BulldogTom

How do you get the CA depreciation information onto the CA SchB for the depreciation differences. TP is an 1120S with 8825 rental activity. All the assets are in the asset entry, but not linking to CA. There has to be a magic box somewhere to link this. Any help appreciated - and if you could hurry that would be great. Tom Staying up all night until this return is done.

Careful Rita. Your statement is true only if the account has been open for 5 years or more. Tom Lodi, CA

I have been waiting for this to happen. I hope the IRS goes that route with every single one of them. Then I hope the government makes oxycontin a controlled substance as well so the IRS can do the same to all those "pain management" doctors who are peddling that as well. It will be interesting to see who steps up and pays for the court case on this one. It has to go to court and be appealed. I am looking forward to seeing how it comes out. Tom Lodi, CA

I am with Maribeth. I have not had a problem with early withdrawals. If this is the case, you should call the IRS for the client and find out what they see on their end that caused them to take it early. Please let us know what you find out. If the IRS is actually taking payments early, I will not offer that as an option for my clients in the future. The IRS can process the check if they are going to change the rules. Tom Lodi, CA

Stay safe Jainen. The one thing I learned while I was in the Coast Guard at Bodega Bay is that you cannot trust what the ocean will do. Perhaps you should go have breakfast in the mountains this morning? Not like you are scared, but just because a nice breafast at 300 feet elevation is a beautiful thing. Tom Lodi, CA

Any of you out there on the coast, especially in Northern CA and Oregon, my prayers are with you that this will be a non-event. Hopefully you are at higher ground already. They are saying the first waves will come in at about 7:30 Local time. In about a half and hour. May God protect you and yours. Tom Lodi, CA

Julie, did you mean Box 1 of the w2? Box 2 is federal withholding. If we do the W2, box 1 would be amount of Premiums, all other boxes blank. Is this the correct way to do this? Thanks. Tom Lodi, CA

Our policy is $75 to amend plus the cost of preparing the return. Returning clients that we prepared and they come up with more info is $75. If we made the mistake, it is free. For a new client that brings me their return from another preparer and it needs an amendment, I will guage the likelyhood of them becoming a continuing client and what they will bring to the table in the future and price from there, but a minimum of $75. Tom Lodi, CA

<<I would bet because they want it done cheaper.>> I would bet you are right. They told me so. Funny how losing money makes people look for a bargain. I am not looking to amend last years return. Let that dog lie right where it is. But I do want this year to be professionally done and audit proof. That is the way I work. Tom Lodi, CA

No, that would be real drama. Wouldn't you just love to see the HRB preparer and the CPA sitting there with the client as the IRS auditor went through their return and asked for the documentation for all the deductions. How about a Q&A afterward asking how they were $1,300 apart on the refund. What if both of them were wrong and the IRS had a completely different number after audit. That would be "must see tv". Tom Lodi, CA

Kea hit it on the head. If the challenge was to get the biggest refund (regardless of accuracy) they should have included some preparers that the IRS busted for filing false returns. What they should have done is brought in the IRS to audit all three returns when they were done and see who really produced the best results. Tom Lodi, CA

Thanks to you all. I will discuss with the clients. Tom Lodi, CA

I type them all in. But I have a small practice. Charge for every line item on the D. Beefs up my bill. Bring them on. I need the money. Tom Lodi, CA

This s-corp is 18 years old. Normally profitable, but not the last two years. Looking at last year tax return prepared by someone else, it looks like they did it a bit "creatively". Added the payments as supplemental information on the K-1. Premiums not deducted at Corp level. No mention of a book to tax difference on the reconcilliation. They just made it go away, but put it on the K-1. Scratching my head on this one, because the CPA who prepared it is very well known in town. The clients could not get another CPA to take it. They have some level of apprehension about the preparation last year and shopped this year's work. They came to me because I rented my office from them a few years ago. I think the clients are just looking to do the right thing, and they are not sure it was right last year. In reading up on this in my Master Tax Guide, I think the corp can deduct the payments. I think the shareholder must bring the amount of the premiums paid into income, and because it is income to him, he has earned income (like a guaranteed payment to a partner). If the corp was profitable, the shareholded could deduct as SE Health Insurance, but because there will be a loss on his K-1, only to the extent that he has net earnings from the corp (net of K-1 loss and Premiums paid on his behalf taken into income) can he deduct as SE health insurance on his 1040. Am I anywhere close on this? Thanks for your help.

