RitaB

Today's Mensa dropout: Lady had $11,500 on a W-2 with $260 FIT withheld. $6000 in self-employment. What do you mean I owe? (Explain, explain, explain) Why don't I get earned income credit? Me: Well, your income is over $12,880. No, it's not. Me: Actually, $11,500 plus $6000 is more than $12,880. Oh, that $11,500 is not taxable. Me: Why is it reported on a W-2, and why were payroll taxes withheld on it? She's gonna call and find out for me.

I have Excedrin Headache #22. Just explained EVERYTHING, and I do mean EVERYTHING, about business expenses to a couple for whom English is their second language. This would not be so frustrating, but I have done their return for eight years now. We go through this EVERY year. Other than that, my 15 year old son is playing in regional basketball tourny tonight, and I am really looking forward to the game! My 17 year old daughter lost her tourny game Sat, but she is now doing track. 20 year old son and husband are both worried about cat, Ricky Bobby, who got neutered today. Ouch.

If that is the case, the worksheet is wrong. Good question, and good thread. Looks like I'll be doing some more research before I amend my client's return... Taxes rule. (Not) Who was it that said "Sarcasm is a tool of the devil"? Was he on this forum? He was funny...

I sure hope so. I can't get my mind around all this money that is being spent. I can just see my kids (and me!) paying some ridiculous tax rate. Even more ridiculous than what I ALREADY pay. I get so disgusted when someone comes in here that knows how to cheat and gets $4000 EIC. Drives off in a $40,000 pick up. I'm all for helping people who need help. But, nobody "deserves" to own a home. You WORK for that. Sorry, I lost it there for a moment.

Oh, boy, the "research department." Bet that means you'll have an answer before you retire. Regarding Pub 17. Oy. I see what you mean. My clients don't have kids. The publication indicates that the client can't get the $300 per child unless BOTH spouses have valid SSN's doesn't it? They don't say "on a joint return." The kids can be illegal if at least one parent was in the Armed Forces. (Sorry, that wasn't politically correct, I know.) After entering a fake child, I went through the worksheet for my client, and I didn't find anything to disallow the $300 for the child. Oy. (Bet that's not PC, either.) Guess I would try "The Code." Terrifies me.

Yeah, I would like to have confidence in the market. I have total confidence that if capitalism is ALLOWED to work, things would correct themselves. But, the folks in Washington are way too involved. In my short, illustrious life I have not seen anything like what is happening now.

Mike, I am at work now (yay), and I think your guy CAN get the RRC. I answered a question on the worksheet that I was supposed to skip. Looks like I have an amended return to do. My client will be happy! UNLESS, the worksheet is wrong... But it sounds like an ATX problem, similar to the message saying the clergy worksheets had not been approved for "filing" when they meant "if you're E-FILING, you need to mail the clergy worksheets with Form 8453." Thanks for asking the question.

I realize this morning that my input up there makes no sense if your client is converting 100% of the account. I was just thinking about him converting part of the account. You know, if he can pay tax on a $10,000 conversion, that's gonna be a lot more shares than probably ever before. Here's a question: What do you all think? Part of me is going, "OK invest now. Stocks are on sale!" Another part of me is going, "What if the whole market just goes down the crapper?" I have 20 years till retirement. All I know is the market has always rebounded. Up to now...

Thanks for the reply. I was soooo dreading telling him he owed tax. I was pleasantly surprised when I spoke to the wife, (he was in VA working, after all). Anyway, wife was so sweet. Said she knew that was gonna happen, and she would tell him to go back to the payroll clerk, beg for forgiveness, and ask her to withhold VA income tax.

I don't believe you can do the MFS unless both spouses have valid SSN's. Sorry, I am not at work, but look carefully at the RRC worksheet again.

Sara - I would just add here that, since the market is down (assuming he's invested in the stock market), I would guess that your client would be able to convert a lot more shares than he could have at this time last year. To me, that is a real attractive argument for converting. Of course, no one knows what will happen in the future... ---Rita

Also, you can divide your deductible expenses between 8815 and 8863 (or the front of 1040) in order to acheive the best outcome. Just don't double dip.

