mcb39

Have been trying to get this to work for weeks. Finally called in the big guns. Had to try to change my avatar.

I prepare the 8829 and then manually input the total into one of the rentals on one of the Other Expenses lines. Have never had a problem with this.

Thank you both...I have gone with your answers and my own feelings and have not claimed the EIC for the grandparents. He could have easily have fallen into the loop as a student except that they could not afford the tuition last year. We will see what happens in 2010 and what SS finally rules. The prior year, he was a student at a technical school. I thought it was "food for thought" and feel assured that I have done my due dilligence.

My prayers are with all on this board who have had or are having health or other difficulties. We all feel as though we know each other and we all certainly care for each other. I had a client die last week who sat in my office on March 23 with complete optimism that he was in total remission. Last week, my cousin was found dead at 57 of a heart attack. I have had a few issues myself and over the years, KC and others have shared their pain with us. It is all about caring and sharing. Peace and God Bless all of you.

Dear Client..... Would you please stop calling me and wasting my time. I will let you know when your tax return is ready. By the way, you just went to the bottom of the stack. Sincerely, P.S. Please read all of the posts by RitaB as they are all pertinent and right to the point. (Also, extremely funny)..........

Oh, Rita, I can actually hear someone saying that.

Does a 22 year old child who has severe diabetes, ADD and other physical limitations have to be on SS Disability in order to qualify as a disabled child for purposes of EIC?. He only earned $153 for the entire year and is unable to get a job. He lives with and is supported by his Grandparents. They are attempting to get him qualified for SS. Can they take the EIC credit for him as they are very low income? I am unable to find a clear IRS definition for "disabled". Thanks!

Is the school including her room and board in her 1099? That was the case with my student.

I also got the email today. I think there is somewhere that you have to sign up to receive emails; or refuse to receive them. I have also been with them since early Saber.

First of all, determine whether the daughter is in one of her first two years of college. Otherwise, the MW disaster credit is null. I slipped up on this one early on. Last year, the disaster credit was not limited. I had to give the student the Economic Recovery credit, which amounted to almost as much. Who is paying the tuition? Who is supporting the student and claiming the tuition credits? I don't believe that working for room and board qualifies the student to claim that she is supporting herself. (However, I have seen a student on an internship receive a W2 for $9210 in regular earnings and $11338 for housing., which was only for a few months. Now, there was a case of inflation and a company wanting a big writeoff at the expense of a very low income student.

I have been wasting time and brain power wrestling with that same question. I sure hope that is the right answer.

Did they itemize last year.? If standard deduction was greater than itemized deductions, they don't owe any tax on the refund.

Education credits always follow the exemption.

File an amendment for 2009 so she doesn't have to wait an entire year for her credit.

Print first before you create. Saves the step of having to re-create. It's actually a nice safety net because if you make the slightest change after creating, it will reject.

Hi Cath......you have my sympathy. I had that last week. This week is a croupy cough. Anyhow, I just finished a return for a new client. Last year, the preparer put on Line 21 Enron Litigation Settlement. This year she had some from Enron and some from AOL Time Warner. I put them both on Line 21 with the wording typed on the Line 21 Worksheet. (Enron Litigation Settlement; AOL Time Warner Litigation Settlement.) Hope this helps you. I never saw this before, but last year she went to a CPA, so I would think they would know how to do it.

Thank you for your comments, Jainen. Of course, we plan to proceed as advised. We will amend the 2008 return and I agree that we shouldn't have a problem with penalties. What I wanted was a clear-cut black and white answer and I feel that we got it and will prepare the returns properly. I was hoping that you would have something to say about this.

If either of them had worked at least part of the year, they would have been eligible for at least some of the Making Works Pay Credit. Unfortunate, but then I always think that students who work and are claimed by their parents lose out on that credit too. Makes you wonder how well thought out some of these things are.

