4th Annual Tax Thread - 2006

[BaNzaiDags]

One more question:

I maxed out Dependent care (FSA) $5000 in 2006 and claimed all back. Does this mean when I do my taxes I have to claim my dependent?

Was toying with the idea to have my girlfriend claim our son as a dependent to see if she gets more back... I don't qualify for EIC but she would.

 

[allisolm]

There was an article in my newspaper this morning saying that more than one third of the people filing so far have not claimed the telephone tax refund. Don't forget it! Link.

 

[EagleKeeper]

Originally posted by: 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.

One more question:

I maxed out Dependent care (FSA) $5000 in 2006 and claimed all back. Does this mean when I do my taxes I have to claim my dependent?

Was toying with the idea to have my girlfriend claim our son as a dependent to see if she gets more back... I don't qualify for EIC but she would.
[/quote]
If both you and the GF qualify with a different dependent, each can claim HOH status.

If you had money not taxed because of claiming a dependant, then you are supposed to file a dependant. Otherwise, you can not claim the Dependant care FSA and should have to pay taxes on that income.

I can not advise you on how to proceed - however, there may be a code on your W2 that indicates the FSA for Dependant. Then not claiming a dependant could raise a flag.

 

[homestarmy]

EagleKeeper -

Regarding claiming my girlfriend as a dependant, it shouldn't be a problem. We have lived together for years. Officially, we lived together in an apartment for one year, and I have owned my home and we have lived together for the last 3.5 years. For most of the time, she has not had an income, and I have been the sole breadwinner. Now she makes less than $10k a year. Last year she made something like $5k.

Is there any reason why I would not be able to claim her? I have for the last few years.

 

[MikeyIs4Dcats]

Originally posted by: homestarmy
EagleKeeper -

Regarding claiming my girlfriend as a dependant, it shouldn't be a problem. We have lived together for years. Officially, we lived together in an apartment for one year, and I have owned my home and we have lived together for the last 3.5 years. For most of the time, she has not had an income, and I have been the sole breadwinner. Now she makes less than $10k a year. Last year she made something like $5k.

Is there any reason why I would not be able to claim her? I have for the last few years.

well, you cannot claim your spouse as a dependent, so I don't see how you could claim a commonlaw wife (if your state recognizes it). and just because you've gotten away with it in the past doesn't mean you should keep pressing your luck. I'd hate to guess how much in penalties and back taxes you'd owe if they find you in violation.

 

[EagleKeeper]

Originally posted by: homestarmy
EagleKeeper -

Regarding claiming my girlfriend as a dependant, it shouldn't be a problem. We have lived together for years. Officially, we lived together in an apartment for one year, and I have owned my home and we have lived together for the last 3.5 years. For most of the time, she has not had an income, and I have been the sole breadwinner. Now she makes less than $10k a year. Last year she made something like $5k.

Is there any reason why I would not be able to claim her? I have for the last few years.

IRS Pub 501
Review the definition of dependant

 

[MikeyIs4Dcats]

Originally posted by: EagleKeeper

Originally posted by: homestarmy
EagleKeeper -

Regarding claiming my girlfriend as a dependant, it shouldn't be a problem. We have lived together for years. Officially, we lived together in an apartment for one year, and I have owned my home and we have lived together for the last 3.5 years. For most of the time, she has not had an income, and I have been the sole breadwinner. Now she makes less than $10k a year. Last year she made something like $5k.

Is there any reason why I would not be able to claim her? I have for the last few years.

IRS Pub 501
Review the definition of dependant

and more explicitly:

Your Spouse's Exemption

Your spouse is never considered your dependent.

Joint return. On a joint return, you can claim one exemption for yourself and one for your spouse.

Separate return. If you file a separate return, you can claim the exemption for your spouse only if your spouse had no gross income, is not filing a return, and was not the dependent of another taxpayer. This is true even if the other taxpayer does not actually claim your spouse as a dependent. This is also true if your spouse is a nonresident alien.

Head of household. If you qualify for head of household filing status because you are considered unmarried, you can claim an exemption for your spouse if the conditions described in the preceding paragraph are satisfied.

To claim the exemption for your spouse, check the box on line 6b of Form 1040 or Form 1040A and enter the name of your spouse in the space to the right of the box. Enter the SSN or ITIN of your spouse in the space provided at the top of Form 1040 or Form 1040A.

You cannot claim her for several reasons.

 

[Albis]

If I have $20,000 in qualified tuition and expenses from a Form 1098-T, can I use 10,000 (max for lifetime credit) under Lifetime Education Credit and use another 4,000 (max for education expenses) under the deduction for qualified tuition and related expenses?

