3rd Annual AT Tax Time Thread

[Turin39789]

Originally posted by: EagleKeeper

Originally posted by: Turin39789
Ok, so im an idiot and just need to be told where to go.

Up until I got off my 1040ez, taxes were a breeze, when i went to the 1040, i did fine but felt like i should have been deducting something(anything)

In 2004 I worked some contract jobs and got two 1099s for them, I also got a 1099 for a forgiven credit card debt. I'm fairly sure that I had it all set up ok, but again hadnt deducted anything, kept meaning to take them somewhere - never did

AKA - didnt file last year, but I am owed money, so im hoping they wont be taking me to jail to pay me money.

This year I got out of debt, and got another 1099 for forgiven credit card debt. I also managed to save a goodwill receipt, and donated some to the united way at work.

Should I even bother with the hassle, when im obviously a n00b, and an unmotivated on at that? Should I go to a place like H&R block or find a cpa? I need to get this taken care of soon so I can get a fafsa filed this year.

I'm a unmarried 23 year old with a small 401k, who rents and has no children. Is it worth it taking this somewhere to get deductions orshould I just spend a few hours disecting irs speak, plug in the numbers off my w-2's and 1099's(I neede a 1040 and a schedule C? right?) and save the fee?

edit -
I made just under 30k this year, and I need to dig up my old forms but I think around 20k last year, maybe less

If you did not file for 2004; hopefully you did fill out the forms to verify that you do not owe $$. Or did you just say, "I do not want to go through the hassle" because everything was unfamiliar? Uncle does appreciate you providing them extra spending money.

Go to the IRS TaxFreedom site and use the online tools.
They will walk you plugging in the numbers, and handling the 1099. When you work with the Schedule C, you will be prompted for related expenses.
Based on your income level and you should also then file for free.

Yea, I went through the forms and verified. I couldn't come up with any related expenses for the jobs, as they were tech contracts installing/upgrading corporate computers for a week or so.

Are there any standard deductions that just about everyone should be able to take?

Like I said I've got some goodwill receipts and united way donations, where do these get deducted. From what you said I should just go ahead and print out the forms for this year/last year and do them myself, with no/little deductions, and its really not worth it to go to a tax guy for my relativly simple stuff.

I'm fair certain I had last years filled out and ready to go once I read up on the 1099, was just dissapointed on how they affected my return.

 

[EagleKeeper]

Originally posted by: Turin39789

Originally posted by: EagleKeeper

Originally posted by: Turin39789
Ok, so im an idiot and just need to be told where to go.

Up until I got off my 1040ez, taxes were a breeze, when i went to the 1040, i did fine but felt like i should have been deducting something(anything)

In 2004 I worked some contract jobs and got two 1099s for them, I also got a 1099 for a forgiven credit card debt. I'm fairly sure that I had it all set up ok, but again hadnt deducted anything, kept meaning to take them somewhere - never did

AKA - didnt file last year, but I am owed money, so im hoping they wont be taking me to jail to pay me money.

This year I got out of debt, and got another 1099 for forgiven credit card debt. I also managed to save a goodwill receipt, and donated some to the united way at work.

Should I even bother with the hassle, when im obviously a n00b, and an unmotivated on at that? Should I go to a place like H&R block or find a cpa? I need to get this taken care of soon so I can get a fafsa filed this year.

I'm a unmarried 23 year old with a small 401k, who rents and has no children. Is it worth it taking this somewhere to get deductions orshould I just spend a few hours disecting irs speak, plug in the numbers off my w-2's and 1099's(I neede a 1040 and a schedule C? right?) and save the fee?

edit -
I made just under 30k this year, and I need to dig up my old forms but I think around 20k last year, maybe less

If you did not file for 2004; hopefully you did fill out the forms to verify that you do not owe $$. Or did you just say, "I do not want to go through the hassle" because everything was unfamiliar? Uncle does appreciate you providing them extra spending money.

Go to the IRS TaxFreedom site and use the online tools.
They will walk you plugging in the numbers, and handling the 1099. When you work with the Schedule C, you will be prompted for related expenses.
Based on your income level and you should also then file for free.

Yea, I went through the forms and verified. I couldn't come up with any related expenses for the jobs, as they were tech contracts installing/upgrading corporate computers for a week or so.

