Kea

Here's what I found in the 2010 The TaxBook regarding non-resident states: CA - 62 - you may want to research CA's rules. TB says if they have any CA sourced income & meet the other CA filing requirements CT - 3 - have gross income over certain limits (and a few things that probably don't apply). Also says: NR must generally file if they meet the filing requirements above & have any CT source income. EXCEPTION: Income from casual, isolated, or inconsequential activities is not included in CT source income. FL - 1 - No state income tax IL - 10 - NR must file "if they earned income from IL sources, or want a refund of IL income tax withholding" IN - 15 - "...if they receive income from Indiana sources" MI - 8 - must file if they have Michigan source income & owe MI tax or their Fed AGI exceeds exemption allowance. NR prorate exemption allowance. NOTE: if you file a federal return you should file a MI return, even if no tax liability, to avoid unnecessary correspondence MO - 2 - over $600 in MO income NJ - 13 - any NJ source income & meet other gross income tests ($10-20K depending on filing status) NY - 56 - various filing levels depending on filing status ($3K - $15K) and: are subject to minimum income tax; or incurred a NY NOL with out incurring a similar federal NOL OH - 10 - any OH source income unless one of the exceptions is met: -- Individual is a full-year NR living in a border state & NR's only OH source income is from wages & salary. --individual has no Sch A adjustments & Fed AGI does not exceed $11,600 or $13,200 (depending on filing status) --Individual's only source of income is retirement income eligible for the retirement income credit and the credit is the same or more than tax before credits --Individual's exemption amount is the same or more than OH AGI. OH allows a $1600 exemption for each taxpayer and each dependent reported on the federal return. TN - 2 --required if they maintained a residence in TN > 6 months AND taxable interest & dividend income exceeds $1250 ($2500 MFJ). TX - 1 -- No state income tax Gee that doesn't look like that saves you many states. I've run into a few K-1s like this, but the states they've listed generally had reasonable minimums. The only time I've had to file a state return due to a K-1 was for one based in OK and all income was OK. They even supply an OK K-1. Since my client is in TX, the OK is NR and cannot be e-filed. Might I suggest an extension for this? But, be careful, some states accept Fed extensions & some don't. Good luck!

Thanks for the advice. I will keep a copy of the notarized income and make sure I explain the importance of keeping good income records. I'll also do the digging to make sure the amount on the letter seems reasonable. (charge per cleaning * number of trips). The conflicts aren't between G Grandma & Grandma. They come to the appointments together so everything is discussed in the open. They aren't trying to claim the same exemptions. (Yes, I have their permission to discuss with each other.) The twins were most likely claimed by their mom. She lost custody of them several years ago due to legal issues. She has claimed the twins before causing Grandma's return to be rejected (2007 & 2008). Grandma has filed paper returns and has been successful in claiming the kids after sending all necessary documents to IRS. All 3 kids meet the tests for qualifying children of either client. So I don't have an issue there. If grandma's income is more than $3650, G grandma can't claim her regardless of support. The only reason I got concerned was the changing amounts on house cleaning income. And I know most people think it doesn't count and / or they didn't really track it. All under the mistaken belief it doesn't matter. That view is wrong, but not uncommon, and not intentionally fraud. (Negligence = yes) It's just that the complex family situation and cash income sounded like what can go on in EIC fraud cases. But that doesn't mean this is. (But how to "prove" cash income.) Thanks to all.

