JohnH

There's supposed to be a check box to the right of the word "Void" on Copy A, but the ATX software doesn't print the check box. It has always been that way (at least as long as I've used ATX). Either the check box isn't required or else it's been slipping through the cracks for lots of years. Here's the official form for comparison. http://www.irs.gov/pub/irs-pdf/fw2.pdf

Yes, I understood exactly what you said. My comments related to the practical aspects of handling this issue in the middle of a busy tax season. If they were receiving SS benefits prior to Nov, 2008, then they definitely received benefits Nov 2008 forward, and meet the presumptive test that they were paid the $250. That means I'm entering the $250 on the Schedule M if it's called for. My final comment was an attempt to clarify my point - if they began receiving benefits any time in the 4th quarter of 2008, I'd do a little more digging because it's likely they either fell on one side or the other of the cutoff or else SSA could have made a mistake in spite of their clearly defined rules.

I'm assuming that anyone who was receiving SS benefits before Nov 2008 did receive the $250 payment, so if they worked and are eligible for the MWP credit, I'm reducing it by $250. I'm also providing them a note explaining what I did. If they later get some sort of correction or adjustment from IRS stating that they are eligible for an additonal $250, I can refer them back to the note and explain how SSA made an error because they didn't follow their own guidleines. (I might do a little more digging if the person actually began receiving benefits in the 4th quarter of 2009.)

So using the examples for the RAL fees vs refund amount, it looks like it would break down like this: Flat Per Cent of Refund paid in fees: 1) $ 500 refund - 19.6% 2) $ 1,000 refund - 15.6% 3) $ 2,000 refund - 9.4% 4) $ 4,000 refund - 4.7% Being very generous with the time frames, if we assume that the RAL facilitates the taxpayer getting their money one month earlier that by using normal filing, that means they are paying the above percentage times 12 when expresing it as an APR. So the amount actually being paid expressed as an APR is: 1) $ 500 refund - 235% APR 2) $ 1,000 refund - 187% APR 3) $ 2,000 refund - 113% APR 4) $ 4,000 refund - 56% APR So while it's a horrible effective APR, I can see how some taxpayers might opt for the RAL since the actual raw dollar amount is relatively small in relation to the refund (at least once the refund gets over $1,000 or so). Maybe they don't have a checking account and would have to pay this much or more at a check cashing service once the IRS check arrives. Or maybe they worry about the IRS check being stolen from their mail box and facing 6-12 months to get a replacement. Or maybe they need to pay something(rent, car payment, tuition, etc)by next week or face an eviction, foreclosure, repossession, etc. Fortunately this isn't my situation as I sit here today, but there have been times in my (younger) life when I'd have gladly forked over $188 to get my hands on $3K or $4K that somebody owed me, rather than have to wait 4-5 weeks for it even though I knew it was on the way. So I'm not going to say that someone getting a RAL is stupid or foolish, even though I'd recommend against it as a matter of prudent financial management. Thanks for providing those numbers for comparison. If I've missed something in the math I'd appreciate someone correcting me. At least we have a little better perspective on the actual impact of the RAL in actual dollars and in terms of relative APR.

Thanks Gail. I just KNEW someone was going to point out a situation to prove me wrong. Guess I'll have to modify my last sentence to say "I don't know of any way that could happen if the forms are all properly prepared."

Can't remember how I did it since I'm not at the computer, but it's possible. I only changed one word - I think I changed "Federal" to "Income Tax". Alignment should stay the same, but if not then I'm thinking there is a "Center" icon at the top of the screen.

This is from memory as I'm not at the office. Without a return open, go to "Modify Masters", then open the "FederaL Client Letters". Select the cover sheet tab and change the wording. Then "Save Masters", then "Close Masters" tab This will only chamge the Master for any return which does't have the "Federal Client Letter" open already. I find that after making changes of this type, I have to delete the Federal Client Letter for any client for whom it's already open, then add it. After donig this, the changes to the master will show up.

Now I'll take exception to something. I have never seen a situation in which the sum of the various boxes on the W-2's did not equal the sum of the entries for the corresponding lines on the 941. I don't know of any way that could happen.

Their withholding was reduced during the year in an effort to approximate the amount of the credit. Claiming the credit on the return reduces the tax liablity in order to net out the reduced withholding. It isn't a matter of getting something twice - claiming the credit on the return is a matter of netting everything out to zero in order to avoid an underwithholding situation. No different than adding an exemption in order to reduce one's withholding if a child is born during the year in anticipation of getting an additional credit on the return at year-end.

I don't think this was the issue in Michael's original question. It was a given that the info goes on the W-2; his question was whether the 4th quarter 941 should also include the adjustment on Line 2. Seems like a reasonable question to me.