Bonnie - I have had two that brought letters saying some particular income was not taxable, but neither brought any documentation regarding the income! So, I don't really know what they received that was not taxable, but their other income was taxable. -- Rita

I thought so. He's gonna flip out. Made a big point of telling me how he "straightened out" his employer's payroll department. They were correctly taking out VA tax for two months, then he raked some poor clerk over the coals and has a second W-2 for the rest of the year with no VA withholdings. Owes em $2500. I just wanted some reassurance. I e-mailed VA Dept of Revenue so I would have more than the directions to show him. They haven't responded. Boy, do I dread calling him. Thanks!

Just bumping this up cause it's about to disappear.

Yeah, I think she still works because it gives her a chance to see people. I was thinking about her this morning in church. I think I'll invite her to come.

Client is resident of TN. Performed work in Virginia for employer in KY. Is the income Virginia source income? I think so. Client is not happy. I hope I'm wrong. I am looking at page 4 of the directions for the non-resident return. The work was performed in VA, so that's VA source income, right?

Thanks for your help! I surely do appreciate it...

Good one! I actually saw a Liberty Tax torch lady yesterday afternoon in a nearby town. I was headed to my daughter's basketball game. Hubby says, "Maybe you should get one of those." No.

Thanks for the reply. I guess the question becomes whether or not the dam has a determinable useful life: Pub 225, p. 37: "Dams, ponds, and terraces. In general, you cannot depreciate earthen dams, ponds, and terraces unless the structures have a determinable useful life." Of course, when I tell my client that, he is going to say, "Oh, yeah, that dam ain't gonna last forever." When I ask him how long it will last, he'll look at my ceiling tiles, then ask me, "How long does it need to last?" So, RoyDaleOne, do you know what the useful life is? I sure don't. And I really don't want to leave it up to this "farmer." He's one of those people that wants to do what he can get away with, not what's correct. When my farmer dad died, we spent 12,000 rebuilding a pond that was probably 35 years old. Some of the ponds are 35 years old, and the dams are just fine. Also, if we can determine a useful life, it appears from Pub 225 that he did not have to have plan certification from Dept of Agriculture. Correct? I appreciate your input. I will start looking for "class life of an earthen dam."

Thanks for the update, Wayne. Think they're reading on the forum?

Huh? A dozer dug out a hole and built a dam with the dirt. It's not a natural wet land or anything like that. 6400 smackers. My opinion, it's more a fishin' hole than a farm expenditure, if you catch my drift. One of those farmers who loses money every year. "Oh yeah, I'm tryin to make a profit..."

Agree, it's a pain. I also make the taxpayer give me the amount. I do, however, enter "Various" for the purchase date. Most of the time that's correct anyway, with a bag of clothes, for example. I am so tired of them telling me "whatever is allowed," when I ask for an amount. I say, "What's 'allowed' is the FMV of your stuff." Then, they ask ME what I think their dadgum refrigerator was worth. Arghhh!

Her foreign tax credit is $912. Maybe she had all her broker statements cause she does them like she does me. Drop in every three days to check. Stays and chats for 30 minutes. Asks me every time: "Why do I have to pay intangibles tax to Tennessee?!" Me: "Your dividends and capital gains distributions exceed $1250, and it's income tax..." I have a hard time telling a 79 year old widow to stay the heck out of my office... but I seriously want to...

Yes, I know, and I'm glad. I was just saying that I'm glad I just had ONE otherwise complete return laying around for three weeks. Yes, clients need to chill out and not "run my practice." But, I downloaded that form from IRS for my sake as much as the client's. I was just saying that IF it were a more common form, I'll betcha even the laid back preparers would want it to be ready for their OWN benefit. Nevermind if the client is a goober. It's easier for ME to finish what I start. BTW, I don't think Form 1116 required extensive reprogramming.