5th Annual Tax Thread - 2007

[Starbuck1975]

Payroll/HR is not perfect. You may wish to look at your last paystub from 2007 and see if the W2 numbers come close.

I contacted my HR department, and they are verifying that my W-2 is correct. That there is a discrepancy from 2006 and 2007 given that I did not change my W-4 withholdings makes me suspect that it could be an accounting error...at least, that is what I hope it turns out to be.

Also, did you itemize in '06. If not, then the refunds are not considered income for '07.

What do you mean by itemize in '06?

 

[CPA]

Originally posted by: Starbuck1975

Payroll/HR is not perfect. You may wish to look at your last paystub from 2007 and see if the W2 numbers come close.

I contacted my HR department, and they are verifying that my W-2 is correct. That there is a discrepancy from 2006 and 2007 given that I did not change my W-4 withholdings makes me suspect that it could be an accounting error...at least, that is what I hope it turns out to be.

Damn accountants!

Also, did you itemize in '06. If not, then the refunds are not considered income for '07.

What do you mean by itemize in '06?

He means did you use Schedule A to itemize your deductions or did you just use the standard deduction?

 

[Starbuck1975]

He means did you use Schedule A to itemize your deductions or did you just use the standard deduction?

I itemized my deductions last year, but they came out to be less than the standard deduction.

I itemized my deductions again this year, and TurboTax defaulted to the standard deduction once again.

Because we don't own real estate, we do not have many deductions to itemize...just the cost of our car registration fees, some donations to the Salvation Army, and some gambling losses...also took the standard sales tax deduction as we did not have any major purchases in 2007, and didn't itemize our sales tax paid for 2007.

 

[CPA]

Originally posted by: Starbuck1975

He means did you use Schedule A to itemize your deductions or did you just use the standard deduction?

I itemized my deductions last year, but they came out to be less than the standard deduction.

I itemized my deductions again this year, and TurboTax defaulted to the standard deduction once again.

Because we don't own real estate, we do not have many deductions to itemize...just the cost of our car registration fees, some donations to the Salvation Army, and some gambling losses...also took the standard sales tax deduction as we did not have any major purchases in 2007, and didn't itemize our sales tax paid for 2007.

okay, back to square one.

Oh, and for future reference, gambling losses can only be deducted to the extent they equal gambling winnings. did you report your gambling winnings?

 

[ViviTheMage]

There was a post on ATOT about getting 600$ of you claim yourself, or if you have a spouse you get 1200$ from the IRS...a strait up check? Is this true?

 

[CPA]

Originally posted by: ViviTheMage
There was a post on ATOT about getting 600$ of you claim yourself, or if you have a spouse you get 1200$ from the IRS...a strait up check? Is this true?

yes, if you meet the income requirements, the Feds will be issuing "rebate checks" out around May or June. You will have to deduct them off of your 2008 tax filing (filed in 2009), IIRC. This is similar to the checks that were distributed a few years ago.

 

[ViviTheMage]

How do you qualify...or sign up?

 

[Starbuck1975]

Oh, and for future reference, gambling losses can only be deducted to the extent they equal gambling winnings. did you report your gambling winnings?

Yes the only reason I am claiming gambling losses is because I got lucky in Vegas this year and have to claim my winnings...so yes, I am easing the pain on those winnings by offsetting them with our losses...good thing I keep receipts, and itemize in Quicken.

 

[djheater]

I received a letter from the IRS in the middle of last summer, they were looking for an additional signature or verification of something I think. I lost the letter and only remebered it when I started thinking about doing my taxes.

Is there a way I can quickly find out my filing status and what I would need to do to ensure I can electronically file this year?

 

[CPA]

Originally posted by: djheater
I received a letter from the IRS in the middle of last summer, they were looking for an additional signature or verification of something I think. I lost the letter and only remebered it when I started thinking about doing my taxes.

Is there a way I can quickly find out my filing status and what I would need to do to ensure I can electronically file this year?

You'll probably have to call the IRS or one of their local offices to see if there is any flag on your account.

 

[CPA]

Originally posted by: ViviTheMage
How do you qualify...or sign up?

You don't do anything, the Feds handle it all.

 

[ViviTheMage]

Originally posted by: CPA

Originally posted by: ViviTheMage
How do you qualify...or sign up?

You don't do anything, the Feds handle it all.

woah, that sounds like too easy of money!

What are the qualifications exactly?

 

[CPA]

Originally posted by: ViviTheMage

Originally posted by: CPA

Originally posted by: ViviTheMage
How do you qualify...or sign up?

You don't do anything, the Feds handle it all.

woah, that sounds like too easy of money!

