Kea

If your question is whether you can use a personal credit card for business purchases, I believe the answer is "Yes." The main thing that IRS would be concerned about is that you have the receipt and can show the business purpose for the expense. Than said, it is typically advisable to use a separate card for business purposes, just like you would have a separate bank account. It keeps the books cleaner to track all expenses separately. It also means you don't have to share your personal expense records with IRS when they audit your business expenses. You may want to check if they will offer you a 2nd account. This is how I set mine up with Discover many years ago. I like the cash rebates (almost never fly). At the time, Discover did not offer a business card, so I just got another card with another account number. But when I make a business purchase at a merchant that does not accept Discover, I just use one of my other cards and then separate the receipt. Note, I have not looked up any specific cites from IRS on this topic.

Even if the TP didn't have income in the prior 2 years, you still carry back, show that there is no change, then carry the remaining (whole) amount to 1 year previous. No taxable income = no NOL used and then you can carry forward to the next year. You continue to carry forward until the NOL is used up. But you still have to file the 1045. When you carry to 2007, you can change the MFS to MFJ. I'm sure the husband wouldn't object to getting their getting the refund on an earlier year. Also, since she had no income in 2007, converting to MFJ would probably reduce taxes even without the NOL. However, if the 2007 was filed prior to 4/15/08, the extra refund would be lost anyway. (Actually you have 3 years after date filed if after 4/15/08, so if his was extended you might still have time.) But, I still say it's a moot point because I'm pretty sure the 2006 NOL is lost at this point. In the few cases where I have filed back taxes for a client, they only had 3 years to claim a refund. I don't know of an exception for NOLs. Perhaps the husband filed his 2006 very late (after 7/7/08)? If within the last 3 years, you could amend that to MFJ and use the business loss that year (and then use smaller NOL depending on H's income).

I believe if no election is made on a timely filed return, the 2006 NOL has to be carried back first before it can be carried forward. I think the default carryback is usually 2 years, but there have been a few times when it's (temporarily) changed - sometimes in February. Check the latest instructions for 2006. Also since it's been more that the 3 year limit for 2006, the NOL might be lost. I know that's true for refunds, and not true for balance due. Not sure about NOL. Actually, now that I think about it, I'm pretty sure it's too late.

I got it, too. I think I'm glad I didn't respond. But I did keep the e-mail in case I see something to change my mind.

I'm working on reading the Trust, but it's in Spanish. I keep my dictionary close at hand and can get through most of it. It's not very exciting - just the history of ownership of the property and description of current ownership and heirs. The house is in a rental pool and did rent once in 2011, but not in 2010. Client does have tax ID (FM3) in Mexico to pay tax. It's my understanding that client will pay that tax, not the trust. Then there will be a capital gains tax when / if the house is sold. But, yes, Mexico does tax Mexico - sourced income. Client does have an accountant there to take care of the Mexican tax return. (I wouldn't mind seeing that, too, but am not looking to add that type of return to my business -- those are filed every 2 months, if there is income!) Yes the trust was created simply to make the purchase legal. Mexican constitution forbids ownership of land within so many miles of borders and coasts. This was done to minimize problems from invasion. But "recently" (not sure when) they decided they weren't too worried about invasions anymore and wanted to be able to sell to citizens of other countries. So, this bank trust mechanism was set up. Trust owns property, person owns trust with all rights of ownership. (That's about the extent of the history I've learned in this process.) This sounds like a grantor trust. But, I'll still take time to read the tax treaty. Thanks all.

Humm. Didn't think that would be a treaty issue. But I'm not an expert (at all) on foreign issues.

bump

Thanks so much. I have been "nervous" about trying it because I don't want to make any mistakes and destroy any data. Would you mind if I asked more questions when I actually try to set it up? Thanks!

Congrats!

The TOD will keep her from paying current taxes on it but won't give her access to the funds until the mother passes. At that point she will access as soon as she gets the death certificate. The TOD will not keep it from being reported as part of the estate (if that's even an issue), but will keep it out of probate. Hope that helps.

I did a quickie test on TaxExact. it looks like it has potential. But it was running slow and clunky. Scrolling down a page made it take too long to redraw. We'll see.

Cool idea. I might try that if I run into a problem while it's at IRS. But neither idea will work when it goes MeF.

