artp

Has anyone had experience with this ? I have read some reviews for these cloud based applications, but the track records appear thin. Their main pitch is that the business owner can track his income and expenses without resorting to a traditional accounting software package (QuickBooks, ect.). I would be interested in your comments. Thanks

Pacun, Thanks for the reply. I was looking at this completely wrong. Art

Taxpayer is a retired state employee currently receiving pension payments under IL govt pension program (not a 457b plan). Is there any way that he would not be considered an active participant in a qualified plan for purposes of making a deductible IRA contribution based on a part-time job as a office clerk ? Modified AGI MFJ>$110,000. My reading of TTB 13-10 says no. Anyone of a different opinion ?

Thanks for all of the replies.

The caregivers (individuals) were paid directly from the mother's checking account which the children control. The payments from the insurance company are based on the claim forms that the children file with the insurance company which show the names of the providers, address,ect and the hours they worked and the amount they are paid. The payments from the insurance company and payments to the providers will be reported on the 8853. I think that part is OK. My concern is any filing requirements and possible payroll tax issues (for the children or the mother) with respect to the amounts that are paid to the caregivers. My only experience has been where the insured is getting care at a nurshing home or assisted living facility and the payments have gone directly to the facility providing the care or the insured receives the payments from the insurance company and uses those funds to pay qualified expenses billed to the insured from the care facility.

Client’s elderly mother who still resides in her home has a chronic illness which requires 24-hr care year- round. She has a qualified LTC contract and received a 1009-LTC for $ 54,092 in 2011. The client and his sister are the appointed guardians for the mother and manage her financials affairs. The children have several individual caregivers (not related) who provide the care. The children fill out the paper work for the monthly claims to the insurance provider. The LTC checks are made payable to the mother; they do not go directly to the caregivers. The children then write checks to the caregivers from the mother’s checking account to pay them for their services. The total amount paid out to the caregivers was $ 68,024 in 2011. This arrangement has been on-going since 2009. The insurance coverage will run out in April 2012. Question: Are the caregivers considered employees of the children and would the payments to them be considered taxable wages? Are the children (or the mother) liable for FICA tax and Fed/State W/H? No 1099s or W-2s have been issued for any years. The children say no based on the following statement from the insurance company: ”Your long-term care insurance contract provides only for reimbursement of qualified long-term care expenses. All benefits paid to reimburse you for such expenses are non-taxable, whether paid to you or to a care provider on your behalf” I am very concerned about the situation both for me as preparer and for the mother and children. I was under the impression that the mother was receiving care in an assisted living facility. I was unaware of the arrangement as outlined above until he dropped off the tax information for himself and his mother last night. Art

Client purchased new home for $120,000 in Feb 2009. He elected to claim the $ 7000 credit on his 2008 return (original). In 2010 he reported the first year pay back amount. Now he wants to go back and amend 2008 to remove the original credit of $ 7000 and amend 2009 to claim the higher credit $8000 and amend 2010 to get back the amount he paid back based on the 2008 return. As far as I can tell the original election to claim the credit in 2008 should be able to be revocked, but I can not find anything positive to support this. Looked back through the many posts on FTHBC but did not find anything on point. Has anyone done this ? Appreciate your input. If this is allowable, would it be advisable to file all of the amended returns together in a single mailing asking the IRS to offset the additional tax owed on the amended 2008 with the credit for the amended 2009 ?

Terry D, Could you post how you got this to work ? Appreciate the tip.

Husband & wife have jointly owned real property (home and farm land) in which they are retaining a life estate and gifting the remainder interest to son and daughter. Wife also had 50% interest in separate farm land with her son. She will also retain a life estate and gift remainder interest in that property to her son and daughter. In additon husband and wife made cash gifts to both children totaling $70,000. All of these gifts were made in April 2011. Question: How do you report the gifts ? Normally for jointly held property (husdand & wife) they would elect to split the cash gifts to maximize the use of the annual exclusion. Since we have both cash gifts and gifts of future interest, do you file a split gift return(s) for the cash and the joinlty held real estate--that is a single client input that will split the gifts and create a gift tax return for each spouse, but filed together- and then a second separate return for the wife only gifting her 50% interest in the separately held property to her son and daughter ? I do not know of a way do file everthing under one client input so I assume this is how you need to do it? I have not filed returns for this kind of situation before so I appreicate your input.

