2013 Annual Anandtech Tax Time Thread!

[CPA]

Form 8621
For the "Central Fund of Canada Limited" i.e. CEF, "Sprott Physical Gold Trust" i.e. PHYS and "Sprott Physical Silver Trust " i.e. PSLV.

Part I: #1 Is this the name of the fund or a description ?

I think this is correct. For parts II and III
Part II: Box A >Check
Part III: 6 a,b,c >Zero
7 a,b,c >Zero

And do I file this form every year I own these or only the years I buy or sell?

NOTE: I own this in a IRA and a cash account.


I can usually muddle my way through but this forms instructions are unclear to me.


.

I will admit, I'm not that familiar with this topic, however IRS instructions for Form 8621, state:

Who Must File
Generally, a U.S. person that is a direct
or indirect shareholder of a PFIC must
file Form 8621 for each tax year under
the following five circumstances if the
U.S. person:
1.
Receives certain direct or indirect
distributions from a PFIC,
2.
Recognizes gain on a direct or
indirect disposition of PFIC stock,
3.
Is reporting information with
respect to a QEF or mark-to-market
election,
4.
Is making an election reportable
in Part II of the form, or
5.
Is required to file an annual report
pursuant to section 1298(f)

So, it depends

 

[CPA]

If the fund is through an IRA, why would you need Form 8621?

Direct and Indirect shareholders of a PFIC must report.

 

[jaedaliu]

yes i have a Schedule A. I just plugged in the $900 that I missed. Looks like I could have gotten back an extra $165.

Because you already filed, I believe you need to file a 1040X, not an extension, in order to get the $$ back.

 

[KlokWyze]

So my employer is based in CA and I've been paying CA taxes... "CA" & "CASDI-E" is on my pay stubs. Do I need to pay taxes on my income to VA? Will I get reimbursed for all taxes paid in CA?

Upon initial incomplete steps on the OLT software it looks like I'm getting a refund of $275 and will owe VA like $2500.

 

[Xcobra]

Direct and Indirect shareholders of a PFIC must report.

Correct but the holdings are through a tax sheltered account, IRA. I would think it would be the same principle if you owned international shares through our US broker. Again, I know PFICs somewhat but haven't encountered this particular case.

 

[Xcobra]

So my employer is based in CA and I've been paying CA taxes... "CA" & "CASDI-E" is on my pay stubs. Do I need to pay taxes on my income to VA? Will I get reimbursed for all taxes paid in CA?

Upon initial incomplete steps on the OLT software it looks like I'm getting a refund of $275 and will owe VA like $2500.

I know this is a State question which are not really covered. If you have nothing to do with California, you need to tell your employer to shut off the California withholding because that is just a pain in the ass to deal with every year. If they are registered with VA, they need to switch your VA withholdings on. If not, they should withhold no CA tax and you should just make VA estimated tax payments every quarter.

For 2013, if you did not work in CA, your best case scenario is to attempt to make your employer issue a corrected W-2 and worse case is file a CA return with no taxable wages/income and for you to get the entire amount of withholding back. Note that a lot of states question returns with no taxable income so be prepared to back that up.

 

[DAGTA]

I presume that he should be ok even if his parents claim him on their returns. Might want to double check the input on the tax software. Unless he has other income.

Thank you!

I did find the literature about having a $1000 standard deduction if he is claimed as a dependent. Unfortunately, he has tried TurboTax, TaxSlayer and TaxAct. They all claim he owes $109 and insist that he create a company to associate to his 1099-MISC.

I'd appreciate any help in telling him how to file to use the deduction. He submitted a FAFSA for college and indicated that he would file his tax return for 2013, hence the need to figure this out.

Thanks!

 

[Xcobra]

Thank you!

I did find the literature about having a $1000 standard deduction if he is claimed as a dependent. Unfortunately, he has tried TurboTax, TaxSlayer and TaxAct. They all claim he owes $109 and insist that he create a company to associate to his 1099-MISC.

