Kea

Actually this is for a farm (OK, actually ranch) partnership. The employee is the guy who lives on the place and feeds the cattle, fixes fences & whatever else needs to be done. My job at the University was in the early 80s right after they raised the SS / Medicare tax. When it was 5%, the University paid the employer & employee portions. When they added the extra 2%, the employee paid the increase. Even though I'm a pack rat, I don't have check stubs or W-2s back that far to see what they did.

That's a very generous offer. I already have Quickfinders books for these years, but I would like to get the CDs for prior years. I just got the one for 2009, but have not been able to get earlier years. I would like to take the CDs when I travel. I don't want to carry around a library of books, but I never know when I'll have to work on an old return. If anyone is getting rid of old reference CDs, I'd be interested. Thanks

I used to aggravate my calculus teacher because she always wanted me to "show my work" -- but I usually did most of it in my head. I'd look at the problem and know the answer. It just took much time for me to write down the 3 or 4 steps that she would show when I could just manipulate the formulas in my head. (Obviously I'm not as good at making my writing as concise!)

OK, so I was right the first time with the way I was doing it. Couldn't use the easy shortcut that my client has been doing. Withholding is still really coming from the employee. Thanks

But then do I calculate the FICA / Medicare on the $700 or on the grossed up amount?

Please forgive me if this is too basic of a payroll question. I've never had a client with an "employee" before -- only contract labor. New client has been paying her part-time employee $600 per month and sending $91.80 in for FICA (15.3% of $600). The employer is contributing both the employer and employee portions because she likes to keep things simple. On the W-2 she is showing gross wages of $7200. Is that correct, or should the gross income be increased to reflect the employee 1/2 of the FICA? She's giving this employee a raise to $700 per month and wants me to determine the FICA. Do I use the new 13.3% of $700 or do I have to back into it to achieve a net $700? Or, am I making this more difficult than it should be? Here's what I did: if X = the new salary X - 5.65% X = 700 (net pay) X = $741.92 New FICA = 13.3% X = 13.3% (741.92) FICA = $98.68 Or, do I just take 13.3% of 700 = $93.10? Almost 30 years ago I worked for a university that paid the 1st 5% of FICA for us. But I don't remember if it was included in box 1 of the W-2. This was before I did taxes professionally and was not paying that much attention. Thanks & Happy New Year

Thanks. That answer makes sense. The deadline applies but it doesn't apply!

Yes, I am the 3rd party designee. I wish I could correct with a phone call. But the matter is a 1099B that was not reported. Obviously, the CP2000 does not consider the basis -- I figure I don't have either. Thanks

I got a fax from a client's mother. The client is currently deployed oversees. The client received a CP2000 and Mom is very concerned that he is in trouble. He will not be home by the January due date on the notice. I know that due dates for tax returns are extended while deployed. Checking the IRS website FAQs for military mention the delay of due dates for various type of returns. I would assume this applies to CP2000s also, but haven't found a definitive answer. Is the CP2000 due date postponed while he is deployed? If so, do we need to notify the IRS that the CP2000 will be addressed when he returns home? I may be able complete a 1040X if the son has e-mail access. Or maybe Mom has POA. Thanks

I know there are a couple of people who use Macs for their tax prep software on this board. I've only done a little. I use a Mac for my main "personal" computer and a PC for my "work" computer. During the off-season, my PC spends a lot of time in the safe. I recently took a trip where it was more convenient to only take one computer. I have Parallels on my MacBook and loaded 2008 & 2009 ATX on it. When I used it, it was extremely slow. For example, when I realized I hadn't "printed" (to .pdf) part of a file I needed -- I rebooted Parallels & started ATX, opened file, and re-"printed," closed ATX & Parallels. All that took just under an hour. When I got home I bought 8 Gig of Ram for the Mac (found a good sale) and now that same process only takes under 10 minutes. I hope you get responses from the ones who use ATX on Macs regularly.

Congratulations to you and your students for a job well done. Great restoration work for a great service man!!

The due date is (slightly) postponed already. Per Pub 17, the due date is 4/18/11. This is due to the D.C. holiday of Emancipation Day. They are applying it to all tax returns, even if you don't live in D.C. I'm kinda thinking about keeping this a secret from my clients. Think I can get the news media to help me? Not.

