Tax and financial advice from the Silicon Valley expert.

Tax preparers – Prosystem glitch for minimum tax credit

This post is for tax return preparers who use Prosystem tax return preparation software only.

If you are like me and process your proformas in January, you could have errors in the calculation of the federal minimum tax credit.

On Prosystem Form P-5, Box 80, the system carried forward the alternative minimum tax (AMT) attributable to 2006 deferral items, but it should have been the AMT attributable to 2007 deferral items. CCH Prosystem has corrected this error in later releases of the software, so if you generate the proforma at the time you prepare the income tax return or reprocess the proforma, it will be correct. It’s also simple to just correct the entry on the form.

In the heat of tax season, we sent several tax returns that had to be corrected – fortunately before April 18.

Be alert for this issue for your clients who are subject to AMT.

Good luck in the final 12 days of tax season!

Repeal of expanded information return requirements passed by Congress

Congress has passed H.R. 4, The Comprehensive 1099 Tax Protection and Repayment of Exchange Subsidy Overpayments Act of 2011. The Senate passed the Act on April 5 and the House passed it on March 3. President Obama is expected to approve the Act.

The Act repeals expanded information reporting for payments to corporations and payments for goods or other property. (Huge sigh of relief!) The Act also repeal the application of information reporting requirements to operators of rental real estate. (Second big sigh of relief.)

The information reporting requirements are the same as they were before the enactment of the Patient Protection and Affordable Care Act (federal health care reform) and the Small Business Jobs Act of 2010.

Tax and financial advice from the Silicon Valley expert.