JohnH

Here's the payment schedule for the Economic Stimulus Rebate Payments, along with a link to an official rebate calculator. Probably need to bookmark this for emailing to clients who inquire... http://www.irs.gov/newsroom/article/0,,id=180247,00.html

So what's the first thing that comes to mind when she starts licking your face?

Thanks again to both of you. I studied the web site a little more and reviewed the return when it printed. Armed with the reassurance you gave me I realized that there's not much to do here - just go with the gross and be sure the number of exemptions & property tax adjustment is right. At least the calculation is simple.

Maybe the church should run a clarification in the next bulletin giving the names & phone numbers of all preparers who wish to have their names listed as being willing to prepare the stimulus return for free. I'm betting the person who approved it just thought they were doing the seniors a favor and didn't pick up on the negative push-back it could create. After all, anything that would help the seniors and cost them nothing woiuld seem like a good thing on the surface. It was a terrible decision to run it in the first place, especially as worded, but since they can't unring the bell the church administration should try to set things right.

Bob: Exactly what I needed to know. I did look at the NJ Div of Taxation web site after posting the question and had more or less come to the conclusion that NJ doesn't exempt pre-tax medical and other such benefits. The "auto" property tax is assessed in most of the states I handle - it's an annual property tax on the value of automobiles, boats, motorcycles, etc and is deductible in the same manner as property tax on real property. ( Bad choice of wording on my original post - I should have said "Personal Property Tax") Your response to both questions reassured me that I'm not missing anything on the return. Thanks for the reply.

I have a client who transferred to New Jersey last year and I have a couple of questions if any NJ preparers can help me. 1) I notice a difference of over $5K between the Fed wages and the NJ wages on the W-2. Apparently there are some items which are excludable from Fed income but not from NJ income. Can anyone name a couple of major items? I'm just curious about this and don't have a year-end check stub to work from. 2) The client tells me they don't pay auto property tax in NJ. Is that correct, or is auto property tax embedded in some other tax they pay, and can it be identified for deduction on the Fed return? Thanks

First of all, get an extension filed by Monday on each of the S-corps to save him the new $85 per month per shareholder penalty for a late-filed 1120S. Prepare a Schedule D for his personal return to report the purchase & sale of the lots (unless a lot sold on 12/27-12/31). Record the net proceeds as a contribution to capital for each S-corp (assuming he deposited some or all of the proceeds into the S-corp checking accounts). Charge your normal rate for his personal return with the appropriate upcharge for the Schedule D's. Charge him your minimum of $600 each for two S-corp returns for the period 12/27-12/31. Maybe discount it 10% since there is little or no activity. Ask him if he has any questions.

This thread is turning into a nice Geography lesson. I like it.

I'm wondering what they will do if they start up a new board and someone posts a link to this one on it. I'd think that insofar as possible they would want to limit the number of users who know there is a self-supporting Community, populated by experienced users, and not subject to the whims of management concerning what can and cannot be said. Of course, by removing such a post they would be reinforcing how important this Community is becoming. They may finally come to the correct conclusion that by initially showing such callous disregard for their customers they shot themselves in the foot.

Now that I think about it, this should have been obvious to me - IT'S ALL GEORGE BUSH'S FAULT. There's clearly no other explanation. I'll bet he dispatched Karl Rove to set up the poor old governor. Since Rove's not in the White House he can carry out all sorts of undercover mischief. Gotta keep that vast right-wing conspiracy machine in good working order.

I've spent most of the day finalizing corporation extensions.

Oh, I see. You don't have to deal with an occasional client's bringing in an IRS letter about not signing, but you do have to deal with each and every clients' signing the paperwork that you have to keep track of on an ongoing basis, rather than holding the IRS responsible for all that detail. Plus you have to keep up with their original W-2 forms as well. Now I understand.

You mean nobody has to sign anything when a return is filed electronically? That's news to me.