I always add it to the Wages entry on the 4th quarter 941 (but not to SocSec/Med wages), because I want the sum of all lines of all 4 of the 941's to agree with the sum of all boxes of the W-2's. If the SocSec/Med entries don't agree with the W-2's there will be a lot of correspondence coming, usually about 2 years down the road. This is a matching that goes on between SSA & IRS and is primarily concerned with SocSec/Medicare Wages. So I don't know if the "Gross Wages" entries are also matched, but I assume that it's posisble that a mismatch there could also generate an inquiry.

You should convince ATX thay they need to give you an installation code for the 2008 software. I'd argue that the 2008 CD isn't doing me any good unless they provide the code, so what was the point in sending it to me?

Off to a fast start here as well. I completed my first return on 1/6/10 - an accounting client who had all his deduction info together, so when I prepared W-2's for his company I just ran his 1040 at the same time. He signed and mailed it in the next day. Now we're interested in seeing how long it takes for his direct deposit to show up in his checking account

That's interesting, because I was under the impression that the fees were much higher (don't know why I thought that). I dropped in on a local preparer last week to ask about his fees. I have one or two every year whom I just send to JH or HRB, but I thought it might be better to give them a name if I felt comfortable with the preparer. This is a small local chain with about 6 storefronts. He offered me a $50 kickback, and when I told him I really wasn't working that angle he said he'd discount the prep fee for the client in the first year. He gave me a few of his business cards and said to write my name on the back of the card & have the client give it to him for the discount. His basic fees seemed to be about in line with what I charge, so that was OK. I then asked him about RAL's and he said he tries to discourage them but the extra cost is usually around $120 - $150. Based on my previous (erroneous) assumptions, I thought maybe he was low-balling me, so I'm pleased to know he was probably being straight with me on that matter as well.

Just out of my personal curiosity and without intending to make any value judgment, what would the RAL cost on average in each of the following situations?: 1) $ 500 refund 2) $1,000 refund 3) $2,000 refund 4) $4,000 refund I'm thinking of additional cost over and above a regular return preparation & filing, unless there are some RAL-related charges embedded in the basic fee.

Tom: I think jainen's reply was intended to directly address the penalty issue. Repayment of the advances or taking a tax deduction was secondary. If a rationale can be advanced that the S-corp election was invalid or terminated due to there being a second class of stock, then it files as a C corp. No income means no penalty for the C corp, and there's no S-corp FTF penalty to worry about or to request a waiver for. It's an interesting concept.

I don't envy you when it comes time to look something up. Welcome back.

Your client could probably qualify the corp in CO as a foreign corporation, but that would mean continuing to file in WA as well since that is the state of domestication. Depending upon Franchise Taxes & other fees, plus your charges for tax prep, that might not be a good idea from the client's point of view in the long run. If they really don't intend to return to WA, then it might be best to incorporate in CO under the same or a similar name, which would involve obtaining new ID numbers, etc because it is a new entity. This would probably also involve dissolving the corp in WA to stop the requirement to pay Franchise taxes and annual fees going forward. However, there may be a host of other issues unrelated to taxes which need to be worked out, so I'd have the client consult a CO attorney to get the legal angles worked through.

It's all right there in front of us, but at any given time any one of us may need help knowing where to look. Sure has happened to me from time to time. Another of the many reasons I really like this Forum.

That selection isn't made in the "Preferences" screen. You make that choice in the "Preparer Manager" because it may differ from one preparer to another when there are multiple preparers in the firm. In the "Preparer Manager", under the "Preparers" tab, look for the "Print Signature" check/uncheck box located between "PTIN" and "CAF".

This is useful information the parents need to keep on hand. The child will appreciate their foresight when he files his 2075 income tax return. Based on current events, the additional standard deduction by then will probably be $10,000 due to inflation and the average tax rate will be around 70% due to government spending policies at the time he was born.

The last time my computer started acting wierd and the keyboard wasn't responding properly, I spent over an hour troubleshooting until I discovered that the battery in my wireless keyboard had run down. Replacing the battery & re-syncing to the receiver fixed it right up.

My system is slightly different. I print the return and drop it in the mail to the client with their invoice. It's up to the client to sign the return and mail it in to the IRS and state - not my responsibility. If I don't get my check within a couple of weeks or so, I call or email the client and tell them I'm calling to verify that they received the return and mailed it in. (And to ask "where's my check?")

If Susan Estrich keeps writing stuff like this, they're going to kick her out of the Democratic Party. She's beginning to sound like a hysterical right-wingnut paranoid conservative. (That's what you get called when you start making some sense) http://www.creators.com/opinion/susan-estrich.html?columnsName=ses

Look in the lower-left area of the screen after the last post. Just under "Search Topic" you'll see "Share this topic:" One of the options is "Print". That will condense the topic and replies into a neat screen that you can print by selecting "File" and "Print" from the top of the screen. (There may be other, easier ways, but that's what I would do)