We asked that same question.; mainly because the 2010 Master Tax Guide, paragraph 2177, page 690 states that ".....the distribution minus the aggregate amount of the owner's nondeductible IRA contributions, is taxed as ordinary income in the year the distribution is received. (Rev. Rul. 92-47)" They looked up that Revenue Ruling and said that it "meant" constructively received. That means that the IRA belonging to the deceased was closed and the monies were placed in an account somewhere and were available to the beneficiary whether he actually had it in his possession or not. Once we were told that we would have little chance of winning at audit, it hardly seemed sensible to take the chance. Financially this was a very disappointing conclusion for the taxpayer. He was quite high income last year; and very low income this year. Otherwise, we wouldn't have cared. In fact, he is so low income this year that without claiming this IRA in 2009 he loses his entire $1500 energy credit for the new windows he put in his house. He zeros out on tax before he gets to the credit. However, all lines have to be drawn somewhere. Speaking of which, does anyone know if the inability to use the entire energy credit in 09 will carry forward to 2010?

The client and I did set up a meeting this morning at the local IRS office. The resulting view taken by the IRS, taken from Pub 538, Page 14 is that the money was constructively received in 2008. "Income is constructively received when an amount is credited to your account or made available to you without restriction. You need not have possession of it." Just because the check and/or the 1099 got lost in the mail, or were mailed late has no bearing on the fact that my client had constructively received the money in Dec, 2008. Therefore, we will have to amend the 2008 return and include the money in income even though the check was not written or received until January, 09. It was the opinion of the agent with whom we spoke that this is a common audit issue and if we were to claim it in 09 and later be audited, we would most likely lose. So, there you have it. Thanks, Taxbilly, for the suggestion. The results are not cost effective for the client, but at least the air is cleared. As long as I had their attention, we cleared the air on a few other issues as well. The downside is that you cannot set up an appointment. You have to wait in line. My client went there and waited in line until he was getting close; then called me and I met him there. Very time consuming at this busy time of the year. I did think that some of you might like to know what the results were.

How would you handle this?. Client received inheritance from deceased brother. Last year, 2008, he received and we reported several inherited IRAs. This year, 2009, on 01/19/09, he receives a check for approximately $39,000, apparently from an annuity. No 1099. We filed 2008 taxes without inclusion of annuity as there was no 1099 and he received the money in 09. Assumption was that 1099 would come this year. Wrong! Had to have client call Ins Co and ask for a 1099 because over $4000 in Fed taxes had been withheld (apparently). Client just received 1099, but is dated 2008. Do we have to amend a very complicated 2008 return and face possible penalties or can we include this in his 2009 very complicated return? Insurance Co will not assist any further (of course) and withholding amounts do not even agree. Also no state is withheld. At least the distribution code is correct at 4. Any ideas out there?

MANY years ago, when my husband first started his business and I had to learn how to do a Partnership return, I struggled through the self-taught course and managed to file the returns (with many errors, I am sure). However, I was unaware for several years that I was also supposed to be filing a Partnership for WI. When the fact finally hit me, I was sick to my stomach.. However, I started to file WI and never fessed up and was never chastised in any way. Just seemed like nobody cared, if they did catch it. However, as Old Jack says, I always reported the income or loss on the Partners' personal returns, which, in reality is what matters. Whether you pay the tax or not. In hindsight, it is amazing all of the things that we might have missed or did miss and never got caught. And, "ignorance is no excuse". Kind of scary when you think about it.

Jainen, as I have said before, I have learned more by reading between your lines than almost anywhere else. Just couldn't let you get away with this one. Just a friendly nudge.

I don't know of any way you can dodge SE taxes through the use of a Partnership. Everything flows through as SE income to the partners unless you are an inactive partner, and then, would not be considered self-employed anyway. Unreimbursed expenses, it is.

I am a sole proprietor LLC. Other than tax preparation and tax planning, I do bookkeeping, sales tax returns and some payroll throughout the year. WI is trying to force all businesses to file every kind of tax report online under a webpage called "My Tax Account". Very secure and very difficult to manage at first. However, now I have access to several clients' accounts as many of them do not have internet access or the knowledge to learn how to use the site. Under "My Tax Account" you can file sales and use tax, payroll tax and any other state taxes that you might owe.