JohnH

What you're seeing is the same mindset I saw when I took my car to the dealer for an oil change and they tacked on a 49 cent "document fee". That is, they charged me a half-dollar to print my invoice. The 49 cents wont' break me, and the 490 dollars the dealer makes for printing 1,000 invoices each month won't make him rich. But he fails to understand (or doesn't care) that he loses $4,900 in goodwill every time a customer notices this nonsense.

It works just like your alumni association or you public TV fundraiser. The more you give, the bigger your title. Keep donating money, and eventually you'll be an "advanced member".

I used to have problems remembering things such as names, dates, appoinments. But after I took a Dave Carnegie course I have a mind like a steel trap - never forget anything.

Wonder what would happen to this question if it were posted on their Forum? Any bets on how long it would take them to remove it?

Well, remember I was more focused on the disinfecting aspect than on the actual info on the 1099. Gotta keep your priorities right in a situation like this.

Soak the 1099 in a Clorox solution. Don't know if it will be any easier to read, but at least it's disinfected.

A picture is worth...

Personally I don't really care what one person or another says, as I find it easy to just skip over posts that don't interest me or that I find not to my taste or liking. But rather than jump into a name-calling contest or speculate about someone else's motives, just keep in mind that it's possible to filter out posts form anyone who offends you. It's an option under "My Controls". Adiditonally, I'd again like to thank Eric for the excellent job he has done and continues to do in setting up this Forum and keeping it operating. I made another contribution last week and hope others will continue to be mindful of the fact that it costs money to keep this thing going. It's a genuine lifeline, and it's unique because no coroprate nitwit can pull the plug on it at the 11th hour. That has value far beyond the little bit of money I've contributed.

I predict I will finally perfect my Continuing Ed seminar that I've been working on for years. It's called "Client Mind Reading for Tax Professionals", and think it's just about ready for production & sale. It's guaranteed to increase your earnings in the future, as it will enable you to extract the essential info from the brains of those pesky clients who either can't or don't want to give you all the details. I say it will help all of "you" because I'll be retiring on the royalties earned from the seminars.

Booger: You can HAVE any clients who won't settle for the extension under these circumstances, as far as I'm concerned. I don't want their business.

The problem with points is that they are not always called "points" because lenders & brokers are very creative. They have many names, but they share a common purpose - they are charges assessed as a percentage of the loan in oder to obtain the loan. That's the main hurdle to overcome. There are a half-dozen or so other things to check off, including whether they are a common business practice in the local area, they are not excessive, they are clearly shown on the settlement statement, etc. They are usually found in the "800" section on page 2 of the standard HUD-1 settlement statement (but not all charges in this section are points). On a refi, they may appear on the front of a single page rather than on a standard HUD-1 form. Sometimes it takes a little study of the documents, but in the end the client comes out way ahead even after paying for your time. My practice is to always insist on seeing the HUD-1 or closing statement on any new home purchase or refi in order to determine for myself whether the client has any sort of deduction. I don't rely on the 1098 to provide this info.

Speaking of humor, my favorite response when someone gets uncomfortable about the extension is simply "You dont' want me preparing your tax return under deadline pressure". (But actually I'm only half-joking when I say it).

We criticize the clients for not planning ahead, but then I think many tax preparers also fail to plan ahead. Let me suggest something for next tax season that will considerably lower your stress level. Pick a date in March and tell everyone who comes in after that date that you'll be filing a "precautionary" extension. Explain to them that by doing this, we can take Apr 15 off the table as an important date. If you get the return finished before Apr 15 then that's fine, but if not they don't need to stress out about the date because you certainly aren't going to do so. I usually use Mar 20, but this year I moved the date to March 12 because of the extra attention the stimulus payments would cause. Following this practice gives you maximum flexibility in early to mid April when you need it most, and once you've done it a season or two, it gets easier and easier. Setting this expectation with the clients also enables you to better control your work flow and actually respond to situations which need special attention before Apr 15 without being distracted by the low-risk stuff.

