5th Annual Tax Thread - 2007

[poncherelli2]

Originally posted by: alkemyst
If you didn't make payments on that loan, the interest was more than likely added back on top of it to be paid later (post-graduation), even if you made payments their could have been interest recapitalized depending on how you set up the payback schedule. This should be known to you.

You tax vision is really anyone's vision, give or take some 1099 income and business deductions. I am not sure what cheap efile is, but if you make below a certain income threshold you qualify.

I understand, there is a few thousand dollars of recapitalized interested that accrued while I was in school. I didn't begin payments until the end of the grace period in October. However, isn't anything "not principle" going to be interest. I'm confused because the unsubsidized stafford loan is pretty much the same (accrued during school, began paying this fall), but it provides a qualified interest total

 

[alkemyst]

Originally posted by: maziwanka

k. i definitely don't want to raise a flag over something small. i always indicated my permanent address to be NJ. BUT, for tax purposes, should i list my dorm address as my permanent address?

if so, then should i still file an NJ tax return if i still have bills and such mailed to my parent's home in NJ?

thanks in advance.

we aren't the IRS, and we can't answer if you are evasive. You need to use where you lived while working. A permanent address has nothing to do with it. If noone can prove you didn't live in NJ then you should be ok...however; if you can't prove where you lived at all you may have a problem.

 

[alkemyst]

Originally posted by: poncherelli2

I understand, there is a few thousand dollars of recapitalized interested that accrued while I was in school. I didn't begin payments until the end of the grace period in October. However, isn't anything "not principle" going to be interest. I'm confused because the unsubsidized stafford loan is pretty much the same (accrued during school, began paying this fall), but it provides a qualified interest total

Depends on the loan...normally you are paying principle and interest...however you can be paying only principle and only interest at times, along with other fees depending on what you signed for.

I would call the lender and verify.

 

[maziwanka]

Originally posted by: alkemyst

Originally posted by: maziwanka

k. i definitely don't want to raise a flag over something small. i always indicated my permanent address to be NJ. BUT, for tax purposes, should i list my dorm address as my permanent address?

if so, then should i still file an NJ tax return if i still have bills and such mailed to my parent's home in NJ?

thanks in advance.

we aren't the IRS, and we can't answer if you are evasive. You need to use where you lived while working. A permanent address has nothing to do with it. If noone can prove you didn't live in NJ then you should be ok...however; if you can't prove where you lived at all you may have a problem.

cool. thanks for the info about the permanent address having nothing to do with it. i'll be filing a NY State permanent resident tax return form.

i certainly wasn't trying to be evasive and like i said, saving some money here and there isn't worth getting in trouble.

thanks for the info and the help.

 

[CPA]

Originally posted by: Lotheron
Thanks guys for the great resource. I have two questions.

For myself: I left a company last year with a retirement in my 401k. I requested a check as I had no way of rolling it over, plus quite frankly I really need the money. However, i did not receive the check in 2007, and it's dated 1-08-08. I'm guessing there is going to be a 1099-R for the early withdrawal, however, since the check is dated this year, will that be on 2008 return or should I expect a 1099-R for 2007?

For my girlfriend: She left a company at around June last year. We received her W2 and it shows they took out very little and change for Federal. They actually took out more for state She had been claiming 1 on her W4s. Up until last year, it had been fine. She called her HR dept. and they said (after two days of checking) that it was right. What penalties/etc should she expect to be paying for this? It looks like shes going to owe somewhere around 800-900 in federal taxes. I'm assuming this is more than the minimum for penalties. We're still waiting on an unemployment W2 to do her taxes, however what should we expect? (never had to deal with a deficit before...)

Thanks!
Lotheron

1) It will be a 2008 item. Taxes are a cash basis process. You are taxed in the year you receive the cash

2) Just because you owe does not mean you will be penalized. In fact, there is a specific rule on who is penalized. Did she pay in as much taxes this year as she did last year? If so, then she won't be penalized. Tax software will know whether to tax her or not.

 

[CPA]

Originally posted by: lokiju
This is my first time having a full year under my belt of income in the state of GA, before I had partial in FL and then the rest of the year I had like $30 income for GA.

That being said, how do you factor in State Tax when doing a Income Tax Calculator?

I've been putting in my total income for the year minus my federal income tax into the usually calculators and keep showing I'll owe about $1,800 but that just seems impossible since I have the maximum amount withheld from my wages as it is.

I'm thinking it has something to do with what I paid in state income taxes that's not getting factored in or something.

Can someone help me figure this out?

I'm not sure what "calculators" you are using, so it's hard for me to understand the question and give an answer. How much state income tax did you pay for the year? Is it close to what the calculator says? If so, you probably paid in already what is expected. My suggestion, however, is stop using whatever calculator you are using and just use a tax software program to figure everything out.

 

[lokiju]

Originally posted by: CPA

Originally posted by: lokiju
This is my first time having a full year under my belt of income in the state of GA, before I had partial in FL and then the rest of the year I had like $30 income for GA.

