3rd Annual AT Tax Time Thread

[ottothecow]

I worked for a bakery part time for a couple of years. They closed up shop and went out of business in january 2005 and I recieved 2 paychecks. I have not had any contact with them since then and I wouldnt know where to start as everything is gone.

Here is my problem: I dont have a W2 from them. I'm sure the amount is small enough that I could just ignore it but I would like to file it (I'll be getting the total back and I'm not about to ditch some money thats owed to me). I have my last two pay stubs but the second one doesnt have a breakdown of the taxes. The first check breaks down what went where: state/federal income, medicare, etc. but the second check was printed the day they closed and only has the total amount for the pay period and the total deducted for taxes.

I'm using the online turbotax and it seems to have provisions for people who never recieved a W2 but I cant at all figure out what I am supposed to do.

 

[EagleKeeper]

As I undertand, the second stub shows that taxes were taken out, but not a breakdown.

Is there a Year To Date (YTD) section on the second stub?

If not; they you should be able to look at the percentage of tax withheld for each line item on the first stub and apply that to the second stub.. You can use the employer ID from the previous tax year.

 

[BaNzaiDags]

two questions

#1 can i claim my cable internet as a work expense. i work from home once a week.

#2 if i set up an account (say ING savings) for my new born son with his SSN, how do I report his interest? do I add it to my own?

Thanks!

 

[EagleKeeper]

Originally posted by: BaNzaiDags
two questions

#1 can i claim my cable internet as a work expense. i work from home once a week.

#2 if i set up an account (say ING savings) for my new born son with his SSN, how do I report his interest? do I add it to my own?

Thanks!

#1 Yes - it will fall under the Form 2106 - Business Expenses. this will require use of the Schedule A. 2% of the AGI will be deducted from the 2106 total amount before it is useful. You will need to proportionally determine the expenses of the items in terms of use vs personal.

#2 Most tax S/W will assist you in handling dependent unearned income.

 

[Al Neri]

So I filed my return on StateFarm.com when they had the turbotax promotion about a month ago. How would I go about getting my tax returns?

 

[EagleKeeper]

Try to log onto TurboTax using the id/password that you should have set up and check the return status.

You should have also been given the chance at the time of filing to print a copy of your return.

 

[Al Neri]

i did print them, and i just found them... i jumped the gun with that post.

Thanks anyway!!

 

[edprush]

If I'm renting an apartment and running a small business (web design) from the apartment, can I write off any of the monthly rent?

 

[EagleKeeper]

Originally posted by: edprush
If I'm renting an apartment and running a small business (web design) from the apartment, can I write off any of the monthly rent?

The proportion of the expenses that are directly related to the business can be expenses if you use Schedule C.
You can also expense proportionaly additional indirect expenses regarding the business activity.

 

[b0mbrman]

I'm sure this has been asked before...and is only sorta relevant...but I can't figure it out...

If it doesn't benefit the group, I could take a PM ...or if it's too off topic, feel free to not answer it at all

Is there really any benefit to me personally occupying my 4-unit rental property?

I'd heard that property need be personal in order to deduct the mortgage interest, but it looks like I can deduct mortgage interest of any rental real estate on Schedule E, line 12.

 

[EagleKeeper]

Originally posted by: b0mbrman
I'm sure this has been asked before...and is only sorta relevant...but I can't figure it out...

If it doesn't benefit the group, I could take a PM ...or if it's too off topic, feel free to not answer it at all

Is there really any benefit to me personally occupying my 4-unit rental property?

I'd heard that property need be personal in order to deduct the mortgage interest, but it looks like I can deduct mortgage interest of any rental real estate on Schedule E, line 12.

There is no real benifit until you actually decide to sell the physical unit.
If the until is converted to your personal residence prior to the sales and you have lived theire for 2 of the previos 5 years, you can avoid capitial gains up to $260K on the sale.
By living off property, that option will not apply.

The other is can you rent out the 4th unit for close to the amount that you would pay for your own place?

 

[edprush]

Originally posted by: EagleKeeper

Originally posted by: edprush
If I'm renting an apartment and running a small business (web design) from the apartment, can I write off any of the monthly rent?

The proportion of the expenses that are directly related to the business can be expenses if you use Schedule C.
You can also expense proportionaly additional indirect expenses regarding the business activity.

