3rd Annual AT Tax Time Thread

[CPA]

Originally posted by: Hoober
My 2 year old son sold stock and had interest income from a brokerage account my wife and I set up for his education. The total income is less than $8,000. Do I need to file a return for him?

Was this a TUGMA or TUTMA account? Was your name also attached to the account?

 

[Hoober]

Originally posted by: CPA

Originally posted by: Hoober
My 2 year old son sold stock and had interest income from a brokerage account my wife and I set up for his education. The total income is less than $8,000. Do I need to file a return for him?

Was this a TUGMA or TUTMA account? Was your name also attached to the account?

It is not a Texas UTMA account, but it is a Unif Trans Min Act account. I am the custodian of the account.

 

[CPA]

Originally posted by: Hoober

Originally posted by: CPA

Originally posted by: Hoober
My 2 year old son sold stock and had interest income from a brokerage account my wife and I set up for his education. The total income is less than $8,000. Do I need to file a return for him?

Was this a TUGMA or TUTMA account? Was your name also attached to the account?

It is not a Texas UTMA account, but it is a Unif Trans Min Act account. I am the custodian of the account.

You will have to include it on your tax return. You will have to fill out form 8814 and it's corresponding worksheets. It's going to be a little complicated, but any tax software should be able to handle it.

Sorry about the T part, living in Texas I sometimes forget to remove it when writing about it.

 

[Hoober]

Originally posted by: CPA

Originally posted by: Hoober

Originally posted by: CPA

Originally posted by: Hoober
My 2 year old son sold stock and had interest income from a brokerage account my wife and I set up for his education. The total income is less than $8,000. Do I need to file a return for him?

Was this a TUGMA or TUTMA account? Was your name also attached to the account?

It is not a Texas UTMA account, but it is a Unif Trans Min Act account. I am the custodian of the account.

You will have to include it on your tax return. You will have to fill out form 8814 and it's corresponding worksheets. It's going to be a little complicated, but any tax software should be able to handle it.

Sorry about the T part, living in Texas I sometimes forget to remove it when writing about it.

Ok, thanks!

 

[Hoober]

Ok. Looking through 8814, there doesn't seem to be a place to enter 1099-B information. 1099-Int is covered, as is 1099-Div, but the stock sale was reported on 1099-B.

Thoughts?

 

[scm518]

I have a quick question. I have a typical 9-5 M-F - but I am also doing consulting work on the side which was my plan all along. I am getting paid via 1099 so I am putting roughly 25% of those payments aside to cover taxes.

My question is, am I allowed to "claim" anything on my taxes against the earning from the 1099 for the cost of setting up/running my consultantcy? (sp?) For instance, cell phone, purchased new computer equipment, purchased an internet fee, etc.

For the 2005 tax season I only received one check of $1000 (small retainer) - but expect much much more as I started on a very large consultanting project the last week of the year.


Thank you for any help you can offer.

Sean

 

[Penth]

Two questions:

First, I have my own business. If I go to dinner with my wife and she asks how work was and I say we did x amount of dollars today can I write that dinner off? If not, what is necessary to do to be able to write off a dinner.

Second, I don't have a work car. Can I write off my car payments and everything? If not, same thing, what do I need to do so that I can?

 

[SmackD]

I have a quick question:

I'm currently a resident in Maryland and work in Maryland.

I will be living in Virginia for about 6 months temporarily and will then be moving back to Maryland.

Do I need to fill out any tax forms for Virginia or change any of my filings?

EDIT: Just saw you're not doing state taxes don't worry then I'll figure it out =P

 

[EagleKeeper]

Originally posted by: scm518
I have a quick question. I have a typical 9-5 M-F - but I am also doing consulting work on the side which was my plan all along. I am getting paid via 1099 so I am putting roughly 25% of those payments aside to cover taxes.

My question is, am I allowed to "claim" anything on my taxes against the earning from the 1099 for the cost of setting up/running my consultantcy? (sp?) For instance, cell phone, purchased new computer equipment, purchased an internet fee, etc.

For the 2005 tax season I only received one check of $1000 (small retainer) - but expect much much more as I started on a very large consultanting project the last week of the year.


Thank you for any help you can offer.

Sean

Anything that is business related to the consulting is fair game.
Dig back through the last two years tax threads for a multitude of ideas that CPA, myself and a few others have posted.

It will be a long read; but well worth it on the bottom line.

 

[EagleKeeper]

Originally posted by: Penth
Two questions:

First, I have my own business. If I go to dinner with my wife and she asks how work was and I say we did x amount of dollars today can I write that dinner off? If not, what is necessary to do to be able to write off a dinner.

Second, I don't have a work car. Can I write off my car payments and everything? If not, same thing, what do I need to do so that I can?

Meals have to be directly business related with respect to a client. Unless your wife is generating income related to the business; the answer is NO. Think on how a bean counter would look at the expense.