That being said, how do you factor in State Tax when doing a Income Tax Calculator?

I've been putting in my total income for the year minus my federal income tax into the usually calculators and keep showing I'll owe about $1,800 but that just seems impossible since I have the maximum amount withheld from my wages as it is.

I'm thinking it has something to do with what I paid in state income taxes that's not getting factored in or something.

Can someone help me figure this out?

I'm not sure what "calculators" you are using, so it's hard for me to understand the question and give an answer. How much state income tax did you pay for the year? Is it close to what the calculator says? If so, you probably paid in already what is expected. My suggestion, however, is stop using whatever calculator you are using and just use a tax software program to figure everything out.

You mean like TurboTax or something like that?

And what I've paid in state tax is about $1,500 ytd while what it says I owe for Federal is $1,800. Does that mean that my State tax paid would be put towards the owed figure for Federal?

 

[EagleKeeper]

Originally posted by: lokiju

Originally posted by: CPA

Originally posted by: lokiju
This is my first time having a full year under my belt of income in the state of GA, before I had partial in FL and then the rest of the year I had like $30 income for GA.

That being said, how do you factor in State Tax when doing a Income Tax Calculator?

I've been putting in my total income for the year minus my federal income tax into the usually calculators and keep showing I'll owe about $1,800 but that just seems impossible since I have the maximum amount withheld from my wages as it is.

I'm thinking it has something to do with what I paid in state income taxes that's not getting factored in or something.

Can someone help me figure this out?

I'm not sure what "calculators" you are using, so it's hard for me to understand the question and give an answer. How much state income tax did you pay for the year? Is it close to what the calculator says? If so, you probably paid in already what is expected. My suggestion, however, is stop using whatever calculator you are using and just use a tax software program to figure everything out.

You mean like TurboTax or something like that?

And what I've paid in state tax is about $1,500 ytd while what it says I owe for Federal is $1,800. Does that mean that my State tax paid would be put towards the owed figure for Federal?

The term Tax S/W is defined in the OP.

Taxes paid to the state are not a credit to the Federal taxes. If you itemize using the Schedule A, you can deduct the state tax paid from your income.

 

[EagleKeeper]

Originally posted by: AbsolutZero
Hey guys, quick question. My father passed away on Dec 3rd, 2006. He and I owned a joint account with his taxpayer ID on it. I transferred the assets of this account into my own account on December 1st of 2007. Is it correct that the executor must file income tax return for the estate for 2007 since the account had my father's taxpayer ID on it? Thanks.

Yes - It is the responsibility of the executor to ensure that the final tax year on the estate is handled.

 

[EagleKeeper]

Originally posted by: poncherelli2
I have a two part question. The first is I graduated in may and received a relocation bonus of 5k, which was processed through payroll and taxed as income and included in my w2. I had about 500 dollars worth of moving expenses (rental truck, gas, tolls)- can I deduct these expenses even though they are less than the bonus?

The next question is about student loan interest. I had a federal unsubsidized loan that sent me a statement saying I paid ~$200 in loan interest last year, so thats fine. I also have a private citibank loan that I've paid roughly 400 dollars in interest on, but my statement for the year says I paid $0.00 in qualified interest for 2007. I know they don't have to report the interest to the IRS because its under $600, but shouldn't I still be able to deduct the 400 or so dollars I paid last year?

Originally posted by: alkemyst
Since the bonus was counted as income, your expenses aren't affected. For a first job, you can deduct moving expenses...I believe there still are some tests you must pass though.

The student loan interest has guidelines. You want to verify if you are qualified to deduct it. Was it recapitalized by any chance? If so you can't count that since it wasn't 'paid'.

You can file the Form 3903 for moving expenses. You do not need to itemize (Schedule A to do so).

You must move for employment reasons.
You must move a distance of more than 50 miles.
The distance from your old house to the new job must be more than 50 miles.


Cost covered are listed in the 3903 instructions. This includes lodging on the road, lodging the first/last day of the move, moving expenses themselves.
Mileage for vehicles and/or transportation tickets.

Utility deposits/termination penalties are not allowed.

 

[lokiju]

Originally posted by: EagleKeeper

Originally posted by: lokiju

Originally posted by: CPA

Originally posted by: lokiju
This is my first time having a full year under my belt of income in the state of GA, before I had partial in FL and then the rest of the year I had like $30 income for GA.

That being said, how do you factor in State Tax when doing a Income Tax Calculator?

I've been putting in my total income for the year minus my federal income tax into the usually calculators and keep showing I'll owe about $1,800 but that just seems impossible since I have the maximum amount withheld from my wages as it is.

I'm thinking it has something to do with what I paid in state income taxes that's not getting factored in or something.

Can someone help me figure this out?

I'm not sure what "calculators" you are using, so it's hard for me to understand the question and give an answer. How much state income tax did you pay for the year? Is it close to what the calculator says? If so, you probably paid in already what is expected. My suggestion, however, is stop using whatever calculator you are using and just use a tax software program to figure everything out.

You mean like TurboTax or something like that?