So, it seems, that there would be more tax advantages if I was renting an apartment from where I ran my business versus running my business from my home (that doesn't have mortgage payments). Because I can write off the proportional part (20%) of my rent payments directly related to my business but if I ran my business out of my home, next year, that is fully paid for (no mortgage) I wouldn't have a rent payment/mortgage to proportionally write off. Am I interpreting this correctly?

 

[EagleKeeper]

Originally posted by: edprush

Originally posted by: EagleKeeper

Originally posted by: edprush
If I'm renting an apartment and running a small business (web design) from the apartment, can I write off any of the monthly rent?

The proportion of the expenses that are directly related to the business can be expenses if you use Schedule C.
You can also expense proportionaly additional indirect expenses regarding the business activity.

So, it seems, that there would be more tax advantages if I was renting an apartment from where I ran my business versus running my business from my home (that doesn't have mortgage payments). Because I can write off the proportional part (20%) of my rent payments directly related to my business but if I ran my business out of my home, next year, that is fully paid for (no mortgage) I wouldn't have a rent payment/mortgage to proportionally write off. Am I interpreting this correctly?

Tax wise Yes - Financially questionable.
You need to determien if the taxes saved from the expense write-offs (based on the proportional use) exceeds the difference between what you pay for rent and the rental value (rent + depreciation) for the apartment that is being rented by a tenant.

 

[igowerf]

I worked for about a month (September-October) as a contract web developer for my current employer before they hired me as a permanent employee. During that first month, I made $4,042 and I have received a 1099-MISC for it. The moment I enter this amount into TurboTax online, my return goes from +$893 to -$116 (difference of $1,009). I'm getting back most of my taxes withheld on my W2s, so why I don't get this $1,009 back? Is it because I made the money as a contract worker? I didn't make very much last year so I expected to get at least a few hundred back.

 

[EagleKeeper]

Originally posted by: igowerf
I worked for about a month (September-October) as a contract web developer for my current employer before they hired me as a permanent employee. During that first month, I made $4,042 and I have received a 1099-MISC for it. The moment I enter this amount into TurboTax online, my return goes from +$893 to -$116 (difference of $1,009). I'm getting back most of my taxes withheld on my W2s, so why I don't get this $1,009 back? Is it because I made the money as a contract worker? I didn't make very much last year so I expected to get at least a few hundred back.

YOu did not pay any taxes on the $4K.

However, when you entered the income into Turbo Tax, did you also then items any potential related expenses against that income?

If not, dig back through this thread for ideas that could lower your tax bill considerably.

 

[igowerf]

Originally posted by: EagleKeeper

Originally posted by: igowerf
I worked for about a month (September-October) as a contract web developer for my current employer before they hired me as a permanent employee. During that first month, I made $4,042 and I have received a 1099-MISC for it. The moment I enter this amount into TurboTax online, my return goes from +$893 to -$116 (difference of $1,009). I'm getting back most of my taxes withheld on my W2s, so why I don't get this $1,009 back? Is it because I made the money as a contract worker? I didn't make very much last year so I expected to get at least a few hundred back.

YOu did not pay any taxes on the $4K.

However, when you entered the income into Turbo Tax, did you also then items any potential related expenses against that income?

If not, dig back through this thread for ideas that could lower your tax bill considerably.

Thanks for the reply EagleKeeper. I'll dig through this thread to hopefully get some back. During that month as a contract worker, I didn't keep track of any expenses though...

If I were a permanent employee at the time instead of a contract worker, I'd be getting this money back now from the taxes withheld on my W2s, right? Instead, I'm paying these taxes now and I'm not getting any of it back? I guess that's what's confusing me.

 

[EagleKeeper]

Originally posted by: igowerf

Originally posted by: EagleKeeper

Originally posted by: igowerf
I worked for about a month (September-October) as a contract web developer for my current employer before they hired me as a permanent employee. During that first month, I made $4,042 and I have received a 1099-MISC for it. The moment I enter this amount into TurboTax online, my return goes from +$893 to -$116 (difference of $1,009). I'm getting back most of my taxes withheld on my W2s, so why I don't get this $1,009 back? Is it because I made the money as a contract worker? I didn't make very much last year so I expected to get at least a few hundred back.

You did not pay any taxes on the $4K.

However, when you entered the income into Turbo Tax, did you also then itemize any potential related expenses against that income?

If not, dig back through this thread for ideas that could lower your tax bill considerably.

Thanks for the reply EagleKeeper. I'll dig through this thread to hopefully get some back. During that month as a contract worker, I didn't keep track of any expenses though...

