4th Annual Tax Thread - 2006

[EagleKeeper]

Originally posted by: Prfstrkr
My friend was telling me that if you owe state tax, then you can put the amount back into Federal return as a negative number in "other incomes". Is that the right way to do? Thanks

At present NO.

When one itemizes, one can claim state income tax.
If you get a refund from your state, then the following year, that refund is considered to be income.
If you do not itemize, then the state refund has no bearing the following year.

Owing state income tax has no bearing on the Frederal income

 

[EagleKeeper]

Originally posted by: BKLounger
where in the world on the income section of federal do i claim income from exercise of nonstatutory stock options? I have already claimed dividends elsewhere. Would this maybe fall under capital gains or other income or maybe something else?

This would fall under the captial gains

 

[EagleKeeper]

Originally posted by: BUTCH1
Hello, quick question: I purchased a new car 10/29/05 but did not know I could deduct the
sales tax so I did not itemize for last year. Can I itemize this year and claim it or must I
file an ameneded return (and itemize) for 2005?? Thanks in advance for any help...

You must use the 1040X on the 2005 return.

 

[EagleKeeper]

Originally posted by: Skoorb

Originally posted by: Prfstrkr
My friend was telling me that if you owe state tax, then you can put the amount back into Federal return as a negative number in "other incomes". Is that the right way to do? Thanks

You may have to wait until next year. Not positive, but the concept is right.

False - see answer above.

Originally posted by: Skoorb
Anyhow, I just finished my taxes. Taxactonline.com has a questionable interface. Turbotax has the most options, since it handles part-year alabama residents, but it was CLEARLY slopped together in this regard because some of the errors I were getting for alabama looked like internal codes the dev team was using while testing, pretty pathetic. Taxcut could not do part-year alabama residents automatically but otherwise has a really clean interface, so I"ll probably go back to that one next year. All gave me the same federal amount except turbo tax for a few bucks lower because it forced me to amoratize points on a second mortgaqge I got (it said I had to, but the other programs did not mention this, and I don't think I had to in my case so I was out about $40 but the program was NOT letting me not amoratize).

Only on the initial mortgage for a comicle can the points be written off immediately.
All other financing/refinanceing on the domicle must be amortized over the life of the loan.

 

[EagleKeeper]

Originally posted by: elwood
I did a few contract jobs last year and was paid without any taxes withheld. I made less than $600. I haven't received any tax forms. Do i need to worry about filing?

IF you have W2 income you need to file, including the contract jobs as misc income or use the Schedule C.

 

[EagleKeeper]

Originally posted by: JEDI
Roth question:

The limit for 2006 is $4k if under age 50, right? and only if my gross is 4k+.

My W-2 is only $3k, but i have $15k in gambling profit (no W2-G).

1) am i limited to $3k for my roth, or does my gambling winnings allow me to put in 4k?

2) If i put down $15k in gambling winnings, will the IRS tell me that's my primary form of income? if so, what are the tax consequences of that?

You are limited to wages vs the IRAs.

Unless you declare that you are a professional gambler as a Scheudle C, then all gaming income is classified as misc.

 

[EagleKeeper]

Originally posted by: axelfox
I am an independent contractor/self employed.

If I pay professional dues/fees in the year 2006 for the year 2007, can I deduct those in my 2006 tax return?

Also, how do tax preparers, CPAs in particular, charge for preparing taxes? Hourly? Flat Fee? Percentage of possible return?

Thanks.

If you are using the Schedule C, they are valid expenses.

If you use the Form 2106 instead, then they will go there, subject to the 2% limit and the overall Schedule A deduction.

 

[EagleKeeper]

Originally posted by: Triforceofcourage
I purchased the Becker CPA review course for about 3,000.
Can I deduct that from my taxes? Can I take the standard deduction and then on top of that deduct the 3,000 or do I need to itemize?

Thanks,

Triforce

You can treat it as part of the Lifetime Learning Credit or as an educational expenses on the Form 2106 using the Schedule A. You can not do both.

 

[Scarpozzi]

Has anyone gotten their tax returns yet? I sent mine off almost a month ago....mailed it.

 

[EagleKeeper]

Originally posted by: Scarpozzi
Has anyone gotten their tax returns yet? I sent mine off almost a month ago....mailed it.

Did you check the IRS Web site for status?

 

[gluck]

Thanks to this site I decided to do my taxes myself.

I have some questions on filling returns for my S-corp

Are refreshment expenses 100% write off? Coffee, Cookies etc. that I get for office.
They should be different from business meals
which are 50% deductible or are 100% deductible.

How do I handle computer depreciation?

 

[EagleKeeper]

Originally posted by: gluck
Thanks to this site I decided to do my taxes myself.

I have some questions on filling returns for my S-corp

Are refreshment expenses 100% write off? Coffee, Cookies etc. that I get for office.
They should be different from business meals
which are 50% deductible or are 100% deductible.

How do I handle computer depreciation?

Refreshment expenses can be treated as office expenses.

If you use S/W, it will ask about such purchases and identify the purchases by type.

