4th Annual Tax Thread - 2006

[EagleKeeper]

Originally posted by: 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?

You can put the Rental income on the Misc income line.

Using the Schedule E allows you to write off the proportional expenses against the income that will be taxable for Federal, State, SS and Self Employment.

 

[ghostman]

Ok, I admit, this is probably a dumb newbie question. I'm a single, full time worker without any kids. Last year, my pay info was incorrect and listed that I had 3 allowances. This resulted in owing lots of money during tax time. Following the W4 form to readjust that info, I totaled 2 allowances***. Come this year, I'm still owing a ton of taxes and I'm required to prepay my 2007 taxes. I follow the TurboTax process and it readjusts my W4 allowances to 0. I'm not sure how someone can total 0 in my situation following W4 instructions***... is this number arbitrary?

My sister is pretty much in the same situation as me, but her allowances is already 0 and she's getting money back. After going through the TurboTax process, it recommends setting her allowances to 2 on her W4. She's also single, full time and without kids. So, I don't get why we're instructed to use different values.

*** I filled out my previous W4 like so:
A. Enter ?1? for yourself if no one else can claim you as a dependent
B. Enter ?1? if: You are single and have only one job;
...
H. Add lines A through G and enter total here.
...
5. Total number of allowances you are claiming (from line H above or from the applicable worksheet on page 2) ____ isn't 2 correct?

 

[EagleKeeper]

Originally posted by: ghostman
Ok, I admit, this is probably a dumb newbie question. I'm a single, full time worker without any kids. Last year, my pay info was incorrect and listed that I had 3 allowances. This resulted in owing lots of money during tax time. Following the W4 form to readjust that info, I totaled 2 allowances***. Come this year, I'm still owing a ton of taxes and I'm required to prepay my 2007 taxes. I follow the TurboTax process and it readjusts my W4 allowances to 0. I'm not sure how someone can total 0 in my situation following W4 instructions***... is this number arbitrary?

My sister is pretty much in the same situation as me, but her allowances is already 0 and she's getting money back. After going through the TurboTax process, it recommends setting her allowances to 2 on her W4. She's also single, full time and without kids. So, I don't get why we're instructed to use different values.

*** I filled out my previous W4 like so:
A. Enter ?1? for yourself if no one else can claim you as a dependent
B. Enter ?1? if: You are single and have only one job;
...
H. Add lines A through G and enter total here.
...
5. Total number of allowances you are claiming (from line H above or from the applicable worksheet on page 2) ____ isn't 2 correct?

Rule of thumb is to set your W4 exemptions to the number of people that show on your tax return.
Then you can adjust the number up depending on additional credits and deductions.

 

[brtspears2]

Originally posted by: EagleKeeper

Originally posted by: 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?

You can put the Rental income on the Misc income line.

Using the Schedule E allows you to write off the proportional expenses against the income that will be taxable for Federal, State, SS and Self Employment.

I'm looking at line 21 of the 1040. I put my amount there for the other misc income. What should I put down as type?

 

[EagleKeeper]

Originally posted by: brtspears2

Originally posted by: EagleKeeper

Originally posted by: 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?

You can put the Rental income on the Misc income line.

Using the Schedule E allows you to write off the proportional expenses against the income that will be taxable for Federal, State, SS and Self Employment.

I'm looking at line 21 of the 1040. I put my amount there for the other misc income. What should I put down as type?

Anything you want - that information is more for your records to know what the income is from if you have to explain it.

 

[RgrPark]

Got a gambling tax question.
I have a players card at the Borgata in AC...i believe they keep track of how you play.
DO they somehow know how much you win and send you a tax form??

 

[JEDI]

i sold stocks in 2000 for a $30k loss.

The max I can expense is $3k/yr, so i have 10yrs (till 2010) to expense all of it.

But in 2004, i didn't expense $3k because I had enough deductions to have a $0 tax bill.

Does that mean i now have till 2011 to expense my stock loses? or did i waste $3k?

 

[EagleKeeper]

Originally posted by: RgrPark
Got a gambling tax question.
I have a players card at the Borgata in AC...i believe they keep track of how you play.
DO they somehow know how much you win and send you a tax form??

If you received a 1099-G from a casino, then such a report can be used to determine & verify losses.

The casino may know what you do, but unless you get a 1200 payout in a slot, race or cash in a large number of chips that you won, they will not notify Uncle.

 

[EagleKeeper]

Originally posted by: JEDI
i sold stocks in 2000 for a $30k loss.

The max I can expense is $3k/yr, so i have 10yrs (till 2010) to expense all of it.