If I were a permanent employee at the time instead of a contract worker, I'd be getting this money back now from the taxes withheld on my W2s, right? Instead, I'm paying these taxes now and I'm not getting any of it back? I guess that's what's confusing me.

If they had treated you as an employee you would have had about 35 percent of that $4K withheld due to taxes.

And you do not have the ability to reduce the tax bit by itemizing expenses related to that income.

Vehicle/insurance, internet, computer, S/W, utilities.
All the above and more can be expenses out at a proportional 10-15% against the income.

 

[azilaga]

I've read a couple of articles that the number of audits have been going up the last couple of years. Anyone here ever been audited? I do my own taxes, and I look for every single possible write off, so it gives me a little bit of a scare to know that the chances of an audit are slightly higher.

 

[EagleKeeper]

Originally posted by: azilaga
I've read a couple of articles that the number of audits have been going up the last couple of years. Anyone here ever been audited? I do my own taxes, and I look for every single possible write off, so it gives me a little bit of a scare to know that the chances of an audit are slightly higher.

I have been through two. One courtesy and one wringer.

Others that have assisted here, have also been told to bend over for the broomstick withouit applying vaseline first.

 

[azilaga]

Originally posted by: EagleKeeper

Originally posted by: azilaga
I've read a couple of articles that the number of audits have been going up the last couple of years. Anyone here ever been audited? I do my own taxes, and I look for every single possible write off, so it gives me a little bit of a scare to know that the chances of an audit are slightly higher.

I have been through two. One courtesy and one wringer.

Others that have assisted here, have also been told to bend over for the broomstick withouit applying vaseline first.

So what did they ask of you? All receipts? Documentation? Do they live with you to see how you operate your business?

 

[EagleKeeper]

Originally posted by: azilaga

Originally posted by: EagleKeeper

Originally posted by: azilaga
I've read a couple of articles that the number of audits have been going up the last couple of years. Anyone here ever been audited? I do my own taxes, and I look for every single possible write off, so it gives me a little bit of a scare to know that the chances of an audit are slightly higher.

I have been through two. One courtesy and one wringer.

Others that have assisted here, have also been told to bend over for the broomstick withouit applying vaseline first.

So what did they ask of you? All receipts? Documentation? Do they live with you to see how you operate your business?

For the wringer, they wanted evidence to justify every number on the tax return. Schooling, mileage, tolls, equipment expenses (I had a donkey initially that did not know about computers), verification that child was a dependent (over 18 but on school).
It started out as a courtesy audit until I quoted them chapter and verse on educational costs.
Then the broomstick came out. I had to file an appeal into the local district and get someone that was unbiased to review the case. That person then used common sense and the following year, actually had her husband hire me to do some work.

 

[MrsBugi]

If I contribute $4k to my Roth IRA before April 15 of this year, can I report it as a 2005 contribution?

 

[EagleKeeper]

Originally posted by: MrsBugi
If I contribute $4k to my Roth IRA before April 15 of this year, can I report it as a 2005 contribution?

Yes, but it has no direct effect on your taxes for that year.

The Roth is taxable when funded; non-taxable when withdrawn.
The regular IRA is non-taxable when funded and taxed when withdrawnn.

 

[MrsBugi]

Originally posted by: EagleKeeper

Originally posted by: MrsBugi
If I contribute $4k to my Roth IRA before April 15 of this year, can I report it as a 2005 contribution?

Yes, but it has no direct effect on your taxes for that year.

The Roth is taxable when funded; non-taxable when withdrawn.
The regular IRA is non-taxable when funded and taxed when withdrawnn.

Understood, thank you.

 

[Phil21]

Quick question, which seems like it should be on some FAQ's somewhere, but I cannot find it.

I currently "live" in MN, with a homestead property there. I also pay rent in IL, and spend roughly half my time in both locations. What is relevent I think is that I claim MN as my 'home state', and also declare my property in MN as homestead.

However, what I am confused about is my employer is based in IL - and I am W2'ed. The employer, while sending checks to MN, does withhold IL state income tax.

Where do I file? Do I file in IL, since that is the only state withholding tax? Or do I file in IL for a full refund or something, and then file in MN? The problem as I see it, is not only do I have the regular W2 income, I also have some "extra" (under $5k) 1099 income which I obviously will have to file for in MN.

Ugh.

Thanks for any help.

-Phil