A friend of mine (from exercise class) started coming to me for tax prep about 7 or 8 years ago (I had already known her a couple of years by then). I will call her "G Grandma." She's a very nice lady with a good heart. A couple of years later, I started preparing her daughter's return. I will call her "Grandma." She seems nice, too, but I don't know her as well as her mother. Grandma lives with G Grandma in G grandma's house. 3 of G Grandma's great grandkids live with them (2 twin girls & a boy cousin). Grandma has legal custody of the twins. The 3rd was listed on her 2008 as foster child. (I need to re-verify the relationship - I think he was a child of an ex-in-law.) All 3 kids lived in the house all year. They started off the appointment saying that the twins were Grandma's dependents and the boy was G Grandma's. I asked about who was providing their support and they said that was how they were supporting them. Since they are descendants' of either of them & didn't provide 1/2 their own support, it shouldn't matter. G Grandma is retired. Grandma had been working, but for part of 2009 & all of 2010 has been going to school full time. In 2009, Grandma claimed all 3 kids. In 2010, Grandma had W2 for approx $1000. Did not work much while in school. We went over the support test worksheet and it appeared Grandma may have provided > 1/2 her own support. (All figures were estimates, because they were in my office at the time and were guessing all costs.) As we kept discussing it, Grandma said that really didn't seem right. After all, it's G Grandma's house, and she really does provide most of the support. So I filed Grandma without claiming herself. After printing, Grandma asked if small amounts of income from house cleaning had to be reported. It was small and she really didn't have any records. I told her basically all income, except gifts, were taxable. Not keeping track was not an excuse. She said the amount was probably only around $50. Since everything was pretty much done and the income wasn't going to change anything, I didn't reprint the return. (Yes, I know I was wrong.) Efiled & accepted. I filed G Grandma claiming all 3 kids and Grandma. Rejected. Twins were claimed by someone else. I tell G Grandma that return was rejected and gave her the options (paper or e-file without twins). She's coming back tomorrow. Grandma then tells me that she was mistaken. Her cleaning income was high enough to claim herself. She got a notarized form showing how much she was paid for cleaning. She wants me to amend hers to claim herself and the twins. I've never had any reason to not trust either of them before. Maybe it's just from reading too many stories about EIC fraud that is now making me suspicious. I'm not sure how to handle tomorrow's appointment. I still don't have any issue with G Grandma's return. No EIC questions since no earned income. Just because using a cash business is a way to fraud EIC doesn't mean that she really didn't earn the money. She's already admitted that she didn't track the income. I have no way of knowing how much she made. Having the person supply a notarized page of what she paid sounds interesting. (I have not yet seen the document so I may have mis-understood what she said / meant.) How can I determine if amount is "real" or scam? Also, I still see G grandma regularly at class & I don't want to create an uncomfortable situation there, either. Therefore firing Grandma doesn't really seem like a good option. I really just want to prepare both returns accurately & legally. I appreciate any advice. Thanks for letting me vent.

They called here Monday & left a message. I always hate renewing any earlier than necessary - especially paying so many months in advance. I'll most likely renew between 4/18 and 5/31 (or 1st?). I will do it early for the discount, but not during tax season.

Depends on the state. Both QuickFinders and The TaxBook have State tabs that list the filing requirements for each state (resident & non-resident). I did learn last year that NM requires an NR return for ANY amount. (BTW, TaxWorks did not calculate any tax for the NM return I rolled over from ATX which calculated $2. It won't even let me "peek" at the form to see how its calculations vary. Oh well, I hope I don't need that one this year.) I wish I could tell you if line 19B is correct. Don't you just love it when the K1 instructions for a particular line say "Check with your tax professional?" Gee, thanks, that tells me a lot. If you don't have either of these books, you can list the 18 states, and I can look up their NR requirements.

They should. I had one earlier a few weeks ago, but client didn't have enough to itemize, so I didn't check it too closely. But I tried on a dummy return & it flowed. I entered the info in the indirect expense column on 8829 & it went over to the Sch A. But this wouldn't be the first time a feature worked for some and not for others. Good luck.

I'm getting to like the speed of the MeF. I now (sometimes) submit the e-file while the client is still here. If the ack comes back in just a couple of minutes I give them the Ack Report before they leave. It's nice to have it all complete at one time!

Thanks. I guess I should add this to the RedGear suggestion box. I also need this feature for *my* computer I switched to personal use. I asked about it before, and never heard anything. Then got busy working for clients and still haven't completed my return yet. This feature (or lack thereof) has only come up twice this season, so I guess it's not really a high priority. Thanks for the confirmation of my "work around."

I like to do needlepoint in my free time. I prefer kits with multiple stitches (hard to find) because I tend to get bored just doing continental & basketweave. I just don't have enough artistic talent to do my own patterns / designs.

Client had been renting house to relative at FMV. In 2010 rental income declined to below FMV & she stopped renting it out at the end of December 2010. How do I show this on the Asset worksheet? The only disposition choices are sale, installment & like kind exchange. It's none of these. Asset was not disposed, just taken out of rental service. Do I just take it out in 2011? The specific amount of depreciation won't be a significant factor since she can't write off the loss in 2010 anyway. ATX had a "moved to personal use" option. Not sure what to use as a work around. Thanks!

The main problem I've had (off & on) lately is with closing the program. I click the Red X in the top right corner and it doesn't do anything. Go to File --> Exit and it "thinks about it." Then I get the Program not Responding message & I choose close program. With that kind of exit, the program doesn't do its backup. I'm not sure if its related to an update. And it doesn't do it every time. Also, there are times I get errors when updating. I try again later & it updates.

Was he in the Military and stationed overseas? There is an exception there. My client bought house in December 2010 after returning from a year in Iraq. I'm more than happy to get the credit for him!