I had a couple of similar conversations over the weekend. In both cases I explained to them that the issue is not who gets the rebate, but who provides the support. If sonny boy doesn't provide over half his support, then it doesn't matter that he's over 17 and nobody gets the rebate, even though he COULD have gotten a rebate if he had earnings and filed a return claiming himself as a dependent. That's just how the tax law works. If it's a close call, then by all means the issue should be settled in favor of the child if their contribution totheir own support is close to 1/2. However, in most cases it's nowhere near a close call, especially if the child is a college student just working to earn enough money to hit the bars on the weekends. And I think you're right about the letter. It will probably be well-written, but most clients won't understand it and will call us for an explanation. Those who do understand it will call us "just to be sure they got it right." I think the most difficult calls will be from those who don't qualify for a rebate at all, even though their neighbor got one and their hairstylist assured them that everybody gets at least $300...

I just enter the basic info the client has given me in order to prepare the estimate, open the 4868, enter the amount being paid if any, and click the "Page Print" while the form is displayed. I've never bothered with trying to batch print extensions, but as I'm typing this I realize you probably efile them and none of what I do would matter to you anyhow.

I do the same thing, but I only change the month. I figure that in the future I may not need to worry about the year.

Glad to be of service. I gain so much from this forum, it's nice to be able to give a little something back.

Look up the rules under the "Bailey Settlement". I can't remember the specifics, but the NCDR wbe site gives a pretty thorough explanation you can print out & give to the client. http://www.dornc.com/taxes/individual/benefits.html

Yes, and no. The estimate on Line 4 of the 4868 is supposed to be accurate, and in theory the IRS can retroactively invalidate the extension if this figure is grossly wrong. In over 30 years, I've only seen this happen one time (an extension not prepared by me), and in that case the guy showed no tax due when in fact he had about $6K due. So line 4 is required to be accurate - enter an intentional understatement on that line and you can have a problem. However, failure to pay the estimated amount due on lin 6 (or underpayment of that amount) will NOT invalidate the extension. Otherwise there would be no reason for the 4868 to have a line 7 (Amount you are paying). Line 7 Instructions make this very clear >>If you find you cannot pay the amount shown on line 6, you can still get the extension. But you should pay as much as you can to limit the amount of interest you will owe. Also, you may be charged the late payment penalty on the unpaid tax from the regular due date of your return. <<< Incidentally the FTP penalty is .5%, plus interest currently at 8% APR. Since neither interest nor penalty is deductible, they are really both the same, so the total cost is roughly 14-15% APR, or about 1.25% per month. This is why I marvel at how IRS works their smoke & mirrors on the extension rules. They allow the filing of a valid extension without full payment, but word their pronouncements in such a way that people are unsure about what they can and cannot actually do while still being in compliance. I believe they allow the filing of an extension without payment because they have a strategic purpose. If the person owes and has no means of paying, then there's a tendency to just not file. IRS doens't know anything about their situation and may spin its wheels trying to scout out the non-filers who owe significant money because they are buried among the non-filers who owe little or nothing. But if the taxpayer can file an honest extension with a partial payment or no payment, thereby completely avoiding the 5% FTF penalty ( a strong incentive), then they are now in the system and the IRS has a means of tracking them. Smart IRS tactics IMO, but tax preparers shouldn't allow IRS to buffalo us into not giving our clients the best advice for their individual situations.

Isn't equipment rentall a Schedule C item (rather than Schedule E)? Still seems to be the accountable plan solves all the problems.

I wonder hy the accountant issued the 1099. Seems to me the shareholder should just submit a reimbursement request under an accountable plan and write a check to herself. No further reporting necessary.

Of course the IRS is going to say that. But if the client doesn't have the $ to pay, the statement is meaningless. And of course none of this matters to the client who has the money to pay. As far as the penalties & interest are concerned, they aren't really that bad in the total scheme of things. They will pay about 1.25% per month in combined P&I - higher than second mortgage rates but significantly lower than credit card rates. IRS knows that many taxpayers & tax pros will recoil from the word "penalty" so they use it very effectively.

OK, OK. Death, taxes & lubricants. And that's all I'm going to say about that.

Well, if we aren't talking about death, we're talking about taxes. May as well combine the two & make it interesting.

They're just wanting to be sure the stimuls return slides through the system without any problems.