4th Annual Tax Thread - 2006

[EagleKeeper]

Originally posted by: chambersc

Originally posted by: dquan97

Originally posted by: chambersc
I'm a student. Do I have to fill out anything to get some money back from my tuition (or anything that I've spent on my university, frankly)? Since I'm a dependent, do I not have to worry about anything and that's my parent's responsibility?

It's your parents' responsibility to report the tuition paid by them to the university as an education credit (either Lifetime or Hope, depending on your standing as a 1,2,3, or 4th yr)

what if they've contributed nothing and I've payed it all?

If you are classified as a dependant - you lose.

Try your negotiating skills on your parents.

 

[EagleKeeper]

Originally posted by: Rage187
My first child was born last month.

Can I still get the full years worth of earned income credit?


Also, I moved cross country this year, built a new house and the old house will be sold next week.
Any special things I should do to get the biggest return?

Any child born before midnight on the 31st is able to be classified as an Dependant. You will need to obtain a SS# for the child though before filing.

A valid Dependant is required to be alive sometime during the year.
That will satisfy the requirement for an Earned Income Credit Dependant.

If you moved due to employment; the cost of moving can be entered on the Form 3903 - this does not require a Schedule A.

The closing costs become deductible on the new house.

If the old house was rented, or you attempted to rent it; then you can look at the Schedule E. This will allow you the ability to depreciate the house, write off some utilities and maintenance/upgrades.

 

[Rage187]

^ Thank you!

 

[TUKIN18S]

Thanks for the thread!

Question: I have a 5 year old son. Me and his mother seperated when he was 1 year old. We were never married. In our arbitration agreement we agreed that she claim him as a dependent for odd tax years and I for even tax years after I graduated college. I graduated in December of 2005 and 2006 is technically my year to claim him as a dependent. Now, I have never done my taxes with a dependent on them. So I don't want to screw up royally my first year. Do I need any special forms since he was claimed by a different person last year?

 

[CPA]

Originally posted by: TUKIN18S
Thanks for the thread!

Question: I have a 5 year old son. Me and his mother seperated when he was 1 year old. We were never married. In our arbitration agreement we agreed that she claim him as a dependent for odd tax years and I for even tax years after I graduated college. I graduated in December of 2005 and 2006 is technically my year to claim him as a dependent. Now, I have never done my taxes with a dependent on them. So I don't want to screw up royally my first year. Do I need any special forms since he was claimed by a different person last year?

She will need to sign form 8332 and you will need to attach it to your return. She will not be able to claim the Child Tax Credit.

 

[Sphexi]

Here's a fun one:

I'm an American citizen, but was only living in the country up until May 15th. At that time I terminated my employment, and flew up to Canada (where my wife is), and became a permenant citizen up here (immigrant). I have been legally living/working up here since then.

Obviously since I worked in the States I have to deal with my taxes, but I've heard that I may have to pay taxes on what I earned up here, depending on how many days I spent in/out of the country? Also, I have NO idea what form to fill out to inform the IRS that I'm no longer in the country, and will not be returning for work or otherwise, and so far all of the software that I've checked has no mention of this process either.

 

[Runes911]

Endorse any tax software. We can safely say that most of the software does it's job well. Without recommending any particular one, you can choose TaxAct, TaxCut, or TurboTax. Additionally, these and many more sites you actually do your taxes online. Even the IRS website has the ability for you to file online with simple filings

Well let me ask this, what tax software do YOU like/use?

 

[EagleKeeper]

Originally posted by: Runes911

Endorse any tax software. We can safely say that most of the software does it's job well. Without recommending any particular one, you can choose TaxAct, TaxCut, or TurboTax. Additionally, these and many more sites you actually do your taxes online. Even the IRS website has the ability for you to file online with simple filings

Well let me ask this, what tax software do YOU like/use?

Pencil, Paper and the most powerful calculator there is have worked well for me.

 

[Runes911]

Originally posted by: EagleKeeper

Originally posted by: Runes911

Endorse any tax software. We can safely say that most of the software does it's job well. Without recommending any particular one, you can choose TaxAct, TaxCut, or TurboTax. Additionally, these and many more sites you actually do your taxes online. Even the IRS website has the ability for you to file online with simple filings

Well let me ask this, what tax software do YOU like/use?

