3rd Annual AT Tax Time Thread

[Shimmishim]

Question:

In June/July (cant remember) I became a US citizen and had my name changed.

Since my name changed mid year, when i file, do I need to use my original name or my new name since my new name is on file now with the government?

(social security # did not change).

 

[CPA]

Originally posted by: Shimmishim
Question:

In June/July (cant remember) I became a US citizen and had my name changed.

Since my name changed mid year, when i file, do I need to use my original name or my new name since my new name is on file now with the government?

(social security # did not change).

Intuition would tell me that you use your legal name as it appears on December 31, 2005. You may want to give the IRS a call to confirm.

 

[ironk]

Omg, i can't figure out what the tax return addresses are. There are so many on MA IRS website:

http://www.massdor.com/help/address.htm

Which one do i use? Its just a basic personal tax return. There is Form 1 with a barcode, and the other one is a 1040. The person is owed a refund, so there is no money to send.

Its confusing because on the IRS website, they only give zip codes and cities. Is that ok to put in with no street address?

Here are the addresses that i think are correct and will appear just like so on the envelope:

State:

Mass. DOR
PO Box 7001
Boston, MA 02204

Federal:

Internal Revenue Service
Andover, MA
05501-0002

Is that correct? Also, should this be sent certified mail or is a delivery confirmation enough (via USPS)?

Sorry, i haven't done snail mail returns before and this is for someone else. I just wanna make sure they at least get to the proper destination.

 

[CPA]

Originally posted by: ironk
Omg, i can't figure out what the tax return addresses are. There are so many on MA IRS website:

http://www.massdor.com/help/address.htm

Which one do i use? Its just a basic personal tax return. There is Form 1 with a barcode, and the other one is a 1040. The person is owed a refund, so there is no money to send.

Its confusing because on the IRS website, they only give zip codes and cities. Is that ok to put in with no street address?

Here are the addresses that i think are correct and will appear just like so on the envelope:

State:

Mass. DOR
PO Box 7001
Boston, MA 02204

Federal:

Internal Revenue Service
Andover, MA
05501-0002

Is that correct? Also, should this be sent certified mail or is a delivery confirmation enough (via USPS)?

Sorry, i haven't done snail mail returns before and this is for someone else. I just wanna make sure they at least get to the proper destination.

The Federal address is correct for a Massachusettes resident NOT sending in a check. I've never used either for my return, but Certified is probably the best route.

The State looks correct, also.

Oh, and the IRS does not use street addresses for any of it's filing sites.

 

[RagingBITCH]

I'm working a job now where I'm considered a "Consultant", a temp employee with no benefits. Can I write off (on my 06 returns) the money I spend on gas, ($28 every 4 days) tolltag fees, ($5 daily), etc as business expenses?

 

[CPA]

Originally posted by: RagingBITCH
I'm working a job now where I'm considered a "Consultant", a temp employee with no benefits. Can I write off (on my 06 returns) the money I spend on gas, ($28 every 4 days) tolltag fees, ($5 daily), etc as business expenses?

If you are not getting a paycheck from them, but rather 1099 income (paid out of A/P), then you could consider yourself self-employed and file a schedule C. If you are getting a paycheck, then you will be considered an employee and you won't be able to write-off expenses in general.

 

[ironk]

thx.

 

[EagleKeeper]

Originally posted by: CPA

Originally posted by: Shimmishim
Question:

In June/July (cant remember) I became a US citizen and had my name changed.

Since my name changed mid year, when i file, do I need to use my original name or my new name since my new name is on file now with the government?

(social security # did not change).

Intuition would tell me that you use your legal name as it appears on December 31, 2005. You may want to give the IRS a call to confirm.

If it is electronically filed; the name & date of birth must match the SS records.
Otherwise it will get kicked back.

Check with the SS office to verify what they have on record.

When filing on paper; the IRS does not care much about the name.

 

[RagingBITCH]

Originally posted by: CPA

Originally posted by: RagingBITCH
I'm working a job now where I'm considered a "Consultant", a temp employee with no benefits. Can I write off (on my 06 returns) the money I spend on gas, ($28 every 4 days) tolltag fees, ($5 daily), etc as business expenses?

If you are not getting a paycheck from them, but rather 1099 income (paid out of A/P), then you could consider yourself self-employed and file a schedule C. If you are getting a paycheck, then you will be considered an employee and you won't be able to write-off expenses in general.

Thanks, I'm getting a paycheck. They do have consultants on board as 1099, so if I created my own company and considered myself 1099, I'd be able to right? Are there any other tax implications in filing taxes next year? Different form from using the 1040? Thanks!