Vehicle expenses as it relates to the business is a valid write-off.
There is vehicle depreciation and maintenaince expenses along with insurance, and other fees required to put the vehicle on the road.
You will have to proportionally allocate the costs (percentage of use) and go from there.

See response to post above for other items that are valid expenses against business income.

 

[scm518]

Originally posted by: EagleKeeper

Originally posted by: scm518
I have a quick question. I have a typical 9-5 M-F - but I am also doing consulting work on the side which was my plan all along. I am getting paid via 1099 so I am putting roughly 25% of those payments aside to cover taxes.

My question is, am I allowed to "claim" anything on my taxes against the earning from the 1099 for the cost of setting up/running my consultantcy? (sp?) For instance, cell phone, purchased new computer equipment, purchased an internet fee, etc.

For the 2005 tax season I only received one check of $1000 (small retainer) - but expect much much more as I started on a very large consultanting project the last week of the year.


Thank you for any help you can offer.

Sean

Anything that is business related to the consulting is fair game.
Dig back through the last two years tax threads for a multitude of ideas that CPA, myself and a few others have posted.

It will be a long read; but well worth it on the bottom line.

Thank you so much for your quick response. I will be sure to read the former posts. My only concern was that I will only be showing $1000 of income from the consultancy - even though I have poured much more into it this far. I just wasnt sure if there were any rules stating that you could only write off an amount equal to what comes in, because after that point it would begin to effect the taxes on my M-F salaried job.

=)

Off to read!

Sean

 

[Linflas]

I want to make sure I understand how the deduction for interest on a home equity loan works. If the fair market value of my house today is $400,000 and mortgage is for $200,000 then the interest on a $100,000 home equity loan would be fully deductable. Is this correct or am I missing something? Thanks.

 

[EagleKeeper]

Originally posted by: Linflas
I want to make sure I understand how the deduction for interest on a home equity loan works. If the fair market value of my house today is $400,000 and mortgage is for $200,000 then the interest on a $100,000 home equity loan would be fully deductable. Is this correct or am I missing something? Thanks.

Correct - as long as the loan principal is below the equity ofthe house.

 

[z0mb13]

Thank you much for your help, but I have another question:

I came here to the US in 1998 as an international student. I know that the money that I put in bank accounts here are not taxable because that money is used for tuition..

However, I changed status last year as a resident (got a h1 visa). I still have some saved money that was earmarked for my tuition and living expenses, my question is: do I pay interest on that money? or just on the money that I have earned since I became a resident?

TIA

 

[EagleKeeper]

Interest that the bank reports to you after you get the H1 becomes taxable.

 

[z0mb13]

Originally posted by: EagleKeeper
Interest that the bank reports to you after you get the H1 becomes taxable.

since I lump my money together, I just need to estimate the portion of interest that I earned after the h1?

for instance, if I have a remaidner of 10k, then I saved 5k so far.. the interest would be just on the 5k?

 

[AStar617]

Searched the thread but it didn't yield anything so excuse me if the answer is buried here somewhere...

What's up with the majority of the Free File Alliance providers putting the squeeze on the AGI requirements for eligibility this fiscal year? I've happily used online TurboTax for 2-3 years now (first year thru TaxFreedom.com, afterwards thru irs.gov free-file link), but all of a sudden you need $28k or lower to qualify... and even the less stringent providers max out only at $50k... I qualify for neither

FYI, only three seem to cover federal filing for over $50K AGI (and in MA):

TaxAct (my current front-runner, free for all residents of AL, AR, AZ, CA, CO, CT, DC, DE, GA, HI, IA, ID, IN, KS, KY, LA, MA, MD, ME, MI, MN, MO, MS, MT, NC, NE, ND, NH, NJ, NM, NY, OH, OK, OR, RI, SC, UT, VA, VT, WI, or WV);

TaxCut (must be under 50, and AGI restriction lifted ONLY IF you take your refund on one of their prepaid debit cards, with a "card fees may apply" asterisk attached :roll: );

ezTaxReturn.com (never heard of 'em, but free for all filers 16 to 51).

Of course, all three require you to link thru the irs.gov website for free filing.

 

[EagleKeeper]

Originally posted by: z0mb13

Originally posted by: EagleKeeper
Interest that the bank reports to you after you get the H1 becomes taxable.

since I lump my money together, I just need to estimate the portion of interest that I earned after the h1?

for instance, if I have a remaidner of 10k, then I saved 5k so far.. the interest would be just on the 5k?

Banks will report the interest paid each month/quarter/year to you.

That is the information that you need to report.

 

[UTmtnbiker]

This is a very general tax software question that hopefully somebody who already has TaxCut/Turbo Tax can answer.

Do either of these packages have sections that cover small businesses? My wife started a small business last year as a sole prop with no income yet, just business expenses. I've looking on both web sites to see if either package deals with business expenses and I don't/haven't seen anything to lead me to believe they do.

We're looking at using a CPA, but in reality, this is the only wrinkle in an otherwise simple tax return.

Thanks.

