3rd Annual AT Tax Time Thread

[Gooberlx2]

Originally posted by: EagleKeeper

Originally posted by: Gooberlx2

Originally posted by: EagleKeeper

Originally posted by: Gooberlx2
Question here:

Can a parent claim their incarserated child (31 years old), who's diagnosed with AIDs, as a dependant? AIDs is obviously a disability, this person is unable to walk and weighs about 120lbs (down from almost 220 when he was healthy), much less perform a minimum wage job. The parents acutally have to pay for just about everything the child is allowed (food, medications, doctor visits, hospitalizations, resitution, toothpaste....everything). According to turbotax he qualifies....but there was never a question about....prison.

There are enough grey areas that if the parents can document that they cover more than half the cost of the person's upkeep; then given the situation that the person is classified as disabled; it would seem to qualify.

Initially the residency test will fail; however this can be considered overridden by the temporary absence clause (depending on the length of the sentence)

Hmmm....length of the sentence is life...and likely he will pass before chance of parole. Does that change anything?

Therefore there is no legitimate reason to think that this incarceration can be considered as a temporary absense.
To claim him as a dependent would be fraud according to the IRS guidelines.

Damn. It really sucks how much the prison system screws the families out of their money. But that's an argument for a different topic. Thanks for clarifying that though. Turns out that turbotax online did eventually say he wasn't elligible.

 

[axnff]

Originally posted by: EagleKeeper

Originally posted by: memo
This is a bit OT, but still pertain a little bit to tax day. If it doesn't relate to the topic please let me know and maybe I'll make another thread. Anyhow, I have been thinking about starting a Roth IRA, and I have read reports online that you can still start one today, and have it reflect on last years taxes, is this a good idea? I made about 42k last year, and I pay close to nothing in rent, have no car payments, but paid off 9k in student loans What, if any benefit will I have for filing for a Roth now?

The Roth allows you to build a nest egg and not have to pay taxes on it when you crack it open.
The normal IRA allows you to build the nest egg now and pay no taxes on it as you build it; just when you crack it.

You can fund a 2005 IRA until tax day 2006. There is no real benifit to funding the Roth for 2005 unless you expect to hit the income limitations for funding in 2006.

If he desired to really get the ball rolling, he could use this to effectively double his maximum contribution in this first calendar year, could he not? The benefits to this would be those of greatly increased compounding. This is, of course, assuming he can afford to put $4k into it in the next two months and another $4k in the twelve after that....

Though I can see your point being true as to no tax benefit, per se....

 

[fanatik]

Ignore me. Sorry.

 

[chambersc]

How long does someone have to be at a residence in Florida to be declared as a dependent? If my mother had a friend live with her from feb to sept of 05, would she be declared a dependent on my mom's tax returns? She paid no rent or any money to help my mother out at all and lived with her for 7months, bascially like a 40+yr old child...dependent legally?

 

[EagleKeeper]

Originally posted by: chambersc
How long does someone have to be at a residence in Florida to be declared as a dependent? If my mother had a friend live with her from feb to sept of 05, would she be declared a dependent on my mom's tax returns? She paid no rent or any money to help my mother out at all and lived with her for 7months, bascially like a 40+yr old child...dependent legally?

Review the definition of a dependent at the IRS Web site.
In general they must be a blood/legal relative at a minimum w/ certain exceptions for foster/adoption

The state has no impact on the Federal definition.

 

[chambersc]

Originally posted by: EagleKeeper

Originally posted by: chambersc
How long does someone have to be at a residence in Florida to be declared as a dependent? If my mother had a friend live with her from feb to sept of 05, would she be declared a dependent on my mom's tax returns? She paid no rent or any money to help my mother out at all and lived with her for 7months, bascially like a 40+yr old child...dependent legally?

Review the definition of a dependent at the IRS Web site.
In general they must be a blood/legal relative at a minimum w/ certain exceptions for foster/adoption

The state has no impact on the Federal definition.

thanks for the help. i'll tell her the bad news.

 

[IHateMyJob2004]

1099-INT

My Ameritrade account and savigns account got $1 and $2 in interest this year. But I got no 1099-INT? Is this normal? Do I have to report these tiny gains?

Ameritrade says I might not get a 1099-INT. Isn't there a rule that only $X+ in interest requires a form be sent?

EDIT:
1099-INT
If you earned more than $10 in interest on a bank account or a certificate of deposit, you'll get one of these forms for each account. Don't dismiss this statement if you reinvested the interest. Tax law says you received the income even if you didn't actually have it in your hand, and reinvested earnings are still taxable income. 1099-INT statements also are issued to persons who cashed in savings bonds.

So, I only get one if it's $10+. So, do I have to report the $2?

EDIT 2:
Thanks to Turbo Tax, I do have to report those tiny amounts.

 

[IHateMyJob2004]

TURBO TAX SUCKS

I hope no one here shorts stock or options. If so, you better look over your long/short term gains numbers! TurboTax isn't recognizing that short trades require the short term tax rate!

