4th Annual Tax Thread - 2006

[EagleKeeper]

Originally posted by: statik213

Originally posted by: scootermaster
I'm a graduate student, and I got a 1098-T. Box one is empty, but box 2 has some numbers. (So do boxes 4 and 5, although TaxCut never asked for those). I had an accountant re-do my taxes in previous years and claim me some real dollars because of this, but I'm back to doing it myself (breakup with the girlfriend/accountant). My school pays for my tuition, but that's not exactly "employer reiumbursement", is it? TaxCut wants to know where the money in box 2 came from. If I put in "other income" I get a nice return. Is this Kosher?

Also, the number on the back, for "Adjustment to prior year tuition" is quite large. Do I do anything with that number?

Sorry for being vague. I can give more specifics if needed.

Thanks, if anyone can provide any help!

I have a similiar question.... In turbotax when I enter my education expenses I put in 23k for my wife's tuition and subtract her grant for around 8k.
So, the 16k that was paid came out of school-loans and wasn't money that we paid. Is it OK to list the 23k (box 2 from 1098-T) under tuition related expenses?

I did not do this in my 2005 taxes 'cos she didn't get a grant then and we did not recieve a 1098-T. Can I get anything back from '05?

This thread rocks!

Even though loans were used for the tuition, your are still responsible for the payment of the loans. Therefore, tuitition paid by loans can be entered a tuitition related expenses for purposes of the Hope, Tuition or LLC credits.

You will need to file a 1040X for 2005 to obtain some credit back.

 

[EagleKeeper]

Originally posted by: scootermaster
I'm a graduate student, and I got a 1098-T. Box one is empty, but box 2 has some numbers. (So do boxes 4 and 5, although TaxCut never asked for those). I had an accountant re-do my taxes in previous years and claim me some real dollars because of this, but I'm back to doing it myself (breakup with the girlfriend/accountant). My school pays for my tuition, but that's not exactly "employer reiumbursement", is it? TaxCut wants to know where the money in box 2 came from. If I put in "other income" I get a nice return. Is this Kosher?

Also, the number on the back, for "Adjustment to prior year tuition" is quite large. Do I do anything with that number?

Sorry for being vague. I can give more specifics if needed.

Thanks, if anyone can provide any help!

If you are working for the school and the tuition is a condition of the employment, it should be considered as re-imbursed. You do not have a receipt showing that you paid for it out of your pocket.

If you read the descriptions for Boxes 1,2,4,5 they should be failry self explanitory.

Box 1 - How much money you paid the school for you tuition.
Box 2 - How much tuition was billed to some-one so it would be paid
Box 4 - Catchup for changes made the previous year due to accounting issues - If you used tuition for 2005, then you should file an ammeded tax return
Box 5 - How much "free" money was recieved - whcihc is deducted from the actual tuition that you are responsible for paying.

 

[statik213]

Originally posted by: EagleKeeper

Originally posted by: statik213

Originally posted by: scootermaster
I'm a graduate student, and I got a 1098-T. Box one is empty, but box 2 has some numbers. (So do boxes 4 and 5, although TaxCut never asked for those). I had an accountant re-do my taxes in previous years and claim me some real dollars because of this, but I'm back to doing it myself (breakup with the girlfriend/accountant). My school pays for my tuition, but that's not exactly "employer reiumbursement", is it? TaxCut wants to know where the money in box 2 came from. If I put in "other income" I get a nice return. Is this Kosher?

Also, the number on the back, for "Adjustment to prior year tuition" is quite large. Do I do anything with that number?

Sorry for being vague. I can give more specifics if needed.

Thanks, if anyone can provide any help!

I have a similiar question.... In turbotax when I enter my education expenses I put in 23k for my wife's tuition and subtract her grant for around 8k.
So, the 16k that was paid came out of school-loans and wasn't money that we paid. Is it OK to list the 23k (box 2 from 1098-T) under tuition related expenses?

I did not do this in my 2005 taxes 'cos she didn't get a grant then and we did not recieve a 1098-T. Can I get anything back from '05?

This thread rocks!

Even though loans were used for the tuition, your are still responsible for the payment of the loans. Therefore, utition paid by loans can be entered a tuitition related expenses for purposes of the Hope, Tuition or LLC credits.

You will need to file a 1040X for 2005 to obtain some credit back.

Wohooo!!! Thanks. I will file 1040X as well.

 

[EagleKeeper]

Originally posted by: UCDAggies
For head of household does a Q.R have to be a mother, father, grandparents, son, daughter, brother, or sister?

