BulldogTom

I sent this mother of 4 home with only 1800 of W2 income (her spouse died the year before, not working, sad story) with no withholdings. No need to file. She does not meet the income limits for the $300 payment. But the IRS instructions say "Parents and anyone else eligible for a stimulus payment will also recieve an additional $300 for each qualifying child. To qualify, the child must be eliegible under the Child Tax Credit....ss#" Since she is divorced, she is going to give her ex a 8332 this year for 2 kids. He is coming in tomorrow. She could really use the payment this summer (her savings and life insurance are running out). Should I file a return for her? Will she get the $300 per child? So confused. Need an adult beverage. Tom Lodi, CA

I have a new client, full year CA resident but with Rental Activities in NY state. Rentals net a loss on 1040. Is a NY NR tax return required? Your help is appreciated. Tom Lodi, CA

You didn't like Maxwell? Shame on you. He took 3 hours to get through a client interview. He was thorough. Tom Lodi, CA

Not exactly, but close. The rebate is the amount of tax paid on the 2007 return, but no less than $300 and no more than $600 for singles. Double that for married. The additional credit is per child at $300 each. Using your example, if they made 20K and had 4 kids, there is no tax liability. They would get $600 for married filing joint and meeting the minimum income requirements, and $1,200 (300 x 4) for the kids or a total of $1,800. At least that is how I am reading it. Tom Lodi, CA

I think the issue is not the quality of the truck, but that the sleeper on the truck rises to the level of a "living space". If that is the case, then they "live" at that space, and not at their home. The "living space" now becomes the tax home. The deduction for business travel away from home is then lost, because they are not away from their "living space" home when they eat. Interesting, and I can see the IRS making this point. On the other hand, they should vote, keep a drivers license, and hopefully and office in the home for their administrative duties at the place where they live the other 65 days per year to strengthen their argument that they are away from home on business. Tom Lodi, CA

<<Yes, it does. The income can come from any source...even Social Security.>> No - it doesn't. From the IRS Website announcement. "Also not included in qualifying income are non-veterans or non-Social Security pension income (such as those from Individual Retirement Accounts)." Only veterans or SS pension payments qualify. If your client has only private or individual pensions outside SS, no rebate. Tom Lodi, CA

I don't know if it was me. I wrote a letter to the Lodi News Sentinal that was published a couple weeks back. Had to do with the FEMA flood map designations. Did the Sac Bee pick up my letter? I don't read the Bee. Tom Lodi, CA

Let me change the facts and see how you would answer. Instead of the 3k getting him a tax benefit (eic), it puts 2,999 into the 25% bracket, and the 4% bracket in CA, along with the 15.3% SE tax on 93.5% of this cash. The taxpayer is now looking at an additional tax bill of $1,299 for telling you about the 3K. Would you still file the schedule c and put it on the return? For the record, I think you need only worry about HOH and can he survive a cash t analysis of providing the support. If he can't, file him as single with the dependent. The 3K is a non-issue in my book. You know what the law says about income from any source, regardless of the tax benefits or detriments that result. My 2 cents. Tom Lodi, CA

I vote for Ahhhhhnnnnolllld as the Terminator. Black leather, Harley, sunglasses. Rebel without a cause look. Right out side the office. (hey, ask your people if I can write off a Harley if it becomes the ATX mascot?) Tom Lodi, CA

If it was possible for Eric to give other software companies a demo page or link to a demo page of their own, would you appreciate that. I know many of us are looking to get new software next year. If there was a working demo of Drake, Proseries, Taxslayer, or any other software out there where we could try it and comment on those trials, would you find that helpful? I have not asked Eric about this, but why ask if there is no interest, right? Just a thought. Tom Lodi, CA

KC is right (as always). It is not my client, and I know you want to do the right thing. Unfortunately, the 90 day window has closed, and the IRS has no incentive to open it back up. This is the real tragedy in this situation. Losing the appeals/tax court track are huge rights that the taxpayer has lost. The IRS does not need to let you go there, and it gets harder to get the proper result for your client if you cannot use the traditional methods and your client does not have a lot of $$ laying around to pay for the taxes, representation, and legal fees. I have a client in the same mess. They don't know what they should be doing, but they know that what has happened to them is not fair. I know it too. But they let the 90 days go by in 2003, 2004, and 2005. I can fix 2006 and I am well on my way to doing that. I can make 2007 right and make sure they get the proper result that they are entitled to under the tax laws. But they are poor (yes, I am basically doing all of this pro bono) and cannot afford to go the court of claims route (at least not yet - I am still working on that one) for the back years where they got hosed. Cientax - good luck. I know you care about your client, and that is a good thing. My advice is to forget about the audit recon route. My experience was that the process is not set up to benefit your client. Use your time and energy on a different tack that will produce better results. I would recommend amending the return, putting everything in order the best you can for that amended return, and see if you can get the IRS to bite on that one. When the IRS ignores or rejects the 1040X, file the claim for refund. They have to pay the taxes and sue for the refund after the IRS ignores them for another 6 months. It is not a pretty scenario. Again, good luck. And if you have a better approach or get better results on the audit recon, please let us know. Tom Lodi, CA