I'd appreciate any help in telling him how to file to use the deduction. He submitted a FAFSA for college and indicated that he would file his tax return for 2013, hence the need to figure this out.

Thanks!

I revisited your previous post. After some calculations, it seems that the $119 is self-employment tax (15.3% for self-employed people - e.g. FICA taxes). Do you know what he was doing to receive that 1099-misc? If he was "self-employed," then I don't think he has a choice. The best he can do is file Schedule C and claim deductions related to that income to reduce his self-employed income and reduce that SE tax.

 

[KlokWyze]

I know this is a State question which are not really covered. If you have nothing to do with California, you need to tell your employer to shut off the California withholding because that is just a pain in the ass to deal with every year. If they are registered with VA, they need to switch your VA withholdings on. If not, they should withhold no CA tax and you should just make VA estimated tax payments every quarter.

For 2013, if you did not work in CA, your best case scenario is to attempt to make your employer issue a corrected W-2 and worse case is file a CA return with no taxable wages/income and for you to get the entire amount of withholding back. Note that a lot of states question returns with no taxable income so be prepared to back that up.

OK. Thanks for your help. I'll see if I can sort it out, but you definitely enlightened me to a few options.

Can I just pay CA taxes and claim $0 taxable wages in VA even though I live here?

 

[DAGTA]

I revisited your previous post. After some calculations, it seems that the $119 is self-employment tax (15.3% for self-employed people - e.g. FICA taxes). Do you know what he was doing to receive that 1099-misc? If he was "self-employed," then I don't think he has a choice. The best he can do is file Schedule C and claim deductions related to that income to reduce his self-employed income and reduce that SE tax.

He was doing general labor for a local company on days he didn't have school.

Thanks again for your help!

 

[TheSlamma]

I don't know where things are cause we moved twice, but I think when I sold my house they gave me a 1099S, I sold it for $261K (I owned it free and clear) and made $151K profit. Since I got the 1099S should I still file it even though I'm under the $500K since my wife and I have never sold a house before and lived there for a decade?
I don't know why they gave me the 1099S even.

 

[Xcobra]

I don't know where things are cause we moved twice, but I think when I sold my house they gave me a 1099S, I sold it for $261K (I owned it free and clear) and made $151K profit. Since I got the 1099S should I still file it even though I'm under the $500K since my wife and I have never sold a house before and lived there for a decade?
I don't know why they gave me the 1099S even.

1099-S is required and is sent it to the IRS in your case. You should report it on Schedule D and make an adjustment to the gain for the amount of Sec 121 exclusion (equaling the gain). Form 8949 has a bunch of codes for those. I believe it is code H.

 

[Dubb]

Last year my employer pulled up stakes in the state and laid everybody off. I went freelance, and thus didn't collect unemployment, but I did pay substantial COBRA premiums till the end of the year.

Is there any way I can deduct these? It looks like I'm not eligible for the HCTC since I didn't go on unemployment or receive any of the other assistance listed in requirement 1.

 

[KlokWyze]

I know this is a State question which are not really covered. If you have nothing to do with California, you need to tell your employer to shut off the California withholding because that is just a pain in the ass to deal with every year. If they are registered with VA, they need to switch your VA withholdings on. If not, they should withhold no CA tax and you should just make VA estimated tax payments every quarter.

For 2013, if you did not work in CA, your best case scenario is to attempt to make your employer issue a corrected W-2 and worse case is file a CA return with no taxable wages/income and for you to get the entire amount of withholding back. Note that a lot of states question returns with no taxable income so be prepared to back that up.

Sorry for the last stupid question.

I'm just going to claim $0 wages in CA and adjusted wages in VA and see what happens. In the meantime I'll just contact HR and get them to stop all CA withholdings and see if it's possible to do VA withholdings or just to an estimated setup as you mentioned.

Thanks again for your help. Do you guys take BTC/DOGE tips? Serious question.

