10th Annual Tax Thread - 2012

[EagleKeeper]

if a spouse has to buy their own health insurance since the insurer doesn't offer it, is there any way to deduct their insurance premium if the total cost was less than %7.5 of the combined gross income?

Out of luck

 

[ni4ni]

I am a city councilman in a small town. Can I deduct expenses? (Ie. stationery, postage)

I do receive a modest salary for my duties.

 

[brianmanahan]

Out of luck

ok thanks

but man, that's bullcrap, i dont get why if you are getting it through an employer it is deductible but not otherwise

not fair

 

[tw33ter]

My Mom sold her old house this past summer (was paid off when she sold it) and the two of us (her-buyer, me - co-buyer) bought a new one about a month later. She came up with the down payment for the new house, I just co-signed on it. We both live in the new house. We split all bills each month 50/50. Since both of our names are on the house, is there anything I need to do on my taxes, or can we both claim the house?

 

[CPA]

FYI ALL TAXACT OWNERS: TaxAct released an update last night to their software. You should see a box requesting permission to download the update. If you don't see it you can go to Online->Check For Updates.

I know the big thing it did was update the AMT Exemption levels.

 

[CPA]

My Mom sold her old house this past summer (was paid off when she sold it) and the two of us (her-buyer, me - co-buyer) bought a new one about a month later. She came up with the down payment for the new house, I just co-signed on it. We both live in the new house. We split all bills each month 50/50. Since both of our names are on the house, is there anything I need to do on my taxes, or can we both claim the house?

Just to be clear: you're both on the deed, correct?

You can both claim it in any apportionment you want that makes sense, but 1) the total amount has to equal the 1099 and 2) it really makes sense for the person with the higher income and/or larger itemized deductions to take it.

I wouldn't go 50/50 unless that is the best scenario for both of you. Most likely, it will be better for one person to take the full amount of the mortgage interest and property tax deduction on Schedule A and let the other person just use the standard deduction. Then split the difference in the gained refund.

 

[CPA]

I am a city councilman in a small town. Can I deduct expenses? (Ie. stationery, postage)

I do receive a modest salary for my duties.

Assuming you are an employee of the city, you can still deduct unreimbursed job-related expenses to the extent the amount is over 2% of your AGI and you itemize.

 

[EagleKeeper]

I am a city councilman in a small town. Can I deduct expenses? (Ie. stationery, postage)

I do receive a modest salary for my duties.

Assuming you are an employee of the city, you can still deduct reimbursed job-related expenses to the extent the amount is over 2% of your AGI and you itemize.

Just to chip in here.

Hypothetically, you earn on your own and with the stipend $30K total as AGI.
2% of that would be $600.

Anything you spend over the $600 will be able to be deducted.
You are also able to deduct travel mileage/tolls related for the councilman position.
Note: This is for
1) Mileage to get to office is on the same day as your primary job
2) Additional mileage supporting councilman position work

 

[cmf21]

I'm trying to gather everything I need to do my taxes this year. I'm a little confused in one area. I ordered some items at the end of December but they didn't ship or charge my credit card until this year.

What year do I claim them in? 2012 or 2013?

 

[EagleKeeper]

I'm trying to gather everything I need to do my taxes this year. I'm a little confused in one area. I ordered some items at the end of December but they didn't ship or charge my credit card until this year.

What year do I claim them in? 2012 or 2013?

You paid for them in 2013. That is where they belong.

 

[Meractik]

tag

 

[gbeirn]

I purchased my first home this year. I used 10K from my Roth IRA and a 10K gift from my parents. Is there anything I have to file with regards to that? Thanks!

 

[EagleKeeper]

I purchased my first home this year. I used 10K from my Roth IRA and a 10K gift from my parents. Is there anything I have to file with regards to that? Thanks!

You may receive a 1099 form from the Roth trustee.
That will have the amount that you withdrew.
That information is required to be classified as income - however, it also gets flagged as a hardship condition.

Because is it a Roth - you ahve already been taxed on it.
Because it gets classified as a Hardship - the 10% penalty is waived.

You have to ensure that such is documented on your 1040 by hand or you answer the appropriate questions when using tax S/W correctly.

$$ from you parents are a gift and does not get reported

 

[seepy83]

I have a question about deducting Mortgage Insurance Premiums. In previous years, my Mortage Insurance (PMI) premium for the year was listed in box 4 on the 1098 I get from the bank that holds my mortgage. This year, on the bottom of the 1098 it says "Mortgage insurance premiums paid or accrued after December 31, 2011 are no longer eligible to be treated as interest paid by the payer/borrow. Box 4 will no longer be populated." I'm assuming that I can still deduct was I paid for PMI, and it's just not listed on that form anymore...is that correct?

 

[mwtgg]

I have a question about deducting Mortgage Insurance Premiums. In previous years, my Mortage Insurance (PMI) premium for the year was listed in box 4 on the 1098 I get from the bank that holds my mortgage. This year, on the bottom of the 1098 it says "Mortgage insurance premiums paid or accrued after December 31, 2011 are no longer eligible to be treated as interest paid by the payer/borrow. Box 4 will no longer be populated." I'm assuming that I can still deduct was I paid for PMI, and it's just not listed on that form anymore...is that correct

When those forms were prepared, PMI was not deductible. The legislation that passed last week allows the deduction of PMI until December 31, 2013.

