2013 Annual Anandtech Tax Time Thread!

[lakedude]

Question

Married filing separately or joint and if separate who claims the newborn?

We had a baby in 2013 and my wife lost her job in 2013.

For 2014 it will just be my income.

Same answer applies to 2013 and 2014?

Does it depend on income level? I don't really want our info posted...

TIA!

 

[highland145]

Question

Married filing separately or joint and if separate who claims the newborn?

We had a baby in 2013 and my wife lost her job in 2013.

For 2014 it will just be my income.

Same answer applies to 2013 and 2014?

Does it depend on income level? I don't really want our info posted...

TIA!

Married joint for all. The married separate is the same as filing single...more taxes. Don't.

http://www.irs.gov/pub/irs-pdf/i1040tt.pdf

 

[lakedude]

Married joint for all. The married separate is the same as filing single...more taxes. Don't.

http://www.irs.gov/pub/irs-pdf/i1040tt.pdf

Thanks for the quick reply.

Thing is when you file separate you each start in the low tax brackets and work up from there, correct?

When you file joint wouldn't her income add with mine in a higher tax bracket?

I made 3 or 4 times what my wife made if that matters...

Okay got it, the cutoffs are different...http://en.wikipedia.org/wiki/Rate_schedule_(federal_income_tax)

Thanks again!

 

[MrChad]

Back in 2011 I had 2000 stock options with my employer that were set to expire. The employer offered me a loan such that I could exercise the options and keep the shares but not pay the full $1 / share. In 2013, the company was sold along with my 2000 common shares. I was paid for the fair market value of the shares minus the repayment of the loan ($2,052). The 2,000 shares should qualify for long term capital gains, but how do I calculate the cost basis factoring in the repayment of the loan?

 

[Doppel]

I always worry about AMT, although turbo tax tells me I don't need to pay it. I trust that, but would still like to know how to figure it out. My taxes are pretty simple, but is the following enough to calculate AMT? This is an example (I obviously make way, way, way more than this since I'm on AT):

W2 wages: $80k
Property interest: $8,000
Single exemption: $51,900.

For some reason I had thought (80,000-8,000-51,900)* .26 was right, but I have no idea why and it seems wildly incorrect.

Unfortunately TurboTax's incredible simplicity also means I can't see the nitty gritty at the moment where I am in the process.

 

[msi1337]

nice

 

[GWestphal]

Ok here's the deal, I made ~42K last year (17K stipend+25K hiring agency). I also started an LLC (pass through taxation) to consult for tech, media, programming etc. I bought some computer hardware and software, so I have about 7K in LLC assets and some business travel I would like to write off. I started if after I started working for the hiring agency because the company I was working for thought they might be able to contract directly with me but it was a whole mess and it didn't exactly work out right, so I was just considering work I was doing was in the capacity of the LLC since I'm the sole owner. The confusing part now, my stipend sends a W2 and I got a W2 from the agency as well, both to me personally (thought it would be a 1099).

Looking at turbo tax I can only write off the assets if I have business income, (the forms specified are 1099 on the help box). So can I treat or convert my w2 to a 1099 some how since I am a sole owner of the LLC? Because W2 or 1099 is just whether money was withheld, so can't I just consider a W2 and 1099 with prepaid taxes?

How can I get the max write off in this case, or do I make little enough that it wouldn't make a difference. Additionally I'm willing and able to contribute to an IRA to further reduce tax burden if there is just a certain threshold I need to meet where under which there is diminishing tax benefits of writing off more stuff.

 

[dmw16]

My wife works for a children's chorus as a conductor and teacher. They pay her on a 1099. They are non-profit (don't think that matters).

She uses her office in our home to write and plan lessons, rehearse the music, and so on. She uses our money to travel to and register for conferences, make copies, etc. She uses her cell phone to conduct business related to the chorus.

Are we allowed to deduct some portion of our home costs (mortgage, interest, etc) based on amount of use, square footage, etc? It seems like yes, but I'm not 100% sure.