Depreciation for each type is preset by the IRS. The tax S/W will take the purchases prices and divided it by the expected usable lifetime. Otherwise you need to duplicate the looking up of the item and determining the years to write off and then the depreciation.

 

[Gibson486]

What's this i hear about a tax credit of $4000 if you make less than 35k a year? My mom said she saw it on the news.

 

[spp]

I'm not sure if this has been answered before but the search within thread thing is not working for me.

Is state tax owe/paid in 2005 deductible for federal tax in 2006? I tried looking for this item in my form but I couldn't find it.


Thanks and sorry for such a noob question

 

[EagleKeeper]

Originally posted by: spp
I'm not sure if this has been answered before but the search within thread thing is not working for me.

Is state tax owe/paid in 2005 deductible for federal tax in 2006? I tried looking for this item in my form but I couldn't find it.


Thanks and sorry for such a noob question

State income tax can be itemized on the Schedule A

 

[spp]

Originally posted by: EagleKeeper

Originally posted by: spp
I'm not sure if this has been answered before but the search within thread thing is not working for me.

Is state tax owe/paid in 2005 deductible for federal tax in 2006? I tried looking for this item in my form but I couldn't find it.


Thanks and sorry for such a noob question

State income tax can be itemized on the Schedule A

under "5 State and local income taxes"? The reason I asked is because it's the same amount as my w2 even though I input into turbotax about the amount I paid for 2005 state. I thought it should be w2+that amount.

 

[EagleKeeper]

Originally posted by: Gibson486
What's this i hear about a tax credit of $4000 if you make less than 35k a year? My mom said she saw it on the news.

There is income credits for low income people.
For those with children, additional credits are granted.

Rumors spread because people do not actually pay attention to what is said and within the context of the phrase that caught their attention.

 

[EagleKeeper]

Originally posted by: spp

Originally posted by: EagleKeeper

Originally posted by: spp
I'm not sure if this has been answered before but the search within thread thing is not working for me.

Is state tax owe/paid in 2005 deductible for federal tax in 2006? I tried looking for this item in my form but I couldn't find it.


Thanks and sorry for such a noob question

State income tax can be itemized on the Schedule A

under "5 State and local income taxes"? The reason I asked is because it's the same amount as my w2 even though I input into turbotax about the amount I paid for 2005 state. I thought it should be w2+that amount.

The W2 contains the total of income from an employer.
The W2 also contains some breakdowns of the income that you never saw and why.

 

[spp]

Originally posted by: EagleKeeper

Originally posted by: spp

Originally posted by: EagleKeeper

Originally posted by: spp
I'm not sure if this has been answered before but the search within thread thing is not working for me.

Is state tax owe/paid in 2005 deductible for federal tax in 2006? I tried looking for this item in my form but I couldn't find it.


Thanks and sorry for such a noob question

State income tax can be itemized on the Schedule A

under "5 State and local income taxes"? The reason I asked is because it's the same amount as my w2 even though I input into turbotax about the amount I paid for 2005 state. I thought it should be w2+that amount.

The W2 contains the total of income from an employer.
The W2 also contains some breakdowns of the income that you never saw and why.

Thanks Eaglekeeper. So you mean that the amount is already included in my W2 form and I shouldn't worry about it?

 

[Asharus]

Where's my damn money, they accepted my e-files last monday.

 

[gluck]

Thank you EagleKeeper.

 

[TallBill]

Since the mods deleted my post which has nothing to do with filing my 2006 taxes, but why would they bother to figure that out.


For the first time in my life I've started putting money into a couple mutual funds through USAA. Anyways, how will I end up dealing with the taxes on these? Do you only pay taxes on the income from selling shares at the end? I'm completely clueless and have never owned stock in any form.

Btw, I just have automatic monthly investing set up to toss in a couple hundred monthly.

 

[EagleKeeper]

Originally posted by: TallBill
Since the mods deleted my post which has nothing to do with filing my 2006 taxes, but why would they bother to figure that out.


For the first time in my life I've started putting money into a couple mutual funds through USAA. Anyways, how will I end up dealing with the taxes on these? Do you only pay taxes on the income from selling shares at the end? I'm completely clueless and have never owned stock in any form.

Btw, I just have automatic monthly investing set up to toss in a couple hundred monthly.

You treat the mutual funds the same as stocks in terms of capital gains.

Keep track of the fund price when you purchase and when you sell. Determine the profit on the # of shares sold.

Best thing to use would be a simple spreadsheet/database containing date, amount, price,buy/sell indication.

 

[imported_elwood]

Originally posted by: EagleKeeper

Originally posted by: elwood
I did a few contract jobs last year and was paid without any taxes withheld. I made less than $600. I haven't received any tax forms. Do i need to worry about filing?

IF you have W2 income you need to file, including the contract jobs as misc income or use the Schedule C.

Thats the only job i worked last year. That was my only taxable income...

 

[JEDI]

Scenario:

My only job in 2006 was as a waiter for 2 weeks. If my W-2 is $100, can i put down $3900 in tips to max the $4000 in Roth IRA?

(My personal and standard deductions will cover the taxes on $4000 gross, right?)