 

[w33bo]

so i heard that there is a standard exemption that you can take for any volunteer work done for katrina. I went down and volunteered for a week, but the only official things that i see are being able to claim mileage/travel costs and lodging, but not food. I only drove one way, and flew the other way, so should I claim the mileage and airplane ticket? or is this 'standard' exemption bigger? (what i heard is that it is a couple thousand dollars). The money I claim (itemized) is about 500 dollars.

thanks

 

[Hubes]

just from messing around with my w-2, looks like i will be gettin over 1,000 back this year.

 

[Wekiva]

QUESTION:
Do I need TurboTax Basic or Deluxe

I've used TurboTax Basic for about 4 years and it's always asked questions that dealt with owning a home and itemizing charitable contributions. Did it change this year so that these types of things won't be covered in Basic? On their web site it says:

Choose TurboTax Basic if:
You rent your home or apartment (don't own a home).
You don't make many charitable contributions or have many deductions to claim (if any).

It says to Choose TurboTax Deluxe if:
You own a home or sold your home in 2006.
You made charitable contributions in 2006.

Are these new instructions or have they always said that? I've owned the home we're in now for about 3 years and have made about 5 different charitable contributions. Is there really any need to use Deluxe?

 

[drnickriviera]

Q: My brother and I did some work for a city. I received a 1099-Misc, but it only list my SSN on it. I want to split that income with my brother. Should I file a 1099-misc saying my brother subcontracted under me? Or is there any other way for him to claim some of this income?

 

[EagleKeeper]

Originally posted by: drnickriviera
Q: My brother and I did some work for a city. I received a 1099-Misc, but it only list my SSN on it. I want to split that income with my brother. Should I file a 1099-misc saying my brother subcontracted under me? Or is there any other way for him to claim some of this income?

1) If the contract with the city had both of your names on it, then you can request that they split the 1099. (not likely)

2) It may be better for you to determine the extra tax that 50% of the income is causing you and ask your brother to pay it to you.

 

[ViviTheMage]

I got a form 1099-MISC from a staffing firm I worked for. They never took out federal income tax or anything. They called it 'nonemployee compensation' do I have to fill out any other special forms for this? Or do I just input this as a W2 and under wages,etc put the amount? also for form 1098-T can I use that as a hope amount? Or do I need to fill out another form for this as well.

 

[EagleKeeper]

Originally posted by: ViviTheMage
I got a form 1099-MISC from a staffing firm I worked for. They never took out federal income tax or anything. They called it 'nonemployee compensation' do I have to fill out any other special forms for this? Or do I just input this as a W2 and under wages,etc put the amount? also for form 1098-T can I use that as a hope amount? Or do I need to fill out another form for this as well.

The 1098-T numbers should be used for the Hope or the LLC. Look in the OP for guidance for the difference if needed.

If you got the 1099-MISC, you can file the amount under misc income (if under the allowed limit) or use the Schedule C.

By using the Schedule C, you have the ability to expense off items that have some potential value with respect to the work that you did to earn the 1099.

 

[GoPackGo]

Heres a bummer.

I did my taxes with taxcut....thought I had all the forms.

I filed electronically last night.

Today I get a 1099-B. (I already had the 1099-DIV) both forms were from the same mutual fund.

Taxcut allows me to fill out the 1040X online, but I have to print it. Also I print out the updated Schedule D.

I mail the necessary forms to the IRS tonight.

The biggest bummer? It reduces my refund by $1.

It was for a mutual fund that I took 500 dollars out of but cost me 481. Of course on the 1099-B they say they dont tell the IRS about the 481 so I figure I better file the 1040X since it seems they tell them about the $500. So in all it increased my income by $19

What perils do I face?

 

[drnickriviera]

Originally posted by: EagleKeeper

Originally posted by: drnickriviera
Q: My brother and I did some work for a city. I received a 1099-Misc, but it only list my SSN on it. I want to split that income with my brother. Should I file a 1099-misc saying my brother subcontracted under me? Or is there any other way for him to claim some of this income?

1) If the contract with the city had both of your names on it, then you can request that they split the 1099. (not likely)

2) It may be better for you to determine the extra tax that 50% of the income is causing you and ask your brother to pay it to you.

There was no contract.

The tax implication isn't a concern. My brother and I get 99% of our income from investments, so we can't use Roth IRA's as we have no earned income. That's why I want to transfer some of that income to my brother.

 

[EagleKeeper]

Originally posted by: GoPackGo
Heres a bummer.

I did my taxes with taxcut....thought I had all the forms.

I filed electronically last night.

Today I get a 1099-B. (I already had the 1099-DIV) both forms were from the same mutual fund.