 

[EagleKeeper]

I have a question about deducting Mortgage Insurance Premiums. In previous years, my Mortage Insurance (PMI) premium for the year was listed in box 4 on the 1098 I get from the bank that holds my mortgage. This year, on the bottom of the 1098 it says "Mortgage insurance premiums paid or accrued after December 31, 2011 are no longer eligible to be treated as interest paid by the payer/borrow. Box 4 will no longer be populated." I'm assuming that I can still deduct was I paid for PMI, and it's just not listed on that form anymore...is that correct?

When those forms were prepared, PMI was not deductible. The legislation that passed last week allows the deduction of PMI until December 31, 2013.

Recommend that you contact the holder of the note and ask for a replacement 1098 be issued.

 

[mwtgg]

Recommend that you contact the holder of the note and ask for a replacement 1098 be issued.

I honestly won't even bother. They're not going to produce corrected 1098's for thousands of people unless they're mandated to do so. If you're having a hard time calculating it yourself, I would just call the servicer and ask. Personally, I've already determined what my PMI is and I'm just going to deduct it.

 

[seepy83]

I honestly won't even bother. They're not going to produce corrected 1098's for thousands of people unless they're mandated to do so. If you're having a hard time calculating it yourself, I would just call the servicer and ask. Personally, I've already determined what my PMI is and I'm just going to deduct it.

I also know exactly what I paid for PMI, so I'm not worried about getting a corrected 1098 unless it's required. If they wanted to audit, I can show them the annual statement from my lender that lists each month's PMI payment.

I only posed the question originally because I was comparing my return and 1098 from last year to the one I have for this year, and I wanted to make sure that PMI is still deductible even though it's not on the 1098.

 

[mwtgg]

I also know exactly what I paid for PMI, so I'm not worried about getting a corrected 1098 unless it's required. If they wanted to audit, I can show them the annual statement from my lender that lists each month's PMI payment.

I only posed the question originally because I was comparing my return and 1098 from last year to the one I have for this year, and I wanted to make sure that PMI is still deductible even though it's not on the 1098.

You're good to go.

 

[TangoJuliet]

I send both of my children to a family friend who runs a daycare out of her house. I asked for her SSN the other day so I could apply for the daycare credit and she refused.

I read somewhere that I can still apply for the credit if "exercised due diligence in attempting to provide the required information."

 

[EagleKeeper]

I send both of my children to a family friend who runs a daycare out of her house. I asked for her SSN the other day so I could apply for the daycare credit and she refused.

I read somewhere that I can still apply for the credit if "exercised due diligence in attempting to provide the required information."

W10 - Provided info
Form 2441 Instructions

You can avoid having the information; however, you need to have the documentation proving due diligence.

Simply accepting a NO does not cut it.

You also may wish to let them know that the expenses for child care is being reported to the IRS for their name/address via your return

 

[CPA]

I send both of my children to a family friend who runs a daycare out of her house. I asked for her SSN the other day so I could apply for the daycare credit and she refused.

I read somewhere that I can still apply for the credit if "exercised due diligence in attempting to provide the required information."

I know this gets beyond the issue and may not be an advantage to you, but consider why she won't give you her SS#. It's obvious because she is not paying taxes on this income. Sorry, she needs to be reported to the IRS.

 

[hclarkjr]

IRS pushed the day they start processing returns to the 31st.

[FONT=&quot]Dear HARRY,[/FONT][FONT=&quot][/FONT]
[FONT=&quot]We wanted to provide you an update about your e-filed return. The IRS recently announced that it will start processing e-file and paper returns on Jan. 30, moving the date back from Jan. 22.[/FONT][FONT=&quot][/FONT]
[FONT=&quot]We know this is later than expected, but we don't want you to worry.[/FONT][FONT=&quot][/FONT]
[FONT=&quot]We've received your return. When the IRS starts accepting returns on Jan. 30, we'll submit your return in the order we received it. We'll send you an e-mail to let you know the status of your return once the IRS processes it.[/FONT][FONT=&quot][/FONT]

 

[sornywrx]

My wife got fired/laid off last week and she had been paying a tiny amount into a work sponsored retirement fund. Don't really know too much about it. I have a 401H here at work and this is something ran by American Funds and looks like her money is in some money market stuff I think like the "Euro Pacific Growth Fund". She only has about $3300 in there but since she's been terminated we are considering cashing it out. On the 14 page document we are supposed to fill out it mentions a 20% tax with holding and also another 10% penalty but it's slightly confusing. I've been told that if I ever leave my job I can cash my fund out with a 30% penalty for taxes so is 30% a pretty standard rate? I'm wondering if she's going to be paying 20% for the taxes and 10% as a penalty for 30% total or if I'm reading it wrong and it's a 20% tax withholding and the 10% is part of that (mentions IRC 72t).

 

[TangoJuliet]

I know this gets beyond the issue and may not be an advantage to you, but consider why she won't give you her SS#. It's obvious because she is not paying taxes on this income. Sorry, she needs to be reported to the IRS.

I figured that was the reason why she told me no. So I asked for it again today saying it was for tax reasons. She told me that if I wanted her SSN then I would have to pay double for her services or I can continue what I am paying now and drop it.