The IRS spells out the rules very clearly for who is a qualifed person when filing as HOH.
Pets and live-in SO do nto count

 

[LordSnailz]

Sorry for the noobish question, but is there a way to calculate the tax break I'm getting from owning a house? Also, do I get back both federal and state?
I know, I've own the house for two years now, I should know, but I've always used taxcut or turbo tax to do it ... so never really found out how to go about calulating that.

thanks in adv!

 

[EagleKeeper]

Originally posted by: LordSnailz
Sorry for the noobish question, but is there a way to calculate the tax break I'm getting from owning a house? Also, do I get back both federal and state?
I know, I've own the house for two years now, I should know, but I've always used taxcut or turbo tax to do it ... so never really found out how to go about calulating that.

thanks in adv!

If you use tax S/W, create a dummy copy of the return and just delete the propery taxes and interest entries.

Look at the differnece for the Federal and State at the bottom line.
Then go around the house and hug each doorway.

 

[statik213]

OK, last question.
I received some money from my bro living in Australia last year. The first time it was to help my wife and I buy a Car. The second time was so I could pay for plane tickets to go visit my family (I'm not a US citizen). The combined amount was less than 10k.
I'm pretty sure the money for the plane tickets is not income, but I am not sure about the money for the car. I also intend to pay him back eventually, but don't have a timeframe in mind. Is (any) of this money taxable?

 

[EagleKeeper]

The tax that you are concerned about applies to the person giving the money, not receiving it.

 

[statik213]

Originally posted by: EagleKeeper
The tax that you are concerned about applies to the person giving the money, not receiving it.

sweeeeeet! Thanks.

 

[TheTony]

Heads up for Turbo Tax (online) users. Security vulnerability discovered.

 

[EagleKeeper]

Originally posted by: TheTony
Heads up for Turbo Tax (online) users. Security vulnerability discovered.

This has to do with achieved info, not the tax return itself states the article - I question that.

TurboTax requests an account name and password when being used online.
The account name must be unique, the password does not have to be.

Ex:
Andrew Smith may be able to use ASmith has his account with the password as smith.
Joe Smith chooses JSmith with the password smith

Jill Smith attempts to choose JSmith and is rejected - she chooses JSmith1 with password as smith.

Some enterprising person knowing such patterns of security noobs could spend some time and collect a lot of old information as well as current info.

TT On-Line does not seem to alert anyone when incorrect passwords are continually attempted. (From experience as a test)

 

[TheTony]

Originally posted by: EagleKeeper

Originally posted by: TheTony
Heads up for Turbo Tax (online) users. Security vulnerability discovered.

This has to do with archieved info, not the tax return itself.

TurboTax requests an account name and password when being used online.
the account name must be unique, the passwrod does not have to be.

Ex:
Andrew Smith may be able to use ASmith has his account with the password as smith.
Joe Smith chooses JSmith with the password smith

Jill Smith attempts to choose JSmith and is rejected - she chooses JSmith1 with passwrod as smith.

Some enterprising person knowing such patterns of security noobs couild spend some time and collect a lot of old information as well as current info.

TT On-Line does not seem to alert anyone when incorrect passwords are continually attempted. (From experience as a test)

She was able to access tax returns for Turbo Tax customers she never met in different parts of the country. On her screen, she found everything needed for electronic filing from bank account to routing digits and Social Security numbers.

 

[Mermaidman]

QUESTION

I sent a check to the IRS last May. I *think* it was for my quarterly estimated tax payment. How can I find out from the IRS the purpose of the payment?

 

[EagleKeeper]

Originally posted by: Mermaidman
QUESTION

I sent a check to the IRS last May. I *think* it was for my quarterly estimated tax payment. How can I find out from the IRS the purpose of the payment?

Hopefully, you labeled what the check was for. Locate the canceled check.

You can also ask the IRS for a list of payments made to them in 2006 and see if the check amount/date matches up.

 

[MrBlahh]

I am currently an electricians apprentice. Each year through the program we have to take 9 weeks of school at 40 hours a week and we get college credit through a local community college for this. We also get a stipend which is what we would normally be making if we were out working. The first 6 weeks we get $50 taken out of our check for a total of $300 to cover the cost of books. Can I deduct the $300 from my taxes for education costs?

 

[Ns1]

Re: Business uniforms/koolaidkid

Sorry, just to clarify, for the business clothes, the criteria is

"work clothes and uniforms if required and not suitable for everyday use"

So, it would depend entirely on how aggressive you want to be in "suitable for everyday use"

 

[EagleKeeper]

Originally posted by: MrBlahh
I am currently an electricians apprentice. Each year through the program we have to take 9 weeks of school at 40 hours a week and we get college credit through a local community college for this. We also get a stipend which is what we would normally be making if we were out working. The first 6 weeks we get $50 taken out of our check for a total of $300 to cover the cost of books. Can I deduct the $300 from my taxes for education costs?