 

[CPA]

Originally posted by: RagingBITCH

Originally posted by: CPA

Originally posted by: RagingBITCH
I'm working a job now where I'm considered a "Consultant", a temp employee with no benefits. Can I write off (on my 06 returns) the money I spend on gas, ($28 every 4 days) tolltag fees, ($5 daily), etc as business expenses?

If you are not getting a paycheck from them, but rather 1099 income (paid out of A/P), then you could consider yourself self-employed and file a schedule C. If you are getting a paycheck, then you will be considered an employee and you won't be able to write-off expenses in general.

Thanks, I'm getting a paycheck. They do have consultants on board as 1099, so if I created my own company and considered myself 1099, I'd be able to right? Are there any other tax implications in filing taxes next year? Different form from using the 1040? Thanks!

They would have to start paying you by A/P (1099) for you to consider it business income and allow you to offset it with expenses. They take a risk by doing that because if they get audited and the IRS deems that they have an employer-employee relationship with you they will get hit with fines and penalties, as well as the taxes they should have paid.

You will still file a 1040, but you will also file a Schedule C and maybe a couple of sub forms or worksheets. The net Schedule C income is reported on the 1040, just on a different line than ordinary income.

 

[CPA]

Originally posted by: EagleKeeper

Originally posted by: CPA

Originally posted by: Shimmishim
Question:

In June/July (cant remember) I became a US citizen and had my name changed.

Since my name changed mid year, when i file, do I need to use my original name or my new name since my new name is on file now with the government?

(social security # did not change).

Intuition would tell me that you use your legal name as it appears on December 31, 2005. You may want to give the IRS a call to confirm.

If it is electronically filed; the name & date of birth must match the SS records.
Otherwise it will get kicked back.

Check with the SS office to verify what they have on record.

When filing on paper; the IRS does not care much about the name.

Good catch! As an example, I've had to use an incorrect birth year for my wife because the SS Administration has it wrong in their records. We'll fix it some year

 

[rasczak]

see below sorry for double post


Joe

 

[rasczak]

i currently started working as a real estate agent out of my house around mid december of 2004. i'm getting 1099'ed by my boss but have never ever filed for this before.

my boss did not take any taxes out of my checks and made about 10g total for that job. (i work 2 jobs and made a little over 20g in the other one)

i bought a new computer (well more like parts for a new pc) and laptop for this venture. are these tax dedutcible?
can i deduct my car's insurance and registration as well?
how about any health insurance that i purchased for my family?
would i be able to deduct a part of my rent since i am working out of my house?
also am i supposed to still put my child in as a depedent when filing my taxes for the business or is that a whole different arena?

tia for the reply.

Joe

 

[CPA]

Originally posted by: jpbelauskas
i currently started working as a real estate agent out of my house around mid december of 2004. i'm getting 1099'ed by my boss but have never ever filed for this before.

my boss did not take any taxes out of my checks and made about 10g total for that job. (i work 2 jobs and made a little over 20g in the other one)

i bought a new computer (well more like parts for a new pc) and laptop for this venture. are these tax dedutcible?
can i deduct my car's insurance and registration as well?
how about any health insurance that i purchased for my family?
would i be able to deduct a part of my rent since i am working out of my house?
also am i supposed to still put my child in as a depedent when filing my taxes for the business or is that a whole different arena?

tia for the reply.

Joe

Assuming you did not set up a Corporation, you should have filed the 2004 1099 income on Schedule C. Your "boss" would not take out taxes generally for 1099 payments. Those are your responsibility.

You can pretty much take all of those items you listed as expenses to your business income as long as you can document the relationship of the expense to the income.

The rent would only be allowed to the extent of the portion of the home you exclusively used for the business. (if you do this, don't forget utility expenses).

Also, don't forget phone costs.

For the auto expense, you are probably better off using the IRS mileage rate rather than actual cost.

The dependent deductions/exemptions are still valid if you showed income from the business. Don't forget the Child Credit (not the Childcare Credit) which would reduce your taxes dollar for dollar.

 

[rasczak]

Originally posted by: CPA

Originally posted by: jpbelauskas
i currently started working as a real estate agent out of my house around mid december of 2004. i'm getting 1099'ed by my boss but have never ever filed for this before.

my boss did not take any taxes out of my checks and made about 10g total for that job. (i work 2 jobs and made a little over 20g in the other one)

i bought a new computer (well more like parts for a new pc) and laptop for this venture. are these tax dedutcible?
can i deduct my car's insurance and registration as well?
how about any health insurance that i purchased for my family?
would i be able to deduct a part of my rent since i am working out of my house?
also am i supposed to still put my child in as a depedent when filing my taxes for the business or is that a whole different arena?

tia for the reply.