They've e-mailed and called me again yesterday & today (when I wasn't here). I was glad that after I complained about the bad timing before they did wait until yesterday to call back. They also sent me a link to a new product (Tax Exact) they are offering for the same $299 price. She said it is more forms-based rather than worksheet based. I hope to look at it tonight or tomorrow. I did get along pretty well with TaxWorks and am not looking forward to converting again. But I do like forms-based, so I'll look at the other program. The e-mail said I could sign up for TaxWorks and change later. I e-mailed back to get a confirmation of that. Here's the link to their other product: http://trxalliance.com/demoproTE.php

Add me to the list. This sole proprietor would not be able to make it with all y'all's help. (Humm, can you tell I'm from TX?)

Thanks for posting this, KC. I got this in an e-mail many years ago. However, in that version it was used as an illustration about how things work (or don't work) in a corporation. I thought I had saved that e-mail & went to send it to someone else & I couldn't find it on my computer anywhere. I'm saving it again & hope I don't lose it again.

I e-filed a return yesterday & quickly remembered that I had forgotten to make one last change. It didn't go MeF and was still at the Filing Center. I was able to delete it, fix & resubmit! I don't think I could have done that in ATX (granted, I never tried). Thanks TRX for letting me fix an answer to an EIC question! (Client had misunderstood my question.)

Thanks for the suggestion, but no, they just buy materials as needed for a particular job. No repairs, either. She referred to a several month period at the end of the year where the phone just didn't ring - said it got covered in cobwebs from lack of use. Winter is always slow anyway, but this was worse. With springtime now hitting central Texas things are starting to pick back up. We've been starting to think about getting some new windows for the back of our house. The street behind us is getting busier & too noisy for sleeping. I may see if that's a project they can do. If those windows help, we might consider adding them to the rest of the house to reduce our energy bills.

Only one asset bought in 2010 and It's on 7 year depreciation. Didn't take the 50% or Section 179. It was "only" $80 anyway, but figured it might help more in later years.

I got an email from her explaining that she went to the food pantry a lot; got extensions on some of her bills so she could pay the mortgage; in-laws paid for Xmas presents; found agencies that would help out when times are tough. I went ahead and put those comments in the software. I hope it keeps IRS happy, but if not, she can document all her income & expenses. Also, in kind of a flip side to what Margaret said, they have bought lots of tools and equipment over the years that are being depreciated. (Taking 179 in earlier years was not particularly beneficial). So they are taking depreciation this year on money that was spent in the past (better years). Also $9000 deduction for mileage that was not an "out of pocket" $9000 cost. (More of a future year cost that will impact what they can sell the vehicle for or what repairs are needed.) And, like Margaret, she does owe me from last year. When I reminded her she explained the situation. That's why I already knew about the struggle to keep the lights on. She did say things were looking better this year -- so far. I hope it keeps up. And she will pay in full when she gets her refund.

I'm more worried about the IRS penalties than the software messages. Gotta keep them happy! (It's too expensive not to.) Thanks

Client is married and has 3 kids. Self-employed with remodeling business. By the time they took all their expenses their $100K revenue was down below $10K Software is showing an audit flag for EIC over 70% of max & income too low for that many dependents & advising that I document my additional questions. I'm not really sure what else I should ask. I've had this client for several years & last year was a bad year (like it was for so many people). They are "friends of friends" and have never given me any reason to doubt them. They have gotten EIC every year. Actually I didn't get either audit flag before I entered the 2nd vehicle's mileage. 18K miles. Lowered EIC by about $1K & Sch C income by $9K. (I did not tell them the extra miles actually "cost" them.) She did comment when she signed the form -- "Wow how did we live off that low an income? It was a really bad year!" I also know from a comment in the early part of the year that they were struggling to make sure they didn't have "everything" shut off (i.e. electricity, gas, etc.) My personal knowledge of them makes me believe they qualify for EIC. Just checking what IRS wants me to add to their questions. Thanks.

I can run ATX 98 - 09 on my Win 7 (Home Premium?)

I *think* the only ones that need to be signed are the ones with a balance due. But even at that point I'm not sure if it can be e-filed if the client isn't paying anything? I've e-filed a few that should get refunds. No 8879 needed for those. So far, my balance due ones have been mailed by clients.

I got this cartoon today & forwarded it to some friends. One wrote back & asked if I knew it was April 15th - and how can I possibly have time for sending personal e-mails today. The very first "senior moment" in history... And that's what happened to the dinosaurs!

In general I didn't tell clients that the deadline was Monday until after they had filed. Then I asked them to keep my secret. But I think the word got out anyway. Wednesday was really busy, a little less yesterday and even less today (only moderately busy). But there are about 7 that are waiting for last bits of info or signatures. And about 5 that I haven't heard anything from. I'm afraid Monday will get ugly.