Yardley CPA

Yes, I thank you as well. Great information.

I think the President will be quick to sign this into law!

I have a couple who filed MFJ in 2009. There was a balance due on their state return. Couple has since divorced (finalized in 2010) and I am preparing both their individual returns this year. Can the balance due on the state return from last year be taken evenly this year on each of their respective Schedule A's under State and Local Taxes? Both have similar income levels.

You learn something everyday. Thanks for both your responses.

MFJ Couple. Husband is 67, wife is 64. Their Financial Advisor suggested they convert both their IRA's (husband's converted amount totaled $105,000 and wife's totaled $110,000) into Roth IRA's to take advantage of the tax deferral into 2011 and 2012. Both of the IRA's were converted to Roth's. The advisor told them to make sure they extended their 2010 return, so that if the value of the converted Roth's decreases you can take advantage of that. I am not all that experienced with IRA conversions to Roth's and would appreciate anyone's input on this one. I've completed the 2010 1040 and it currently shows a refund in excess of $4,000. I recognize that half the conversion amount will be taxed in 2011 and the remaining half in 2012. I am estimating the 2011 and 2012 tax and will include the additional tax due to the conversions. I assume estimated payments may be warranted since they do not currently have enough withheld. Any thoughts would be greatly appreciated. Thanks!

Amazing is right! That guy is pretty good at what he does!

Since posting this entry, I've done a bit of research, mainly through Google, and came upon another community that extensively debated this same topic. The overall consensus was to do nothing. The wife passed away, the 1099C came in her name with her SSN, the credit card company wrote off the amount owed. Here are a few excerpts from that dialogue: "If there was no estate administered, there was no fiduciary appointed. Why doesn't the widower just do nothing? If IRS ever requests a return, respond that the taxpayer is deceased and left no estate. As a practical matter you shouldn't have cancellation of debt because it appears there was no consideration given in exchange for cancellation of the balance. (As in paying a percentage.) The credit card company has just written off a bad debt as uncollectible." "Lawyers alert: If I'm not mistaken, unless a tax is assessed before death, and possibly a Notice of Federal Tax Lien filed, transferee liability cannot be imposed on the heirs who inherit the property of the deceased taxpayer." "Thanks to all who wrote in. I just spent an hour trying to answer this question using Quickfinder handbooks, JK Lassers handbook, and IRS publications 17, 559, 4681, as well as searches on the IRS webpage, to no avail. And yet this is a very simple question, and must happen often. In my case, there is no estate, nor assets, and I just wanted to make sure, in black and white, that the income wasn't included on the spouses' tax return. I know that it shouldn't be, I just wanted to be sure, and have the supporting guidance." I am not saying I completely subscribe to and agree with their conclusion, but I am leaning toward doing nothing. I still would appreciate this community's thoughts.

I have a client who filed MFJ until his wife passed away in 2009. Included in this years information that he sent me is a 2010 1099-C sent to his deceased wife, showing cancelled credit card debt of over $11,000. This year taxpayer will have a filing status of "single" since there are no qualifying dependants. My question: must the taxpayer include the 1099-C sent to his deceased wife on his return and show the cancelled debt as Other Income? Thanks!

Frank also gave us "My Way" They don't make em like that anymore.

Wouldn't the manufacturer of Fiber Aluminum Roofing market it as eligible for the Residential Energy Credit if it were? I think this site you speak of would make mention that the material is eligible for the credit. If it does not state that, maybe a call to the manufacturer would be the route to go.

I don't believe any of the distribution is taxable. She meets all the criteria, age, account open for more than 5 years. So I would say no part of the distribution is taxable.

I have a MFJ couple, husband received a distribution from his previous employers qualified plan, which represented over $3,900 in pretax contributions, into a Traditional IRA. Is form 8606 required to be filed in this instance and, if so, would it be Part 1 of the form that is completed? I don't have all that much experience with rollovers from qualified plans into an IRA account and just was wondering exactly when 8606 is required? Any feedback is appreciated. Thanks!

Thanks...appreciate the feedback. I'm still brain dead. ;-)

Single filer who took Standard Deduction in 2009. 2009 state return showed balance due. This year, filer has enough deductions to itemize. Can they deduct the tax paid with 2009 state return as an itemized deduction on this years Schedule A - State and Local Taxes? Why am I brain dead on this? I know you do not reflect a state refund as income if you did not itemize your deductions the prior year. But I'm drawing a blank regarding state taxes paid with state return and whether they are deductible? ATX automatically included it as a deduction on this years Schedule A.

Thanks, Pacun. I guess as a CPA I don't have to register. I appreciate your response.

I thought I read that tax preparers must file with the State of New York before we can efile New York returns? I am a Pennsylvania preparer who has just a couple of individuals who require a New York return. Must I register prior to efiling the returns? If so, is there a cost associated with the registration? Will I receive a certain tax preparer ID number that I will be required to use in order to efile? Thanks!

I agree. I think ultimately I would amend this return.

Rita is correct BullDog...account has been open for over 10 years. Thanks for chiming in.

Single filer who is 54 years old and retired under an incentive from his employer. Met age and time worked guidelines. He needed some extra funds and decided to tap his Roth IRA for $10,500. Received 1099R showing the gross distribution as $10,500 and -0- as the Taxable Amount with the Taxable amount not determined box checked. Client indicates this entire distribution consists of his contributions and no growth. He also had surgery during the year and indicates he is "disabled". I know there is Schedule R that we can have completed to verify the disability. I also know that distributions from a Roth may qualify as tax free if the recipient is under 59.5 and disabled. My question pertains to the Roth Distribution. Given his age, would the entire distribution be considered not taxable (if he were not considered disabled), showing on form 8606 that the basis and the distribution amount are the same? Any thoughts would be appreciated. Thanks!

Here's a video clip that appeared on the CBS Morning Show. CBS asked a couple to file their taxes three ways, Turbo Tax Online, H&R Block and at a local CPA. One thing that struck me is the advice they gave that indicated arriving at your tax preparer organized and prepared would help save you money. So true! A client who comes to a meeting with me prepared with all their records in order definitely pays less than someone who drops off a shoe box of information. http://www.cbsnews.com/video/watch/?id=7358568n&tag=cbsnewsLeadStoriesAreaMain;cbsnewsLeadStoriesHeadlines

It certainly is! Thanks very much!

I have a MFJ client who divorced. Is there a way to change the return name this year from the husband and wife to just one of the spouses? In the Return Manager it was originally saved as John and Mary Doe. The return contains a significant amount of information that I would prefer not recreate. I was hoping to simply remove one of the spouses names and re-save the return showing only the remaining spouse...the Return Manager continues to show both. I recall reading it was not possible but wanted to check. Thanks!

Thanks for the responses.

Does anyone know of a way for the ATX program to reflect "Various" as the option when you are prompted to select a Foreign Country or Possession? I receive more and more 1099R's with Various indicated as the Foreign Country or US Possession. Thanks!

I have a client who made a $6,000 contribution to a Roth IRA in 2010. Problem is, he or his wife (MFJ) have no earned income. Both are retired and all sources of income are unearned. Can anyone provide some insight on what can be done in this situation? Is there a way or a need to reclassify the contribution? The contribution is reflected on his return as a carry over of excess contributions. Thanks!