But in 2004, i didn't expense $3k because I had enough deductions to have a $0 tax bill.

Does that mean i now have till 2011 to expense my stock loses? or did i waste $3k?

10 years does not equal 11 years.
If you did not use the $3K in 2004, you can not using it in 2011

 

[ghostman]

Another newbie question. I was given company stock this year. The value was added to one of my paychecks, then deducted to buy the stock. It appeared as income on my pay stub, so it was taxed. Now, do I have to report this stock purchase somewhere? I didn't sell the stocks yet.

 

[EagleKeeper]

Originally posted by: ghostman
Another newbie question. I was given company stock this year. The value was added to one of my paychecks, then deducted to buy the stock. It appeared as income on my pay stub, so it was taxed. Now, do I have to report this stock purchase somewhere? I didn't sell the stocks yet.

You do not have to report it. Just keep track of the purchase date and price.
When you sell it, the sales and purchase information will be needed for the Schedule B.

 

[Slew Foot]

I won a BBQ in a contest and received a 1099 for it (~1600, the MSRP). However the retail price in stores is closer to 1200, can I go about adjusting the 1099?

 

[EagleKeeper]

Originally posted by: Slew Foot
I won a BBQ in a contest and received a 1099 for it (~1600, the MSRP). However the retail price in stores is closer to 1200, can I go about adjusting the 1099?

You can not.

The 1099 is what the value of the prize was considered.

The info reported on the 1099 must add up between you and the gifter. The gifter will usually have the higest value assigned (MSRP) due to their tax records in order to reduce their taxes.

However, if you choose to report the 1099 on a Schedule C, then all the expenses used toward getting the item can be expensed off.

 

[daniel49]

sat down to look at my 17 year old daughters taxes on 1040EZ.
She made about 6500.00 + or - on her after school job.
But there appears to only be 165.00 fed withholdings on her w-2's
which looks to me to be at about 2%.
If you then go to the tax table she then owes about 500.00 in taxes.
(which is a wad of money for a kid)

It seems to me for some reason her withholdings were really low for that amount of earnings...I asked about her w4 and she doesn't know so I told her to find out.
It seems if she has earned over 5000.00 she has to file.

Am I missing anything here any other idea why those withholdings might have been so low?
she is working in a nursing home and claimed on my return as well.
thx

 

[EagleKeeper]

Originally posted by: daniel49
sat down to look at my 17 year old daughters taxes on 1040EZ.
She made about 6500.00 + or - on her after school job.
But there appears to only be 165.00 fed withholdings on her w-2's
which looks to me to be at about 2%.
If you then go to the tax table she then owes about 500.00 in taxes.
(which is a wad of money for a kid)

It seems to me for some reason her withholdings were really low for that amount of earnings...I asked about her w4 and she doesn't know so I told her to find out.
It seems if she has earned over 5000.00 she has to file.

Am I missing anything here any other idea why those withholdings might have been so low?
she is working in a nursing home and claimed on my return as well.
thx

find out what she did on her W4

 

[daniel49]

Originally posted by: EagleKeeper

Originally posted by: daniel49
sat down to look at my 17 year old daughters taxes on 1040EZ.
She made about 6500.00 + or - on her after school job.
But there appears to only be 165.00 fed withholdings on her w-2's
which looks to me to be at about 2%.
If you then go to the tax table she then owes about 500.00 in taxes.
(which is a wad of money for a kid)

It seems to me for some reason her withholdings were really low for that amount of earnings...I asked about her w4 and she doesn't know so I told her to find out.
It seems if she has earned over 5000.00 she has to file.

Am I missing anything here any other idea why those withholdings might have been so low?
she is working in a nursing home and claimed on my return as well.
thx

find out what she did on her W4

yeah on it already.... she's supposed to ask tomorrow ...only thing I could think of was a bunch of exemptions that shouldn't have been there.

 

[ViviTheMage]

I did some contract work for a couple thousand dollars and I bought a car during that time, could I use the money I used to purchase the car as something to deducat? Also, gas expenditures and parking? (I kept the receipts for gas and parking ramps, obviously have the receipt for the purchase of my car)

 

[fallenangel99]

I received Vista and Office 2007 as part of a promotion for free by Microsoft. I filled out a W9 and sent it out to them.

