JohnH

If the individual wants to go the "misclassified employee" route, just be sure to ask how important the job may be to them in the future. If they never want to work there again, don't mind getting fired if they're still there, and if they don't have any family or friends working there whom they might get into trouble, then this route might be worth saving 7-1/2 %.

Prospective client: "Do you charge to answer questions?" Me: "The answer to the first question is free, but there's a charge for the next question and everything after that." Prospective client: "How much do you charge after the first question?" Me: "$120 per hour with a one hour minimum. What's your second question?"

I ALWAYS file an extension, even when no tax appears to be due. If something unexpected pops up later, you have no excuse for not having filed the extension. A piece of paper is pretty good insurance against an ugly surprise. I filed an extension today for someone expecting a refund of over $4K. But if he calls me up a couple of weeks from now and says "I forgot to tell you about that $25K early withdrawal form my IRA", I won't be doing any explaining.

The problem is, you can never document things well enough to stay out of trouble with someone who's looking out for an opportunity to make a quick buck off someone else. You'll spend all your time doing CYA, when that should be billable time on good, decent clients.

Any time someone jumps to the possibility of suing someone else for their own stupidity, I head for the exits. Especially when that stuff comes out early in the conversation. They're just looking for an opportunity to cash in. When their mind works that way, I assume it's just a matter of time before they will be looking for ways try to get me involved as well. People like this are nothing but trouble, and the worst thing you can do is accept money from them for services rendered.

Thanks for all your effort KC. Hope this is a wonderful birthday for you and that you have many more of the same.

Just a gentle reminder - birthdays are an opportune time for presents. Might be a good opportunity to click on that "Donate" button if it's been a while since the last time.

They are intentionally confusing. Too much easily-readable information is bad for business.

Do you think it's possible that every now & then a client actually knows the bad news and they are just playing mind games with us for the fun of it?

I don't tell them an extension of time to file is not an extension of time to pay. I tell them it's TECHNICALLY not an extension of time to pay, but as a practical matter it IS an extension of time to pay at a 1-1/4% monthly rate that approximates an APR of about 14%. A rate that's more than the cost of a HELOC, but less than most standard credit card rates. And no matter what happens, it won't ding your credit. For some people, that's an acceptable compromise, especially if they just don't have the money right now. But my most common reply right now is "I know you don't want an extension, but the only way your return is getting filed before Apr 15 is if you take it to HRB, JH, or Liberty. Do you want your stuff back?"

Or they can just skip the 2009 distribution if they wish and not have to worry about 2 taxable distributions this year.

Did the financial advisor make any suggestion about how much tax she should be paying? After it, her tax liabilty is a finite number and if he thinks it's too high, then he should be able to provide another finite number for an amount that won't be "too much". Ask her to get him to write that number down and you'll look over it.

Plus, they could still sell the truck and have the money to pay the taxes, plus maybe enough left over to buy a cheaper truck - one that they could afford to own.

I understand your reasons for wanting to break the news in person, but I'm just the opposite. I call them on the phone or send an email, accompanied with the message that I realize this may be a shock to them but I want them to have the info as soon as possible so they can begin to prepare for it right away. I then offer to give them all the details when we meet. If the circumstances warrant it, I usually try to make the point that they had the use of the money during the year, and that whatever they spent it on would not be in their possession now if they had paid the taxes when due. I also point out to them that they might be able to sell the boat, motorcycle, car, house, etc that they bought with their tax money, and that would make them better able to pay the taxes. When appropriate, that usually focuses their attention where it should be, because people will go to any lengths to avoid giving up their toys.

Are you sure the expense paid by the employer to the moving company is grossed up on the W-2? That would be highly unusual, especially since these relocation companies promote their services partly on the basis that they know how to handle these things from a tax standpoint. I've never seen a statement from this particular company, but I have seen a few that were a little hard to read. And I believe the only reason the moving expense would be grossed up would be in a case where the moving expense didn't qualify as being tax deductible in the first place.

Excellent suggestion, and good timing as well. I just sent another donation as well.

