JohnH

The key is whether the retiree was vested before Aug 12, 1989. If so, then the entire pension is excludable. They are considered vested if they had 5 or mer years of creditable service prior to Aug 12, 1989, so that means creditable service must have begun before Aug 12, 1984. http://www.dor.state.nc.us/taxes/individual/benefits.html The $4,000 exlcusion applies to State and Federal employees who don't meet the Aug 12, 1989 test under Bailey.

Many trade shows have strict rules about this. As a condition of exhibiting, vendors must agree not to sell their product at the exhibits. They can only hand out literature, showcase their products, and obtain sales leads for later follow-up. They are prohibited from taking orders during the trade show. Sounds like thia was the case at the show you attended.

Without a doubt one of the best April Fools jokes I've been fooled by in a long time. (Good one)

I'd like to pose a question for the computer whizzes on this forum. There's been lots of publicity about the computer virus/worm that may spring up on Apr 1 and nobody really knows how bad it may or may not be. So as a temporary measure, I'm wondering what would happen if I reset my computer calendar to March 30 before I leave tonight (I turn it off each night). Then when I start up on Apr 1, it should think it's March 31 and even if it's infected the computer should still work fine. That would allow a whole day to see how others are being affected before resetting the calendar to the correct day (or maybe doing the same thing again the next day as well, if things are really bad) Good idea, bad idea, silly idea? Any suggestions on this?

Tell them their returns will just have to get in line - you have posts to make on the ATX Forum that won't wait.

How long do you have to respond to the CP-2000? You could always request additional time to respond, stretching it out long enough to be sure they receive their refund for 2008 before sending in a written reply. I don't think I've ever been given less than 30 additional days just by making a phone call, even when the issue was a slam dunk.

I certainly wouldn't want to be trying to sort out a situation like this under deadline pressure, especially since all the facts aren't yet established. This is a prime candidate for an extension, with plenty of warnings to the client that even the best estimate of tax liability could be way off base at this point.

Also be sure the "Pension Plan" box was checked on the W-2 when it was issued.

You all need to know about the secret SSA-1099 exclusion - the form isn't meant to be opened. If you persist in trying to open it you must include the SocSec income on the tax return. Retaining the form unopened entitles them to exclude the SocSec income from Line 20 altogether.

My previous pastor (who always faithfully reported income from Weddings, Funerals, Revivals, etc) used to joke about how people were always asking him what's "average" for these events. He would tell me he wanted to reply "The average is about $40, but hardly anybody ever pays average."

Your client reminds me of a sales manager I was dealing with years ago in my manufacturer's rep business. (This was back before cell phones were as common as they are now) He canceled our representation agreement because I was hard to get in touch with. He almost always had to leave messages when he called - I never seemed to be in the office. I still laugh about his stupidity. If the sales rep isn't in the office, there's a pretty good chance he's OUT CALLING ON CUSTOMERS!.

Maybe that is what was on his mind. But even at Baskin Robbins you need to be ready to order AND PAY when you go in the door. And I don't think number 11 from today will still get you the same place in line if you come back Saturday, no matter how badly you want ice cream...

I had one of those today also. One of my regular procrastinators stops by to let me know he's "getting the info together". So I told him he doesn't need to rush - just get the W-2 forms to me so I can file the extension. He then says "well, with the economy like it is we need to get the refund on the way". I reply that the first step in that process is to get his info to me so I can get started on the return. Next he asks how long it will take to get the return done, to which I reply it's hard to say until I see his info, but I'm making no promises since I've been filing extensions for over a week now. Then he says he really needs the refund. I reply that he could have already had his refund if he'd brought his info to me 3-4 weeks ago. (I'm proud of myself for not saying "HRB can handle it for you a lot faster than I can", but I'll admit the thought crossed my mind). He left promising that he'd work on it, but if things go as usual I won't see him again until around Apr 10 (assuming he comes back at all). But I'm still wondering why he came in today - does he think I work like Baskin Robbins where you pull that little numbered ticket when you go in the door so you can get your place in line?

