3rd Annual AT Tax Time Thread

[EagleKeeper]

Originally posted by: $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?

Tax S/W for the PC can import data from certain financial programs (Quicken, Money).

Also, if you can dump the transactions to a spreadsheet; then importing them in the reference S/W it may work.

Because you need mulitple pieces of information for each transactions; a simple cut/paste into the tax S/W from the spreadsheet into an itemized list may not work.

 

[Squisher]

Should I get a preparer to do my taxes?
I've always done it with TurboTax, but this year I'm not sure the software can handle all of my needs.

My new situations:
Sold a house where I paid $4500 of the buyer's closing costs.
Incurred numerous expenses to make the house more sell-able
Bought a house.
Turned in stock options (NQSO)
Sold a number of shares that were bought in small lots over a number of years.

What do you think?

 

[EagleKeeper]

Originally posted by: Squisher
Should I get a preparer to do my taxes?
I've always done it with TurboTax, but this year I'm not sure the software can handle all of my needs.

My new situations:
Sold a house where I paid $4500 of the buyer's closing costs.
Incurred numerous expenses to make the house more sell-able
Bought a house.
Turned in stock options (NQSO)
Sold a number of shares that were bought in small lots over a number of years.

What do you think?

Is there a reason why you think tax S/W can not handle the situation.
House sale should not incur capitial gains unless the profit was more than 250K/500K (single/married)
You have to have a record of the stock transactions anyhow for anyone that you would have to do the work; therefore you already have the info at your finger tips. You are just paying some to enter the numbers for you (in that respect).

It is up to you if you wish to pay someone $200-$300 because you are lacking self confidence in yourself.

 

[Squisher]

Originally posted by: EagleKeeper

Originally posted by: Squisher
Should I get a preparer to do my taxes?
I've always done it with TurboTax, but this year I'm not sure the software can handle all of my needs.

My new situations:
Sold a house where I paid $4500 of the buyer's closing costs.
Incurred numerous expenses to make the house more sell-able
Bought a house.
Turned in stock options (NQSO)
Sold a number of shares that were bought in small lots over a number of years.

What do you think?

Is there a reason why you think tax S/W can not handle the situation.
House sale should not incur capitial gains unless the profit was more than 25K (single)
You have to have a record of the stock transactions anyhow for anyone that you would have to do the work; therefore you already have the info at your finger tips. You are jsut paying some to enter the numbers for you (in that respect).

It is up to you if you wish to pay someone $200-$300 because you are lacking self confidence in yourself.

The thing that stuck out in mind was the expenses to make my old house sell-able and $4500 dollars of closing costs I paid of the buyer's costs.

I've used the software before for some fairly long returns (all my wife's business expenses including a home office, my expenses, and all the charitable donations of goods)

 

[EagleKeeper]

Look at what the capital gains will be on the sale of the house. Being married; you have $500K to play with before the worry about expenses come into play.

You can never claim any loss on the sale of a primary residence; nor do you have to worry about taxes on the sale unless you exceed the threshold [selling price - (orginal price + improvements + expenses in the sale)]

 

[TrueBlueLS]

I've got a friend who only made $6,053.63 in 2005. He had $437.80 taken out in federal taxes and cannot be claimed as a dependent. Is my understanding correct that he would receive the full amount of what his federal withholding is?

 

[Heinrich]

Originally posted by: 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.

Thanks, but I'm still confused. As a Condo owner, with a building that is 3 stories high, where is my 'land'? I thought I saw something about the 'land value' on one of these thousands of pieces of paper but I can't find it. It was specifically asked for when I was typing information in about my home office - the difference between the building and the land.

I do have 'personal property tax' listed on my tax papers from my bank but nothing about real estate taxes.

 

[IHateMyJob2004]

Is a 5.4% effective tax rate normal?

Our adjusted gross was $77K
I have a baby
My wife is in school
I paid $12,000 in intrest on my mortgage.

Probably $600 charitable donations.

Did I screw something up?

 

[nobody2you]

I have a question:
I didn't file my return in 2004 and I received a letter from the IRS why I didn't file etc...
I dont think I own any taxes as I have dont previous year returns and my income didnot change. So, if the IRS did go about whatever they do and conclude that I have tax refund owe to me.......
1. Will they give me a check for the amount?
2. Will they give me a check for the amount+interest?
3. Something else?

