RitaB

Thank you so much. I see it now in first column of p. 28. Client cannot depreciate his pond. Unless he goes to Lefty across the tracks.

I was about to tell the client, no, a pond just increases your basis. But reading Publication 225, I think it's possible, but limited to 25% of gross farm income each year. Is that correct? I gotta tell ya, I'm about fried. What would you use for the class life? Please forgive me if it's supposed to be obvious and I completely missed it.

Bonnie, you can use some qualified expenses on Form 8815, and the remainder on Form 8863. If you open the directions to Form 8815, it indicates that you should not use expenses on line 2 of Form 8815 that you also used on Form 8863. So, you can separate the qualified expenses to get the best outcome. Just don't use the same expenses on both forms.

Yeah, you're right. On the other hand, I kept looking at her pile of stuff (she likes the jumbo 15 x 20 envelopes), and decided I wanted it out of the office more than I wanted to flex. Plus, she is about a hundred (OK, 79) and is a real complainer. Still works at Wally World, and there's really no substitute for bad publicity, if you know what I mean. I could just hear her telling everybody there what a slacker I was, even though I explained to her that the form was not approved yet. And who knows when ATX will have the Form 1116 ready? Also, when I assembled her return today, I realized that I had forgotten a lot of details about the return that I wanted to point out to her. I did the return about three weeks ago. Took a while to refresh my memory about all of those things. I really hate putting a return aside once I've started on it. I wish I had used the irs.gov form sooner, to be honest. And, what if I were waiting on a form that I use a lot, say Sch C or Form 8863? Can you imagine the stress of not being able to finish half of your returns? The mountains of files laying around, the phone calls... OK, that's not a pretty image. Thank goodness it was just that one. Whew.

Mike, I have been waiting on the 1116, too. KC suggested (on a previous thread) filling in the form on irs.gov with the numbers from our "draft" form and just printing that and attaching to return. I did that today for a client who keeps calling me, "What's taking so long?" Of course, client is paper filing. It's a pain, and the ink is blue (what's that about?!), but the client was REALLY bugging me. We should not have to be doing this, but I think it's the lesser of two evils. At least I got the client out of my hair. Hope this helps.

JB - I just had my youth pastor pick up his return. It was completely different than last year - he got ordained and had a baby. (Well, his wife had the baby, but I digress.) Last year the return was $60, this year $150. He said, "Hey that's a bargain, I know it was a lot of work." This is the attitude that makes us go out of our way to do a good job for people. It does not seem to me that you are unreasonable in your fees. If your guy does not appreciate you, I suspect you're better off without him. I agree that you should give him the opportunity to summarize his records himself, and give him whatever instruction he needs (this time) to do the bookkeeping himself. There are people out there who think we have to have all the receipts; he might be happy to do it himself.

Here's what MY own nephew did. County clerk's office starting hounding him to get caught up on his business taxes. He brought me six years to do first of January. I did them, told him they were ready. Finally, I MAILED them to him first of February. He calls me Monday: "I have this huge job that I can't lose (landscaper), but I have to be current on business taxes." I WILL kill him April 16. I am too mad right now to bother with it.

JB - I know this sounds easier to do than it is, but I would disregard the prior year's fee and just figure what I'd charge if he were a new client. Surely he realizes that this return is completely different, and you can't be expected to charge the same fee.

Bump. Wow, I'm glad someone asked this question. My message says, "Not ready for filing." But, I think you're right, KC, they don't say "draft", so I'm printing and going forth. I was thinking for days, "Why in the world are these not ready?!" That message needs to say, "Hey you have to send clergy worksheets with 8453 if you're e-filing" if that's what ATX means.

Regarding cell phones, this is REALLY bothering me. Do you have clients that give you their cell number, but apparently do not check their messages, or don't know how? I had THREE people in one day to call checking on how their return was coming along (*&^%), and I had called ALL three of them and left them messages.

Ain't that the truth! My client who actually has the highest W-2 wages of anyone I see didn't think he needed to tell me about his wife's little make up selling business. She got a 1099-Misc, and he didn't think they needed to report it cause it was under $10,000. He's in the health care industry. Hope nobody dies.

LOL. Yes, thank goodness. Saves on research time. I often wonder why they trust us to prepare the tax return when they feel compelled to go over EVERY cotton pickin form with us. haha! One guy, when I asked if anything had changed, told me yes, he changed jobs. Hold the phones, people!