Taxcut allows me to fill out the 1040X online, but I have to print it. Also I print out the updated Schedule D.

I mail the necessary forms to the IRS tonight.

The biggest bummer? It reduces my refund by $1.

It was for a mutual fund that I took 500 dollars out of but cost me 481. Of course on the 1099-B they say they dont tell the IRS about the 481 so I figure I better file the 1040X since it seems they tell them about the $500. So in all it increased my income by $19

What perils do I face?

Money moving around via brokers and mutual funds get reported.
The IRS attemtps to synch up those reported numbers with what you report.

If the numbers mismatch, an agent may ask why.

 

[EagleKeeper]

Originally posted by: drnickriviera

Originally posted by: EagleKeeper

Originally posted by: drnickriviera
Q: My brother and I did some work for a city. I received a 1099-Misc, but it only list my SSN on it. I want to split that income with my brother. Should I file a 1099-misc saying my brother subcontracted under me? Or is there any other way for him to claim some of this income?

1) If the contract with the city had both of your names on it, then you can request that they split the 1099. (not likely)

2) It may be better for you to determine the extra tax that 50% of the income is causing you and ask your brother to pay it to you.

There was no contract.

The tax implication isn't a concern. My brother and I get 99% of our income from investments, so we can't use Roth IRA's as we have no earned income. That's why I want to transfer some of that income to my brother.

You could expense off half the income to your brother using the Schedule C and have him also file a Schedule C showing the income received from you.

 

[GoPackGo]

Originally posted by: EagleKeeper

Originally posted by: GoPackGo
Heres a bummer.

I did my taxes with taxcut....thought I had all the forms.

I filed electronically last night.

Today I get a 1099-B. (I already had the 1099-DIV) both forms were from the same mutual fund.

Taxcut allows me to fill out the 1040X online, but I have to print it. Also I print out the updated Schedule D.

I mail the necessary forms to the IRS tonight.

The biggest bummer? It reduces my refund by $1.

It was for a mutual fund that I took 500 dollars out of but cost me 481. Of course on the 1099-B they say they dont tell the IRS about the 481 so I figure I better file the 1040X since it seems they tell them about the $500. So in all it increased my income by $19

What perils do I face?

Money moving around via brokers and mutual funds get reported.
The IRS attemtps to synch up those reported numbers with what you report.

If the numbers mismatch, an agent may ask why.

I did mail the amended return with the updated information from the 1099-B which was missing from the e-filed return.

 

[bondboy]

My parents have a house in NY, but it's under my name. They are currently living in it, and last year I helped out by paying the property taxes on the house. Can I deduct that even if I live in CA? Thanks for the help.

 

[pinoy]

Just a couple of questions:

1) Last year I paid additional amount to my Federal ITR. Can I add this to my 2006 Witholding tax? My only proof is the electronic receipt I received (paid online).

2) When my wife and I applied for a job in California, we have to take our kids (2) with us. Is their airfare (and maybe food) also tax deductible since we don't have anybody else to take care of them?

thanx in advance for the response.

 

[brtspears2]

Sched E Federal Question:

I rented a room out of my home for 5 months of the year. For the rest of the year, it was returned back to my personal use. Right now, it is put down at a 15% business use for that room I rented.

How would I figure out how much to put down for Mortgage Interest and real estate taxes? Since it was used only 5/12 months of the year, do I put in the full amount paid or 5/12ths or the value?
Same question for HOA fees and insurance. Do I put down what it cost for the 5 months in 2006 or the whole amount?

OR is there a way just to claim the rental income I got (very little) without hoping through this Sched E stuff?

 

[EagleKeeper]

Originally posted by: bondboy
My parents have a house in NY, but it's under my name. They are currently living in it, and last year I helped out by paying the property taxes on the house. Can I deduct that even if I live in CA? Thanks for the help.

For the Federal, you can deduct the taxes because it is in your name.

 

[EagleKeeper]

Originally posted by: pinoy
Just a couple of questions:

1) Last year I paid additional amount to my Federal ITR. Can I add this to my 2006 Witholding tax? My only proof is the electronic receipt I received (paid online).

2) When my wife and I applied for a job in California, we have to take our kids (2) with us. Is their airfare (and maybe food) also tax deductible since we don't have anybody else to take care of them?

thanx in advance for the response.

1) The IRS should have a record of payment if it was electronic. As long as you have a receipt of some type of tracking number, you are in the clear. This amount would go on the line item for additional taxes paid.

2) Job hunting costs that would include the children transportation costs and living expenses does not count. You made the choice to go together.

Moving expenses would be covered. If the children flew out prior to, during or post move; those costs would show on the 3903. The IRS does not really define a pre-move time frame.