There's a list of keyboard shortcuts in the program help option under the "Support" heading. The "Ctrl-E" is handy, as well as the Ctrl-B, Ctrl-S and Ctrl-F. I mainly use the shortcuts when preparing a return, as I don't find them useful in the return manager, rollover manager, or preparer manager. Those seem to be easier to navigate with the mouse. One handy use for the control keys is when entering info on an 8283. I wish ATX offered an accessible data base similar to the "Payer Manager" when preparing the 8283, but since they don't it's necessary to formulate a work-around. If the client has a half-dozen Goodwill receipts, I've only come up with one way to shortcut the entry process. I enter the first set of info, then use Ctrl-C to copy the name, then use Ctrl-V to past it in to the corresponding field on the next 5 entries. Then I repeat this process sequentially for the "address", "city" and "zip" fields. Still a little cumbersome, but easier than retyping the info when there are multiple receipts. If anyone has a simpler method, I'd like to hear about it.

You need more information. How did they arrive at $22K? Did the seller just say "Give me $22K" and the buyer wrote a check?" It's difficult to believe there wasn't something in writing. It isn't up to you to allocate the purchas price - that's the client's responsibility.

Great point. I usually press Ctrl-E to bring up the report, and as you said it catches a lot of little details that are eay to overlook.

Yes, there's a separate screen for entering amortizable points. Once you enter the data, you just need to go there each year and enter the number of months paid for each succeeding year. This is a helpful step because it reminds you each year to check for a writedown if there's a subsequent refi or sale.

For what it's worth, I don't send in a 1040X. I go back to the program for the year in question, enter the adjustments, and print a new return. Then I transfer the relevant info to a spreasheet which shows changes in income and/or deducstiond in roughly the same format as the 1040X, attach the spreadsheet and relevant forms or schedules (usually a Schedule D, and maybe a Schedule A or B since the majority of CP-2000's revolve around 1099B, DIV, INT, or W2-G), and send it in to IRS. I generlaly do not reveal to IRS my recalculation of the tax. They have their numbers and I have mine. If theirs are greater than mine, we go another round. If their are equal to or less than mine, we accept the changes. Commendations to Tom for reading all 10 pages of the CP-2000. I didn't know it was possible to read the whole thing without dozing off.

How employess can shoot themselves in the foot reminds me of a situation with a client of mine a few years back. He handed out bonus checks at Christmas time (with all taxes withheld), and one employee erupted "Can't you do anything about these taxes?!" (Not word of thanks or appreciation for what he did get, just criticism over the taxes which were beyond my client's control). My client replied that he would look into it the next time bonuses were paid. A few months later the client handed out bonus checks due to some business goals having been met, but the employee in question didn't get one. He finally got up the nerve to ask and my client told him he wanted to be sure the taxes didn't upset him, so he just didn't pay this guy a bonus. The point having been made, and this client being a nice guy at heart, the employee was later given a bonus check, but I'm pleased to say there haven't been any more complaints about the taxes.

Don't know the answer to your question, but I sure wonder why someone would pay a $2,000 management fee when they can set up a SEP at no cost.

You should be getting an extension. You and your clients are entitled to it. I usually insist on filing extensions for any client who comes in after March 20. Last year I moved it to March 15 because of the stimulus mess, and this year I decided March 10 was a good cutoff date. Glad I did that because I came down with a bad case of bronchitis this week so things are backing up a bit. If you don't use extensions to control your work flow, you are cheating yourself out of valuable sleep & down time. I think it's much better to extend your hours but slow down your pace the last 4 weeks - this gives you valuable time to prioritize and be sure you don't overlook something important. I always tell my clients the last thing they want is an overworked, tired person handling this important task, so I'm not going to do that to them or to me. My recommendation is to file the extensions - and start doing it right now.

Why not tell them "This is what the IRS web site says, but everybody knows you can't depend on the government to keep its promises."

I think the brokerage houses intentionally create confusion. This info isn't usually that difficult to trace, IF every broker provides original cost basis. But they somehow omit that info when it counts the most, unless the client has dealt with them in-house for the entire transaction. It appears that when a client leaves, many brokerage houses like to take a parting shot at them by not providing basis info with the transfer. I also think they tend to bury basis info so the client has much more trouble figuring out their overall gain/loss performance over time. Their statements tend to give reliable info only on a year-to-year basis, not cumulative.

I like the "malicious" expense category - will have to remember that. With some clients, it's the "mysterious" expense category.

I'm relieved to hear that. I was beginning to think my software was "unique" in some manner, and that was not a comforting thought.