This guy just cracks me up. Every year he does this: Brings in his stuff, tells me item by item what everything is: "This is my W-2, this is my wife's W-2, this is my mortgage interest..." He's heading out the door, and turns around. Oh, one more thing ma'am. Have you heard anything about us getting another stimulus check? (Discussion about that.) Starts out the door. Oh, yeah, ma'am, do you need to know the amount of that stimulus thing last year? I wrote it on this paper that I didn't give you. (Discussion.) Starts for the door. Oh, one more thing, ma'am. Haven't we already been deducting property tax? (Yes, cause you itemize...blah, blah, blah.) He will call me in a few minutes with "one more thing, ma'am." I can't help but like him, he's so polite. Every year I think of Peter Falk as Columbo. If they remake that show, I have the guy for them! haha!

Things Clients do that make you go HUH? Existing client DROPS IN to ask when would be a good time to DROP OFF their two W-2's and one unemployment form. Me: How about NOW?

You are correct, the HA is set by the church PRIOR to the minister being paid. Of couse, the minister should have input, but it is NOT correct to tell the church the HA AFTER the compensation is received. The (proper) HA is not subject to INCOME tax. So, if guidelines had been followed correctly, this HA would have been both income AND SE tax free, since he filed 4361 (to opt out of SECA -"self-employed contributions act") sometime or other. There are some additional rules regarding the amount of HA that can be excluded. Try Pub 517, (page 8 in the 2006 booklet I'm looking at). Also, clergy worksheet #1 on page 23.

I think you mean the tax liability is more than 300.00? "Am I correct when I read that her stimulus payment was less than $600.00 and because her tax liabitlity for 2008 is greater than $300.00, she gets the additional $300.00 credit?" --- Terry D. Not necessarily. We are talking about a person that did receive $300 stimulus payment, if I understand correctly. If so, if the tax liability is $508 this year, the RRC will be $208, for example. If the tax liability is $750, the RRC will be $300. If the worksheet is giving her $300 this year, her tax on 2008 tax liability must have been at least $600, right? Also, I'm assuming there are no credits. So, I guess line 56 is at least $600, correct?

This may sound stupid, but the person did withdraw the funds, right? I mean, I have had a ridiculous number of people wanting to deduct portfolio losses and they didn't sell. (Course, they never said anything when they had gains.) Agree with others here, if all ROTH accounts are distributed, the loss goes on Sch A. Hope they can itemize...

Just wanted to bump this up in case it can help someone else. I had to order some of these today, and I really appreciate the time it saved me to have this info. I ran a copy of this thread back in Nov and put it with my blank forms so I'd have the address handy. Thanks to all you helpful folks!!! It is so nice to have friends at the office!

I saw it. He was my pick...

That's awesome! Glad to help.

You got that right! Hey, and anniversay is Feb 28... I should be drowning in candy then, too, huh? Yay me!

You are not missing anything. Since Housing Allowance is not subject to income tax (just SE tax), it would be double-dipping to deduct any of his 2106 ministry expenses on Schedule A for income tax purposes. His ministry income is not subject to income tax, so he's already at zero for income tax purposes. (When the worksheet and pub 517 say "tax free" they mean "income tax free.") Let's say 40% of a pastor's compensation is HA. Then, it would be appropriate to deduct 60% of his ministry expenses on Sch A, cause 40% of the compensation (HA) is already subtracted for income tax purposes. Now, you do have legal double-dipping with mortgage interest and real estate tax on schedule A (since they are housing costs). I hope that made sense.

I am bookmarking this. Thanks. (Love the "out-of-towel" expenses. "cya" taxes - I thought of something besides "Confidentially Yours Accounting" heehee)

Oh, I know what you mean about that - I have a farmer that brings me a completed Sch F (well, not the depreciation) and I love that, too. I wish some Sch C people would do it, so they'd know logical categories of expenses. Had one I was working on last night with a ledger sheet. Had a column for postage with $70 in it for the entire year. Office supplies in another column that totaled $32 for the year. Ran out of columns and put $3000 worth of various items in "miscellaneous." Oh, well. My people that fill out the forms for me are W-2 folks with kids and EIC who want to make sure they get all their money. You know, I might miss something they're entitled to.

Guy sitting in parking lot waiting on me to get here. Disappointed when he picked up return yesterday cause they're only getting back $251. OK, wife changed her withholdings and had 1,000 less withheld on same income as last year. He worked, then started drawing SS. 85% taxable. TP: Why can't I deduct my mileage to work? I go thru the whole commuting miles thing. TP: Can I deduct mileage where they sent me to (blah, blah, names EVERY location) after I got to work? Me: Yes, but your standard deduction right now is 5,000 more than your itemized, so you're going to more than 10,000 miles before they start helping. TP: Oh, I had that for sure...blah, blah (tells me the locations again). Me: Well, great! Figure out a number for me, and I'll be happy to do it over. TP: Now, they paid me mileage on that. (Employer reimbursed him.)