I may eventually file but I was curious what would they do. I dont make enough money to even be bother with. I haven't worked since 2004 and now i'am back in school.

 

[IHateMyJob2004]

Originally posted by: nobody2you
I have a question:
I didn't file my return in 2004 and I received a letter from the IRS why I didn't file etc...
I dont think I own any taxes as I have dont previous year returns and my income didnot change. So, if the IRS did go about whatever they do and conclude that I have tax refund owe to me.......
1. Will they give me a check for the amount?
2. Will they give me a check for the amount+interest?
3. Something else?

I may eventually file but I was curious what would they do. I dont make enough money to even be bother with. I haven't worked since 2004 and now i'am back in school.

Umm, if you mave a savigns account, a job, etc..... you have to file. If the IRS cotnacted you about an audit, you need to go find a lawyer. You really need to supply more info though. What did you earn? Did you have a job? etc...

 

[sigpop]

thx again for this thread.

we had another kid this year and i got booted from my office (upstairs bedroom). so we built an office in the basement (same exact size as bedroom office). i work full time from the home for a company (not self employed). i also teach some classes online from the home (using the same office/equipment).

i don't get reimbursed for my computer/software purchases, so i loaded up on new equipment this year since it was a high income year for wife and i. a conservative estimate, we use the stuff 90% for business. the other 10% is recreational use, like digital photos and reading anand of course .

i am trying out turbotax online (scary?) so i'm not well versed on specific form numbers.

1. looks like i should split all the expenses between the two jobs?
2. for the computer stuff, i used the sect 179 option. is that wise?
3. i can't seem to determine where i enter the costs for building the office. there was a box for "maintenance that applies directly to the office". does that sound right?

thx for any input.

 

[EagleKeeper]

Originally posted by: sigpop
thx again for this thread.

we had another kid this year and i got booted from my office (upstairs bedroom). so we built an office in the basement (same exact size as bedroom office). i work full time from the home for a company (not self employed). i also teach some classes online from the home (using the same office/equipment).

i don't get reimbursed for my computer/software purchases, so i loaded up on new equipment this year since it was a high income year for wife and i. a conservative estimate, we use the stuff 90% for business. the other 10% is recreational use, like digital photos and reading anand of course .

i am trying out turbotax online (scary?) so i'm not well versed on specific form numbers.

1. looks like i should split all the expenses between the two jobs?
2. for the computer stuff, i used the sect 179 option. is that wise?
3. i can't seem to determine where i enter the costs for building the office. there was a box for "maintenance that applies directly to the office". does that sound right?

thx for any input.

0) I would spend the few extra $$ and get the PC copy of tax S/W. Having the actual file and be able to play around with what if scenarios by copying the master file gives me a wamr fuzzy. (Personal Opinion Only)

1) Expenses between the two jobs should be proportionalized by income.

2) Use the Sect 179 against the income that you get that is not W2 (employee wages).
If you use the computer equipment costs against the W2, you will loose the 2% required as Misc Expenses on the 2106.

3) When you define that you have a home office; and indicated that it is part of your primary residence; the tax S/W should ask you about upgrades and utlities/taxes/interest. (TaxCut does request that infor from me). It will proportionally adjust those items that can go on the Schedule C and put the other allowed items on the Schedule A.

4) Anand doesnot count as recreational - you are using it to handle your taxes; including the cost of the internet access.

To be able to use the home office as a W2 business expense, you need to be working there for the convience of the employer.

 

[sigpop]

0) I would spend the few extra $$ and get the PC copy of tax S/W. Having the actual file and be able to play around with what if scenarios by copying the master file gives me a wamr fuzzy. (Personal Opinion Only)

wise advice. i regret typing in all my info in online. i've used the desktop version of taxcut the last cpl years, so i may just go buy it to do different combos.
i've also often wondered why these pacakges dont have an option that lets you see the differences if you file maried/independent with the push of a button, too.

2) Use the Sect 179 against the income that you get that is not W2 (employee wages). If you use the computer equipment costs against the W2, you will loose the 2% required as Misc Expenses on the 2106.

so i probably should try it both ways. i went with the sect 179 because it seemed easier (not depreciated over few years) and i thought it would give me a bigger deduction this year. so far as the 2% cutoff, the software asked me to type in interest, taxes and insurance for my mortgage, so i assume that counts towards that 2%. i also typed in interest and taxes as a standard deduction--is that double dipping?

