3rd Annual AT Tax Time Thread

[EagleKeeper]

Originally posted by: RMSistight
I know this is a little early. But I need to plan ahead for next year.

I recently got hired as an independent contractor for a winery doing IS helpdesk stuff. I got my first paycheck and my boss told me that I should store away about 25-30% of every paycheck into a separate checking account for tax purposes. I work three jobs and two of them I'm an employee so taxes are taken care of for me.

My question is: How do I determine how much tax I will have to pay when tax time rolls around 2007? I've already finished filing my taxes for this year. What about stuff like FICA, Medicare, state taxes and stuff....like taxes employers normally take out if I was an employee?

Just to clarify, when I signed up for the job, they specifically stated I was an indepedent contractor and would not handle any of the taxes. Thanks guys for your help.

When tax time rolls aroung, you will fill out a Schedule C for the 1099 income.
After figuring out the expenses, the net will become taxable for SS, etc.
There will be a formula that is used to determine the proper taxes.

Most Tax S/W will hande this situation for you in terms of figuring out the tax bite.

It is best to take 25% of the 1099 type income, stick it into a seperate account and sent it to Uncle every quarter.

That will then get accounted for against the total tax bill.

 

[EKKC]

can i fedex multiple tax forms (for me and gf, filing separately) to IRS in one envelope? yes im cheap

 

[coalrabbit]

How do I report jury duty pay? I didn't receive a 1099 for it, so I don't know exactly how much they paid me. http://www.dcd.uscourts.gov/jury-FAQ.pdf says that they only send out a 1099 if they've paid you more than $600 and I'm under this limit.

 

[Rumpltzer]

Originally posted by: CPA

Originally posted by: Rumpltzer
Okay, I've got another question:

My company hired me in January, moved my stuff, paid for some mileage, and put me up in a hotel and paid me a per diem as part of the move package. I stayed in the hotel for about two weeks while looking for a place to live.

My company paid the hotel bill directly. However, they paid out the per diem and mileage as part of my salary and they took out taxes and whatnot for the amount they paid for the hotel stay.

In total, let's say it's about $1600 additional that was taxed and is being reported as part of my income. The problem is that I don't have any documentation that says it's relocation expense. Should I work to get that? Does this situation count as relocation expense for tax purposes?

What box of your W2 was the $1600 reported in - Box 1 or box 12? If you don't see anything in box 12 then it was included in box 1.

Thanks for the response.

My moving expenses were included in Box 1 of the W2 except for $9.80 of it that's shown in box 12. I looked more closely at my pay stubs from 2005 and found that there's a row for "Relo taxable" in my YTD earnings. I'd never noticed it before, and it turns out that it's more like $4200!

I'm hoping I get a break on that or something? I guess the tax software will work it out.

 

[EagleKeeper]

Originally posted by: EKKC
can i fedex multiple tax forms (for me and gf, filing separately) to IRS in one envelope? yes im cheap

Yes.

It would be best to put each set of forms in a seperate envelope with your SSN on it and then put each package in the delivery envelope.

As long as you mail them by the 17th, the delivery time/method does not matter.
If you are concerned about the package being received, that then becomes the PO problem. Just get a receipt from the PO when mailing the package. USPS standard mail may even be cheaper than Fed Ex.

Note: Depending on income levels, either one of you could e-file (especially if a refund is due).

Also, unless you are legally married, you should not be able to file as married/joint.

 

[CPA]

Originally posted by: coalrabbit
How do I report jury duty pay? I didn't receive a 1099 for it, so I don't know exactly how much they paid me. http://www.dcd.uscourts.gov/jury-FAQ.pdf says that they only send out a 1099 if they've paid you more than $600 and I'm under this limit.

Don't you have the check stub? You can always check with the court. It will be included as ordinary income.

 

[edprush]

I bought property last year (house and land) as an investment.


Are there any tax advantages/disadvantages for having property as an investment? Is there anything I can write off regarding expenses or repairs?

Please keep in mind that this is NOT a rental property.

Thanks.

