5th Annual Tax Thread - 2007

[EagleKeeper]

Originally posted by: BUTCH1
Hello, my question is: My wife didn't work at all last year, do I claim her as a Dependant
and file as married/jointly? Thanks in advance..

Yes - file jointly
She is not classified as a dependant - that is built into the joint filing.

 

[alkemyst]

Originally posted by: jds2006

Originally posted by: alkemyst
First how old are you and is your father supporting you. If you are a minor and/or he is; let him claim you (based on an income of less than $700 a month, someone must be supporting you)

Providing you are an adult and/or supporting yourself with loans or savings, I'd just do a quick 1040 EZ or turbo tax and see what you get back. If your dad agrees to stroke you a check for that, file with him.

What I used to see happen in these situations is the kid gets screwed esp when they are footing their own expenses for college already and on loans. If you are a student you can claim Hope for the first two years and LLC for the rest of them.

I'm a 19 year old college student and my father does help me with my rent and tuition.

If he is supporting you allowing him to claim you will probably give the biggest benefit.

Remember the hope deduction.

 

[sciencewhiz]

At one bank, I have two accounts, one which earned < $10 interest and one that earned > $10 interest. The 1099-INT that I received from the bank only shows the interest for the higher account. Do I need to include the interest for the lower amount?

 

[EagleKeeper]

Originally posted by: sciencewhiz
At one bank, I have two accounts, one which earned < $10 interest and one that earned > $10 interest. The 1099-INT that I received from the bank only shows the interest for the higher account. Do I need to include the interest for the lower amount?

You should report the total interest for all sources. The additional amount is not going to break your wallet and if every checked on by the IRS, it will show that you are not attempting to hide anything.

 

[alkemyst]

Originally posted by: EagleKeeper

Originally posted by: sciencewhiz
At one bank, I have two accounts, one which earned < $10 interest and one that earned > $10 interest. The 1099-INT that I received from the bank only shows the interest for the higher account. Do I need to include the interest for the lower amount?

You should report the total interest for all sources. The additional amount is not going to break your wallet and if every checked on by the IRS, it will show that you are not attempting to hide anything.

QFT, you are on the hook whether or not it's reported.

 

[Turin39789]

Tuition Reimbursement - I got my 1098-t and for some reason they left box 1 blank, and put everything into box 2. Can't figure out why, but I just checked my billing history and the numbers add up. Oh well.

I get tuition reimbursement through work, but they don't report it as income, or anywhere on my w-2. Why are the tempting me to declare the entire amount! my tuition came out to 3339.48, I was getting $1500 per rolling year through work, which I initially used up entirely in the fall of 06, so I paid the spring tuition entirely on my own, then they upped the amount to $2500. I think they paid me back for the summer semester, but not sure, but pretty sure. I'm guessing I need to contact HR adn see if they can give me the check amounts.

But they tempt me to be a liar and just take the full 3339.48 writeoff. But I wont.

 

[alkemyst]

Tempting or not the penalties will be on you. It's up to the tax payer to report correctly regardless of what banks, employers, et al report. More than likely one office doesn't know you paid another.

 

[NeoV]

other than energy improving ones, are there any home improvements that are deductable, like if I add a patio or a fence?

 

[Caveman]

I have a stake in an Investment Trust Fund. Back in ~Mar07, all assets were frozen during an SEC investigation of an alleged crooked trader who had "touched" some of the money (along with dozens of other accounts). Therefore, I have no access to any earnings made in 07, and had no way of knowing anything would happen that would make me want to retrieve the funds before the freeze. The funds are expected to be released in the next few weeks, at which point I'll have access to the money in 08.

1) Are any earnings from TY 07 considered taxable in this scenario?

2) Is a 1099-B required to be sent out? I heard that it is an option for a business/investment party to send out 1099s (at their discretion)...

 

[EagleKeeper]

Originally posted by: NeoV
other than energy improving ones, are there any home improvements that are deductable, like if I add a patio or a fence?

Not unless you are renting the property

 

[EagleKeeper]

Originally posted by: Caveman
I have a stake in an Investment Trust Fund. Back in ~Mar07, all assets were frozen during an SEC investigation of an alleged crooked trader who had "touched" some of the money (along with dozens of other accounts). Therefore, I have no access to any earnings made in 07, and had no way of knowing anything would happen that would make me want to retrieve the funds before the freeze. The funds are expected to be released in the next few weeks, at which point I'll have access to the money in 08.