Are there any standard deductions that just about everyone should be able to take?

Like I said I've got some goodwill receipts and united way donations, where do these get deducted. From what you said I should just go ahead and print out the forms for this year/last year and do them myself, with no/little deductions, and its really not worth it to go to a tax guy for my relativly simple stuff.

I'm fair certain I had last years filled out and ready to go once I read up on the 1099, was just dissapointed on how they affected my return.

For someone that is smart enough to come to this tax thread, you are dissapointing me for not thinking outside the box on expenses. :disgust:

The 1099 acts as if you were a small business.
Therefore ANY expenses that could be related to the pursuit of such business can be claimed either in completely or proportionaly.

Goodwill deductions, unless it was for items that could have been used for business, will only provide a warm fuzzy, unless you use the Schedule A. (based on what you have described, you should not)

As for some examples/hints/questions on expenses:
You are posting these tax questions from a computer (I would assume).
How are you getting on line?
Who owns the computer you are using?
Where is the computer located?

You were installing/upgrading computers on a contract.
Did they deliver the computers to your bed?
If not, how did you get to the site, walk?
How did they contact you? esp
Did they provide you with nourishment while there? (Breakfast, lunch, dinner on them)
Did the knowledge that you may have obtained on what/how to do, come out of thin air in 2004 or 2005?

Please forgive the sarcasm; however, THINK - use some of the toungu/cheek statements above.

 

[Turin39789]

Originally posted by: EagleKeeper

For someone that is smart enough to come to this tax thread, you are dissapointing me for not thinking outside the box on expenses. :disgust:

The 1099 acts as if you were a small business.
Therefore ANY expenses that could be related to the pursuit of such business can be claimed either in completely or proportionaly.

Goodwill deductions, unless it was for items that could have been used for business, will only provide a warm fuzzy, unless you use the Schedule A. (based on what you have described, you should not)

As for some examples/hints/questions on expenses:
You are posting these tax questions from a computer (I would assume).
How are you getting on line?
Who owns the computer you are using?
Where is the computer located?

You were installing/upgrading computers on a contract.
Did they deliver the computers to your bed?
If not, how did you get to the site, walk?
How did they contact you? esp
Did they provide you with nourishment while there? (Breakfast, lunch, dinner on them)
Did the knowledge that you may have obtained on what/how to do, come out of thin air in 2004 or 2005?

Please forgive the sarcasm; however, THINK - use some of the toungu/cheek statements above.

Thanks, I've just never taken a deduction before, so im a bit confused on the process, do I just estimate gas - 40, food 35, etc. no receipts needed? Can I deduct the cost of a computer for a week long deployment contract in november and 5 weekends in july?

I'll pull the forms together tonight and see what I can figure out.

 

[EagleKeeper]

In theory you should have reciepts for all expenses.
However; reasonable judgement of the expenses for travel purposes will usually work
Look at either mileage or actual expenses on the vehicle.
Remember that the vehicle must be registers/insured. Those are related costs

If you were deployed out of the area; who covered the lodging.
With respect to the computer; if the computer was needed for work; then you can ust estimate the percentage by either the time used or the relationship to income earned.

 

[Turin39789]

Originally posted by: EagleKeeper
In theory you should have reciepts for all expenses.
However; reasonable judgement of the expenses for travel purposes will usually work
Look at either mileage or actual expenses on the vehicle.
Remember that the vehicle must be registers/insured. Those are related costs

If you were deployed out of the area; who covered the lodging.
With respect to the computer; if the computer was needed for work; then you can ust estimate the percentage by either the time used or the relationship to income earned.

ugh tax freedom is telling me I owe $72 buckaroos for this year

Taxable Income
Adjusted Gross Income $29,986
Less: Standard Deduction $5,000
Less: Personal Exemptions $3,200
____________
Taxable Income $21,786
Taxes and Credits
Income Tax $2,901
Payments
Federal Tax Withholding $2,829
Estimated Payments $0
____________
Total Payments $2,829
____________
Balance Due $72

Damn that $1291 debt cancellation, damn it to hell

 

[CPA]

Originally posted by: sygyzy

Originally posted by: EagleKeeper

Originally posted by: sygyzy
As part of a merger, part of my funds were kept in an escrow to be distributed once a year, over three years. 2005 was the first disbursement. What would this be considered? Ordinary income? Where would I add this to my tax form?