Be warned!

 

[IHateMyJob2004]

ARGHHHHHHHHHHHHHHHHHHH

Turbo tax does all the short term/long term stuff at the end. not "on the fly". Why even have hte on the fly updates if they don't work?

 

[CPA]

Originally posted by: IHateMyJob2004
1099-INT

My Ameritrade account and savigns account got $1 and $2 in interest this year. But I got no 1099-INT? Is this normal? Do I have to report these tiny gains?

Ameritrade says I might not get a 1099-INT. Isn't there a rule that only $X+ in interest requires a form be sent?

EDIT:
1099-INT
If you earned more than $10 in interest on a bank account or a certificate of deposit, you'll get one of these forms for each account. Don't dismiss this statement if you reinvested the interest. Tax law says you received the income even if you didn't actually have it in your hand, and reinvested earnings are still taxable income. 1099-INT statements also are issued to persons who cashed in savings bonds.

So, I only get one if it's $10+. So, do I have to report the $2?

EDIT 2:
Thanks to Turbo Tax, I do have to report those tiny amounts.

Like other forms (1099, 1098, even W2s), even if you don't receive them you have to report the amounts (you may note that you didn't receive the form).

 

[CPA]

Originally posted by: axnff

Originally posted by: EagleKeeper

Originally posted by: memo
This is a bit OT, but still pertain a little bit to tax day. If it doesn't relate to the topic please let me know and maybe I'll make another thread. Anyhow, I have been thinking about starting a Roth IRA, and I have read reports online that you can still start one today, and have it reflect on last years taxes, is this a good idea? I made about 42k last year, and I pay close to nothing in rent, have no car payments, but paid off 9k in student loans What, if any benefit will I have for filing for a Roth now?

The Roth allows you to build a nest egg and not have to pay taxes on it when you crack it open.
The normal IRA allows you to build the nest egg now and pay no taxes on it as you build it; just when you crack it.

You can fund a 2005 IRA until tax day 2006. There is no real benifit to funding the Roth for 2005 unless you expect to hit the income limitations for funding in 2006.

If he desired to really get the ball rolling, he could use this to effectively double his maximum contribution in this first calendar year, could he not? The benefits to this would be those of greatly increased compounding. This is, of course, assuming he can afford to put $4k into it in the next two months and another $4k in the twelve after that....

Though I can see your point being true as to no tax benefit, per se....

I would think that if you contributed $4k by April 17th for year 2005 taxes, then you could contribute another $4k any time up to April 15th next year. But I'm not an IRA expert.

 

[sygyzy]

What is underpayment penalty and how can I avoid it?

 

[EagleKeeper]

Originally posted by: sygyzy
What is underpayment penalty and how can I avoid it?

IRS - FAQ - Underpayment of Extimated Tax

The United States income tax is a pay?as?you?go tax, which means that tax must be paid as you earn or receive your income during the year. There are two ways to pay as you go. One is through tax withholding and the other is through estimated tax payments. Topic 355 provides information on paying estimated tax. If you do not pay enough tax through withholding or estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will have paid enough tax to avoid this penalty if they have paid at least 90% of the tax shown on the return for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller.

Trick is to make sure that you keep track of what your tax payments are and pay the needed chunk at the last minute if you have to stay inside the rules

 

[vtohthree]

NEW QUESTION!

I'm in college, I worked part time, and I made under 2k for 2005. My parents claim me as a dependant, but I was stupid and didn't know that I didn't have to file for a refund since I'm claimed as a dependant.

I did my taxes online and got a rejection code 0510. How do I fix this? Do I have to refile? What should I do?

Eh, all this trouble from my ignorance =P haha

Thanks, your a life saver.

 

[EagleKeeper]

Originally posted by: vtohthree
NEW QUESTION!

I'm in college, I worked part time, and I made under 2k for 2005. My parents claim me as a dependant, but I was stupid and didn't know that I didn't have to file for a refund since I'm claimed as a dependant.

I did my taxes online and got a rejection code 0510. How do I fix this? Do I have to refile? What should I do?

Eh, all this trouble from my ignorance =P haha

Thanks, your a life saver.

If your parent claimed you as an dependant; then when you file; you MUST make sure that is the classification that you use. Just refile with the proper category for your status.

If that fails; you have another issue that is beyond our scope.

 

[vtohthree]

Originally posted by: EagleKeeper

Originally posted by: vtohthree
NEW QUESTION!

I'm in college, I worked part time, and I made under 2k for 2005. My parents claim me as a dependant, but I was stupid and didn't know that I didn't have to file for a refund since I'm claimed as a dependant.

I did my taxes online and got a rejection code 0510. How do I fix this? Do I have to refile? What should I do?

Eh, all this trouble from my ignorance =P haha

Thanks, your a life saver.

If your parent claimed you as an dependant; then when you file; you MUST make sure that is the classification that you use. Just refile with the proper category for your status.

