Is this really how tax preparers do it, fudge factor? Poll!

[lendaddy]

Are IRA distributions considered "earned income"?

[VaSteve]

Originally posted by lendaddy


Also, if I have a home office which takes up say 12% of my home, can I really deduct 12% of ALL my homes costs? Even mortgage payments? Electric bills, heating, etc....... I just want to be sure I understand this.

Yes, but......

Do you spend any personal time in that office. Say...surfing PP? After hours? Kids play videogames on that computer in your office?

That's a no-no. The IRS is coming down real hard the past few years on the "home office" and they might drop by to take a look. Then again they might not Anyhow, any personal use and you're in a world of hurt. Funny, think of how much personal time you spend at an office you don't own.

Here's another tip...most of those H&R block guys are not CPAs. They have simply been trained by H&R block. Starting guys make $7.5/hour. My wife and I are both CPAs (neither of us practice publicly), she took the class to consider doing it on the side. They have a 10 year non-compete for clients you worked with.

RallyJon is right. The buddy with the fudge percentage, better have the data to back it up. I didn't have a bill for my personal property tax, so I made sure to print out a KBB valuation and stick it in the file should it ever come up.

Skipdup, honest mistakes are OK. I forgot to file a form last year. It took several months to sort it all out. Mostly because they send you a form saying somehting is wrong - not what it is Takes a while, but they took away the interest and all. No biggie. I do my taxes in Tax Cut, because I like the way it organizes stuff. Last year my taxes were fairly complex, I have consolidated a buncha stuff. Simple, no? I still managed to forget to attach the W-2's. Ooops.

Looks like I'll be going around again.

[stevepaa]

http://www.irs.gov/pub/irs-pdf/p17.pdf

IRA distibutions may be taxable, see chapter 18 page 125?
good luck

[stevepaa]

http://story.news.yahoo.com/news?tmpl=story&cid=2358&ncid=2358&e=3&u=/csm/20050413/ts_csm/ataxman_1

IRS is after tax evaders

[onewhippedpuppy]

My wife's boss is on the "agressive" side, never lost an audit though. His favorite question is, "So how much do you want to get back?". Unlike Steve, who is a CPA and has a lot to lose, he is only a PA, so he doesn't have his certification to lose if he gets caught. You can do a lot better than H.R. Block, as Steve said, most of those people don't have any formal education. Regardless, in most cases you WILL get back more by going to an accountant. Oh yeah, supposedly E-File-ing increases your possibility of an audit, that way the computer is able to check the forms and raise red flags, instead of a lazy IRS worker.

[red-beard]

[i]Oh yeah, supposedly E-File-ing increases your possibility of an audit, that way the computer is able to check the forms and raise red flags, instead of a lazy IRS worker. [/B]

Uh, no. The forms are scanned into the computers by the lazy workers, and if they are not read well, you're much more likely to get an audit.

I like my Tax program, I've been using the same company for 16 years.

Oh, and the IRS will find missing form 1099's...ask me why...

And the programs are not infallible. In 2001, the program said I didn't have to file any forms to do with my house sale, since the amount I made was way under the exclusion. Nope. I had to work with an IRS agent to fill out the right form. In the end...I was able to turn it into a Capital Loss and get another check! She was actually a very nice and helpful person.

[stevepaa]

Back to Bryan.

I think he is under 24, a full time student living at home.

"Qualifying Child of Another Person
You are a qualifying child of another person (your parent, guardian, foster parent, etc.) if all of the following statements are true.

You are that person's son, daughter, adopted child, stepchild, grandchild, or eligible foster child. Or, you are that person's brother, sister, stepbrother, or stepsister (or the child or grandchild of that person's brother, sister, stepbrother, or stepsister) and that person cares for you as his or her own child.

At the end of the year you were under age 19, or under age 24 and a full-time student, or any age if you were permanently and totally disabled at any time during the year.

You lived with that person in the United States for more than half of the year."

I think he is a qualifying child for his parents.

But maybe I'm wrong. Then I looked at his siblings as qualifying for him.
"To be your qualifying child, a child must be your: (skipped some other criteria)

Brother, sister, stepbrother, stepsister, or a descendant (for example, your niece or nephew) of any of them whom you cared for as you would your own child."

To care for one as one's own child would mean to provide shelter, food, etc,- basically that child is your dependent.

I think this is a stretch.

I'd take a second look at that , Bryan.

I would advise calling the IRS now so you won't have a problem later.

[azasadny]

I learned a very valuable lesson this week. I will NEVER use TurboTax or TaxCut again and I will hire a CPA to prepare my taxes.

[Sonic dB]

Lendaddy....can you clarify this:

he got everything he paid back AND a check from you and me for $1,500 cause he is so poor???!!!????

I just cant believe that ANY tax payer would pay 0 tax.

Are you saying that he got a refund of all of his federal withholdings + an additional $1500?

Sounds like BS to me and/or an audit waiting to happen.

[Sonic dB]

One other thing... I am a sales rep earning well over 6 figures. This year, I got audited by the IRS because I deducted the 911 as a business expense, which was probably spurred by a flag at my income leve.

Well...I had the receipts and documentation to support the deduction, and I was free to go.

The IRS is not stupid and are looking for reasons to audit you. If people think that they can just multiply expenses 3X to get a refund...well they'd better do some clever ass-covering when the man calls to see them.

[lendaddy]

Sonic, I'm not going to claim I know all aspects of this guys return, but yes people get back more than they paid in. It's called EITC, and is basically hidden welfare.

[cool_chick]

Lendaddy, I admire your morals. Most claim to have morals, but have no qualms cheating for their benefit. IMO, taxes are no different.

[lendaddy]

Originally posted by cool_chick
Lendaddy, I admire your morals. Most claim to have morals, but have no qualms cheating for their benefit. IMO, taxes are no different.

Thanks CC, but don't worry I am consistently finding new ways to disappoint people in other areas