4th Annual Tax Thread - 2006

[MikeyIs4Dcats]

TurboTax gurus check in:

Does TT automatically determine if Married Filing Jointly or Married Filing Seperately is better for you? I used TaxCut previously, and it would run the numbers for you automatically, but I don't see anywhere that TT does the same.

 

[ScottFern]

Originally posted by: MikeyIs4Dcats

Originally posted by: ScottFern
I have a question about receiving my tax forms from HSBC regarding my savings account. I earned probably $400 in interest in a money market savings account in 2006 and I have NOT received the form yet. Doesn't HSBC have to send me the form post marked by yesterday the 30th? So should I be expecting this form soon?

HSBC files them electronically online only. Check your online account. You should have received an email regarding this.

No I mean my 1099 form. That isn't going to be on my online account? I can't find it at least.

 

[MrsBugi]

Tax question:

One of my sister's serious boyfriends is quite wealthy and was nice enough to pay her college tuition this semester (approximately $4500). Should she report it in this section or not report it at all?

"WB12. Money received, or paid on the student's behalf (e.g., bills), not reported elsewhere on this form."

Will this be taxed at all, and if so at what point?

Thank you!

 

[IceBergSLiM]

just got back from the accountant.........hello $6500.00 return! woot! woot ! woot!

 

[MikeyIs4Dcats]

Originally posted by: ScottFern

Originally posted by: MikeyIs4Dcats

Originally posted by: ScottFern
I have a question about receiving my tax forms from HSBC regarding my savings account. I earned probably $400 in interest in a money market savings account in 2006 and I have NOT received the form yet. Doesn't HSBC have to send me the form post marked by yesterday the 30th? So should I be expecting this form soon?

HSBC files them electronically online only. Check your online account. You should have received an email regarding this.

No I mean my 1099 form. That isn't going to be on my online account? I can't find it at least.

yes, it is. I got mine the very same way.

 

[MikeyIs4Dcats]

Originally posted by: MrsBugi
Tax question:

One of my sister's serious boyfriends is quite wealthy and was nice enough to pay her college tuition this semester (approximately $4500). Should she report it in this section or not report it at all?

"WB12. Money received, or paid on the student's behalf (e.g., bills), not reported elsewhere on this form."

Will this be taxed at all, and if so at what point?

Thank you!

<shiftyeyes>

depends, is HE going to claim it? Did HE write the check directly?? Either one could come back to bite her.

 

[MrsBugi]

Originally posted by: MikeyIs4Dcats

Originally posted by: MrsBugi
Tax question:

One of my sister's serious boyfriends is quite wealthy and was nice enough to pay her college tuition this semester (approximately $4500). Should she report it in this section or not report it at all?

"WB12. Money received, or paid on the student's behalf (e.g., bills), not reported elsewhere on this form."

Will this be taxed at all, and if so at what point?

Thank you!

<shiftyeyes>

depends, is HE going to claim it? Did HE write the check directly?? Either one could come back to bite her.

I'm not sure if he is going to claim it or not, and he paid for the tuition via phone with a debit/bank card.

If she does report it, how could it come back to bite her? Would it be taxed?

Thank you very much for your assistance, she asked me for advice and I did not know so I am grateful to have you and others for your help.

 

[MikeyIs4Dcats]

Originally posted by: MrsBugi

Originally posted by: MikeyIs4Dcats

Originally posted by: MrsBugi
Tax question:

One of my sister's serious boyfriends is quite wealthy and was nice enough to pay her college tuition this semester (approximately $4500). Should she report it in this section or not report it at all?

"WB12. Money received, or paid on the student's behalf (e.g., bills), not reported elsewhere on this form."

Will this be taxed at all, and if so at what point?

Thank you!

<shiftyeyes>

depends, is HE going to claim it? Did HE write the check directly?? Either one could come back to bite her.

I'm not sure if he is going to claim it or not, and he paid for the tuition via phone with a debit/bank card.

If she does report it, how could it come back to bite her? Would it be taxed?

Thank you very much for your assistance, she asked me for advice and I did not know so I am grateful to have you and others for your help.

oh, I am in no way a tax pro, but if there was ever an audit, she would have to provide receipts showing SHE paid for the tuition if she claims the expenses. If she doesn't claim it, it would be harder to get busted, but still possible.

 

[MrsBugi]

Originally posted by: MikeyIs4Dcats

Originally posted by: MrsBugi

Originally posted by: MikeyIs4Dcats

Originally posted by: MrsBugi
Tax question:

One of my sister's serious boyfriends is quite wealthy and was nice enough to pay her college tuition this semester (approximately $4500). Should she report it in this section or not report it at all?

"WB12. Money received, or paid on the student's behalf (e.g., bills), not reported elsewhere on this form."

Will this be taxed at all, and if so at what point?

Thank you!

<shiftyeyes>

depends, is HE going to claim it? Did HE write the check directly?? Either one could come back to bite her.

I'm not sure if he is going to claim it or not, and he paid for the tuition via phone with a debit/bank card.

If she does report it, how could it come back to bite her? Would it be taxed?

