RitaB

You're welcome, my friend! Google search: "Fair rental value by state."

I fired a guy yesterday that I hadn't even hired yet. He came in for a quote. Wife had a little nothing crafting "business". He did the little air quotes and eye roll to indicate she is no businessman. Calls about something same afternoon. Drops in two days later to ask if he can deduct moving expenses. He's on disability (and happened to mention he was better now, but not giving it up. Grrrrr.) They moved here from PA. She has no job. Just loses money on crafts. Your move was not work related, you just like it here, correct? "Yeah, pretty much." Then, no, you cannot deduct moving expenses. I'll look up the rules and send them to you. HE FRIKKIN CALLED me the next day to tell me HIS PA PREPARER said I could deduct his moving expenses on Form 3903 and blah, blah, blah. I sent him an email with links to Publication 521, instructions to Form 3903, and two articles. Note at bottom: "I am going to respectfully decline the opportunity to prepare your return, I am well aware of the process used to deduct legitimate moving expenses, and I don't need instructions from your previous preparer about anything."

Yes, it is the client's responsibility. Yes, realtors are a good source. FRV varies so widely by region. My client who just came in charges $700 a month for a 1500 square foot home. I know him and he's getting the maximum he can, if you know what I mean. I was thinking about that thread were a suggestions was 1% of square footage per month. That would never work here. I did find this that might help a little: https://www.huduser.gov/portal/datasets/fmr/fmr_il_history.html

Good for you! I hope I can figure it all out before next time. I have to discard client letters and attach a new one about every third return. I am spending too much time on letters, but they look so much better than the default. Maybe I'll get there. I hate a dinky letter.

Yeah, if they're lying, it's taxpayer fraud. But, sometimes taxpayers really do forget, or don't realize that they are technically wrong. There are ways to facilitate getting to the truth with honest but forgetful people. Client: Ricky Bobby left May 25th. Good tax preparer will casually ask: Ok, sorry, this will seem like a stupid question, but I have to ask, approximately how many nights did Ricky Bobby stay with you during the last half of the year? Honest client will remember and tell you. You can't make the dishonest client tell the truth, but you have done your job and documented the answer. It's on the taxpayer. Now Lefty will START by saying, "If Ricky Bobby did not stay with you at all during the 2nd half of the year, it will save you $1,.200 on taxes."

Same.

Who are these people who mail their returns???? Actually I do have a lot of very lovely clients. Forgive me for whining so much. But while I'm here - New guy and wife came in with a wine box full of everything but wine. He even had directions to TN Income Tax Return in there in case I needed them. His CA accountant kinda messed it up last year because he wasn't "well versed" in TN taxes (hey, the instructions are two whole pages), so he wanted to be sure I knew how to do them. Oh, and the other preparer messed up the Federal a little dab, too. The adjustment letter said about $18,000. But he was a good preparer other than that. I asked what was in the box. Oh, I'll get out what you need. Won't take long. Thirty minutes later, he was all set. Love him already.

I know, right? A friend's ex husband ran a business into the ground, took bankruptcy, I get a call from him wondering if I can direct my clients to him as he's now a Financial Advisor. Sure, I'll get right on that.

Yep, you know it happens all the time.

Oh, if a loophole is a means of evading a law, the biggest loophole I see is lying about your income and business miles. Sorry about that. When politicians and most others talk about tax loopholes, I think they are talking about legit tax laws most of the time. http://dictionary.reference.com/browse/tax-loophole Tax Loophole: A provision in the laws governing taxation that allows people to reduce their taxes. The term has the connotation of an unintentional omission or obscurity in the law that allows the reduction of tax liability to a point below that intended by the framers of the law.