Joe

You can pretty much take all of those items you listed as expenses to your business income as long as you can document the relationship of the expense to the income.

you mean by receipts correct?

 

[EagleKeeper]

Originally posted by: jpbelauskas

Originally posted by: CPA

Originally posted by: jpbelauskas
i currently started working as a real estate agent out of my house around mid december of 2004. i'm getting 1099'ed by my boss but have never ever filed for this before.

my boss did not take any taxes out of my checks and made about 10g total for that job. (i work 2 jobs and made a little over 20g in the other one)

i bought a new computer (well more like parts for a new pc) and laptop for this venture. are these tax dedutcible?
can i deduct my car's insurance and registration as well?
how about any health insurance that i purchased for my family?
would i be able to deduct a part of my rent since i am working out of my house?
also am i supposed to still put my child in as a depedent when filing my taxes for the business or is that a whole different arena?

tia for the reply.

Joe

You can pretty much take all of those items you listed as expenses to your business income as long as you can document the relationship of the expense to the income.

you mean by receipts correct?

Receipts and a possible explanation on what the item was used for along with a percentage justification. I usually just put a writtne note on the back of a receipt that is used and not obvious.

With any luck, you will not need them; but if Uncle comes a knocking; you want to start rocking.

 

[rasczak]

Thanks for the reply. Makes a bit more sense now. I'm just wooried about how disciplined I will be when it comes to starting my PC repair/Consulting business within the next year. Looks like I'm gonna have to let my wife take care of the finances

 

[EagleKeeper]

Originally posted by: jpbelauskas
Thanks for the reply. Makes a bit more sense now. I'm just wooried about how disciplined I will be when it comes to starting my PC repair/Consulting business within the next year. Looks like I'm gonna have to let my wife take care of the finances

Setup a seperate bank account and put in 25% of ALL income from the business into that account. Use those $$ for only tax purposes.

 

[CalvinHobbes]

My wife has a 1099-MISC from a company she used to consult for. The income is listed on the 1099-MISC as (3) Other Income.

Do I only report this amount on her Schedule C?

or

Do I report it on both Schedule C and in the 1099-Misc section?

Thanks.

 

[EagleKeeper]

You can report it in the Misc income on the Schedule A.

By using the Schedule C you can write off expenses against that income.

 

[Taggart]

Are kickbacks from credit cards taxable? I received at least $100 in 'dividends' from my Citi Dividend card in 2005 for purchases I made. They didn't send me a tax form or anything.

Should I report this on my taxes?

Thanks.

 

[EagleKeeper]

Originally posted by: Taggart
Are kickbacks from credit cards taxable? I received at least $100 in 'dividends' from my Citi Dividend card in 2005 for purchases I made. They didn't send me a tax form or anything.

Should I report this on my taxes?

Thanks.

This falls in line with the "should I report a garage sale".

The same could apply to the kickbacks if they do not send you a form; they are lowering the cost of the items you purchased.

The IRS seems to consider that income to be non-taxable then.

This would be treated different that the "bonuses" that banks give you for opening an account. Those bonuses are considered to be interest earned on funds that you have deposited.

In, short, my opinion is that kickbacks from purchases are equivalent to rebates.
Unless the cost of tiemes is used to reduce taxes, you do not have to report them as income.

 

[rasczak]

Originally posted by: EagleKeeper

Originally posted by: jpbelauskas
Thanks for the reply. Makes a bit more sense now. I'm just wooried about how disciplined I will be when it comes to starting my PC repair/Consulting business within the next year. Looks like I'm gonna have to let my wife take care of the finances

Setup a seperate bank account and put in 25% of ALL income from the business into that account. Use those $$ for only tax purposes.

that is a great idea. thanks guys!

 

[Zedtom]

My girlfriend works out of the house and is itemizing her deductions for home office expenses. She heard on the radio that if you do this it will affect the depreciation allowance on her house.

Is this something anyone is familiar with?

 

[EagleKeeper]

Originally posted by: Zedtom
My girlfriend works out of the house and is itemizing her deductions for home office expenses. She heard on the radio that if you do this it will affect the depreciation allowance on her house.

Is this something anyone is familiar with?

Expenses related to the home office have no impact on the depreciation of the property.

It is only if you actually take depreciation on the property itself, that it must be recovered when the place is sold.