Pencil, Paper and the most powerful calculator there is have worked well for me.

But thats not a software...

 

[TangoJuliet]

simple question: when is the earliest that I can file? is it as soon as I get my w2s, etc?

 

[EagleKeeper]

Originally posted by: alkohoLiK
simple question: when is the earliest that I can file? is it as soon as I get my w2s, etc?

As soon as you have all the required & relevant paperwork after Dec 31,2006

 

[alkemyst]

Originally posted by: Runes911

Originally posted by: EagleKeeper

Originally posted by: Runes911

Endorse any tax software. We can safely say that most of the software does it's job well. Without recommending any particular one, you can choose TaxAct, TaxCut, or TurboTax. Additionally, these and many more sites you actually do your taxes online. Even the IRS website has the ability for you to file online with simple filings

Well let me ask this, what tax software do YOU like/use?

Pencil, Paper and the most powerful calculator there is have worked well for me.

But thats not a software...

In all honesty, unless you have a very run of the mill return, software will cost you money in the long run.

I use turbotax to prepare, but also do it myself to verify...if turbotax can't get my numbers I fill out the forms manually.

 

[alkemyst]

Originally posted by: EagleKeeper
If you are classified as a dependant - you loose.

Try your negotiating skills on your parents.

This is a HUGE snafu I heard about in college. Kid is footing the whole bill and his parents are writing them off.

The only way out of this is to go to court if your parents won't see the light of day....unfortunately many colleges look at your parent's income to determine aid unless you are married or have a kid until you are 24 (at least while I was in college).

Colleges also expect you to be able to save 30% of your income toward expenses. When I sat down with the Financial Aid office I flat out told them if I could save 30% of my income, I would not be going back to school.

 

[CPA]

Originally posted by: Sphexi
Here's a fun one:

I'm an American citizen, but was only living in the country up until May 15th. At that time I terminated my employment, and flew up to Canada (where my wife is), and became a permenant citizen up here (immigrant). I have been legally living/working up here since then.

Obviously since I worked in the States I have to deal with my taxes, but I've heard that I may have to pay taxes on what I earned up here, depending on how many days I spent in/out of the country? Also, I have NO idea what form to fill out to inform the IRS that I'm no longer in the country, and will not be returning for work or otherwise, and so far all of the software that I've checked has no mention of this process either.

Assuming that you have or will be terminating your US citizenship, you will have to file form 8854. Until such time you are still considered a resident of the US and are obligated to file tax returns. Read the instructions carefully, especially about section 877.

 

[Sphexi]

Originally posted by: CPA

Originally posted by: Sphexi
Here's a fun one:

I'm an American citizen, but was only living in the country up until May 15th. At that time I terminated my employment, and flew up to Canada (where my wife is), and became a permenant citizen up here (immigrant). I have been legally living/working up here since then.

Obviously since I worked in the States I have to deal with my taxes, but I've heard that I may have to pay taxes on what I earned up here, depending on how many days I spent in/out of the country? Also, I have NO idea what form to fill out to inform the IRS that I'm no longer in the country, and will not be returning for work or otherwise, and so far all of the software that I've checked has no mention of this process either.

Assuming that you have or will be terminating your US citizenship, you will have to file form 8854. Until such time you are still considered a resident of the US and are obligated to file tax returns. Read the instructions carefully, especially about section 877.

Yep, I already knew that tax returns and citizenship was bunched in together, and although I'm an immigrant in Canada, my status here is tied to my US citizenship. Until such time as I can become a Canadian citizen (2009), I'm obligated to keep my US citizenship (I'll keep it forever most likely).

I just wasn't sure which forms I had to file, to let them know I'm not in the country and secretly earning money without paying taxes on it or something. It may be easiest to check with someone up here and just pay a little to have it dealt with properly I suppose

 

[SarcasticDwarf]

Under my sole proprietership I lost $250 through someone not completing the work they were supposed to. I filed a police report and all, but nothing was ever recovered. Where would that value go on a 1040/schedule C?