I think it's pretty clear cut that any travel expenses for conferences are deductible.

How about her cell phone? It's also a personal phone so it seems like a grey area.

She uses her personal laptop for her work. Can we somehow depreciate that? Or this might be too small to bother?

 

[JulesMaximus]

My wife works for a children's chorus as a conductor and teacher. They pay her on a 1099. They are non-profit (don't think that matters).

She uses her office in our home to write and plan lessons, rehearse the music, and so on. She uses our money to travel to and register for conferences, make copies, etc. She uses her cell phone to conduct business related to the chorus.

Are we allowed to deduct some portion of our home costs (mortgage, interest, etc) based on amount of use, square footage, etc? It seems like yes, but I'm not 100% sure.

I think it's pretty clear cut that any travel expenses for conferences are deductible.

How about her cell phone? It's also a personal phone so it seems like a grey area.

She uses her personal laptop for her work. Can we somehow depreciate that? Or this might be too small to bother?

I wouldn't write off your home office. I looked into this for my wife but it only amounted to about $150 deduction and having a home office increases your chances of getting audited plus if you use that room for anything but her work related activities and you do get audited the deduction will not be allowed and you will have to pay interest and penalties.

My wife uses her cell phone almost exclusively for business so we deduct that along with some portion of the utilities as well. Business equipment is also deductible but you need to make sure they are used exclusively for business. Have her track her mileage and just take a flat mileage deduction if she uses her car for travel.

 

[dmw16]

I wouldn't write off your home office. I looked into this for my wife but it only amounted to about $150 deduction and having a home office increases your chances of getting audited plus if you use that room for anything but her work related activities and you do get audited the deduction will not be allowed and you will have to pay interest and penalties.

My wife uses her cell phone almost exclusively for business so we deduct that along with some portion of the utilities as well. Business equipment is also deductible but you need to make sure they are used exclusively for business. Have her track her mileage and just take a flat mileage deduction if she uses her car for travel.

Thanks.

It's a shared office now that we have a baby due in a few weeks it's her office, my office, and my rower is in there too. Not worth $150, heck it wouldn't be worth $500 it doesn't sound like.

Sounds like same with the cell phone. She uses it, but it's far from exclusively. So that probably isn't worth it.

Mileage, she can't deduct mileage to/from the primary place she works (where they hold rehearsals), right? Only to conferences and so on?

 

[gorcorps]

My wife works for a children's chorus as a conductor and teacher. They pay her on a 1099. They are non-profit (don't think that matters).

She uses her office in our home to write and plan lessons, rehearse the music, and so on. She uses our money to travel to and register for conferences, make copies, etc. She uses her cell phone to conduct business related to the chorus.

Are we allowed to deduct some portion of our home costs (mortgage, interest, etc) based on amount of use, square footage, etc? It seems like yes, but I'm not 100% sure.

I think it's pretty clear cut that any travel expenses for conferences are deductible.

How about her cell phone? It's also a personal phone so it seems like a grey area.

She uses her personal laptop for her work. Can we somehow depreciate that? Or this might be too small to bother?

Starting in tax year 2013 there's a fairly simple way of deducting a home office. See: http://www.irs.gov/Businesses/Small...d/Simplified-Option-for-Home-Office-Deduction

Basically you can claim $5 per sq ft of dedicated work space.

That's for the home part of it. The rest can be deducted as a business expense if they're actually used for business. This includes PC purchases, printers, ink, etc. I'll warn you though... if you don't have a receipt then it's not worth claiming. In case of an audit you need a good paper trail of costs including date they were incurred.

Mileage and travel expenses can count as long as they were never reimbursed by somebody else. Again, paper trail is key here so if she hasn't been keeping receipts or a mileage ledger to know exactly how much driving she's done for work then you can't make a guess.

One of the professionals can weigh in here as I'm just going off of my experience and quick research. My dad is self employed and dealt with this crap every year. He keeps all receipts and writes down mileage when he starts the work day and when he gets home.

 

[JulesMaximus]

Thanks.

