Originally posted by AJsTax
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I don't know what the big deal is with trying to enter the amounts on a 1099-MISC entry screen. The 1099-MISC itself does not get transmitted with an individual return. It goes nowhere, other than carrying an entry to Schedule C or 1040 or wherever.Originally posted by FEDUKE404 View Post
So just skip the 1099-MISC entry screen and type it on line 21 of 1040. Every software I've ever seen allows you to type a description and amount for line 21, as there are things that need to go there that don't give you a form.
Seems a pointless struggle to either get a corrected 1099-MISC (good luck) or "lie" about the box just to get an entry on a line you can type an entry on anyway.Comment
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1099-MISC information transmitted?
That's a question only the software developer could answer.Originally posted by David1980 View Post
One would think the worksheet/explanation generated by TaxACT might send more of the relevant Form 1099-MISC information to the IRS than a mere number. There are other items in the miscellaneous income group worksheet which generate a code (such as RFST for amortized reforestation expenses) that does appear on the face of the tax return and presumably also gets transmitted to the IRS.
I was merely responding to the comments by the experienced former Block preparer about how such an entry could "not" be done with the software on hand. Also I did not take too well to the thread title "FE is out in LEFT field."
FEComment
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FEDuke
I make lots of errors and I have learned a lot from others over the years and every single day. I said I knew how to lie to the program and get the income on line 21, My point was exactly as I said in the original post, the 1099-misc had box 7 income and I was questioning if that was right. As you so plainly stated, you have to LIE to the program and tell it the income belongs in box 3, not in box 7 where a very large, multi-national corporation had listed it. I assumed they had better informed people that worked with this issue every day and knew the correct characterization of the income. Now I have come to the conclusion that corporation entered in the wrong box on the 1099-misc.Originally posted by FEDUKE404 View PostWell, thank you AJ for the very strong vote of confidence.
To assist you in your personal use of TaxACT, here is how you enter the information for non-Schedule C income reported in Box 3 of Form 1099-MISC:
1 - In the "Documents Received" section, select "Form 1099-MISC."
2 - In the menu that appears, for Box 3 click on the folder on the right side.
3 - Select Form 1040 Miscellaneous Income. Do not select Schedule C which appears above it.
4 - Enter the appropriate information from your client's Form 1099-MISC, paying particular attention to Box 3.
5 - Go to Form 1040, and look at line 21. The information from Box 3 of Form 1099-MISC will be there. You can also click on the folder beside "worksheet attached" to view any other entries that may be included on line 21.
6 - There is no need to "lie to the software."
As mentioned by others, if the income on the Form 1099-MISC appears in Box 7, that is a separate problem.
I commend you for your past tax experience and computer expertise.
One thing that many of us learn from these boards is that frequently we can procure useful information from other board members.
......And also most of us are not error-free.
FE
But the software subject is way off the original question. I am sorry the software issue even came up.
David, you are correct, in Lacerte you do not enter a 1099-misc. but I let the directions within Taxact help me put things on the correct form when I am not sure and you can override the box, but you get a warning that it is the wrong way to do it.
I see a lot of returns every year that were done wrong in the past, both by individuals and by other preparers. I even had one that came in because his CPA that had done the work for years fell ill and had to quit. The CPA was quite experience and respected, but put everything on the residential rentals to 10 year SL depreciation. Even the stuff only a year or two old.
My point in all this being, how in the h... can we know how to do everything?? We can't, it it too big a mess now. So we rely on other experts to help us along. I thought that the persons that write the software and test it probably know a thing or two about how to report income, so I trusted their judgement and direction.
In regards to youi get what you pay for, true to a point. TAxAct is a very good program within limits and Lacerte has it's good points, but after working several years in Lacerte I think it is way over priced and has not kept up with the times as well as others. you can do almost anything you need to in Lacerte, but we have had numerous problems with it this years, especially in the MFS worksheet and splitting the returns. There are a lot of errors being made in the program we have to fix manually. And that is not just me talking, the other preparers in the office are not happy either.
This whole system has just gotten too far out of hand.
But at the end of the day I still enjoy the challange and enjoy helping my clients with their accounting and tax needs so I will continue to do so.
The sun is shining and it is warm here for a change, I am going back outside for the rest of the day.