 

[EagleKeeper]

Originally posted by: UTmtnbiker
This is a very general tax software question that hopefully somebody who already has TaxCut/Turbo Tax can answer.

Do either of these packages have sections that cover small businesses? My wife started a small business last year as a sole prop with no income yet, just business expenses. I've looking on both web sites to see if either package deals with business expenses and I don't/haven't seen anything to lead me to believe they do.

We're looking at using a CPA, but in reality, this is the only wrinkle in an otherwise simple tax return.

Thanks.

The Tax S/W that I have looked at (TT and TC) both easily support the needs of a one person shop.

They walk you through the all general areas (line items) required for a Schedule C.

Both companies have a "small business" tax S/W package that may support additional features; however when I looked at the features list; I saw no benefit to myself.

For myself, I use a database & spreadsheet to track all expenses. The database has categories that correspond to the Schedule C line items.

This makes it easy to then either itemize (regretfully the Tax S/W can not import or cut in tabulur data) or enter the total on the line item.

If you would not go to a CPA for your taxes under normal circumstances; there should be no need to do so just because of a one person operation. Once you have all the information collected it will just take no more than an extra hour to get the info properly entered.

 

[CPA]

Originally posted by: UTmtnbiker
This is a very general tax software question that hopefully somebody who already has TaxCut/Turbo Tax can answer.

Do either of these packages have sections that cover small businesses? My wife started a small business last year as a sole prop with no income yet, just business expenses. I've looking on both web sites to see if either package deals with business expenses and I don't/haven't seen anything to lead me to believe they do.

We're looking at using a CPA, but in reality, this is the only wrinkle in an otherwise simple tax return.

Thanks.

Yes. They all have the Schedule C (Business Loss/Income).

If she is a Corporation (my guess is she is not) then she will have to file an 1120. The software program may or may not come with it, but if not, you can download it from the IRS website. And since she is small, she will only have to fill out about a page worth of info. It's very easy to file.

 

[Tu13erhead]

Hi all.

I received $1000 worth of Best Buy gift cards last summer through an online rewards site. Before I received the cards, they requested that I fill out a W-9 tax form and send it to them, which I did.

My question is, do I have to do anything related to that when I do my taxes? Do I pay tax on the cards that I received? If so, any idea how much will it be?

Thanks!

 

[EagleKeeper]

Originally posted by: Tu13erhead
Hi all.

I received $1000 worth of Best Buy gift cards last summer through an online rewards site. Before I received the cards, they requested that I fill out a W-9 tax form and send it to them, which I did.

My question is, do I have to do anything related to that when I do my taxes? Do I pay tax on the cards that I received? If so, any idea how much will it be?

Thanks!

In theory; those would be treated as misc income. If they exceed the mic income threshold, they will have to go on the Schedule C.

Using the Schedule C, you can then expense off anything that is related to you obtaining those cards.

 

[Tu13erhead]

Originally posted by: EagleKeeper

Originally posted by: Tu13erhead
Hi all.

I received $1000 worth of Best Buy gift cards last summer through an online rewards site. Before I received the cards, they requested that I fill out a W-9 tax form and send it to them, which I did.

My question is, do I have to do anything related to that when I do my taxes? Do I pay tax on the cards that I received? If so, any idea how much will it be?

Thanks!

In theory; those would be treated as misc income. If they exceed the mic income threshold, they will have to go on the Schedule C.

Using the Schedule C, you can then expense off anything that is related to you obtaining those cards.

Hmm...I'm not sure I understand (I'm somewhat a nub when it comes to taxes). Do you know what the misc income threshold is? Does it change based on my income?

Also, related to the second part - I spent about $241 of my own money (though I got all but $26 back eventually) in obtaining these cards. Would I expense that $241 or $26?

Thanks!

 

[EagleKeeper]

Originally posted by: Tu13erhead

Originally posted by: EagleKeeper

Originally posted by: Tu13erhead
Hi all.

I received $1000 worth of Best Buy gift cards last summer through an online rewards site. Before I received the cards, they requested that I fill out a W-9 tax form and send it to them, which I did.

My question is, do I have to do anything related to that when I do my taxes? Do I pay tax on the cards that I received? If so, any idea how much will it be?

Thanks!

In theory; those would be treated as misc income. If they exceed the mic income threshold, they will have to go on the Schedule C.

Using the Schedule C, you can then expense off anything that is related to you obtaining those cards.

Hmm...I'm not sure I understand (I'm somewhat a nub when it comes to taxes). Do you know what the misc income threshold is? Does it change based on my income?

Also, related to the second part - I spent about $241 of my own money (though I got all but $26 back eventually) in obtaining these cards. Would I expense that $241 or $26?

Thanks!

Usually the accepted threshold is $300 for non specific income. I do not have a reference for that number; however, some tax S/W used to use that as a switchover point. It is not income dependent.

You would expense the $241 and also credit the amount that you recovered.
However; look closely at what means you used related to get the cards. Internet access; mailing supplies, etc. All those should be proportionally expensed.