3) When you define that you have a home office; and indicated that it is part of your primary residence; the tax S/W should ask you about upgrades and utlities/taxes/interest. (TaxCut does request that infor from me). It will proportionally adjust those items that can go on the Schedule C and put the other allowed items on the Schedule A.

i think that is what i was talking about in #2 above. hopefully the maintenance/upkeep in turbotax is correct. i don't recall an "upgrades" question.

To be able to use the home office as a W2 business expense, you need to be working there for the convience of the employer.

this is definitely the case for me. we are a virtual company.

 

[EagleKeeper]

The best thing to do to aleviate worry about double dipping would be to printout the worksheets and ensure that the total of the taxes/interest match up with the statements from the bank/government

The home office questions prompts may be slightly different than the rental of a home w/ respect to expenses.

As stated; look at the worksheets closely; that is where the double dipping will be detected.

 

[IHateMyJob2004]

Originally posted by: sigpop
thx again for this thread.

we had another kid this year and i got booted from my office (upstairs bedroom). so we built an office in the basement (same exact size as bedroom office). i work full time from the home for a company (not self employed). i also teach some classes online from the home (using the same office/equipment).

i don't get reimbursed for my computer/software purchases, so i loaded up on new equipment this year since it was a high income year for wife and i. a conservative estimate, we use the stuff 90% for business. the other 10% is recreational use, like digital photos and reading anand of course .

i am trying out turbotax online (scary?) so i'm not well versed on specific form numbers.

1. looks like i should split all the expenses between the two jobs?
2. for the computer stuff, i used the sect 179 option. is that wise?
3. i can't seem to determine where i enter the costs for building the office. there was a box for "maintenance that applies directly to the office". does that sound right?

thx for any input.

If you are deducting your PC, I hope you keep a log of all it's use. It was a red flag for the IRS several years ago (maybe 2000). You've been warned.

PS: Why didn't your company pay for all the garbage?

 

[nobody2you]

Originally posted by: IHateMyJob2004

Originally posted by: nobody2you
I have a question:
I didn't file my return in 2004 and I received a letter from the IRS why I didn't file etc...
I dont think I own any taxes as I have dont previous year returns and my income didnot change. So, if the IRS did go about whatever they do and conclude that I have tax refund owe to me.......
1. Will they give me a check for the amount?
2. Will they give me a check for the amount+interest?
3. Something else?

I may eventually file but I was curious what would they do. I dont make enough money to even be bother with. I haven't worked since 2004 and now i'am back in school.

Umm, if you mave a savigns account, a job, etc..... you have to file. If the IRS cotnacted you about an audit, you need to go find a lawyer. You really need to supply more info though. What did you earn? Did you have a job? etc...

Yes I did work in 2004 but taxes are automatically taken from each of my paycheck. When I do file the tax, it doesnt make much of a difference. I suppose I was wondering if the IRS ever say "hey you overpaid" since I read that they do "Hey you underpaid" thing to people and demand money.

 

[sigpop]

If you are deducting your PC, I hope you keep a log of all it's use. It was a red flag for the IRS several years ago (maybe 2000). You've been warned.

hmm, a log of all it's use is a tough requirement. even somewhat laughable from a tech standpoint. i suppose i'd be screwed if they requested that. i could run pct of files that are work related vs recreational. or relate number of hrs i work vs hrs in the day left for goofing off.. i am a software developer so it seems odd that would be an issue. i can make a good enough argument for having multiple server/workstation setup, but i do my work primarily on one desktop and one laptop.

PS: Why didn't your company pay for all the garbage?

it's a tradeoff i'm willing to make. i work for a small startup company and make decent wages for where i live. working from home is obviously more flexible than the typ office environment. they did send me a sweet herman miller aeron chair.

 

[sigpop]

The best thing to do to aleviate worry about double dipping would be to printout the worksheets and ensure that the total of the taxes/interest match up with the statements from the bank/government

The home office questions prompts may be slightly different than the rental of a home w/ respect to expenses.