There is a line item for misc income on the 1040.
That is where this amount should be entered.

I was told by my CPA (from last year) that the distribution (check) I received includes "imputed interest". The company didn not provide me with the exact value but I believe the IRS has a default value to use.

What is imputed interest? How does this affect my tax situation? I don't want to pay taxes on the full amount if I don't have to. I was just going to enter it as MISC Income til I came across her email.

You will need to keep in mind that a portion of those amounts included imputed interest.

I believe it's IRS section 1274 (or maybe 1275) that discusses imputed interest. The best bet for you is to call up the company and ask them if they included imputed interest and how much did they calculate.

 

[CPA]

Originally posted by: robisc
OK I have a friend that paid to have his taxes done, he had on his 1040 a Line 34 tuition deduction of $3584 and a Job Expense deduction (Business Expense) for $2921 but had it on a form 2106, problem is he neither is in school or has his own business, how can they do this. He called the preparer and all they said was that it was all "within the law" anyone know about this loophole if it is in fact a loophole?

The tuition deduction is very suspicious if he is not in school.

An no, you can NOT deduct expenses for your kids in school.

2106 is for unreimbursed business-related expenses. This is for actual expenses he incurred related to his employment but not reimbursed by his company. Be very careful with this, because it is NOT intended to provide a benefit for normal expenses to get to and from work.

 

[Hooobi]

I am co-owner of a Type S Corp (we actually discontinued operations at the end of Feb), but are still perfectly soluble.

When I started the company early last year (2005), our accountant suggested that we do "distributions" instead of "dividends" so I've issued two quarterly distributions so far (3rd/4th Q 2005). Can someone tell me how these should be treated both in the corporate accounting (I seem to only have a 'dividend' option in Peachtree), as well as on our individual returns?

TIA!

 

[fallenangel99]

I'm in trouble.

My W-2 form has $0 for federal and state withholdings. I looked at all my pay stubs - $0.00 was taken out for my federal and state taxes. Somehow, I did not notice this nor my employer.

And now I owe about $5k in fed/state taxes.

Ouch

 

[CalvinHobbes]

On my 2005 taxes, is there somewhere that I enter the tax I owed (and paid) for last years tax return?

 

[latino666]

Hurry up April, I need the commission for doing tax returns. People don't like filling in March it seems.

 

[b0mbrman]

Originally posted by: EagleKeeper

Originally posted by: b0mbrman
Thanks again for doing this...

One more question...if I own a 4-plex and rent out the other three, do I have to report the rental income on both a Schedule C and a Schedule E?

Do I even have to fill out both forms?

Schedule E Only.
Did into expenses all related expenses. ITems that can be used for both personal and rental should be proportional expensed.
Posing tax related questions can justify the cost of having the internet.

:Q

Really...

 

[sygyzy]

Originally posted by: CPA

Originally posted by: sygyzy

Originally posted by: EagleKeeper

Originally posted by: sygyzy
As part of a merger, part of my funds were kept in an escrow to be distributed once a year, over three years. 2005 was the first disbursement. What would this be considered? Ordinary income? Where would I add this to my tax form?

There is a line item for misc income on the 1040.
That is where this amount should be entered.

I was told by my CPA (from last year) that the distribution (check) I received includes "imputed interest". The company didn not provide me with the exact value but I believe the IRS has a default value to use.

What is imputed interest? How does this affect my tax situation? I don't want to pay taxes on the full amount if I don't have to. I was just going to enter it as MISC Income til I came across her email.

You will need to keep in mind that a portion of those amounts included imputed interest.

I believe it's IRS section 1274 (or maybe 1275) that discusses imputed interest. The best bet for you is to call up the company and ask them if they included imputed interest and how much did they calculate.

Once I receive this value, what do I do with it?

 

[EagleKeeper]

Originally posted by: CalvinHobbes
On my 2005 taxes, is there somewhere that I enter the tax I owed (and paid) for last years tax return?

For electronic filing, you will need last years AGI

 

[TheCanuck]

Two questions:

1) I lived in PA from January to February 2005, (also all of 2004,2003) and then moved back to Canada for the rest of the year. Now I'm back in PA for 2006 -- Should I file a 1040 or 1040-NR? Total wages were less than 10k so they would fall under the treaty if I'm not mistaken.