Every one have a wonderful day. and I am serious when I say that...AJ, EAComment
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Quick answer
Actually, my client originally had a Form 1099-MISC with an entry in Box 7. After a couple of calls it was reissued with the same number in Box 3.
Problem solved without any untruths whatsoever.
Reminds me of a story about a preparer who did not want to put up with Form 8283, so just put everything as "cash" contributions. (Same numbers, right??). Truth be told, he later received some active jail time and every one of his clients got audited by NCDOR. A couple of them even called me....
And it is a nice day outside!
FEComment
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Well it's always possible that they throw the data into an IRS preparer note, but that would definitely be oddball and not as specified. For the most part the only things ever included in an efile are the actual form fields. (Some software also has handy easily selectable elections which get attached as an election statement.)Originally posted by FEDUKE404 View Post
Anyone who can find the list of accepted forms for efile on an individual return & a Pub 1346 can answer the question of what "should" be transmitted.
Accepted forms. (Easy way to get there is IRS.gov -> efile (left column) -> Tax Professionals -> 2008 Tax Year IRS e-file of Individual Income Tax Returns -> Accepted Forms and Form Field References for TY2008 e-file
IRS Pub 1346
You'll find acceptable line 21 literals on part II page 18-19.
The thing about efile images is that the standards are all publicly accessible. If you have access to the efile image you can actually determine crazy things like why you are getting an IRS reject code 10. Unfortunately, it seems just about everyone has decided to hide this from the preparer. IntelliTax last year had it available (but they of coures no longer exist). ATX had it available a few years ago. I'm not aware of any tax prep software that still allows you to see the efile image, which really is sad.
True. It's pointless to try to memorize everything, far more useful is knowing where to find everything (maybe not quite everything). If you know how to use the tools available, things like the tax book & this message forum, your practical knowledge is many times greater than your real knowledge.My point in all this being, how in the h... can we know how to do everything?? We can't, it it too big a mess now.Last edited by David1980; 03-22-2009, 02:53 PM.Comment
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Bottom Line
Tax software is not a substitute for a good tax professional. taxeaBelieve nothing you have not personally researched and verified.Comment
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The type of income
I worked for HRB for 11 years and never had a software "form" on which to enter a 1099-MISC, and we all know how idiot-proof Block makes their software. We were instructed to ask the client what type of income it was and to enter it in the appropriate place, Schedule C, Line 21, whatever. I remember the first time I had a Form 1099-MISC with SPIFF income, I was so surprised at that unknown to me type of income (never heard of an employee getting monies from other than her employer for selling appliances) that I called the HRB Hotline for guidance. They told me Line 21, no matter where the manufacturer entered the income on the Form 1099-MISC, and faxed me two IRS pubs explaining the issue.Comment
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Garbage in Garbage out
No matter the software...if you don't have even a basic understanding of the tax codes the software, especially DIY software, will let you make the kind of mistakes that can get you into trouble with the taxing agencies.
I stand by tax software is not a substitute for a good tax professional. taxeaBelieve nothing you have not personally researched and verified.Comment
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Taxea is preaching to the choir
taxea - AMEN, and amen, and amen once again!Originally posted by taxea View Post
Too many folks are dependent on "whatever" the software tells them and have limited understanding of what actually is going on behind the scenes.
My approach is frequently first to figure out, very roughly and using tax logic (sometimes an oxymoron in itself), what numbers certain situations will generate (consider office in home with mortage interest/property taxes/depreciaiton limits all rattling around). Form 8582 with those limitations/carryforwards/worksheets is another example. If the computer comes up with those numbers, all is more or less well. If not, either I was mistaken or the operator put in some erroneous information, aka GIGO.
Such an approach can also come in quite handy when a client wants to know "why" something came out the way it did. "The computer said so" won't gather you much business.
Are you really in Hawaii? Being there could probably favorably alter my perspectives on a lot of tax "problems"!
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Just saw one of the strangest Box 7 1099-Misc items this morning. T/P inherited a partial interest in some land on which a oil and gas drilling company was dropping some test holes into. They paid the owners a fee for access to the land and reported it in Box 7.
It's not royalities since there aren't producing wells yet. It's certainly not SE income either.In other words, a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.
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