If that fails; you have another issue that is beyond our scope.

THey don't have a 1040EZ on the webservice I was using, just a 1040.

I don't see such a classification, through eztaxreturn, I only have the options to file as:

*single
*married/jointly
*married/separately
*Head of household
*Qualifying widower

I of course filed as single.

EDIT: I just unchecked the box that said I was trying to claim myself as an EXEMPTION.

Now I will refile...am I still eligible for a refund even though I am a dependant? (I only made a measely $1671...$193 with held) In that case, should I just not refile and let the government keep my money..it should all be on record anyways since I only had income through wages from a W-2 form..haha, unless of course this not legal or I could get in trouble etc... even though the gov. benefits from me not asking for a refund that's already documented on a W-2.

I should mention that I DO NOT have any other unearned income, just my wage.

 

[EagleKeeper]

Originally posted by: vtohthree

Originally posted by: EagleKeeper

Originally posted by: vtohthree
NEW QUESTION!

I'm in college, I worked part time, and I made under 2k for 2005. My parents claim me as a dependant, but I was stupid and didn't know that I didn't have to file for a refund since I'm claimed as a dependant.

I did my taxes online and got a rejection code 0510. How do I fix this? Do I have to refile? What should I do?

Eh, all this trouble from my ignorance =P haha

Thanks, your a life saver.

If your parent claimed you as an dependant; then when you file; you MUST make sure that is the classification that you use. Just refile with the proper category for your status.

If that fails; you have another issue that is beyond our scope.

THey don't have a 1040EZ on the webservice I was using, just a 1040.

I don't see such a classification, through eztaxreturn, I only have the options to file as:

*single
*married/jointly
*married/separately
*Head of household
*Qualifying widower

I of course filed as single.

EDIT: I just unchecked the box that said I was trying to claim myself as an EXEMPTION.

Now I will refile...am I still eligible for a refund even though I am a dependant? (I only made a measely $1671...$193 with held) In that case, should I just not refile and let the government keep my money..it should all be on record anyways since I only had income through wages from a W-2 form..haha, unless of course this not legal or I could get in trouble etc... even though the gov. benefits from me not asking for a refund that's already documented on a W-2.

I should mention that I DO NOT have any other unearned income, just my wage.

If the numbers via the web site indicate that you are owed a refund, then the government owes you the money; it is your choice if you choose to file to request it. You actually have three years to ask for it.

 

[Tal]

Is is legal for an employer to (for payment of health insurance premiums), write down and pay an employee for 52 hours over a two week period, rather than the 80 hours that were worked? It would seem to me that the correct taxes and withholdings, etc are not being taken out in this case. It also would make it look like the employee was only part-time right? as then the employee works less than 32 hours in a given week? Thanks!

 

[Corporate Thug]

can some point me to which section of the tax code addresses educational expenses?

 

[EagleKeeper]

Originally posted by: Corporate Thug
can some point me to which section of the tax code addresses educational expenses?

Work educational Expenses

Do a search at the IRS site for college related expenses for the Hope Credit or Lifetime Learning Credit

 

[oog]

I've been keeping track of how much stock I have and when I bought it in an Excel spreadsheet. Now, the broker says that I have about 1000 more shares of a stock than my records do. Their records don't go back as far in time as mine (at least from what I can access on their site). Since I have no record of when I picked up these 1000 shares, is there a legal way that I can still sell them and report them correctly on my taxes? I wouldn't know what cost basis to assign to them when I sell this lot.

 

[EagleKeeper]

They may have records that are archived; Have the research them if you know that you purchased the shares through them.

Otherwise I would go back to the earliest records that are available (you or them) and use that as a cost basis.

 

[Heinrich]

HI HI HI

This is probably a stupid question, but what is the difference between 'personal property tax' and 'real estate tax' none of my BofA forms mention real estate tax. Didn't I pay some sort of real estate tax through mortgage or buying of home?!?

 

[EagleKeeper]

Originally posted by: Heinrich
HI HI HI

This is probably a stupid question, but what is the difference between 'personal property tax' and 'real estate tax' none of my BofA forms mention real estate tax. Didn't I pay some sort of real estate tax through mortgage or buying of home?!?

In a nutshell:
Personal property taxes are assessed on personal items (vehicles/boats) that the government regulates.
Property tax is on physical land & buildings on it.

 

[$pade]

I am looking for an easy way to prepare my Schedule D for Tax reporting purposes. There are a couple online progams available but they all seem to charge an arm an leg. I have a buyAndHold account that allows you to make unlimited monthly stock purchases. Add in divident reinvesting and you end up with tons of transaction. Around 400 for 2005, but I think i need to look at all past transactions as well for lot matching purposes.
So for my purposes ,I would need a service that can process 1000 or unlimited transactions. That will cost 150+ (checked with gainskeeper and tradeaccountant)dollars per year. I assume that is still cheaper than hiring an accountant to do it for me, but is there any service that is even more affordable? Or has anyone created a program they would be willing to share?