 

[EagleKeeper]

Originally posted by: edprush
I bought property last year (house and land) as an investment.


Are there any tax advantages/disadvantages for having property as an investment? Is there anything I can write off regarding expenses or repairs?

Please keep in mind that this is NOT a rental property.

Thanks.

Is the property/house completely vacant and just sitting there?

If not being used as a rental, then only the taxes are deductible.
If you could use it as a rental, then much more can be deducted/expensed.

 

[kogase]

I'm doing my taxes for the first time right now. I already sent in my federal 1040-EZ which was simple enough, but now I'm doing my NYS return. Maybe my brain has just turned to mush after staring at these little boxes for the last hour or so, but I'm staring at one of the last boxes on this form and I cannot make sense of it. What is your "Total Estimated Tax Payments"?

 

[EagleKeeper]

Originally posted by: kogase
I'm doing my taxes for the first time right now. I already sent in my federal 1040-EZ which was simple enough, but now I'm doing my NYS return. Maybe my brain has just turned to mush after staring at these little boxes for the last hour or so, but I'm staring at one of the last boxes on this form and I cannot make sense of it. What is your "Total Estimated Tax Payments"?

Did you send in any additional money other than what was withheld by your employer(s)?
If so, then that line items is where you would enter that amount.

 

[kogase]

Originally posted by: EagleKeeper

Originally posted by: kogase
I'm doing my taxes for the first time right now. I already sent in my federal 1040-EZ which was simple enough, but now I'm doing my NYS return. Maybe my brain has just turned to mush after staring at these little boxes for the last hour or so, but I'm staring at one of the last boxes on this form and I cannot make sense of it. What is your "Total Estimated Tax Payments"?

Did you send in any additional money other than what was withheld by your employer(s)?
If so, then that line items is where you would enter that amount.

Okay, thanks. This is their explanation:

* Your 2005 estimated income tax payments for New York State, New York City, and Yonkers (include your last installment even if paid in 2006).

Let's just pause for a moment... Isn't that obvious?

If you marked filing status but made separate 2005 estimated income tax payments (Form IT-2105), enter your combined total estimated income tax paid;

Edit: Wait, that does make sense now!

* Any amount of overpayment from your 2004 return that you applied to your estimated income tax (if this amount was adjusted by the Tax Department, use the adjusted amount); and
* Any amount you paid with Form IT-370, Application for Automatic Six-Month Extension of Time to File for Individuals. If you marked filing status but you and your spouse filed separate Forms IT-370, enter the total amount you and your spouse paid.

I just have no idea what they're talking about.

 

[EagleKeeper]

Originally posted by: kogase

Originally posted by: EagleKeeper

Originally posted by: kogase
I'm doing my taxes for the first time right now. I already sent in my federal 1040-EZ which was simple enough, but now I'm doing my NYS return. Maybe my brain has just turned to mush after staring at these little boxes for the last hour or so, but I'm staring at one of the last boxes on this form and I cannot make sense of it. What is your "Total Estimated Tax Payments"?

Did you send in any additional money other than what was withheld by your employer(s)?
If so, then that line items is where you would enter that amount.

Okay, thanks. This is their explanation:

* Your 2005 estimated income tax payments for New York State, New York City, and Yonkers (include your last installment even if paid in 2006).

Let's just pause for a moment... Isn't that obvious?

If you marked filing status but made separate 2005 estimated income tax payments (Form IT-2105), enter your combined total estimated income tax paid;

Edit: Wait, that does make sense now!

* Any amount of overpayment from your 2004 return that you applied to your estimated income tax (if this amount was adjusted by the Tax Department, use the adjusted amount); and
* Any amount you paid with Form IT-370, Application for Automatic Six-Month Extension of Time to File for Individuals. If you marked filing status but you and your spouse filed separate Forms IT-370, enter the total amount you and your spouse paid.

I just have no idea what they're talking about.

What is obvious does not have to make sense. Unless it is spelled out in Black & White; someone will claim that they were misled due to stupidiy (on their part).
One can usually ask for part of a tax refund to be applied to the following year's taxes.
You can also overpay your tax when you file an extension.