It's a shared office now that we have a baby due in a few weeks it's her office, my office, and my rower is in there too. Not worth $150, heck it wouldn't be worth $500 it doesn't sound like.

Sounds like same with the cell phone. She uses it, but it's far from exclusively. So that probably isn't worth it.

Mileage, she can't deduct mileage to/from the primary place she works (where they hold rehearsals), right? Only to conferences and so on?

That is correct.

 

[CPA]

That is correct.

And only for the portion of miles above the amount to her regular place of work. If the conference is 50 miles away and her office is 30, she can only use 20.

 

[CPA]

I wouldn't write off your home office. I looked into this for my wife but it only amounted to about $150 deduction and having a home office increases your chances of getting audited plus if you use that room for anything but her work related activities and you do get audited the deduction will not be allowed and you will have to pay interest and penalties.

My wife uses her cell phone almost exclusively for business so we deduct that along with some portion of the utilities as well. Business equipment is also deductible but you need to make sure they are used exclusively for business. Have her track her mileage and just take a flat mileage deduction if she uses her car for travel.

Jules, that's sort of a myth. the increase in chance is very small and only if the deduction is outside the norm.

 

[hclarkjr]

looks like the IRS is starting a little earlier than they stated, my return was accepted today

 

[sze5003]

Whats the point of doing taxes so early? Don't you have to wait to get your refund in April anyway?

Also, I've been using turbo tax to file mine every year since I get a discount from my employer. Are those go to places any better ? My mother went to h&r block and they messed it up. I'm sure if I had a house, properties, so on it would make sense but I don't so I figure I don't loose anything doing the same stuff every year.

 

[hclarkjr]

Whats the point of doing taxes so early? Don't you have to wait to get your refund in April anyway?

Also, I've been using turbo tax to file mine every year since I get a discount from my employer. Are those go to places any better ? My mother went to h&r block and they messed it up. I'm sure if I had a house, properties, so on it would make sense but I don't so I figure I don't loose anything doing the same stuff every year.

ever hear of direct deposit???

 

[sze5003]

ever hear of direct deposit???

Yeah thats how I get my refund. Didn't seem to arrive any quicker last two years and I did taxes early last year compared to the "normal" time the year before that.

 

[hclarkjr]

i had my return the Wednesday the next week last year.

 

[sze5003]

I was just wondering because I've been getting bombarded with emails and info about do your taxes now!! Hurry! My refund blows anyway so it's not like it's anything exciting.

 

[FallenHero]

Another question that came up. My wife went on short term disability that was paid through Metlife(birth of our baby). She had set up the plan with her employer and she paid 100% of the premium with post-tax income. According to turbotax, I am not required to report any of her income from that plan as income (unless I am reading it wrong.) Is this correct or do I need to report it as income?

 

[bradly1101]

Me again. The person I'm doing taxes for converted his 401K to an IRA, and got two 1099-R's (he also withdrew some). He just got the 1099-R for that whole amount of the conversion. That's not taxable though and its box one (total distribution) doesn't go on the 1040, right? Just the amount he withdrew (shown on the other 1099-R), right?

In other words, you don't report the conversion, just the withdrawal right?

 

[raildogg]

Hey guys, I have a question regarding IRA rollovers please.

In 2013, I rolled over a 401-K from a previous employer to a Rollover IRA. I simply assumed this would be a non-tax event. Well, I received a 1099-R from that previous employer's 401-K manager, I believe. On it, the taxable amount being shown is the same amount I rolled over to a Rollover IRA. So this means that I have to pay taxes on this?

I am thinking about calling them to find out.

I would appreciate any responses. Thank you.

 

[pontifex]

Why the hell does it cost 17.99 to have my refund direct deposited?

Does anyone do this or do you just request a check?

 

[jaedaliu]

Why the hell does it cost 17.99 to have my refund direct deposited?

Does anyone do this or do you just request a check?

IRS doesn't charge anything for that service. It's whoever that's doing your taxes that's adding the fee.