 

[jaedaliu]

Sorry for the last stupid question.

I'm just going to claim $0 wages in CA and adjusted wages in VA and see what happens. In the meantime I'll just contact HR and get them to stop all CA withholdings and see if it's possible to do VA withholdings or just to an estimated setup as you mentioned.

Thanks again for your help. Do you guys take BTC/DOGE tips? Serious question.

You're going to need to file CA and VA tax returns. The reason why you don't answer state tax questions is because there's approximately 46 different set of state tax rules, and it's a lot to keep track of.

However, in general, these rules may apply:
1) because you didn't live or work in CA at all, you should be able to get your CA withholdings returned.
2) you're going to pay all of your VA taxes via a check included with your return.

In other news, I was married in 2012, and unemployed for part of it, so we ended up getting lots in our joint return. 2013, not so good. I need to revisit my withholdings.

 

[lakedude]

So I just filed after learning here about why married filing jointly is better for federal income tax, however I also determined that filing separately is better(much better) for our state return.

The state tax tables are progressive and exactly the same for individual or joint returns. On a joint return the second income effectively starts at the highest marginal rate of the primary taxpayer instead of at the lower rates at the beginning of the scale.

Tax Bracket (Single) Marginal Tax Rate
$0+ 1.00%
$4,099+ 2.50%
$8,199+ 3.50%
$12,199+ 4.50%
$20,399+ 6.00%
$33,999+ 7.00%
Tax Bracket (Couple) Marginal Tax Rate
$0+ 1.00%
$4,099+ 2.50%
$8,199+ 3.50%
$12,199+ 4.50%
$20,399+ 6.00%
$33,999+ 7.00%

 

[ajskydiver]

In November I paid $2,800 for an HVAC guy to repair the chimney at my rental.

Can I just deduct this as a repair? Pretty please?

No? I have to depreciate it? What kind and how long? grumble grumble.

As CPA stated, it is a repair and can be deducted.

However, how much you can deduct depends on how you're filing and your AGI.

If you're single and making over 100K AGI, 0% deductible.
If you're married, filing separately, 0% deductible.
If you married, filing jointly:
<100K AGI, 100%
>100K AGI, 30%
>150K AGI, 0%

That's what TurboTax Online is telling me, just FYI.

 

[s0me0nesmind1]

Tax Experts: I am in need of some help.

I am looking to maximize my property tax deductions. We have 3 "Taxes" for our property.
1. County Tax
2. School Tax
3. Utility / Distr Tax (I have no idea what this is, thats what it's called on our statement)

I am completely at a loss as to what I can include as a deductible tax. #1 and #2 are obvious. But #3 I am unsure. I am also a bit weary, because that was included on our last

We recently changed who owned our mortgage, Bank of America sold it off to some other random company. On the bottom of the mortgage statement for BOA every year it said "Property Taxes" and gave us a simple number to put on our taxes. That isn't the case this time - and I think on the BOA statement it was including #3. So when we were going through our tax software and it asks how much in property taxes we had, I naturally just wrote the amount that was on the BOA statement.

Any clarification here for item #3 is greatly appreciated.


edit: Also, is Home PMI tax deductible in anyway? I notice it is listed on our mortgage statement, but I don't see where it can be used in anyway.

 

[Blackjack200]

As CPA stated, it is a repair and can be deducted.

However, how much you can deduct depends on how you're filing and your AGI.

If you're single and making over 100K AGI, 0% deductible.
If you're married, filing separately, 0% deductible.
If you married, filing jointly:
<100K AGI, 100%
>100K AGI, 30%
>150K AGI, 0%

That's what TurboTax Online is telling me, just FYI.

I am, embarassingly enough, still under $100k AGI. I plugged all the numbers into TaxACT, and I hope if my income disqualified the deduction it wouldn't have taken it.