The workaround is to move the interest to line 48. Unbelievable is the word I used when it popped up on my computer. According to other posts, the progammers believe this is the proper programming per IRS regulations. Un-be-liev-a-ble Welcome to the new ATX...powered by idiots at CCH. Tom Lodi, CA

I think they will not have to file a return if they are elderly or disabled vets. I read that the IRS will get the information for seniors from SSA and the disabled vets from the VA. I think the only people we have to file a return for are those who make less than the minimum filing requirements and at least 3,000. That will kick their return into the system and get them the $300 in the summer. Tom Lodi, CA

ceintax, Listen to Jainen on this one. I requested audit reconsideration, and the IRS never read my letter. They $hitcanned it and never even sent me a reply. I called and they just acted like it never got there. I have proof of mailing, but that did not impress the witch on the phone. Your time will be better spent elsewhere than asking for an audit that will not be granted. Kinder gentler IRS my butt. They are still the lazy, vindictive, incompetent slobs they always were. (no offense intended to anyone who every worked for them - just a generalization/opinion). Tom Lodi, CA

Take a look at a §195 election and you may be only amortizing 1K. I think you can expense in the first year up to 5K of start up cost if you make the timely election. Don't quote me on this one because I am going from memory. Look it up and I think that will be the way to go. Tom Lodi, CA

Use of ATX software is not a requirement to be a friend on the board. Many of us may not be using the software next year - so you just look like the leader who read the tea leaves best and got out while the getting was good. Could you please tell us what software you are using and how you like it. Welcome back. Tom Lodi, CA

Wasn't she the one who sold the homemade pens online that her kid made? Didn't her screen name start with an "A". KC should know. Tom Lodi, CA

Sorry, I have not done this. I have been watching your posts to see what you came up with because I am not sure how it would work out. Wish I could help you, but that is a new one to me. The only MFS I file is the spouse who is stuck without the kids and the other has been gone for 6 months. Very rare. Sorry. Tom Lodi, CA

There is no formal election proceedure, you just figure the additional taxable amounts for the prior years, and then put LSE on the line. ATX will do this for you when you use the LSE worksheet. If it results in less taxable income, the entry will be made. When you e-file, the form will flow through with the return. Tom Lodi, CA

So long as the degree does not qualify her for a different job (ie doctor), I would agree with you. Tom Lodi, CA

If there is a change to the law, please let me know, because I have a client in the same mess. Took the distribution from the 401K. 10% penalty applies. Please correct me if I am wrong because I still have the return at my desk waiting for other final items from the client. How is "the tax programs are allowing the deduction"? Are you entering a code in the penalty worksheet for IRA withdrawal for first time homebuyer? Tom Lodi, CA

On my example, number 1 was not met also - the taxpayer is not in AMT, and interest on 150K of mortgage debt is not deductible (assuming they did not improve the home). Tom Lodi, CA

Not necessarily. Remember, only 100,000 of home equity debt is deductible as qualified home mortgage interest. Out here in CA, you could have blown past that amount in a couple of years when the housing market was hot. For example, if I bought a home in Clovis CA in 1997 (5 bdrms on 2 acres with horse corrals) for about 250,000, it very easily could have been worth 600,000 in 2005. Say I refinanced for 500,000, using all of the proceeds on other than home improvements, I can only deduct the interest on 350,000 (250K acquisition debt + 100k home equity debt). This is the law regardless of AMT implications. If in AMT, then it gets worse, because no Home Equity debt is allowed. Hope that helps Tom Lodi, CA

Good luck on that. When we ask about mortgage history, there are two responses: 1. Why and how much is it going to cost if I tell you the truth.. 2. Huh - I don't know... Tom Lodi, CA

That is why you childless folks aren't going to pay it back. But those of us with bundles of joy still at home are going to pay it back next year. I read the house version of the bill that passed 2 weeks ago. This might not be the same after the senate got through with it. I have not read the text of the new bill that will go to the president. Tom Lodi, CA