What are the qualifications exactly?

Make less than $75K single, $150K jointly. Each kid nets another $300.

 

[ViviTheMage]

Originally posted by: CPA

Originally posted by: ViviTheMage

Originally posted by: CPA

Originally posted by: ViviTheMage
How do you qualify...or sign up?

You don't do anything, the Feds handle it all.

woah, that sounds like too easy of money!

What are the qualifications exactly?

Make less than $75K single, $150K jointly. Each kid nets another $300.

kaching. I make very little because of school, no kids though.

 

[EagleKeeper]

Originally posted by: Starbuck1975

He means did you use Schedule A to itemize your deductions or did you just use the standard deduction?

I itemized my deductions last year, but they came out to be less than the standard deduction.

I itemized my deductions again this year, and TurboTax defaulted to the standard deduction once again.

Because we don't own real estate, we do not have many deductions to itemize...just the cost of our car registration fees, some donations to the Salvation Army, and some gambling losses...also took the standard sales tax deduction as we did not have any major purchases in 2007, and didn't itemize our sales tax paid for 2007.

the final issue is did you file a Schedule A or not last year.
If you did, and deducted the state tax withheld, then that refund is classified as income.

If you did not claim the state tax or did not actually file the Schedule A, then the state tax refund is not reported as income.

Gaming losses can only offset the winnings IF you file a Schedule A. Filing with the standard deduction (any form) will not allow you to offset the winnings.

 

[Starbuck1975]

EagleKeeper,

I checked my return from last year, and did file a Schedule A, which included state taxes paid, and a charitable donation from 2006.

As I did receive money back from the state last year, I already included it as income on this year's return.

I similarly intend to file a Schedule A this year.

Still awaiting word from HR on my W2.

 

[TheBloodguard]

Eaglekeeper,
A company I used to work for years ago ( that reorganized Chapter 11?) gave stock as compensation due to a lawsuit brought on by former employees. In 2007 they
paid for the shares by a check. It was a minor amount, under $400 total and (edit) no taxes taken out.
Would this be filed under other income or Capital gains?
I don't recall receiving a 1099-B.

Thanks

( Edited for confirming that taxes were not taken out)

 

[Syppion]

I'm a bit confused about line 10 of the 1040.

I have never recieved a 1099-G from the state (Ohio) and doubt I will this year. In previous years I've been claiming amount of the previous year's state tax refund as income on line 10 (perhaps wrongly). We have never applied any refund amount to the next year.

Question 1)
In 2006 we itemized and the amount on line 5 of our 2006 Schedule A is the amount of income taxes - not sales tax. In the absence of a 1099-G from the state, do we claim the refunded amount, or zero (basically, what goes on line 1 of the worksheet on page 20?).


Question 2)
We bought a vehichle this year (2007), so if we use sales tax it comes out to ~$100 more than income tax on line 5 of the schedule A - is there any other advantage/disadvantage to using the sales tax amount? It looks like I'll need to use pub 525 next year, but it shouldn't change the amount of the refund taxable right?

Thanks for the thread
-Sypp

 

[CPA]

Originally posted by: TheBloodguard
Eaglekeeper,
A company I used to work for years ago ( that reorganized Chapter 11?) gave stock as compensation due to a lawsuit brought on by former employees. In 2007 they
paid for the shares by a check. It was a minor amount, under $400 total and I believe
they took taxes out.
Would this be filed under other income or Capital gains?
I don't recall receiving a 1099-B and I think they withheld taxes like a regular check but
I'll need to see if I can pull up the check at my bank to confirm this.
Thanks

If they treated this as a stock option, then it will be reported as W-2 wages. They probably withheld 28% for Fed, which is usual for stock option exercise type transactions. You may not receive a 1099-B, but possibly just a statement of exercise. You would then only report the fees/commissions as a Schedule D loss.

 

[TheBloodguard]

Originally posted by: CPA

Originally posted by: TheBloodguard
Eaglekeeper,
A company I used to work for years ago ( that reorganized Chapter 11?) gave stock as compensation due to a lawsuit brought on by former employees. In 2007 they
paid for the shares by a check. It was a minor amount, under $400 total and I believe
they took taxes out.
Would this be filed under other income or Capital gains?
I don't recall receiving a 1099-B and I think they withheld taxes like a regular check but
I'll need to see if I can pull up the check at my bank to confirm this.
Thanks

If they treated this as a stock option, then it will be reported as W-2 wages. They probably withheld 28% for Fed, which is usual for stock option exercise type transactions. You may not receive a 1099-B, but possibly just a statement of exercise. You would then only report the fees/commissions as a Schedule D loss.