Thank you very much for your assistance, she asked me for advice and I did not know so I am grateful to have you and others for your help.

oh, I am in no way a tax pro, but if there was ever an audit, she would have to provide receipts showing SHE paid for the tuition if she claims the expenses. If she doesn't claim it, it would be harder to get busted, but still possible.

That makes sense. She should fill in the amount in the space above, then - I wonder if she will be taxed for it, I think up to $10k monetary/cash gifts are deductible?

 

[Yreka]

Originally posted by: EagleKeeper

Originally posted by: Yreka
Looks like we are missing a W2(or whatever the equivalent document for a consultant). My wife had worked as a consultant for a market research firm for the first part of the year, however they are... not very professional. I understand businesses have until Jan 31, but assuming we never see a document from these guys, what is our recourse ? What (if any) would be an appropriate grace period to wait after the 31st ?

I wanna get these $^%% things done soon, and we are just waiting on this one last doc.

TYIA

What yuou are talking about is a 1099

1) You can contact Uncle for a copy. HOwever, if the company has not sent it to you, they may not have sent it currently to Uncle.

2) Allow until 7 Feb to receive the document - after that call them and ask for a copy to be both mailed and faxed.

3) You can total up the payments to her and enter that numbers as part of the Schedule C income.

TY Eagle,


Just to clarify #3, You mean I could go ahead and file anyway (wihtout the form) just listing her earnings for the short time worked ? We know how much she made by looking at the bank statements. I am assuming "Schedule C" is an option on the 1040 or is it a separate form? ( I am using Tax Cut)

If I screw up, I can always amend it later correct ? (assuming its not past the due date)

 

[ScottFern]

Originally posted by: MikeyIs4Dcats

Originally posted by: ScottFern

Originally posted by: MikeyIs4Dcats

Originally posted by: ScottFern
I have a question about receiving my tax forms from HSBC regarding my savings account. I earned probably $400 in interest in a money market savings account in 2006 and I have NOT received the form yet. Doesn't HSBC have to send me the form post marked by yesterday the 30th? So should I be expecting this form soon?

HSBC files them electronically online only. Check your online account. You should have received an email regarding this.

No I mean my 1099 form. That isn't going to be on my online account? I can't find it at least.

yes, it is. I got mine the very same way.

It's attached to the bottom of my January 2006 statement. Thanks for letting me know that!!

 

[ViviTheMage]

I am in my second year of college. So which woudl be better for me to pick, HOPE or LLC?

I got a form in the mail from my school, can I use it for deductions? (form 1098-T). I am not sure how to do it if I am filing online with taxslayer.com.

So I cant deduct books that I bought, from out of pocket?

Thanks eagle

 

[Canun]

Originally posted by: MikeyIs4Dcats
TurboTax gurus check in:

Does TT automatically determine if Married Filing Jointly or Married Filing Seperately is better for you? I used TaxCut previously, and it would run the numbers for you automatically, but I don't see anywhere that TT does the same.

I think it does. I know the professional software from them does it standard.

 

[Alphathree33]

If someone buys something from me for $X, does that count as "income" and as such is subject to "income tax"?

Is this true in all cases?

What if someone buys the rights to some software I've written?
What if someone buys my house?

Does the buyer have to pay sales tax and I have to pay income tax?

 

[homestarmy]

Can you claim something as a Lifetime Learning Credit (form 8863) if it was covered by Pell Grants?

I claim my girlfriend, she recieves Pell Grants and other aid, and the tuition is taken out of the Grants before she recieves the rest. Can I claim that amount that she had to "pay" from the grants?

Also, do those grants count as income and should they be so claimed on her tax return?

Thanks a million!

 

[homestarmy]

Also, what if the amount that I paid for tuition over the course of a year (including this Spring, as I claim it for last year as is allowed, and not including last Spring for the same reason) is higher than the amount claimed on my 1098-T form as provided by my college?

I can even go to their Peoplesoft page and see the reciepts for what I have paid, and it is about $200 higher than what they say?

Also, number 4 on the form "Adjustments made for a prior year" this is just recording that something was covered on a previous year's 1098-T, right? I don't need to subtract it from anywhere, correct? In other words, it is just informational, no?

Thanks again a million!!

 

[EagleKeeper]

Originally posted by: ViviTheMage
I am in my second year of college. So which woudl be better for me to pick, HOPE or LLC?

I got a form in the mail from my school, can I use it for deductions? (form 1098-T). I am not sure how to do it if I am filing online with taxslayer.com.

So I cant deduct books that I bought, from out of pocket?

Thanks eagle

Hope provides a 50% credit
LLC is 20% credit

Do the math

 

[EagleKeeper]

Originally posted by: ScottFern
I have a question about receiving my tax forms from HSBC regarding my savings account. I earned probably $400 in interest in a money market savings account in 2006 and I have NOT received the form yet. Doesn't HSBC have to send me the form post marked by yesterday the 30th? So should I be expecting this form soon?

Forms are not sent by Express Mail - they are sent by bulk.
The IRS rules state that forms are to be mailed by a certain date. But there is no penalty for missing that date.