Because of seperate forms (SSNs being used, they need to combine the total payments made if filing jointly.

Make sense now?

 

[kogase]

Originally posted by: EagleKeeper
Make sense now?

Most of it does. As long as I get my $98.32 I'll be happy though.

 

[Kelemvor]

Prior Year Unallowed Loss

OK, I have my own business doing computer repairs and stuff at home. I created it in 2004 and just registered the name and such but didn't actually start doing any work. So last year I had to put in a Loss of $11.

Now this year I can claim that unallowed loss from 2004. However according to Taxcut, if I do that I can't e-file and I'll have to wait 2 months for my check.

So, since it's a loss, do I have to report it? Can anything happen if I just leave that off there so I can efile? Technically the income for last year was only like $400 so I thought that if you made less than $500 or something you didn't have to report anything but I don't know about that for sure.

Anyone know for sure if the $11 loss from 2004 really has to be reported since it'd seem the IRS wouldn't mind me not reporting a loss... heh.

If you respond to this and have time, shoot me a PM so I know it's here. Thanks.

 

[EagleKeeper]

You do not have to report a prior years loss for business or rental property.

 

[Kelemvor]

Originally posted by: EagleKeeper
You do not have to report a prior years loss for business or rental property.

Great! Thanks!

 

[coalrabbit]

Originally posted by: CPA

Originally posted by: coalrabbit
How do I report jury duty pay? I didn't receive a 1099 for it, so I don't know exactly how much they paid me. http://www.dcd.uscourts.gov/jury-FAQ.pdf says that they only send out a 1099 if they've paid you more than $600 and I'm under this limit.

Don't you have the check stub? You can always check with the court. It will be included as ordinary income.

You mean I have to exert additional effort so that I can have money taken away from me? lol. I'll see what I can dig up then. Thanks!

 

[EagleKeeper]

Originally posted by: coalrabbit

Originally posted by: CPA

Originally posted by: coalrabbit
How do I report jury duty pay? I didn't receive a 1099 for it, so I don't know exactly how much they paid me. http://www.dcd.uscourts.gov/jury-FAQ.pdf says that they only send out a 1099 if they've paid you more than $600 and I'm under this limit.

Don't you have the check stub? You can always check with the court. It will be included as ordinary income.

You mean I have to exert additional effort so that I can have money taken away from me? lol. I'll see what I can dig up then. Thanks!

You could have declined the miniscual stipend and avoided this effort and tax consequence.

 

[stan394]

I just married my wife last November. We are filing jointly together for the first time. We played around with the different filing status online and we discovered some huge differences in tax payments. We are wondering if we are doing anything obviously wrong?

Our filings are very simple, W-2, some interests and dividends and that's it. No dependent, no mortgage, no investment sold.

We plan to file as "married, jointly" and our tax payment would be 69K. On the other hand, just as a comparison, if we were to file as "Single", the tax payment would be 48K + 15K = 63K, whereas if we filed as "married, separately", the tax would be 55K + 15K = 70K.

We were kind of puzzled by the extra 6-7K just to file as married. Apart from the filing status, nothing changed. One reason I could think of is that we both have our withholding status as Single the whole year within our payroll. Would that make such a big differences? I played around online with TaxACT and TurboTax and they give the same result.

Our individual adjusted gross income are 202K and 83K respectively. I am happy to provide more info if needed.

Thanks a bunch for the help! We were just trying to figure out if there is anything obviously wrong we had done.

 

[EagleKeeper]

Originally posted by: stan394
I just married my wife last November. We are filing jointly together for the first time. We played around with the different filing status online and we discovered some huge differences in tax payments. We are wondering if we are doing anything obviously wrong?

Our filings are very simple, W-2, some interests and dividends and that's it. No dependent, no mortgage, no investment sold.

We plan to file as "married, jointly" and our tax payment would be 69K. On the other hand, just as a comparison, if we were to file as "Single", the tax payment would be 48K + 15K = 63K, whereas if we filed as "married, separately", the tax would be 55K + 15K = 70K.

