Gail in Virginia

But he has never been in the business of creating and selling software - he worked for a large company as a programmer. Not sure that is the same thing at all. To the best of my knowledge, he was never a software developer. We are talking about somewhere in the neighborhood of $26,000 US. I also don't think that a one time payment like this will increase his benefit, but if it is self-employment it would result in paying back part of this benefits this year (maybe - the work was actually complete several years ago, the software was just purchased this year.) Thanks for the reply, Pacun.

I got a call the other day from a client who runs a local non-profit. Seems her husband wrote a software program a couple of years ago and let another non-profit have it gratis for their use. Somehow,the non-profit changed hands, or management, or something, and the new "owners" were so impressed with this program that they wanted to purchase it. They have therefore wired the money to purchase it to my client's husband. The company purchasing the software is Australian - which doesn't really matter, except that I have no idea what kind of reporting they will do for this income, if any. Now, normally, I would expect this to be schedule C income subject to self-employment tax if the creator of the software is in the business of creating software. But while he used to work as a programmer, he now "works" only for this non-profit and is actually taking his social security early because the non-profit business just doesn't pay very well. I remember reading something about former presidents who write their memoirs not being subject to SE tax on their royalties from the books because they are not professional writers. Would this be a similar situation? Does anyone know how I would report this and have any documentation for that method? If it is subject to SE tax, it will also affect how the social security he can draw this year.

And actually EA's are required to have more continuing education under that status than the RTRP's will be required to have under their status. We are required to have 72 hours every 3 years, with a minimum of 16 hours per year, two hours of which every year must be ethics. RTRP's will be eventually required to have 15 hours per year, two hours of which must be ethics, three hours of which must be tax updates, and the other 10 hours can be any thing related to other federal tax law. CPA's have their own requirements for continuing education.

Until the property is sold, I don't think that you know what the forgiveness is. If they sell if for the FMV, then yes the forgiveness is $20K. However, if they bank only nets 2 million, then the forgiveness would be 620,000. At least that is the way I think that it works, and that is why you don't know until you get the 1099C what the forgiveness of debt is going to be - you have to find out how much the bank actually wrote off for the customer. I am not expert on this, but before this "downturn" is over, we all might have to become experts.

And it doesn't make sense to me that they would start imposing competency requirements of their own now - why not just say you have to be allowed to prepare federal taxes to be allowed to prepare the state? If they weren't worried about competency before, I see no reason to start now unless it is just a revenue generator.

Congratulations! Twins - how exciting! I hope everyone did well and is healthy, and that you all stay that way! Thanks for all that you do on this board, and be sure that you keep the emphasis on family first - we can wait!

If you are doing a corrected W-2 anyway, why not correct the misspelling?

Joe, the rule about beginning distributions at age 70 and 1/2 applies to IRA accounts. Defined benefit pension plans are a different breed of animal altogether, and are largely governed by the plan documents. I don't believe there will be any penalties associated with his failure to receive benefits as far as the IRS is concerned, but you might want to consult someone local to your father about his specific situation. Particularly if this is a large employer in his area, you might be able to find someone who is familiar with this particular plan and can give you definitive answers to your specific questions. Asking general questions on a tax professionals board will only get you general answers at best, and without knowing all of the details can sometimes result in erroneous answers.

And is there any chance that with the death of his wife the taxpayer can make a case for innocent/injured spouse? My sympathies also, Tom. It is difficult to think clearly about taxes at a time like this.

I have a client that uses a separate payroll account for confidentiality reasons. They use QuickBooks for their accounting and several employees have access to it for different reasons. They hired us to do the payroll, and want the payroll account that shows up on the accounting at their location to only reflect totals as opposed to showing each individual paycheck. We keep the detailed records here and reconcile the checking account for payroll. I think they could accomplish much the same thing with the proper use of passwords and assigned authorities within QuickBooks, but they prefer doing it this way. :dunno:

My guess would be that PAL stands for Passive Activity Loss, but without knowing the situation that is just a guess.

:lol:

I think that is interesting information. Can you provide a web site or other source of information where we can look at which states owe how much in UI debt? I am curious now that you have raised the issue.

If I remember correctly, ATX won't let you mark both boxes on the same return ( or at least it wouldn't the last time I tried.) In that case I normally just mark the final box assuming that the IRS will know from when they issued the EIN that it is the initial return, but won't know it is final unless I tell them on the return. Besides, on fiduciary returns you don't get the standard exemption on the final return so that box is really important in the calculation as well as the information.

Not sure I am clear on what happened. Did the son win a prize for a Grand Champion steer he had raised, or did he win a prize which was a grand champion steer?

Marilyn, S corporations are a funny animal. Normal employees can exclude their health insurance from their income and social security taxes before they receive their pay - the corporation either pays it for them or they pay it pre-tax. However, an S-corp owner who owns more than 2% of the corporation must add the amount of health insurance premiums back to his or her taxable income on his or her W-2. Therefore, they are allowed to deduct it on page one of the tax return.

I believe that 2009 was the last year that you were allowed to carry back NOL's for 5 years. And because it was statutorily extended the normal three year limitation on claims for refunds did not apply to a claim due to an NOL. However, some states (Virginia among them) did not allow the extended carryback period even though the federal did. So yes, you are correct that you can only carry it back for 2 years.

Investment income would count as unearned income, and according to the instructions for form 1040, if you can be claimed as a dependent on someone else's tax return, and you have unearned income of $2.350 or more, you must file a tax return. The fact that once this goes on the schedule D there may be no income to speak of or even a loss does not mean that the child does not need to file.

The main reason I bought the Pro and Ultimate versions of Windows 7 rather than the Home Premium is because we are networked. If I am not mistaken, the network requires that we upgrade from Home to Pro.

If anyone wants to read the article, it is available on line. I just read it and it looks wonderful, Lion! Congratulations! I will try posting the link here if anyone else is interested: My link I hope that works. And since it is their public available website, it should be legal!

Jainen, I would laugh at your post if I weren't paying for that kind of taxation. What a commentary on our system! :wall:

I couldn't have said it better. Happy Easter and Happy Passover to everyone, and I hope you will check in throughout the year. The season may be over, but at least around here the fun continues! Thanks everyone for contributing! :spaz:

When you roll the returns over, you must then open the return in the 2010 program. If you don't open it, then when you go to roll it over next year for 2011 the program will tell you that you don't have anything in the 2010 program because the return was never opened. I would also compare the return's depreciation with what the other firm used while you have it opened to check for assets added or removed or any discrepancies in how the depreciation was handled. I hope that I understood your question correctly.

ATX is not supporting Windows 7 for 2007 and 2008, but like Taxbilly, I am running both of those years in a network environment without a problem. I have Windows 7 Ultimate and Windows 7 Professional on my newest computers.

Thanks for the information! I heard it here first. :)