Christian

How do you get Kiplinger's for free I do wonder?

From news accounts it now looks as if the Individual Mandate soon will be history. No more scratching about to come up with an exception that fits. What a relief !

Surely y'all jest. IRS publications are so edifying and stultifying. Not to mention mesmerising.

Happy Thanksgiving to all and especially those who have assisted me with some of my more creative tax ideas ! Oh, my client got his college credit after my herculean efforts.

Kinda looks like you solved my problem Gail. Oh me, let's see a single federal return, a married filing separate Virginia return, a married filing separate New Jersey return. Hmm, I see the billable hours rising upwards . Clearly his marriage will produce unexpected benefits. It has come to light she is a care giver to her aged mother and wants mom to come south as well. Ah, the joys of newly wedded bliss. Thanks again. It's so great to have a fellow Virginian to help me out with these occasional head scratchers.

A bachelor client who is 47 years old had a mental storm of some sort and decided to tie the knot this year (2017). Ordinarily this is no problem but yesterday I learned his beloved who is a New Jersey resident (my client along with me are Virginia residents) has not moved to the Old Dominion as yet and will not likely do so for the foreseeable future. He trots up some six hundred or more miles every third week or so to abide with his beauty. This will mean when they file in 2018 there will be a question as to how they will file their return. She has contacted Social Security and changed her name to her new married name. In Virginia our surrounding states are given reciprocal rights which allows the use of taxes paid in another state to be used on the Virginia return. I have yet to check this but I doubt New Jersey qualifies. Having not encountered this exact situation before my initial feeling is that they should file MFS. This is not advantageous but for now I see little alternative. Any input would be appreciated. It's a long time before he files next year but having this tied down before then is for me a good idea.

Assuming you do not tax $5,000 or so earnings in the account he still has some $7,000 dollars or so of fully taxed basis applied to the tuition. Why would this not qualify for a credit based on $4,000. I see no difference between that money and money he might have paid out of post taxed wages or pension income for that matter. If the credit is based only on after tax money surely his basis will qualify ? Of course, no one ever said our beloved tax was simple.

Alas. To quote the immortal bard "One more time into the breach dear friends" or something to that effect . The tuition was $13,900 and the 529 distribution was $12,100 all applied to the tuition. Subtracting $4,000 form $12,100 leaves $8,100 . Since the credit is based on $4,000 surely he qualifies for it would you not think? For future reference I will require more info from clients should this recur. I do mostly older folks and my experience with this particular credit was likely not what it needed to be although I read the relevant material but as sometimes happens I must have missed something. I have already contacted my client and advised him to have the university business office supply him with a breakdown or statement showing that the 529 distribution was fully applied to his tuition. Lord ! What I now need is a vacation in Tennessee where I can recover from this matter.

On a day like today I feel like taking out my trusty .38 and relieving myself of all my client's future tax woes .

We will see how it plays out. I sent the Service copies of over $9,000 in personal checks made payable to the university. Since this was out of his pocket and is not identified as to what it paid for it may resolve it altogether. Otherwise we will just have to get the university to cough up some additional info. Between tuition and room and board the client coughed up some twenty two grand in all. So if we need to argue about it we can. This may be my last ed credit . In point of fact he entire 529 distribution (earnings and basis) were used to pay tuition which amount was greater than the entire distribution.

I think I got this resolved. It seems to me the university by reporting the tuition amount as billed in box 2 of the client's 1098-T instead of showing it in box 1 indicating it as paid caused this problem. In any event the client had enough money in basis in his 529 distribution which was paid toward tuition to qualify him for the credit. However, knowing the Service they may yet ask for more info. To be brutally honest this whole matter smells of a fishing expedition on the part of the Service but time will tell.

Thanks Catherine I may have to ask the client to obtain that from the college.

Thanks to all for your replies. The client produced his Form 1099-Q from his 529 plan. The funds were a direct transfer from the plan to the university. The university had reported the tuition CHARGES on line 2 of the Form 1098-T (my mistake) hence the IRS did not know if that amount had been paid by the client. We are sending them a copy of his Form 1099-Q and a cover letter. They may come back and ask proof that the funds were paid for tuition which since the tuition charges were greater than the amount paid by the plan I would not expect but knowing the Service I am preparing for that possibility. I will need to make sure any Forms 1098-T I get in future show the amounts in box 1 or this will likely happen again. Whether a college will cooperate with such a request is another question.