Well, Pacun, I think your example there of married people filing with the wrong status is tax fraud, not a loophole. Loopholes are really just tax laws that are perceived as unfair by someone who doesn't benefit from it. I think the benefit that rubs me most wrong is pastor housing allowance. The days of paying the pastor with fried chicken and a dinky, ancient place to stay are long gone. And getting to deduct home mortgage interest and property tax twice, since they're housing expenses and still allowed on Sch A. That's a double dip. I love my pastor. This is not his fault, and he'd be stupid not to take advantage of it. But if Joe Parishioner, busting his butt to make post tax mortgage principle payments and electric bills knew this, I don't think he'd like it much.

See, this would increase the incidence of clients asking me to buy them a computer.

I agree, Terry, I want to hand my clients a nice product. I admit I have been guilty of thinking "all my clients" must lose their copies. But that's a severe reaction under duress to the five to ten out of 385 who ask for copies later. Sorta like that one Algebra II class that I thought was "full of delinquents" because three kids out of 27 sucked the life out of me. The great majority we don't have to babysit after we're done; it's just those other little derelicts that make our jobs tough. And they don't lose their copies; they're just too lazy to locate and/or copy them. If it gets to be a habit, I just quietly increase their fee the next year.

Well, what if kid got 3,000 in scholarships that was designated to be used for tuition, and tuition was $2,600? Wouldn't $400 be taxable scholarship on kid's Line 7?

I had to chuckle at the title. Thought ILLMAS was doing my ex's tax return. Just the title. None of the details are remotely similar. Just to be clear.

Taxable scholarships go on recipient (kid's) return, on Line 7, note at left "SCH 500" or (whatever amount is). No, not subject to SE tax.

Paper (22 lb) copy. Nice folder. Discuss until client is satisfied with explanation or gives up on understanding. Hard to tell. I am very patient and know you explain thoroughly when people ask questions. And try to use words they understand. I think some figure out that they will never figure it out, but if she is willing to try this hard, I'm going with whatever she says. Always tell them to call if you think of something else to ask. No problem. Many, perhaps most, don't want to know anything, just tell where me to sign.

P. S. I told you Catherine is the mean one.

I found two articles that might help. The quote from Pub 517 in KC's first post seemed to agree with me on the need to be an employee, I think. (Use of the word employ.) Anyhow, these are not exactly from the horse's mouth, but they might get your there. http://www.freechurchaccounting.com/housing-allowance-for-evangelists.html http://churchlawgroup.com/resources/blog/are-traveling-evangelists-entitled-to-a-housing-allowance/ Although I didn't see your issue addressed (but I may have missed it), I thought this document from Guidestone would be an excellent thing to give to churches and clergy: https://www.guidestone.org/~/media/GuideStone%20Corporate/Ministry%20Tools/2166_MinTaxIssues%20pdf.ashx

Electrocution thru the phone.

Well, I always come in under what the other preparer charged anyway, and it saves time for me. I can prepare the Sch A quicker than I can explain standard deduction vs itemized to this particular type taxpayer. Win / win.

No, he'd had to be an employee. "A licensed, commissioned, or ordained minister may be able to exclude from income the fair rental value of a home (a parsonage) or a housing allowance provided as compensation for ministerial services performed as an employee." https://www.irs.gov/taxtopics/tc417.html

To answer this particular question: Heck no, I wouldn't recommend that.

My new policy on simple returns is to tack on $50 for the first “it’s simple” and $25 for each subsequent “it’s simple,” up to three. Then it’s gonna be, “You’re right, this is really too simple a return for me to prepare as I specialize in difficult returns. Thanks for calling, but I can’t take this engagement.” "I should just do this myself," gets a punch in the stomach thru the phone.

You nailed it there. I could not believe I had a lady in here worried about what she was going to make on the sale of a rental. I think she was actually trying to figure out if she should sell it for less because of taxes. I stopped her and said, "STOP thinking that way. Sell it for all you can. Taxes have ZERO to do with the decision about what to sell this house for." I thought her husband was going to cry he was so happy. "Yes. Thank you, OMG, thank you for telling her that."