1) Are any earnings from TY 07 considered taxable in this scenario?

2) Is a 1099-B required to be sent out? I heard that it is an option for a business/investment party to send out 1099s (at their discretion)...

1) Yes

 

[sciencewhiz]

I donated to a children's hospital (child's play) through amazon by buying goods. Do I enter the price I payed for the goods on line 17 of Schedule A? Or since I never saw the goods, do I treat it as a cash donation on line 16?

 

[alkemyst]

Seeing the goods is not a requirement.

 

[Wonderful Pork]

probably a ridiculous question but:

Do I have to file state and federal taxes at the same time? I'm getting ~$100 back from State and have to Pay ~$110 to Fed. I'd like to defer paying the Fed until 4/15 but get the money back from State ASAP. Of course I could pay now, I just want to hold the money as long as possible (mostly out of principle!)

thanks!

 

[alkemyst]

state tax laws can be complex so I'd call on that one or look it up on your state's tax site.

 

[EagleKeeper]

Originally posted by: Wonderful Pork
probably a ridiculous question but:

Do I have to file state and federal taxes at the same time? I'm getting ~$100 back from State and have to Pay ~$110 to Fed. I'd like to defer paying the Fed until 4/15 but get the money back from State ASAP. Of course I could pay now, I just want to hold the money as long as possible (mostly out of principle!)

thanks!

There is no requirement that both returns have to be filed at the same time.

However, some states will not accept an e-file unless the Fed is e-filed at the same time.
This is something that the middle man (tax s/w) will ensure.

 

[kldang]

My parents have a joint account that yields about $4000 interest last year. That's the only income they have. Do they need to file tax return?

They live with me and I supported their living (over $4000). Can I claim them as my dependents despite they have some income? Can I also claim myself as head of household?

One last question: I spent like over thousand dollars on applying for grad school. I spent money on GRE/GMAT fee and application fee. Is there anyway that I can claim these expenses as deductible? I am filing a 1040A form.

 

[EagleKeeper]

Originally posted by: kldang
My parents have a joint account that yields about $4000 interest last year. That's the only income they have. Do they need to file tax return?

They live with me and I supported their living (over $4000). Can I claim them as my dependents despite they have some income? Can I also claim myself as head of household?

One last question: I spent like over thousand dollars on applying for grad school. I spent money on GRE/GMAT fee and application fee. Is there anyway that I can claim these expenses as deductible? I am filing a 1040A form.

They will need to file a return.

You can legally claim them as dependants baed on the definition of the dependancy rules - it may be touchy with the IRS when they have assetts that generate $4K of interest.

If you do so, it will allow you to file as Head of Household.


The fees are not deductible as any type of educational credit.

If you file a 1040 and Schedule A, then you can use the Form 2106 to cover those expenses (if the grad school is benifical to your employment). You can place the tuition on the LLC or on the 2106. Mileage for school (when working) can also show on the 2106.

 

[PCNewb]

Eh, I've always just ignored this when it comes to taxes, but people at work suggested I look into it.

I have a 9 year old son. He lives with his mother, but I have him on weekends and a few weeks out of the year. We never had custody in a form of documentation, and its never really been an issue as its been a friendly / easy path so far.

As for taxes, she has always claimed him, or so I thought, but turns out she hasn't been. She claims her other two children [I'm not the father on her other two].

I wouldn't say I provide more than 50% of his living, but do support him [in addition to Child Support]. Clothes, school fees/supplies, sports/school activities [soccer, field trips, etc].

Is any of this something I should look into reporting for an exemption/deduction? I always assumed Child Support is non-reportable, and don't provide primary living.

Thanks guys.

 

[EagleKeeper]

Originally posted by: PCNewb
Eh, I've always just ignored this when it comes to taxes, but people at work suggested I look into it.

I have a 9 year old son. He lives with his mother, but I have him on weekends and a few weeks out of the year. We never had custody in a form of documentation, and its never really been an issue as its been a friendly / easy path so far.

As for taxes, she has always claimed him, or so I thought, but turns out she hasn't been. She claims her other two children [I'm not the father on her other two].

I wouldn't say I provide more than 50% of his living, but do support him [in addition to Child Support]. Clothes, school fees/supplies, sports/school activities [soccer, field trips, etc].

Is any of this something I should look into reporting for an exemption/deduction? I always assumed Child Support is non-reportable, and don't provide primary living.