American royalty also has servants to dres them and do their hair. If you don't believe that, just ask any of the Kennedys.

I was researching a question for a client who serves in the military today and I ran across a blog where someone is speculating on what should be deductible. Thought I'd share them on this forum - maybe you'll get a chuckle. (with thanks to Jeff Bacon and his "Broadside Blog") Love handles. Today’s military is computer intensive, and those things grow like breakfast biscuits from sitting in front of the screen every day. I don’t know about you, but if this were a deduction, I’d always get money back. Emails. In the paperless Navy, it’s not uncommon to receive a hundred emails a day, and unlike civilian email, you can’t hit a SPAM button on military stuff. We should be able to claim a loss of productivity, with a bonus deduction for time spent shuffling paper that never went away. Acronyms. Time saved by using acronyms and initials instead of actual words should be deductible. All that extra productivity should be acknowledged ASAP. Home office. You can claim a certain percentage of your mortgage as a business deduction if you work out of the home. What if your home is a ship? We live and work on the ship, and we pay for the ship with our taxes. A carrier costs something like $6 billion. You do the math.

Are there short-term gains in the mix?

I've tried Drake and I agree it's a very good package. I prefer the ATX for its forms entry, intuitive functioning, and price right now. But if ATX ever make changes in any of those areas that I can't live with, I'll definitely switch to Drake. As a matter of fact, I'll probably use Drake on some of my extension returns this year just to stay familiar with its layout. Doing that falls under the general concept of "keeping your powder dry".

joelgilb make a great point about not quitting Oct 14. I work year-round as well, but my answer related to when I quit preparing personal returns. And then I remembered that last year that wasn't even true. A couple of my hard-core procrastinators didn't get their info to me until Nov. And of course there's all that odd-ball stuff that you put off until the end of tax season that gets crammed into Nov - Dec.

My understanding is that the broker summary is acceptable IF it follows the same format as the schedule D. That's a key distinction, but it's right there in the instructions. This year, for the first time, I've seen a couple of broker summaries which do meet this test. Most don't, which I think is by design since they don't really want the client to know very much about their performance - an informed, knowledgeable client isn't particularly good for business. I don't see how IRS can reject a broker summary if it meets their own requirements. Has anyone on this forum ever filed a return attaching a compliant broker summary and had the return rejected?

I'd like to have at least one more level to check off in the opening view. One level would be "Show All". The next level would be "Show Incomplete". The third level would be "Show Active". This set of choices would enable you to hide the returns which have an extension completed & mailed and display only those which still need attention in the "Active" screen. Ultra Tax gave you multiple options of this type which were user-controleld and I used it regularly to manipulate about 6 types of classsification. It helps to keep the "Active" screen truly accurate. I intend to send in a suggestion about this at the end of tax season, along with a suggestion that they create a lookup table for non-cash contribution entities similar to the "Payer Manager". This would greatly streamline the prep of the 8283.

I quit around Oct 14. Between now and Apr 15 I won't complete a large number of returns - mainly I just prepare extensions and complete some of the simpler returns when I have time. I consider it a well-organized tax season when I spend Apr 14 -15 reviewing extensions and making sure I didn't miss anything. And of course if a last-minute emergency comes up I can give it the amount of time needed to get a reliable extension prepared for him. The biggest treat is taking my wife out to dinner the evening of Apr 15 when everybody assumes I'm slaving away at the office. Unless you close your office after Apr 15, I believe procrastinators can be a good source of income. You just have to control the process and not let the clients dictate your agenda or work schedule.

That is unusual. The Methodist Church (for example) enters nothing in Box 2 of the 1099-R and marks the "Taxable Amount Undetermined", because they simply pass an annual resolution declaring all income received by retired Methodist Ministers to be a housing & utilities allowance. The retired minister then does the calculations, attaches a statement to the return stating how much was excluded, and pulls the remainder back into income on Line 16b. That seems to be a reasonable way to handle the matter. But it Box 2 is filled in, then you may have a problem. I'll bump this back up - maybe Mike Malody will jump in and suggest whether you should go for a reissued 1099-R or simply rely on an explanatory attachment.