Yes - however, it would have to be on the Form 2106/Schedule A.
That requires itemization which I suspect that you do not have enough deductinos to make it practical.

 

[EagleKeeper]

Originally posted by: NeuroSynapsis
Re: Business uniforms/koolaidkid

Sorry, just to clarify, for the business clothes, the criteria is

"work clothes and uniforms if required and not suitable for everyday use"

So, it would depend entirely on how aggressive you want to be in "suitable for everyday use"

If you would be comfortable wearing the clothes to an IRS audit or doing yard work; they should not be considered deductible as a business expense.

 

[BarneyFife]

Ok guys here is my deal....

I filed a 1040ez back in early February. About a week later my parents told me that they can't use me as there dependent anymore so I filed a 1040x. Sent this around mid Feb and have not heard back yet for my additional refund. Also, I checked online for the irs refund search and they can't find me. Should I re-send the 1040x thinking that they didn't get it yet? Can I still send a 1040x after April 15th without any penalty? I'm not sure what to do.

 

[EagleKeeper]

Originally posted by: BarneyFife
Ok guys here is my deal....

I filed a 1040ez back in early February. About a week later my parents told me that they can't use me as there dependent anymore so I filed a 1040x. Sent this around mid Feb and have not heard back yet for my additional refund. Also, I checked online for the irs refund search and they can't find me. Should I re-send the 1040x thinking that they didn't get it yet? Can I still send a 1040x after April 15th without any penalty? I'm not sure what to do.

The 1040X is paper only and therefore goes to the bottom of the paper stack because it is a 1040X.

You may see the results about 6-8 weeks after 17 April.
After the 4th of July, you can contact the IRS to find out what may be going on.

When you say the IRS can not find you; is that for the 1040EZ or the 1040X refund?

 

[BarneyFife]

Originally posted by: EagleKeeper

Originally posted by: BarneyFife
Ok guys here is my deal....

I filed a 1040ez back in early February. About a week later my parents told me that they can't use me as there dependent anymore so I filed a 1040x. Sent this around mid Feb and have not heard back yet for my additional refund. Also, I checked online for the irs refund search and they can't find me. Should I re-send the 1040x thinking that they didn't get it yet? Can I still send a 1040x after April 15th without any penalty? I'm not sure what to do.

The 1040X is paper only and therefore goes to the bottom of the paper stack because it is a 1040X.

You may see the results about 6-8 weeks after 17 April.
After the 4th of July, you can contact the IRS to find out what may be going on.

When you say the IRS can not find you; is that for the 1040EZ or the 1040X refund?

Its for the 1040x refund. My 1040ez refund was found and I have cashed it in. Unfortunately, my new refund is about $800 more and kind of eager to get it.

 

[EagleKeeper]

I will be unavailable for answers until Mon AM.

Please be patient waiting for your replies until then.

 

[Shame]

Any idea how to report honorarium. It was $500.00 via checks with no taxes dedected either.

Edit: They didn't send a 1099 and I am using Turbotax.

 

[Muse]

Working in my Turbotax it seems that the more I contribute to my Roth IRA, the more taxes I owe. I don't comprehend that. To make a contribution I have to do it from some funding source, a source that I've already paid taxes on. In other words, my contribution to my Roth IRA is after-tax funding. So, why would my payment to the government in taxes increase if I make a contribution?

What am I missing here? To fund it I have to transfer funds from my mutual fund and/or write a check on my checking account. Why is my tax liability increased because I choose to invest in my Roth IRA instead of use the money for something else?

 

[Muse]

Originally posted by: EagleKeeper

Originally posted by: Muse
I am outright owner of the house I live in (no mortgage), a very old house (almost 100 years). During the 2nd WW, there was a housing crunch here and many houses were officially divided into two units, including mine. The process from an administrative and zoning perspective was done with an application for and approval of a city regulated "use permit." By virtue of this, the house was until last summer still officially divided into upper and lower units, even though the upstairs kitchen hasn't been used as a kitchen for decades.

I qualified for a no interest loan through my city's housing department in conjunction with a federal program, but the city officials told me that I had to have the house officially changed back into a single family dwelling or their hands were tied in releasing the allocated funds.

So, during the summer of 2006 I applied for a use permit with the city to initiate the change. I had to have all my neighbors sign a document saying they were cool with it, put a big sign in front of the house, fill out documents and pay a big fee to the city (over $1300), and then give my neighbors a big window of time to complain, if they had a mind to and then wait for the city's decision. At the end of the summer, the house was officially declared a single family dwelling. Is there any way I can factor my out of pocket costs into my taxes?

Those costs can be used against the cost basis when you sell the place. They do not factor into your taxes for 2006.

Yeah, thinking about it later I figured that would be your answer. Thanks.