 

[EagleKeeper]

Originally posted by: MikeyIs4Dcats
TurboTax gurus check in:

Does TT automatically determine if Married Filing Jointly or Married Filing Seperately is better for you? I used TaxCut previously, and it would run the numbers for you automatically, but I don't see anywhere that TT does the same.

Married - Seperately is useful only when there is a large disparity of incomes and the possibility of shifting the Schedule A deductions toward one partner.

 

[EagleKeeper]

Originally posted by: Yreka

Originally posted by: EagleKeeper

Originally posted by: Yreka
Looks like we are missing a W2(or whatever the equivalent document for a consultant). My wife had worked as a consultant for a market research firm for the first part of the year, however they are... not very professional. I understand businesses have until Jan 31, but assuming we never see a document from these guys, what is our recourse ? What (if any) would be an appropriate grace period to wait after the 31st ?

I wanna get these $^%% things done soon, and we are just waiting on this one last doc.

TYIA

What yuou are talking about is a 1099

1) You can contact Uncle for a copy. HOwever, if the company has not sent it to you, they may not have sent it currently to Uncle.

2) Allow until 7 Feb to receive the document - after that call them and ask for a copy to be both mailed and faxed.

3) You can total up the payments to her and enter that numbers as part of the Schedule C income.

TY Eagle,


Just to clarify #3, You mean I could go ahead and file anyway (wihtout the form) just listing her earnings for the short time worked ? We know how much she made by looking at the bank statements. I am assuming "Schedule C" is an option on the 1040 or is it a separate form? ( I am using Tax Cut)

If I screw up, I can always amend it later correct ? (assuming its not past the due date)

Schedule C is a seperate form that is filed with the 1040
One can always file a 1040X with the new AGI numbers and a corrected Schedule C.

 

[EagleKeeper]

Originally posted by: Alphathree33

If someone buys something from me for $X, does that count as "income" and as such is subject to "income tax"?

Is this true in all cases?

What if someone buys the rights to some software I've written?
What if someone buys my house?

Does the buyer have to pay sales tax and I have to pay income tax?

Payment for services and ownership rights is considered to be taxable income.

Profits from the sale of a house MAY BE taxable by the Federal goverment.

Sales tax is dependant by state.

 

[EagleKeeper]

Originally posted by: homestarmy
Can you claim something as a Lifetime Learning Credit (form 8863) if it was covered by Pell Grants?

I claim my girlfriend, she receives Pell Grants and other aid, and the tuition is taken out of the Grants before she receives the rest. Can I claim that amount that she had to "pay" from the grants?

Also, do those grants count as income and should they be so claimed on her tax return?

Thanks a million!

1) Be very very careful on claiming your GF as a dependent. I suspect that she does not meet the requirements, including that the relationship meeting the laws of your state.

The IRS has voided many such "relationships" as fraud. One way is , they look at the SS information to see what the legal relationship is. If such fraud is detected,you have back taxes, penalties and interest plus a many year follow on interest in your tax returns by auditors.

2) The Pell grants are income, the tuition amount being taken out in advance has no bearing.

She needs to file the Pell Grants as income.

Originally posted by: homestarmy
Also, what if the amount that I paid for tuition over the course of a year (including this Spring, as I claim it for last year as is allowed, and not including last Spring for the same reason) is higher than the amount claimed on my 1098-T form as provided by my college?

I can even go to their Peoplesoft page and see the reciepts for what I have paid, and it is about $200 higher than what they say?

Also, number 4 on the form "Adjustments made for a prior year" this is just recording that something was covered on a previous year's 1098-T, right? I don't need to subtract it from anywhere, correct? In other words, it is just informational, no?

Thanks again a million!!

The 1098-T is an advisory form.

You can use any number that for tuition. If such numbers differ from what is provided to the IRS on the 1098-G, you will have to justify it during an audit 2-3 years down the road.

The IRS is paying close attention to the tuition credits being claimed because of the potential of abuse.

 

[MikeyIs4Dcats]

Originally posted by: EagleKeeper

Originally posted by: MikeyIs4Dcats
TurboTax gurus check in:

Does TT automatically determine if Married Filing Jointly or Married Filing Seperately is better for you? I used TaxCut previously, and it would run the numbers for you automatically, but I don't see anywhere that TT does the same.

Married - Seperately is useful only when there is a large disparity of incomes and the possibility of shifting the Schedule A deductions toward one partner.

yeah, I figured out finally TT does NOT run both ways, so I did it myself and the was A $1600 differnce. Jointly it is!

 

[ScottFern]

Question for those who used TaxACT. I used it tonight and I filed electronically and used direct deposit for both Federal and State, however on tpo of their $15.95 TaxACT charge they topped on a HSBC transfer fee of $15.00 and kinda upset me because I read a document saying they have HSBC handle the fund transfer or something? But thats crap when they advertise $15.95 up front for State + Federal and then half way through say OH YEAH, you have to pay $15 to HSBC to handle the transaction? BS.

 

[BaNzaiDags]

Question:

Can me and my girlfriend be "head of household" at the same address? We each of have a dependent and we are unmarried.