How do I go about reporting this (1099 form i think?) in TaxACt or to HR Block (if i do go there)? I don't recall TaxAct asking me (or maybe they didn't and I forgot)

Thanks

 

[EagleKeeper]

Originally posted by: ViviTheMage
I did some contract work for a couple thousand dollars and I bought a car during that time, could I use the money I used to purchase the car as something to deducat? Also, gas expenditures and parking? (I kept the receipts for gas and parking ramps, obviously have the receipt for the purchase of my car)

Given that the vehicle is related in some way to the contract work.

The vehicle can be expensed as related to the work as well as expenses.
You can choose to use mileage or expenses. Expenses include maintenance, insurance, registration as well as fuel.
Parking for the contract work falls under a seperate line item for the Schedule C.
Note that additional items related to work beyond tjust the vehicle can also be expensed against the income.

You can actually have a net loss, which will carry over against regular taxable W2 type income.

 

[EagleKeeper]

Originally posted by: fallenangel99
I received Vista and Office 2007 as part of a promotion for free by Microsoft. I filled out a W9 and sent it out to them.

How do I go about reporting this (1099 form i think?) in TaxACt or to HR Block (if i do go there)? I don't recall TaxAct asking me (or maybe they didn't and I forgot)

Thanks

If they give you a 1099 for such items (value of the S/W), you can choose to classify it under Misc income or use the Schedule C.

The benefits of using the Schedule C is that cost that you may have incurred related to obtaining the S/W can be expensed.

 

[ViviTheMage]

Originally posted by: EagleKeeper

Originally posted by: ViviTheMage
I did some contract work for a couple thousand dollars and I bought a car during that time, could I use the money I used to purchase the car as something to deducat? Also, gas expenditures and parking? (I kept the receipts for gas and parking ramps, obviously have the receipt for the purchase of my car)

Given that the vehicle is related in some way to the contract work.

The vehicle can be expensed as related to the work as well as expenses.
You can choose to use mileage or expenses. Expenses include maintenance, insurance, registration as well as fuel.
Parking for the contract work falls under a seperate line item for the Schedule C.
Note that additional items related to work beyond just the vehicle can also be expensed against the income.

You can actually have a net loss, which will carry over against regular taxable W2 type income.

It is related as in I drove it to and from locations. Its was for a brief period...4-5 months or so. Silly question, how do I put the expenses (like the money I put down for my car, gas, parking, oil changes, etc) into sched C?

I just want to be sure that I can use the sched C for the amount of money I put down on the car (as well as interest I have been paying, maybe even the monthly payments??) how detailed does it get as to what I can use it for?

 

[EagleKeeper]

Purchase price of the vehicle unless you are leasing

There are line items on the schedule C for different types of expense groups.



You may wish to invest in some Tax S/W to assist you in extracting the proper numbers.

The S/W will ask you the questions needed on the usage of the vehicle and cost, etc.

 

[ViviTheMage]

Originally posted by: EagleKeeper
Purchase price of the vehicle unless you are leasing

There are line items on the schedule C for different types of expense groups.



You may wish to invest in some Tax S/W to assist you in extracting the proper numbers.

The S/W will ask you the questions needed on the usage of the vehicle and cost, etc.

should I pick up turbotax? I have heard good things .

 

[EagleKeeper]

Originally posted by: ViviTheMage

Originally posted by: EagleKeeper
Purchase price of the vehicle unless you are leasing

There are line items on the schedule C for different types of expense groups.



You may wish to invest in some Tax S/W to assist you in extracting the proper numbers.

The S/W will ask you the questions needed on the usage of the vehicle and cost, etc.

should I pick up turbotax? I have heard good things .

I can neither confirm nor deny that statement.

I prefer to not use online S/W, but that is a personal preference and makes it easier to play what ifs.

There is some S/W that is free online, or available for free download.

See the OP or threads in Hot Deals for additional options.

 

[Raduque]

eagle keeper, firstly, many thanks for this thread. Year after year you dispense advice at no cost to us and hopefully, you know ATOT as a whole, greatly appreciates it.

Now that the asskissery is done, on to my question! I received two W2's for 2006, one from the first part of the year from my job in WV(Aerotek), and a second one from my job from the later part of the year after I moved back home to Tx(APAC). I've already filed those two W2s online with H&R Block, and it's been processed and accepted and I'm awaiting the directdeposit. I have just received in the mail a 3rd W2 - an unexpected one from Aerotek. This W2 has a much larger amount on it then the first W2 I got from Aerotek.

What I'm wondering is, can I file again with this W2, or am I basically out of luck because I didn't wait for this W2, which I didn't even expect in the first place?

If it makes any difference, the company changed their name partway through the first quarter of 06, so the first W2 I received from them had the new name/emp ID, and the one I just received has the old name/emp ID.