 

[CPA]

Originally posted by: SarcasticDwarf
Under my sole proprietership I lost $250 through someone not completing the work they were supposed to. I filed a police report and all, but nothing was ever recovered. Where would that value go on a 1040/schedule C?

It would be classified as one of your expenses on schedule C. It doesn't matter that the services weren't performed, you still incurred the expense. You could set up a receivable on your Balance Sheet with a credit to expense, but you will most likely never see the services or money, so it isn't required. Whatever expense you classified it as part of your bookkeeping is what it would be expensed under on your schedule C.

edit: This assumes you actually paid out the $250 to person.

 

[BigJ]

I'm a student and I believe my parents still claim me as a dependant. I have a sizable amount of student loans for this year. These loans are in my name and my mother co-signed on the loan. I also have tuition that was paid via credit card.

Can I get tax credit for this, and if so is there anything special I have to do seeing as I paid some of the tuition via credit?

EDIT: Read your response to Chambersc and it looks like I got the shaft on this one. It was a good amount too, in excess of $30k.

So my parents can claim the tuition I paid on their taxes and get a further break?

 

[chambersc]

A follow up question. When am I no longer considered a dependent?

 

[senseamp]

Can I deduct my doctor and medical procedure co-pays?
Do I need to itemize to deduct my state income taxes?

 

[49erinnc]

Originally posted by: senseamp
Can I deduct my doctor and medical procedure co-pays?
Do I need to itemize to deduct my state income taxes?

I was going to ask a medical-related question that was discussed in a previous thread but I cannot find it. I'm sure your question and mine can be knocked out in one post. From my understanding, you have to meet a 7.5% of your net (or is it gross???) income in order to deduct medical.

I had surgery this year and I think that I may be able to reach 7.5%. I just want to be sure I'm claiming the right stuff. I plan on deducting my annual deductible that I had to pay out of pocket for surgery, all of my office copays (including dental), prescription copays and remaining balances for my surgery after insurance payments. Am I in the right to deduct all of those? And what about stuff that I've bought such as ice packs, OTC pain relievers, therapeutic devices (TENS unit), etc. that I have used as post-op recovery?

Thanks for this annual thread. Definitely one of ATOT's best.

 

[allisolm]

Originally posted by: 49erinnc
[I had surgery this year and I think that I may be able to reach 7.5%. I just want to be sure I'm claiming the right stuff. I plan on deducting my annual deductible that I had to pay out of pocket for surgery, all of my office copays (including dental), prescription copays and remaining balances for my surgery after insurance payments. Am I in the right to deduct all of those? And what about stuff that I've bought such as ice packs, OTC pain relievers, therapeutic devices (TENS unit), etc. that I have used as post-op recovery?

Topic 502 - Medical and Dental Expenses
Don't forget $.20 per mile for driving to appointments, picking up prescriptions, etc. .

 

[FP]

My old company gave me private stock in the company in 99'. They basically gave us a cash bonus, took it back and gave us shares of the company.

I sold the shares back to a current employee this year for 1/50 the price they were sold to me.

How do I claim this loss? There really isn't any paperwork because it was a private party sale.

 

[shuttleboi]

I just started a new job in November. I received 1000 shares of stock and 3000 options. A friend told me that I would be taxed just for receiving the shares and the options, but I haven't even sold them to incur capitol gains tax. Is he right? Heck, I only receive a third of the 1000 shares and 3000 options per year over the next 3 years. Will my W-2 have all the information related to these stocks?

 

[manlymatt83]

I've never done my taxes before... my dad always did them.

I graudated College in May, and this year moved out on my own, got my own car insurance, got my own health care halfway through the year, etc.

This year I have to do my own taxes. I've held two jobs this year, and have also done a bunch of donating, of which I have receipts for... I've also had about $1200 in co-pays for medical bills, all of which I have receipts for.

Three questions

1) Can I deduct the $50 donation to 501c3's and the $1200 in co-pays for medical bills, or will the standard deduction be cheaper?
2) I've had stocks and forex trades this year, and I assume those places will send me tax statements. Mostly it was a loss. I didn't make any gains at all this year.
3) I declared "0" dependents at both jobs... and i assume I'll get a W2 for each.

My question is: Where do I start? Is there an easy program to do this for me?