Lion EA

Form an LLC per his state law. Form 8832 to elect corporate taxation. Read the instructions and deadlines. Organizing the LLC is usually easy. Having a good operating agreement if more than one member is the part that needs a lawyer familiar with your state law. What do you do when the members disagree, one wants out, one dies, one wants the other to leave, spouse inherits, one wants to sell, etc.? Those are the things to put in a legal document now while everyone is getting along, before anything goes wrong.

It's gotten too corny for me.

My least favorite is the family size info. If Mom has a child living with her but ex-husband claims the child and has child on his health plan, Mom has to have some info from Dad, right? Or, Mom pays the penalty since child is in her household, right? Makes for a new way for spouses to argue, stick it to one another, use the child, take more of our time.

Rita, you are truly out standing in your field.

ProSystem fx. In the time it takes to deal with ATX issues, you could prepare a few more returns in Pro fx and earn enough to pay for the more expensive software. By the way, I like both ProSystem fx and Ultra Tax better than Lacerte. Just sayin'. Send for the demos.

Can you download it when you're done working for the day or going to be out at lunch or to a client's site or even working fewer hours after 15 October? Create your own disk. (When I worked at Block, I worked afternoons and nights so was often the last person to leave. It was my job to start the back-ups on my way out. The manager made sure all was well first thing in the morning upon arrival.)

That sounds about right. I had some late clients that I filed in November.

And, your state may assess a penalty. Have had only one VA client, so don't know.

Thank you.

US Citizen goes to SIngapore for two years as a professor and house master at National University of Singapore. Left 1 August 2013; has satisfied the physical presence test now. Do I put his wages on line 7? Dummy up a W-2? Or, do I start on Form 2555 and it will flow. I don't want to double up or go in a wrong order and miss something. I thought I understood the theory, but the practical application of reporting on the return is leaving me shaky. Especially since I started this last Friday but my computer overheated and shut down and Dell argued with me and still hasn't fixed it. Enough ranting; I wasted too much time with Dell. Gotta make this flow the way I know it should. Thanx for any pointers.

I have had luck using the procedure for partnerships that all was reported on personal returns even though S-Corp return was late. You could also try for the one-time abatement. I'd coach the clients in what to say/write and have them try, using the ratio of the penalties to their income, supporting a family, a few tears, etc. It's worth a try before exploring bankruptcy.

The intelligence level of bankers is dropping (just like at the IRS). I hardly ever meet one who can read a tax return. I have had to explain my clients' returns many times. Not understanding why an S-corporation pays no federal income tax, what guaranteed payments are on a partnership return, a zero at the bottom of the first page of a 1040, OIH for a schedule C, depreciation, depreciation, and depreciation.

There's a form that both buyer and seller include with their returns that breaks out the types of items that make up the sale of a business. Also, the sales agreement probably has more or better detail, pricing the furniture and equipment, for instance. Essentially, it's whatever she paid for it.

Some days I wish I'd taken Latin like my mother told me to do! I took Russian during the cold war, because a science major really needed Russian or maybe German. Like that did me any good.

Her purchase price might have included an amount for depreciable equipment, that washer and dryer, for instance.

I had one client on Kickstarter during 2014, but her project did not get funded. If your client kept a spreadsheet, he probably has all his expenses listed. Most of these Kickstarter projects offer things in return for various funding levels, books, tee-shirts, an iPhone app, original artwork, etc., so the purchase or creation of those things, if outside their normal manufacturing or business expenses, also create expenses. For example, my client was going to ship tee-shirts, stylus (what's the plural?), etc., in January 2015; so we'd discussed paying for them during 2014 to match the year she would receive the income. In her case, she has huge expenses for developing an iPhone app, so the $5,000 she was seeking would still leave her in the red this year.

I appreciate what NYSSEA did (and does) for EAs. In fact, I sent money to their legal committee or whatever was asking for monetary help when NY registration first appeared and EAs had to comply that first year. My favorite group for education is the NY/CT-ATP. Our two-day December Seminar will include NY and CT updates as well as federal tax courses (yeah, 16 hours of CE for CPAs but only 14 for EAs). http://nyctatp.org/

Should I drag them out to the street?

Yep, talking with client confirmed that view. He boards a ship, his work location, at a LA port. He lives and works on the ship for a month or so in international waters. He returns to his family home in CT between assignments, about a month off each time. No withholding was done for LA. Filed CT resident return and RI nonresident, because a prior job withheld for RI when he was actually in the Pacific Ocean in international waters (but had left from a port called Newport in OR, so some HR person coded his work location as Newport, RI, and withheld accordingly. Client had direct deposit and did not see his paperwork while on the ship for a year, spanning two tax years, as his mailing address was his parents' home in CT.) He was always a CT resident from birth; once a CT resident, CT does not consider you a nonresident until you leave AND "stick" the landing, establishing that you actually live someplace else. Doesn't want to lose their residents and their tax money to FL where many have winter homes, buy their cars, etc.

Are EAs still exempt from the NY's definition of commercial preparers? I have lots of commuters. And, CA? I know if you're in-state. But, I have about one per year PY CA and PY CT or NY. There's another western state that has preparer registration, Oregon? Utah?

Was it his pension? I think on the usual line for pension and usual line for withholding. A long time ago, I had a US citizen who'd been overseas for a few years but was back in the states. He received a 1042-S for investment income. We reported it as usual. But, I had him deal with the brokerage to get future years reported on his consolidated 1099. That's really not the right reporting form, but few companies would change their 2013 reporting after the fact. Hopefully, it's early enough for your client to deal with 2014 reporting. And, to have the withholding stopped.

Thanx, Lynn.

OK, talked to client (instead of just him mom) who says he's on a ship 200-500 miles out in international waters for a month at a time, them back to CT for a month, and repeat. So, NO work location in LA or CT or any state. With work location in international waters (explains why no state withholding) and CT has always been his home and continues to be his home between "voyages," he's taxed as a CT resident, right? CT considers you as a resident until you move to another state (or out of the country) and "stick" the landing. He hasn't moved out of CT as far as I can tell, per CT's rules. His work location is in international waters. He could live in LA or anyplace. With a month off at a time, he chooses to remain at his parents' home in CT. But, I would think it's just commuting to get back to the port when the ship is ready to sail, yes? How would LA view this? Is he just visiting his family in CT? He's not required to live anyplace, just be on board the ship when it's ready to sail.

Finally talked to client (up to now, it's been his mom). He's assigned to a ship 200-500 miles out in international waters for a month or so, then back to CT for a month or so, and repeat. Only works on ship, not in CT and not in LA. So, I think taxed in CT where he resides, right?

Client lives in CT with parents. A Louisiana employer hires him to work on a ship in the Gulf of Mexico for a couple weeks at a time, then sends him home, then back again, etc. Withholds federal FIT but no state. He has no other work location in CT or LA or anyplace else other than a ship for a couple weeks at a time. During 2013, this began in April, so less than a year. But, it has continued, so now more than a year. Does LA have any claim to him? Does he need to file a LA return? I think we lost any benefits to a temporary job when it went over a year, right? But, I'm most concerned with his work location. If out in the Gulf of Mexico, is it LA or no state?