I had this conversation with a client last week. He was asking whether he should sign a 4506 in conjunction with a refi, and I made the mistake of asking the loan details. He's paying over $5K in total expenses to refi a $180K loan, with about $3K being points. All for a 1/2% drop in the rate. I told him he's signing up for a 5-year payback on the refi, even allowing for the tax effects. When he didn't understand this, I explained how he needs to divide the actual interest savings into the transaction costs to approximate his payback period, and he said "Oh, I don't have any transaction costs - they're just adding the fees to the loan balance." And he's an educated guy & an otherwise good businessman.

You asked for it, so here is some relevant info in case you can't access the site. However, I suspect that if this affects you then you're already aware of the problems. High volume April 14-15 is generating "server errors" 04/14/2008 We are experiencing very high efile volume today, 14th, and expect that to continue tomorrow too of course. We are seeing more "server errors" today than usual, and there is no action needed. Simply keep trying to send your efiles. This high efile volume translates into higher call volume to the CS Dept and our wait times are much longer than usual. We have added staff, increased hours, shortened lunches, and extended our closing time to 11pm tonight.

In terms of current benefit, the unamortized points from a prior refi yield a much larger deduction than the current-year amortization on a new refi. I think it's one of the most commonly-missed deductions by the chains and it is almost always lost when a client moves from one preparer to another, unless the new preparer asks about it. However, there is a little trap when the borrower uses the same lender. If the refi is with the same lender, the unamortized points cannot be deducted in full - they must be folded into the points on the new refi. Almost everybody has unamortized points when they refi or sell a home, unless they never did a refi the entire time they owned it, or else if they did a refi during the ownership period but didn't pay any fees based on the loan amount. (points, origination fee, yield spread premium, loan discount, etc). The broker industry has come up with lots of interesting names over the years to confuse the borrower, but if they're based on the loan balance they probably qualify as points.

You might also want to check to see if there was a prior refi on the home. If so, the unamortized points from that refi (if any) can be deducted in 2007.

This would all be true if the rebate were actually about stimulating the economy. The rebate is about buying votes for both political parties in this election year - any positive economic effect is simply a nice side benefit insofar as the politicians are concerned.

So how is everybody doing at this point? It's 4:00 EST on Apr 14 and I all my completed returns are out. I've already filed 36 extensions and will be completing 6 more extensions (plus my own) by tomorrow AM. Hopefully it will all be done by noon and I'll spend a couple of hours back-checking to be sure all the extensions were handled properly, then out for dinner with my wife. I sure do like Form 4868. Hope things are going smoothly for everyone else. (Can't believe I misspelled "Extension" and now can't figure out how to edit the topic title)

I doubt you'll hear anything about the unsigned returns. I think the penalty is for anyone who blatantly disregards the rules. If there was any correspondence about it, I'll bet an explanatory letter would make the penalty go away. As for your client who doesn't like paying tax on her gains, I'd tell her that unless she paid me for a pro forma return, anything I said to her just falls into the category of "conversation". If she wasn't willing to pay for some work to determine the actual liability, she needs to accept the consequences of her misunderstanding (or yours, as the case may be). She's just mad because she wants to keep the money and not pay it to the government - remind her that her problem with the the politicians who make the tax laws, not you. You might also want to remind her to keep this in mind when she votes in November - I've found that to be an especially helpful reply to people who owe in this election year.

I'll be he hasn't told you abou ihis side job or unreported income yet. He will spring that on you at the last minute. Then you will have to undo everything you did up to that point.

Only if you want the form to be accepted.

I've been able to get onto it with no problem because I keep the sign-on info & password stuck to my monitor on a sticky note, but don't recall seeing anything of importance on it all season.

So why don't you just do her return for free and see what happens? Maybe infinity works both ways...

Margaret: Stay out of that rum until next Tuesday night!