The summer has been blissfully uneventful until now. A client has a daughter who has been in university for three years. I computed the American Opportunity Credit for him as I have done for the prior two years. He just received a notice disallowing the entire credit until he can show proof that he and wife paid the tuition and related expenses to the university. The university sent him the required Form 1098-T with box 1 clearly showing what amount was paid. He has cancelled checks for part of his daughter's expenses but much of her tuition was paid directly from a 529 plan which he paid into for her over a number of years. I am wondering if a letter from the university verifying that the couple paid them the amount indicated in box 1 of the form would suffice. Any info would be appreciated. He has checks for an amount much greater than the $4000 allowed for computing the credit and I am wondering if this would do the trick as well.

A male client decided to marry in 2016. He and his now spouse decided to buy a new home and sell the two homes they had owned as single individuals. She sold hers last year and his is up for sale. My thinking in respect of the tax exclusion on these homes is that each one is entitled to the $250,000 exclusion. His former home is titled in his name only. What do y'all think?

My reading is they will refund the full fee to all who paid it. If memory serves me they did not appeal the RTRP ruling but I may be wrong. They did fully refund the test fee. It would be a strange feeling for me to receive a check from the IRS .

Nope Forbes.Com. My guess they will appeal so they likely won't refund for ages.

It was posted on Yahoo News and was published in today's Forbes Magaizine.

Well the Service has lost another one in federal court. All PTIN fees will have to be refunded. I figure I've paid almost $400 since they were imposed in 2010. Hope I live long enough to get it back !

I am sure what you say is correct Sara but nowadays if I encounter a sticky tax question we have forums such as this one in which our fellow folks in the field can share their knowledge. CCH just sent me two useful book sources of tax law as an incentive to early renew which will replace my older ones. Most of what I encounter are run of the mill situations which I have dealt with for ages and the couple of questions I had this past season I submitted here or contacted the practitioner help line. According to Kiplinger the tax legislation being proposed will likely not be addressed until next year so we have another year to wait perhaps.

I note the new tax legislation being proposed includes the right for the Treasury Department to regulate the industry. I passed the original RTRP test but it was a real pain in the butt. In addition it required a 130 mile road trip just to get to and back from the test center. I hope it dies in committee but I rather suspect it may very well pass this time around. So many items addressed in the original test are never seen by small time tax folks like myself.

I appreciate all of your feedback. I feel comfortable with what I charged. While he keeps good records it always comes in by mail in a large jumbled pile at the end of the season due to the fact he has to wait for the amended 1099 forms from his brokerage accounts. I forgot the K-1 form from some fund he has. It takes easily 4.5 to 5 hours to address all of this plus he mails them. If he ain't happy he can just take a hike as I am too old in the tooth to fret over clients like him anymore.

A client took exception to the price of his return so out of curiosity I'd like to hear what some of you think. His return is a Form 1040 with the following attachments. Schedule A, Schedule B, Schedule C (he is a part time minister),Schedule D (two investment accounts),Schedule SE, Form 8948, Form 8949 and of course, his Virginia state return. I priced this return at $325.00 (bear in mind I am not a CPA or an Enrolled Agent) but still feel I did not over charge him. Any input would be appreciated.

The usual offer from ATX quoting the best price of the year. This year they apparently are not sending a CD. This year's increase is even greater than ones in prior years amounting to right at 10% for the package I use. Next year I am planning an across the board increase for almost all clients. I look into other software options from time to time but never find one better price wise than ATX. I have never packed my returns with stuff (calculations and all that stuff) but next year will begin doing so as apparently many clients feel it really means they are getting their monies worth even though they have no clue what all that stuff means. Despite my concerns about diy returns the business was fairly stable this year and I had all I should really take on as I about wore myself out. I sincerely appreciate all the responses to my posts during the season as so many help clarify these occasional thorny problems.

I have a female client who updated her Social Security card some years back and her efiles only go through under the old registration. Clearly the system needs some tuning.