2) This is for my GF who is itemizing. Pittsburgh has an EMS (Emergency & Municipal Services) tax. Is this an allowed deduction under "Other Taxes" on Schedule A - Itemized Deductions, line 8?

Thanks.

 

[kldang]

I would like to know if I need to report the following income in my tax return:

1. My sister gave me $10,000 for my living last year. She wired the money to me from Hong Kong and she's not an US citizen.
2. I won over $3000 from playing online Poker

 

[EagleKeeper]

Originally posted by: kldang
I would like to know if I need to report the following income in my tax return:

1. My sister gave me $10,000 for my living last year. She wired the money to me from Hong Kong and she's not an US citizen.
2. I won over $3000 from playing online Poker

#1 No - gifts do not have to be reported. If she does not file US taxes then you are OK.
If she files US taxes (for any reason) and declares you as an dependent, then you need to file properly.

#2. If you won the funds and they reported it to you, then you need to file.
If you "lost" that amount or more over the complete year; then you can balance it out with "losses" of the same amount. You can not declare losses that excedd the reported winnings.

 

[ajf3]

Hey - great thread!

I have a question myself... won a little money at a B&M casino this year that they issued a w2-g for...

I'm scrounging around for gambling losses to post as deductions against the winnings (I already itemize)... which of the following are ok to use?

1. State sold lottery tickets (powerball, scratchoffs, etc).
2. Non profit sold lottery tickets - churchs, baseball teams, schools, etc all sell their own tickets around here.
3. Entry fees to nonprofit (local firehall, churches, etc) poker tournaments
4. Losses at online casinos (such as partypoker).

Thanks!

 

[EagleKeeper]

Any documentation that you can provide that shows you putting money at risk to win some, will suffice for the Fereral taxes.

Raffle tickets for a prize will not count as an expense against gaming winnings.
Entry/admission fees themselves MAY not count. This is due to the fact that you have not put any money at risk at that point.

Some states do not tax state lottery winnings; therefore they may not allow the expense of state lottery tickets to be deducted.

Online gaming may not work unless that actually will provide you with a winning W2-G at the end of the year.

Illegal income (gaming or otherwise) has to be declared, however, taking a deduction/expense for the generation of such income will not fly.

 

[ajf3]

Thx for the info!

I thought that online gaming wasn't illegal at this time... something about it's illegal to run one (that's why they're all offshore), but it's not illegal (yet) to wager there as a user...

 

[EagleKeeper]

Originally posted by: ajf3
Thx for the info!

I thought that online gaming wasn't illegal at this time... something about it's illegal to run one (that's why they're all offshore), but it's not illegal (yet) to wager there as a user...

Online gaming within the US is illegal except where allowed by state laws.
Nevada only at this time that I know of:thumbsup:

And the controls regulating it within the state are such that they can reject me from placing a wager if I attempt to access my account from an out-of-state ISP and/or outside the authorized area.

 

[faZZter]

Ok here is my question-

I lived in one state for first half of year then moved to another state. I took a relatively small distribution form a 401 K plan I had with a previous employer. (don't worry I kept most in the acounts) I "earned" the money that was put in to the 401K in the first state, but I received the distribution after I had moved to the second state. Under which state tax do I have to reprt this income, the previous state or current?

 

[EagleKeeper]

Originally posted by: faZZter
Ok here is my question-

I lived in one state for first half of year then moved to another state. I took a relatively small distribution form a 401 K plan I had with a previous employer. (don't worry I kept most in the acounts) I "earned" the money that was put in to the 401K in the first state, but I received the distribution after I had moved to the second state. Under which state tax do I have to reprt this income, the previous state or current?

If the distribution gers reported to you on a form, use the state information regarding the form.
Otherwise, the income should be relevant to the that state that you receive the funds in.

 

[edprush]

Are there any tax implications that occur when you decide to live in a property which was previously a rental property that you owned?

 

[EagleKeeper]

Originally posted by: edprush
Are there any tax implications that occur when you decide to live in a property which was previously a rental property that you owned?

No tax implications other than to make sure that you hanlde the depreciation and expenses properly for that year that you took personal possesion (ie. no longer a rental)and do not depreciate/expense anything while it is personal use.