I have had the same issue with IL. For some reason TRX is having a problem with Mef so for now the fix is to opt out...really slows done the ack time. Art

Mike, I have been waiting for a reply on this same issue..nothing to date. Now it sounds like it would be a waste of time. I had a direct contact at Red Gear last year who hooked me up on a filing program from Taxworks, but that contact is not there..so I guess it is time to punt and find a stand alone program to take care of the W-2s and 1099s. Art

The amounts I listed were the taxable amounts. Art

Elderly clients intended to exchange annuity contracts with Company A to Company B. They mistakenly had Company A send them a check which they cashed ($ 20,000) in March 2009 and then invested in the new annuity with Company B ($20,000 + additional cash =$ 25,000 total) also in March 2009 per discussion with their “financial advisor”. Company A issued 1099-R code 7. Clients said they never received the 1099-R and were unaware that they had a taxable event when the annuity was cashed. Nothing was reported on their 2009 return. IRS issued CP2000 in June 2010 for the taxes on 1099-R. Has anyone been successful in getting the IRS to grant 1035 treatment in a case like this? Advice on how to proceed ? Thanks, Art

ALERT CLARIFICATION The $ 229 price for the regular $ 699 package is only good through tomorrow per Morgan at TRX. Art

I did successfully down load the TaxExact Premium demo. I intend to test it out this summer as time permits. I was offered the special renewal price of $ 299 for the full package TRX Pro (reg $ 699). I was told by TRX rep that if I renewed by 05/31 I would have until Dec to make a final decision if I wanted to stay with the TRX package or go with the TaxEaxct Premium package. They will be offering on line training during the summer. I agree with Mike. I generally had only a few issues with the software this year--support was OK, but nothing to write home about. I too would like not to learn a new software, but these days we need to be flexible. Art

Anyone else getting e-mail meassages from TRX on this new product for next year ? I think it is their own in-house tax software ? Message makes it sound like I was requesting this. They had link to download a trial version. Never happend on my end. I wonder if they will be offering the $ 299 special deal on this too. Pushing for renwals in May. Art

Client age 23 graduated from college in June 2010 and accepted an elementary teaching position in China starting in Sept 2010 thru June 2011 as part on an international educational program. Her visa will expire in June 2011 so it appears she would not qualify for physical presence exclusion unless her employment contract is renewed. She did not receive a W-2 form. The only document she has received just lists the Chinese taxes deducted from her pay. This was written in Chinese and she had a TA translate it into English. Her gross income from teaching in 2010 is $ 5300 US$. There was $215 deducted for Chinese taxes. How does she report the income on her 1040? Wages line 7 with no W-2? Schedule C? Subject SE Tax? Can I e-file this return or paper only? The language in her employment contract with the Chinese school would (under US rules) seen to make her an employee since they control all aspects of her work, but I am not certain that this is controlling for a US citizen working abroad. I have not prepared a return like this before so I would really appreciate some guidance here from anyone who has experience with US citizens working abroad. Art

Jainen, Thanks for the quick reply. I was hoping we might find another solution. Client will have a 5K refund coming on this year's return and might be able to find a way to finance the rest. Art

Client (company manager) was injured in auto accident (company auto) in July 2010 which resulted in substantial time off due to his injuries. The other driver was at fault and is paying claim damages. He tried to perform what functions he could, but was unable to work and was placed on worker’s comp. His medical bills have been covered so far by the other driver’s insurance company and his medical policy with his employer. In Aug he borrowed money (40K)from his 401-K at the company to cover living expenses. He requested that his employer allow him to make payments on the loan while he was on workers comp (his wife has a job), but they refused. When he was released to go back to work in Dec 2010, his company terminated him immediately, claiming loss of business during the current economic downturn. He has only recently been able to find employment, Meanwhile, the administrator for the 401-K plan sent a letter in March 2011 threatening to treat the loan as delinquent which according to them would mean that it would be a deemed early distribution and be subject to 10% penalty since he does not meet any of the exceptions. So far he has not officially been notified that the loan is indeed in default. 1. Is this the correct treatment for a “defaulted” 401-k loan? 2. Can the company refuse to allow repayments on 401-K loans when an employee is on worker’s comp and is not receiving a pay check from the company? I suggested that my client contact the plan administrator to see if some payment arrangement could still be worked out to avoid a taxable distribution and the accompanying penalty. He is also pursuing legal action against his former employer. Has anyone come across a situation like this in their practice ? Any suggestions would be welcome. Thanks, Art

Don, Thanks for reply. I will give it a try. Art

How do I get the DCN for an e-filed return processed thru TRX ? The Federal E-file confirmantion has a Submission ID #, but that does fit the DCN input for Form 8453 which I need to file to transmitt a Form 4852. I tried several times to get an answer from TRx, but they could not assist me. Has anyone done this with TRX ? Your assistance is appreciated. Art

Thanks again for your help. Winding down to the 30 returns, hopefully. Art

Thanks Mike, I missed it. BTY I assume you can still e-file if you use this form. Does it slow down the refund process ?

Client has been unable to get W-2 from employer. We have final 2010 wage and w/h info. Instructions say to enter on W-2 input and also complete Form 4852. Do not see this available in TRX package-not on forms list. Help

So if in my original example there was an annuity within the insurance contract with the same amounts as state from the insurance company there would be a deductible loss ? Art