Thanks guys.

Take a look at Pub 501 - Pg 12.
If she agrees, you can file the child as a dependant which allows you Head of Household and pick up all the extras that come with it. Tax S/W will detect all the extras.

And if she agrees, you may be able to file a 1040X to correct the filing status for 04-06.

For previous years, check to ensure that you can change your status. The rules will be the same for 2007

 

[Maximus96]

Originally posted by: CPA

Originally posted by: Maximus96
I have a question about child care expenses. My wife and I currently pay my wife's mother to take care of our 2-year-old and 6-month-old daughters during the day. I figured the total payment made to her this year is $6300.00. However, most of these payment were cash and a couple was thru bank transfers. Is this something I can claim as a credit? If so, how much credit can I claim?

Thanks so much!

You can claim it as part of Schedule 2441 - Child and Dependent Care Credit. It will be limited by the ceiling and/or your annual income. But, be careful, you will have to include your mother's name, address and SSN. She will, then, have to file this as income. Now, she may not have to pay any taxes on it depending on her individual situation, but you need to talk to her to make sure she files. The IRS can and many times will crosscheck to see if the provider you listed reported income. She will have to file a Schedule C.

We will probably scratch out this idea. Besides this Child and Dependent Care Credit, are there other credits or deductions that we qualify for with two children? My wife and I both work in our family of four.

thanks!

 

[WannaFly]

I have a couple quick, general questions - sorry if they've been asked already..

1) I bought a house last year, I know I can deduct PMI/Interest/Taxes/Loan orignation fees, anything else that i might be missing? I've always filed an EZ before and I guess I have to do an A this year
2) I've always done my taxes myself online, but am thinking of going to a professional this year, any opinions? Besides the house my taxes should be relatively easy, a little charity donations, no work from home or engery credits, no school loans, etc. Any advise on going to a big shop (H&R) or finding someone that does it personally?

Thanks!

 

[CPA]

Originally posted by: Maximus96

Originally posted by: CPA

Originally posted by: Maximus96
I have a question about child care expenses. My wife and I currently pay my wife's mother to take care of our 2-year-old and 6-month-old daughters during the day. I figured the total payment made to her this year is $6300.00. However, most of these payment were cash and a couple was thru bank transfers. Is this something I can claim as a credit? If so, how much credit can I claim?

Thanks so much!

You can claim it as part of Schedule 2441 - Child and Dependent Care Credit. It will be limited by the ceiling and/or your annual income. But, be careful, you will have to include your mother's name, address and SSN. She will, then, have to file this as income. Now, she may not have to pay any taxes on it depending on her individual situation, but you need to talk to her to make sure she files. The IRS can and many times will crosscheck to see if the provider you listed reported income. She will have to file a Schedule C.

We will probably scratch out this idea. Besides this Child and Dependent Care Credit, are there other credits or deductions that we qualify for with two children? My wife and I both work in our family of four.

thanks!

Yes, the child tax credit.

For this year, though it may be too late, check with your employer's to see if they offer a Dependent Care Flexible Spending Account. It essentially does the same as the Child Care Credit and in certain circumstances is more beneficial. You don't have to list child care providers either.

 

[CPA]

Originally posted by: WannaFly
I have a couple quick, general questions - sorry if they've been asked already..

1) I bought a house last year, I know I can deduct PMI/Interest/Taxes/Loan orignation fees, anything else that i might be missing? I've always filed an EZ before and I guess I have to do an A this year
2) I've always done my taxes myself online, but am thinking of going to a professional this year, any opinions? Besides the house my taxes should be relatively easy, a little charity donations, no work from home or engery credits, no school loans, etc. Any advise on going to a big shop (H&R) or finding someone that does it personally?

Thanks!

1) That's about it, but be careful, depending on when you bought the house and the total amount of your itemized deductions it may or may not be better than the standard deduction.
2) Just pay $12.95 for TaxAct, or a similar product, and do it yourself at home. It will probably take all of an hour to do it.

 

[PCNewb]

Originally posted by: EagleKeeper
Take a look at Pub 501 - Pg 12.
If she agrees, you can file the child as a dependant which allows you Head of Household and pick up all the extras that come with it. Tax S/W will detect all the extras.

And if she agrees, you may be able to file a 1040X to correct the filing status for 04-06.

For previous years, check to ensure that you can change your status. The rules will be the same for 2007

Much appreciated! We'll see what she LETS me do!