I read one article a few days ago that said the legislators were motivated to avoid a shutdown this time. They realized that meant their Blackberry accounts would be shut down with everything else. Interesting priorities!

If you go the split route, it splits the amount between 2011 & 2012, so none would show up on current 2010 return. I'm not using ATX this year, so I can't tell you where the declaration is made. Taxworks defaults to splitting it. If you want to include it in 2010 income, there is a checkbox on the 8606.

I'm not sure about how to move him to another program. I tried a copy / paste into Word. He shows up, but doesn't move anymore. But I just copied from your post. Another forum I read also has icons for "stirring the pot", a butt wiggle (i.e. nah nah nah nah nah nah - probably spelled wrong and loses something in writing), and "beating a dead horse."

Thanks. I had been confused because he never had that Roth, and even if he had there would have been no RMD. So for the original 1099 that shows 4G in box 7, can I just input the taxable amount in box 2? Or, I need a new 1099 since IRS won't expect a taxable amount on a rollover? Thanks!

Shouldn't the rollover be a code "2" taxable but no penalty? Still not sure about being able to split. Your 2 statements seem contradictory --or, am I missing something? Do I have the RMD taxability right?

If he meets the requirements for unreimbursed employee expense & has enough other expenses to meet the 2% hurdle then, yes you can use either. However, I would question that the education doesn't qualify him for a new job as an EMT. I would think that would be different from being a police officer.

OK, I'm still confused on this one. I thought it would make more sense when I got the 1099Rs. When Dad passed, I was eligible for a death benefit from his pension. This was not Dad's money / not an IRA or anything. His pension stopped with his death. One of my options was to roll it over to an Inherited Roth IRA. I couldn't find much info on this scenario, but it sounded like a good way to minimize future taxes. I filled out distribution paperwork indicating the rollover was to an Inherited Roth. Custodian I rolled it over to said I need to take RMD. No problem. Teacher Retirement sent a 1099R with the whole amount in box 1. Box 2 = 0. Box 7 = 4G. Since it's rolled to a Roth, shouldn't it all be taxable? If so, does it qualify to be split between 2011 / 2012? New custodian issues 1099R with RMD in box 1. Box 2 is blank; taxable amount not determined is checked. Box 7 = T (Roth distribution, exception applies). I would think the original amount would be taxable, but RMDs from Roth would not be taxable -- as long as the distributions don't exceed the original contribution during the 1st 5 years. Once I'm past the 5 years, distributions would not be taxable regardless of amount. This wasn't yet a Roth when I inherited it, so I'm not sure how (if) that impacts anything. Thanks

New Mexico taxes all income determined to be NM sourced with no minimum. But I agree with GeorgeM for help in determining what is sourced in NM.

Thanks Crank. That's the repair I used a few times in January. Things got a LOT better after I turned off the user account. The re-registering was also helpful. Since I'm starting to get some funky errors again, it's time to do more maintenance. Just making sure I'm doing all the right things.

My client is a file clerk. I don't know what her boss' title is. Is any employee considered an agent? Also, I'm not sure that the boss was "preparing" the amendment, or just showing her how to do it. I do know that even though my client's return is pretty basic (W-2, 1099 INT, 1098 & RE tax), she doesn't want to take any chances of doing it herself -- since she is held to that higher standard. I'm not looking to get anybody in trouble here!

I have a client who works for the IRS. This year she brought in a receipt for Jury Duty for $90 for 2009. She found it while gathering her 2010 info. She's in the 15% tax bracket so it only adds $13 - $14 to her taxes. But because she works at IRS, they are held to a higher standard. She also said her boss would help her file the amended so that it wouldn't cost her anything. I would have really felt bad charging her for such a small amendment. I'm glad she could do it free. (No, her boss was not willing to file her annual returns free, even though they are probably easier than the amendment.)

Yikes! Has anyone noticed a pattern of what forms are causing these changes? Or, is it happening even with a basic W2 / 1099 Int / 1098 return?

I've had some problems with the program applying upgrades periodically -- including yesterday. It did finally upgrade last night. I haven't noticed any changes to existing returns. I'll have to pay more attention - scary! I think it is a good idea to re-register. That did help last month. A repair probably wouldn't hurt either. I assume you are referring to the repair in the add / remove program section of the control panels, right? Or, is there another place inside the program? I agree completely about the lack of undo or exit without saving. I sometimes play "what-if" scenarios to help the client with potential changes for the next year, but can't do it as easily in TRX. (I just created a dummy return & input changes there, but would have been quicker to use existing return without saving.)