Thanks CPA ,
I checked my Bank and I received the full amount of shares X price. It sounds like
it would be okay to file the total amount as net income under 1040-D and just pay the tax
on it. No commissions, purchase price or offset on them.

 

[CPA]

Originally posted by: TheBloodguard

Originally posted by: CPA

Originally posted by: TheBloodguard
Eaglekeeper,
A company I used to work for years ago ( that reorganized Chapter 11?) gave stock as compensation due to a lawsuit brought on by former employees. In 2007 they
paid for the shares by a check. It was a minor amount, under $400 total and I believe
they took taxes out.
Would this be filed under other income or Capital gains?
I don't recall receiving a 1099-B and I think they withheld taxes like a regular check but
I'll need to see if I can pull up the check at my bank to confirm this.
Thanks

If they treated this as a stock option, then it will be reported as W-2 wages. They probably withheld 28% for Fed, which is usual for stock option exercise type transactions. You may not receive a 1099-B, but possibly just a statement of exercise. You would then only report the fees/commissions as a Schedule D loss.

Thanks CPA ,
I checked my Bank and I received the full amount of shares X price. It sounds like
it would be okay to file the total amount as net income under 1040-D and just pay the tax
on it. No commissions, purchase price or offset on them.

I would just check with the payroll department to see if they included it on your W2.

did you pay anything for the stock? It doesn't sound like you did. I would question whether this is truly a Schedule D item or just normal income. I'm going to do a little more research.

 

[Starbuck1975]

CPA & EagleKeeper,

Just heard back from HR...last year, when I updated my company profile, I changed my marital status from "single" with 0 withholdings to "married" with 0 withholdings.

My HR representative stated, that in making that change, it reduced my federal and state withholdings percentage from paycheck to paycheck. I verified several pay stubs, comparing them from 2007 to 2006, and sure enough, my withholdings did decrease for both State and Federal.

Now this is where I am confused...with an account setting of "married" with 0 withholdings, I would assume that my withholdings would still cover my taxes for the year. That I owe such a significant amount for 2007 concerns me...nearly $6000 for Federal and nearly $3000 for State.

What else could be causing such a discrepancy? Did I possibly jump a tax bracket or something, where I don't have enough deductions to adequately cover the tax hike? I thought there was a tax incentive to being married?

I just checked my company's system again, and changed my W4 status from "married" to "married but withhold at higher single rate" so I don't get hammered again for 2008.

 

[TangoJuliet]

CPA

I received two small letters in the mail yesterday from the NYS TAX Department.

They are statements of Tax Overpayment for the tax year 2006. Both were sent to an old address where I was no longer living. Not exactly sure what they mean....can you shed some light?

 

[TheBloodguard]

Originally posted by: CPA

Originally posted by: TheBloodguard

Originally posted by: CPA

Originally posted by: TheBloodguard
Eaglekeeper,
A company I used to work for years ago ( that reorganized Chapter 11?) gave stock as compensation due to a lawsuit brought on by former employees. In 2007 they
paid for the shares by a check. It was a minor amount, under $400 total and I believe
they took taxes out.
Would this be filed under other income or Capital gains?
I don't recall receiving a 1099-B and I think they withheld taxes like a regular check but
I'll need to see if I can pull up the check at my bank to confirm this.
Thanks

If they treated this as a stock option, then it will be reported as W-2 wages. They probably withheld 28% for Fed, which is usual for stock option exercise type transactions. You may not receive a 1099-B, but possibly just a statement of exercise. You would then only report the fees/commissions as a Schedule D loss.

Thanks CPA ,
I checked my Bank and I received the full amount of shares X price. It sounds like
it would be okay to file the total amount as net income under 1040-D and just pay the tax
on it. No commissions, purchase price or offset on them.

I would just check with the payroll department to see if they included it on your W2.

did you pay anything for the stock? It doesn't sound like you did. I would question whether this is truly a Schedule D item or just normal income. I'm going to do a little more research.

Thanks for all the help.
I paid nothing for the stock...I received a couple hundred shares
as settlement in 2003(?), they then sent me a notice in 4/2007 that they
were buying the shares back at a set price. I sent in the shares and received a check
a month or so later. I did not receive a W-2 from them so far.

 

[maziwanka]

hey guys, quick question. i received my w2 in the mail today and it lists my school address in NYC under Employee's name, address and ZIP code (section e/f). BUT, my parents live in NJ and i live there as well. can i file my returns using my NJ address or am i stuck with the NYC address and thus the NYC taxes?

thanks.