We were kind of puzzled by the extra 6-7K just to file as married. Apart from the filing status, nothing changed. One reason I could think of is that we both have our withholding status as Single the whole year within our payroll. Would that make such a big differences? I played around online with TaxACT and TurboTax and they give the same result.

Our individual adjusted gross income are 202K and 83K respectively. I am happy to provide more info if needed.

Thanks a bunch for the help! We were just trying to figure out if there is anything obviously wrong we had done.

Welcome to the marriage penalty situation.

Large income disparity between spouses

 

[GeneValgene]

<sigh>

i owed $287 this year on my tax return

 

[CPA]

Originally posted by: coalrabbit

Originally posted by: CPA

Originally posted by: coalrabbit
How do I report jury duty pay? I didn't receive a 1099 for it, so I don't know exactly how much they paid me. http://www.dcd.uscourts.gov/jury-FAQ.pdf says that they only send out a 1099 if they've paid you more than $600 and I'm under this limit.

Don't you have the check stub? You can always check with the court. It will be included as ordinary income.

You mean I have to exert additional effort so that I can have money taken away from me? lol. I'll see what I can dig up then. Thanks!

You asked.

 

[CPA]

Originally posted by: GeneValgene
<sigh>

i owed $287 this year on my tax return

that's good. You want to owe. It means you kept more of your money during the year. Unfortunately, the IRS, the media, and retail companies have conditioned many of us that not getting a huge refund is bad.

 

[stan394]

Originally posted by: EagleKeeper

Originally posted by: stan394
I just married my wife last November. We are filing jointly together for the first time. We played around with the different filing status online and we discovered some huge differences in tax payments. We are wondering if we are doing anything obviously wrong?

Our filings are very simple, W-2, some interests and dividends and that's it. No dependent, no mortgage, no investment sold.

We plan to file as "married, jointly" and our tax payment would be 69K. On the other hand, just as a comparison, if we were to file as "Single", the tax payment would be 48K + 15K = 63K, whereas if we filed as "married, separately", the tax would be 55K + 15K = 70K.

We were kind of puzzled by the extra 6-7K just to file as married. Apart from the filing status, nothing changed. One reason I could think of is that we both have our withholding status as Single the whole year within our payroll. Would that make such a big differences? I played around online with TaxACT and TurboTax and they give the same result.

Our individual adjusted gross income are 202K and 83K respectively. I am happy to provide more info if needed.

Thanks a bunch for the help! We were just trying to figure out if there is anything obviously wrong we had done.

Welcome to the marriage penalty situation.

Large income disparity between spouses

so she brought me up to a higher tax bracket, is that basically it?

 

[EagleKeeper]

Originally posted by: stan394

Originally posted by: EagleKeeper

Originally posted by: stan394
I just married my wife last November. We are filing jointly together for the first time. We played around with the different filing status online and we discovered some huge differences in tax payments. We are wondering if we are doing anything obviously wrong?

Our filings are very simple, W-2, some interests and dividends and that's it. No dependent, no mortgage, no investment sold.

We plan to file as "married, jointly" and our tax payment would be 69K. On the other hand, just as a comparison, if we were to file as "Single", the tax payment would be 48K + 15K = 63K, whereas if we filed as "married, separately", the tax would be 55K + 15K = 70K.

We were kind of puzzled by the extra 6-7K just to file as married. Apart from the filing status, nothing changed. One reason I could think of is that we both have our withholding status as Single the whole year within our payroll. Would that make such a big differences? I played around online with TaxACT and TurboTax and they give the same result.

Our individual adjusted gross income are 202K and 83K respectively. I am happy to provide more info if needed.

Thanks a bunch for the help! We were just trying to figure out if there is anything obviously wrong we had done.

Welcome to the marriage penalty situation.

Large income disparity between spouses

so she brought me up to a higher tax bracket, is that basically it?

Whoever was the lower income was dragged into a higher bracket.
However, look at it this way; You got a nice wife to play footsey with. That should be worth something to each of you.