BTW, I find this rule really bizarre. It's a business expense, why the heck would my AGI matter? So if I get above $100k AGI I'll need to completely segregate my business, set up a Tax ID for it, and file a separate return for it (quarterly even, right?) just so I don't have to pay taxes on business expenses? Ugh.

 

[highland145]

I am, embarassingly enough, still under $100k AGI. I plugged all the numbers into TaxACT, and I hope if my income disqualified the deduction it wouldn't have taken it.

BTW, I find this rule really bizarre. It's a business expense, why the heck would my AGI matter? So if I get above $100k AGI I'll need to completely segregate my business, set up a Tax ID for it, and file a separate return for it (quarterly even, right?) just so I don't have to pay taxes on business expenses? Ugh.

I was thinking that only applied to personal deductions, not business/rental ones.

 

[CPA]

I am, embarassingly enough, still under $100k AGI. I plugged all the numbers into TaxACT, and I hope if my income disqualified the deduction it wouldn't have taken it.

BTW, I find this rule really bizarre. It's a business expense, why the heck would my AGI matter? So if I get above $100k AGI I'll need to completely segregate my business, set up a Tax ID for it, and file a separate return for it (quarterly even, right?) just so I don't have to pay taxes on business expenses? Ugh.

Yeah, that's a fallacy. Unless your primary business is renting out, then your rental is an investment property, not a business. Investments have different tax rules.

 

[Xcobra]

Tax Experts: I am in need of some help.

I am looking to maximize my property tax deductions. We have 3 "Taxes" for our property.
1. County Tax
2. School Tax
3. Utility / Distr Tax (I have no idea what this is, thats what it's called on our statement)

I am completely at a loss as to what I can include as a deductible tax. #1 and #2 are obvious. But #3 I am unsure. I am also a bit weary, because that was included on our last

We recently changed who owned our mortgage, Bank of America sold it off to some other random company. On the bottom of the mortgage statement for BOA every year it said "Property Taxes" and gave us a simple number to put on our taxes. That isn't the case this time - and I think on the BOA statement it was including #3. So when we were going through our tax software and it asks how much in property taxes we had, I naturally just wrote the amount that was on the BOA statement.

Any clarification here for item #3 is greatly appreciated.


edit: Also, is Home PMI tax deductible in anyway? I notice it is listed on our mortgage statement, but I don't see where it can be used in anyway.

As far as I know, any property tax is deductible as long as it based on the value of the land. This is what the IRS says when you cannot deduct them:

Deductible real estate taxes do not include taxes charged for local benefits and improvements that increase the value of the property, such as assessments for sidewalks, water mains, sewer lines, parking lots, and similar improvements.

Not quite sure on the PMI question though. See below:

You can treat amounts you paid during 2013 for qualified mortgage insurance as home mort-gage interest. The insurance must be in con-nection with home acquisition debt, and the in-surance contract must have been issued after 2006.

Qualified mortgage insurance. Qualified mortgage insurance is mortgage insurance pro-vided by the Department of Veterans Affairs, the Federal Housing Administration, or the Ru-ral Housing Service, and private mortgage in-surance (as defined in section 2 of the Home-owners Protection Act of 1998 as in effect on December 20, 2006).

 

[TheSlamma]

1099-S is required and is sent it to the IRS in your case. You should report it on Schedule D and make an adjustment to the gain for the amount of Sec 121 exclusion (equaling the gain). Form 8949 has a bunch of codes for those. I believe it is code H.

Cool, thanks Xcobra

 

[s0me0nesmind1]

As far as I know, any property tax is deductible as long as it based on the value of the land. This is what the IRS says when you cannot deduct them:



Not quite sure on the PMI question though. See below:

Here is my problem: This is no "local benefit and improvement". It IS defined as a property tax. I pay it every year for nearly the same amount. Arrrgh, I'm confused on which way to go here

 

[Xcobra]

Here is my problem: This is no "local benefit and improvement". It IS defined as a property tax. I pay it every year for nearly the same amount. Arrrgh, I'm confused on which way to go here

Then, I see no problem