If you use inkjetsuperstore.com, use the promo code "new5off" for 5% off your price. I thought it was just for 1st time purchases, but I keep using it and it keeps working. I don't know if it will keep working, but it did last spring. My orders usually arrive in less than a week.

As far as I know (limited, at best), the interest (and any other non-wage income) is taxed at the rate as if the wages were taxed & that is true for 2009 & 2010. I know we discussed the re-calculation needed for interest with foreign income exclusion in the tax update class a couple of weeks ago. No mention was made of this changing. Hope that helps.

I got my same PTIN but it was marked provisional. The guy I spoke to at IRS said it was because I didn't have any certifications. The provisional label will be dropped after I pass the test. But he said I can use the provisional PTIN for preparing taxes in 2011. Hope that helps.

It's my understanding that it applies to self-employed as well -- but I haven't read it anywhere. I also thought the 2% reduction was for 2 years. I'm waiting for NATP to come out with their summary.

But would it still be subject to the 30% withholding? I realize the landlords are US citizens, but this still doesn't seem like US source income to me. The grocery store doesn't pay attention to the citizenship of its customers, why should the yard boy or rental management company? i had a client in Columbia. Should I check and see if I owe any income tax to Colombia?

What about rentals in foreign countries? I have a client that bought a house in Costa Rica that he is renting out. Assuming he pays anyone there more than $600, how does he issue the 1099Misc? The yard boy (or whoever) does not have a US SSN. When I brought this up in the tax update class, the instructors said that since the landlord (my client) is a US citizen, the yard boy's income is now US sourced and would owe taxes on it (assuming he did enough of these to meet the filing requirement). Another client has a rental house in Mexico (< 100 miles from the US). They use a rental management company. That company would have significant US sourced income (many of the homes and condos are owned by US citizens). But if they start getting 1099s, this could have a major impact on their business decisions. However, the grocery store would also get a lot of US income but not for business purposes. I'm having a hard time believing that these foreign companies (and individuals) would be subject to US taxes just because they have US customers. None of their business takes place in the US. This could get interesting!

Thanks for sharing these. The first was my favorite. But I fully admit to be a numbers geek. And seeing the charts "brought to life" was cool.

I just downloaded the update file a few days ago. I did not run it yet because I wanted to see if Mike D's concerns would be resolved. (And because I'm good at procrastinating.) When was the new conversion posted to the TRX website? I did notice that there was only one conversion posted. Fortunately, I'm converting from ATX. Will there be other conversion for people converting from other programs? Just curious. Thanks to Mike D. for informing them of the issues. Thanks to the tech teams that were able to make the corrections that they could.

Yes, they will charge interest (and possibly penalties - not as sure on that one). I generally have the client pay the difference in the taxes and wait for the bill for the interest. The interest is a moving target based on when IRS gets the check. I prefer them to send the bill so that you have a specific amount and a due date. I will sometimes give the client an idea as to the approximate amount. Also, I have heard of cases where the interest is small enough that the IRS does not bother to bill for it (it costs them more to process the billing than the interest they could get). But that is usually when the client is paying for the current year before 4/15. I'm sure others can chime in with better answers.

You have to use the grand total to figure the required distribution. But you can take it out any or all of them.

Ahhh, but the Wildfire is currently available in the US. company website YouTube video

I have not yet converted my files. But in past years I've found the depreciation hardly ever converts correctly (ATX to Intellitax, Intellitax to TaxWise or TaxWise to ATX). But I usually did not have many other issues until last year when I converted from TaxWise to ATX. It had problems with almost everything except the W-2s. It didn't even do the EIC. I basically re-entered every file (and in the process found a few errors - mostly minor). It surprised me that that was the most useless conversion since it was between two programs from the same company (CCH). I only have a little over 100 files, so my conversion shouldn't be too bad. But I won't wait until January like I did last year. Thanks for the heads up!

Great TP Origami video. I grew up preferring "under" now I no longer care. But it was always "under" when we had cats. I guess that they preferred "over" like most people!