy of any return. You would be amazed how $20 will make some people actually look for the return. Others pay willingly. Since I store all returns in .pdf, it is less than 2 minutes to send one. Also, I do NOT send any information to ANY third party, no matter what. I send it to the client only. Keeps me out of any "situation."

Just have them pay one and sleep well.

You are absolutely correct. Only the person contractually liable can deduct the interest. Co-signing is NOT the same as being contractually liable. Follow the 1098-E.

1098-E shows the amount of interest PAID on the student loan.

Whose name and SS# are on the 1098-E? This is the person that can claim the deduction.

No worries. Election results in 2012 gave us at least 15 years of job security. (bittersweet) Election results in 2016 just added 6-10 more years to the job security. A flat tax, fair tax etc., will never be enacted in our lifetime. Congress will NEVER relinquish the greatest power it has over the people of this country, the power to tax. There may be some "restructuring" or modifications, but our jobs are more secure than ever.

The disk is in the package with the Master Tax Guide. I never use it. Always go to the website and download the latest install file. It will contain all the updates.

This is exactly what I have done since tax year 2003. Although I have never receive a request for such information or verification after my initial setup with ATX. Paranoia abounds...

What is the small print for the *?

I have moved to having as many of my clients as possible, drop off information. In my private practice, with ~220 clients, I only do 10 in office preparation appointments. The exception is for new clients. First time, I always have an in office appointment with new clients. After that, drop and I will call. It is much faster to prepare returns when the clients are not in my office. I am able to be more efficient. You are correct, people do not keep appointments and do not have enough courtesy to even call when they know they will not be there. One of the reasons I adopted the "drop and I will call" approach.

Still does not state that the transmitter is REQUIRED to verify EFIN information AGAIN for this coming tax season. Enhance does not equal require re-submission of already established identity. I will be installing the software this week. We will see. Been e-filing since 2003.