As stated; look at the worksheets closely; that is where the double dipping will be detected.

actually, now i am curious how that pans out. say i paid 10k in interest this yr and entered that in the standard mortgage deduction part. then it asks in the home office part what i paid in mort interest again, and again i enter 10k, i would hope the software is smart enough to handle it.

i'm definitely going to pick up some desktop software to do some playing around.

 

[QED]

OK, two quick questions:



1) Are those educational expenses (related to undergrad tuition) deductible the tax year the tuition is charged, or the tax year the tuition is actually PAID?

and

2) My father-in-law has been out of work for nearly three years. I have a little side business and a pretty decent job. I would like help his family out a little bit by giving him around a thousand dollars a month. Tax wise-- what is the best way to handle this? Should I just gift it to him? Or "hire" him as a part-time employee?

Thanks!

 

[EagleKeeper]

Originally posted by: MathMan

OK, two quick questions:



1) Are those educational expenses (related to undergrad tuition) deductible the tax year the tuition is charged, or the tax year the tuition is actually PAID?

and

2) My father-in-law has been out of work for nearly three years. I have a little side business and a pretty decent job. I would like help his family out a little bit by giving him around a thousand dollars a month. Tax wise-- what is the best way to handle this? Should I just gift it to him? Or "hire" him as a part-time employee?

Thanks!

Either option can be used based on examples from the IRS site for tutition expenses.

If you treat a person as an employee; there will be tax papertwork for both parties.
The gift tax will come into play when more than the allowed limit (per donor/per person) is done each year.

The amounts that you are talking about should fall under that radar level

 

[SirChadwick]

Question about the form 8453-OL (moving expenses)

I e-filed w/ TaxAct this year and reported moving expenses for my new job. After filing I had to print the 8453-OL form and signed it to turn into the IRS. It says that the form must be verified. Does this mean that I need to document the amount that I've declared by making copies of statements/receipts? They are very unclear, but I'm assuming that they mean to proofread the form before submitting it.

 

[Len12345]

Thanks in advance for your help.

Last year I did the taxes for my family using turbo tax and it wasn?t too hard. First the background. My mom passed away late 2005 and I?m not sure about whether I?ll be able to do the taxes for 2005. My brother (22) and I (23) both had joint accounts with my mom some of which was our money listed with our SS# and some of which was her money listed with her SS# as well as individual accounts. I have the 1099s for these accounts and they credit all of the interest income as if she lived the whole year, basically the same way they came for the year before. I also have bank statements showing interest earned around her date of death.

The main problem, as I see it, is that I?m not sure how I have to account for the interest income earned after my mothers death, because I?ve heard conflicting information.

Based on the above information hopefully the following make sense.

1) I can file a joint return for my parents for 2005 my dad for the whole year, and my mom through the day she died.

2) My brother?s and I can file our returns as normal, but will need to add any interest earned, after her death, from joint or POD accounts with my mom respectively

3) If 1 and 2 are correct how do I show that with just a single 1099.

4) A final return will have to be filed that will include income earned after her death that will include things like interest earned on individual accounts that weren?t included above. Is this part something I?m better off having an accountant do.


I?m sure there are some things I?m forgetting but this is what I want to try to figure out so I can get started. If you have any questions or need more information let me know. Thanks again.

 

[aphex]

Sister in law has been living down in Costa Rica for the past 2 years... This is the first year that she did not earn any money in the US.

Is she still required to file taxes as she has filed for 10 or so years in the US? She is not giving up her citizenship and still returns every few months or so.

 

[CPA]

Originally posted by: aphex
Sister in law has been living down in Costa Rica for the past 2 years... This is the first year that she did not earn any money in the US.

Is she still required to file taxes as she has filed for 10 or so years in the US? She is not giving up her citizenship and still returns every few months or so.

No earnings = no filing as far as I'm concerned.

 

[CPA]

Originally posted by: SirChadwick
Question about the form 8453-OL (moving expenses)

I e-filed w/ TaxAct this year and reported moving expenses for my new job. After filing I had to print the 8453-OL form and signed it to turn into the IRS. It says that the form must be verified. Does this mean that I need to document the amount that I've declared by making copies of statements/receipts? They are very unclear, but I'm assuming that they mean to proofread the form before submitting it.

Just make sure you have records and that you are only claiming moving expenses that are eligible. You won't need to send in anything in.