Discussion:Preparing individual tax returns
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Discussion Forum Index --> Tax Questions --> Preparing individual tax returns
| 14 August 2008 | |
| What are the rules for filing an estimated tax return versus reconstucting certain data, such as income, for a return? | |
| 14 August 2008 | |
| I know what he is asking but I am holding out for a profile. | |
| 14 August 2008 | |
| Glad you do IRS...I have no clue what he/she is asking. Doing a tax return on the "fly" just to get them filed? And then amending the return for accurate info?
Tag...you're it....never heard of doing this before... | |
Death&Taxes (talk|edits) said: | 14 August 2008 |
| "Rules? We ain't got no rules. We don't need no rules. I don't have to show you any stinking rules." | |
| 14 August 2008 | |
| hehehe D&T. I would love to see what the h double hockey sticks are filing an estimated tax return versus a real one? Guess I have gotten transcripts and only file complete returns....maybe I will learn something else today!! hehe | |
| 14 August 2008 | |
| I have perhaps the most insightful and profound response ever posted on this forum ready to go. But alas, no profile. | |
Death&Taxes (talk|edits) said: | 15 August 2008 |
| C'mon, fill in that profile.....I can't hold my breath much longer. | |
| 15 August 2008 | |
| The definitive answer: In dealing with cases of estimated versus reconstructing returns...
No, I just can't do it without a profile. | |
| 15 August 2008 | |
| I think the Poster may be referring to the lady lawyer - here in South Florida - who went out on here own - and had $120,000 in 1st year Gross Receipts (cash basis taxpayer) she filed estimated tax returns indicating zero liability. Then filed a Form 1040 stating her tax liability and paid it late with penalties.
The IRS prosecuted her for "income tax evasion" on her false estimated tax returns. And won. And she was suspended by the Florida State Bar, as well. | |
| 15 August 2008 | |
| HEHEHE; or income averaging?
Damnit IRS...fill out your profile I am DYING to know what you have to say on this...hehehehehe | |
| 15 August 2008 | |
| If the answer was printed in the newspaper, I would probably win a Pulitzer for it. But alas.... | |
Death&Taxes (talk|edits) said: | 15 August 2008 |
| Well, the Bulwer-Lytton prizes were already handed out, so you can go ahead. | |
Actionbsns (talk|edits) said: | 16 August 2008 |
| SFL seems to have an edge and knows what an estimated tax return is. Are they thinking of the extension request where you are supposed to estimate your taxes and pay whatever you think is due? | |
| 16 August 2008 | |
| As I read the case, it is a lesson that the four (4) Estimates are Returns as well as the Extension. | |
| 19 August 2008 | |
| Sorry to be confusing.
The situation is this. I have a scheudle C client with poor records and we will need to reconstruct his income. I do have a critical number which will allow me to estimate the income fairly accurately. The bank deposits aren't even close. The expenses will come from invoices he has provided. Now, once I reconstruct the income, do I need to identify the return as an Estimated return? | |
| 19 August 2008 | |
| Is the income per the bank statements higher or lower than your critical number?
Going through an audit now on a Schedule C client and auditor is matching up both 1099's she received as well as any income on the bank statements. If you are going by what you have, then it is not estimated; you have recreated it as best you can and that then is what as well IRS will want.... Have you gotten a transcript from the IRS for 1099's or any other form of income reported to the client? | |
| 19 August 2008 | |
| Sandysea
Thanks for your response. The bank numbers are much lower than appears reasonable. There had no 1099's and IRS had very little in 1099's. The problem is we are talking about a bulldozer and they have several thousand dollars in receipts for diesel fuel. I will have a workpaper showing how I estimate(reconstructed) the income. I will prepare and go. Thanks again. | |
| 19 August 2008 | |
| This is a situation that makes me uneasy, but there's a great deal of reality to it.
I don't like coming up with final numbers for the client when I'm preparing a return, especially if it's based upon the client's very poor (non-existent?) records, as in this case. The uneasiness increases when it is an income number. What should the practitioner have signed by the client in Weds case? I'm asking because most engagement letters assume independence, whereas we all know that you can very rarely depend on the client's financials, mostly because of mistakes/lack of knowledge, and not necessarily ill intent. Assuming they even have financials, lol (as we all know, QuickBooks does 'em). Note in the OP's case, we are talking about what is income (essentially finding income), also, I would imagine: what are expenses, not just: well, this expense is in the wrong category. | |
| 19 August 2008 | |
| Wed how did the client pay for the fuel? Credit cards or cash, etc? I would venture to guess if he paid cash, then these were from cash paying jobs, so I would essentially figure to add those as income as well and not estimate it. If he is audited, I don't think this is going to fly. First year of business too? Or do you have any historical data to assist in "wheres the money???"...hehe | |
