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Client was married on 6/16/07, separated on 9/1/07 and the marriage was annulled in 2/08. Is Married filing separate or MFJ the only options for 2007? Client was surprised this would matter.

The 1098 shows mortgage insurance premiums paid. However, this is a rental property. Are they deductible or is it considered basis?

Three single clients bought a house together. All three are listed on the deed and all three are liable for the mortgage. However, the 1098 only came in one person's name. I plan to e file all three returns. Should I report the mortgage interest on Schedule A Line 11 for the two owners who are not listed on 1098 and report reduced amount on Line 10 Schedule A for the person whose SSN is on 1098? The instructions for Schedule A indicate to attach a schedule with other persons SSN and Address. Any ideas on how to accomplish this in ATX? Thanks!

I'm confused on which member, if any, should be put here. The entity is an LLC. I read the 1065 directions, but am still not sure. Any guidance on how to determine if one of the members should be put here?

That is correct. Be sure to review the subtractions modifications on page 2 to see if your client qualifies for any of these. It is the only way to help eliminate some of the tax.

The phone call was from the tax preparer who works for Liberty Tax Service. You are correct - no taxable income but no deduction either. Thanks for helping me think this through. The brain is a bit tired.

The pension act of 2006 allowed an individual to donate up to $100,000 directly from retirement plan to a charitable organization. Someone donated in this fashion to my church. The church received a phone call saying that they needed to complete a specific form in order for the individual to receive deduction. The church had previously sent a letter of acknowledgement of receipt. Does anyone know what form this would be? Any help is appreciated.

The commitment fee charged a corporation by the bank in establishing a letter of credit - is it amortizable or is it considered part of basis? The client is a land developer and was charged $8500 for this.

Client received $2,000 in insurance reimbursement for tools and small equipment stolen from locked shed. They spent $898 to replace items and decided not to replace certain items. There are several small equipment purchases on the depreciation schedule but hard to identify which are for stolen property. Do I "sell" one of the equipment assets for the difference and call it equal? I'm not sure how to report. The entity is an S Corp if that matters.

Several clients want the credit for purchasing energy saving light bulbs. I do not see this as part of the Residential Energy Credit. Am I missing something? TTB nor 1040express answers addresses light bulbs.

This client is already over limit for Suta. Not an issue. Thanks for the heads up though.

Thank you.

Per TTB, if cash wages are greater than $1600 for the year, withhold SS/Fica/Federal. If wages are greater than $1000 in any calendar quarter, then taxpayer must pay FUTA also. Hope this helps.

I am having a brain freeze. I have a more than 2% shareholder in an S corporation. The health insurance is paid through the business. I know the amount is added to box 1 of the W2. Question - is this amount subject to SS/Medicare?

I have had the exact same problem. I just haven't had time to check out why. If you figure anything out, please post here to help all of us.

I prepare WV returns regularly. There was no change in WV rule regarding Franchise taxes. It is an ATX problem. I have been removing the amount carried over for Retained Earnings and then the calculation is correct. The amounts should be on one line if they are an S corp and have always been one.

I'm going to try this one more time. I posted before but did not receive any helpful posts. Client has $2800 in General business creidts. They have $1500 in income tax. They also have 3 children qualifying for the child tax credit. ATX and child tax worksheet is applying child tax credit toward income tax which means they still have the $2800 in General Business credits to carryforward. Is this correct? I cannot find any documentation clarifying the order to apply these credits but Form 3800 page 2 does not allow them to use any of the $2800 carryforward. It would be helpful to use the general business credits up first and increase the Additional child tax credit so that there would be some reduction in the balance due. There is consideralbe SE tax for this client. They had a very good year and chose not to pay any estimates. Thanks for any guidance. I know we are all busy.

The IRS recognizes the scanned version of these forms as the original. The IRS specifically addressed this a couple years ago. I have been using this procedure for at least 3 years. I can't find the site right now though.

The copy you keep of the 8879 and related state schedule can now be digital - scanned in and kept on computer. I run a paperless office and backup the computer often.

Client paid $16,000 for dental expenses during year. There was no necessity for the dental work other than cosmetic. Are these expenses still deductible as medical? When I look at the list of cosmetic expenses not allowed, dental is not listed. What is your opinion?

This is probably quite simple. However, I need some help. Client is an LLC being taxed as a partnership. During 2007, the members all contributed to the 401K plan. These are voluntary deferred compensation. An employee would have box 1 of the W-2 reduced by that amount but would still pay SS and Fica on the deferred comp amount. The members are not employees. It does not seem right to increase the guranteed payments by the amount of deferred compensation. It also does not seem right that the full amount of deferred comp is a deduction to the partnership. Please help me here.

I'm confused also - that's why I posted this problem. ATX is calculating child tax credit of 1498 to offset all income tax. It is not allowing the 2800 in General Business Credits to be used. The client then qualifies for the remainder of the Child tax credit on Form 8812. My question is whether that is the correct order to use the credits. It appears per the schedules that ATX is correct but was hoping the client could use the Carryforward of General Business Credits to offset the 1498 in income tax and then still get the 3000 on the Form 8812. Yes, my client had 60,000 in SE income. They were advised to make estimates, but did not. Now, they are unhappy with the amount of taxes owed. They also received a 21,000 refund of prior year expense and did not tell me until 2008. Still, I am trying to educate this client. I beleive they will pay the 2008 estimates I have advised.

My client has a carryforward of a General Business Credit of $2800. They also have 3 children which qualifies for Child Tax Credit. The total tax before credits is 1498. They do have 9,000 in SE tax. The program is applying the Child tax credit first which leaves them with no tax therefore unable to use any of Genera Business Credit. Is this correct? Obviously, they need to use all the credits available to help offset such a large liability. I'm trying to help reduce the liability and utilize some of that carryforward. At this rate, the General business credit will expire and they will receive no benefit. Please help. The IRS instructions were not very useful.

I have a client that has a $2,800 carryover from tax year 2004. They have had no tax liability and this is still available. The number is showing on my Form 3800 however, it is not carrying over to Form 1040. Any ideas on what the problem could be? Any help is appreciated.

I have tried to receive acks this morning and get a message that there is a server error. Unable to receive acknowledgments. Try again and if this persists, contact ATX Technical support. Sigh!!! Is the server down or is this just me?