S-corp has insurance plan but no employees. Owners do not take salary. One owner participates in health plan. Premiums paid by S corp. Where do I imput this on the K-1 and allocate to this shareholder to make taxable on his 1040? Is there a place for this on the k-1? Thanks Tom Lodi, Ca

Figured it out. Had the wrong asset subcategory clicked in Asset Entry. The simplest things screw you up. Tom Lodi, CA

Client has a storage rental building. They have a truck that they use on site to move things. It is not driven very much. Vehicle depreciated every year. Still in service. Still used in business. The rules are straightforward. In the case of a vehicle to which the luxury limits apply, you can take $1775 per year for the vehicle until the vehicle is fully depreciated. How do I make the software take the 1775 depreciation in the eighth year? Thanks. Tom Lodi, CA

How do I make atx take the additional years at $1775 on vehicles used 100 percent in business but but beyond the 6 years of normal life? I know it needs to go there, but I don't know how to make it happen. Any Help? BTW it is a 1120S return with everything on the 8825. Thanks Tom Lodi, CA

TP gifted two homes to his daughters after his wife's death. Both are rentals. This is what I think should happen: Children must use carryover basis (his basis) for depreciation on homes moving foward. Gift Tax valuation is FMV on the date of the gift. Please let me know if I messed this up. Thanks Tom Lodi, CA

We are going on a cruise this summer for our 20th. Thanks for remembering. You are way too thoughtful at this time of year. Thanks KC Tom Lodi, CA (but in palm springs)

...Is very valuable. Confirmed in Circular E and Pub 15B. Thanks for getting me on the right track. Apprceciate the help. Tom Lodi, CA

So glad you responded. So the Futa wage base is Gross wages minus any 125 if no cash option. 401k is not deducted for FUTA wage base. Example: Paid $1000. Has $100 deducted for 401K and $50 for 125 health (no cash option). Taxable wages are $850 for FWH and SWH, FUTA and SUI Tax base is $950. Do I have this correct? Thanks for the response. Very much appreciated. BTW, I am in CA for SUI purposes. Tom Lodi, CA

When setting up payroll, do you use gross wages or taxable wages for calulating the $7000 limit on FUTA and SUI? Example: Employee is paid $1000 for the week. Has 401K plan that he contributes $100 to. Federal taxable is $900. Is FUTA and SUI based on $1000 or $900? From Circular E under Computing FUTA tax: "The tax applies to the first $7000 you pay to each employee as wages during the year". From Circular E under Depositing FUTA tax: "Stop depositing FUTA tax on an employee's wages when he or she reaches $7000 in taxable wages for the calendar year." I think it needs to be on the $900 in the example above because of the second statement in Circular E. Thanks in Advance. Tom Lodi, CA

The net result will be the same if it goes on line 7 or line 21. While KC is technically correct, there is nothing for the IRS to match to, so why gum up line 7? Put it on line 21 and be done with it. Tom Lodi, CA

I just had a returning client come in. Simple return. Rolled over from prior year. Nothing really different from prior years. When I was reviewing the CA return with him, there was an extra exemption credit of $99 for being blind. He is not blind nor is his spouse. Could not find the place on the entry where you would check for being blind, although I did find the place to check for spouse being blind. I ended up overriding the entry (which I hate to do) but I needed to finish the return. Anyone know where the check box is for taxpayer being blind on the CA 540? This may have been a one time glitch. I have not had this problem at all this year. Wierd. Tom Lodi, CA