And what I've paid in state tax is about $1,500 ytd while what it says I owe for Federal is $1,800. Does that mean that my State tax paid would be put towards the owed figure for Federal?

The term Tax S/W is defined in the OP.

Taxes paid to the state are not a credit to the Federal taxes. If you itemize using the Schedule A, you can deduct the state tax paid from your income.

I just saw that State Farm is offering free TurboTax for customers so I guess I'll just use that and see what it comes up with.

Just new to having to file a state tax and kind of freaked me out to have it tell me I owe (a lot) of money.

But I did not deduct the state tax paid from my income figure when figuring my federal.

 

[Lotheron]

Originally posted by: CPA

Originally posted by: Lotheron
Thanks guys for the great resource. I have two questions.

For myself: I left a company last year with a retirement in my 401k. I requested a check as I had no way of rolling it over, plus quite frankly I really need the money. However, i did not receive the check in 2007, and it's dated 1-08-08. I'm guessing there is going to be a 1099-R for the early withdrawal, however, since the check is dated this year, will that be on 2008 return or should I expect a 1099-R for 2007?

For my girlfriend: She left a company at around June last year. We received her W2 and it shows they took out very little and change for Federal. They actually took out more for state She had been claiming 1 on her W4s. Up until last year, it had been fine. She called her HR dept. and they said (after two days of checking) that it was right. What penalties/etc should she expect to be paying for this? It looks like shes going to owe somewhere around 800-900 in federal taxes. I'm assuming this is more than the minimum for penalties. We're still waiting on an unemployment W2 to do her taxes, however what should we expect? (never had to deal with a deficit before...)

Thanks!
Lotheron

1) It will be a 2008 item. Taxes are a cash basis process. You are taxed in the year you receive the cash

2) Just because you owe does not mean you will be penalized. In fact, there is a specific rule on who is penalized. Did she pay in as much taxes this year as she did last year? If so, then she won't be penalized. Tax software will know whether to tax her or not.

We requested a copy of her paystubs to check. However, I'm thinking, as the other guy before, she had been filing as married. (Her divorce was finalized in July, she also sold a house at a huge loss after the divorce, which I know you can't claim). I'm going to use the tax software and see what it comes up with once her unemployment W2 shows up. Any suggestions, or insight as to what I should expect with the information I've given you?

 

[EagleKeeper]

Much will depend on how long she was on unemployment, were taxes taken out of it and when she restarted work.

 

[Lotheron]

I think she recieved about 5 checks from unemployment which are weekly (so 5 weeks or so, not long then). I believe taxes were taken out of it (as a rule?)

 

[Lotheron]

Edit: Stupid edit....

 

[EagleKeeper]

Originally posted by: Lotheron
I think she recieved about 5 checks from unemployment which are weekly (so 5 weeks or so, not long then). I believe taxes were taken out of it (as a rule?)

Taxes are taken out if requested. Usually 10%

The best thing is to wait until you have everything in hand. Speculation can only generate headaches.

 

[moonbit]

I had to pay for COBRA for a couple of months. Can I write this off as medical expenses?

 

[upsciLLion]

How much of a hassle would it be to file an amendment if I wanted to open a Roth IRA and contribute to it under the 2007 window?

 

[EagleKeeper]

Originally posted by: moonbit
I had to pay for COBRA for a couple of months. Can I write this off as medical expenses?

If you use the Schedule A

 

[EagleKeeper]

Originally posted by: upsciLLion
How much of a hassle would it be to file an amendment if I wanted to open a Roth IRA and contribute to it under the 2007 window?

If you can get it done by the 15th of April, there is no paperwork required

 

[upsciLLion]

Originally posted by: EagleKeeper

Originally posted by: upsciLLion
How much of a hassle would it be to file an amendment if I wanted to open a Roth IRA and contribute to it under the 2007 window?

If you can get it done by the 15th of April, there is no paperwork required

Just to confirm, this still applies even if I've already filed my 2007 return?

vvv :lips::lips::lips:

 

[EagleKeeper]

Originally posted by: upsciLLion

Originally posted by: EagleKeeper

Originally posted by: upsciLLion
How much of a hassle would it be to file an amendment if I wanted to open a Roth IRA and contribute to it under the 2007 window?

If you can get it done by the 15th of April, there is no paperwork required

Just to confirm, this still applies even if I've already filed my 2007 return?

Pub 590 - Pg 58

Contributions not reported. You do not report Roth IRA
contributions on your return.

 

[ballmode]

I made $12193.83 in 2007. I put that I get $4000 for the tuition credit, I claimed myself, yet only am getting back $595.xx

does this seem right?

Reason why I ask is because I claimed 1 (myself)

My friend made $10,800 claimed 0 and is getting about 1000 back.

 

[jiggahertz]

I donated ~$900 in clothing based on thrift shop value to a charity through one of those donation boxes. The tax receipt they gave me is basically a signed blank form where I list the donated clothing. I've completed form 8283 for non-cash donations with a single entry for clothing at a $900 value, purchased value of $4k. I just wanted to make sure that the tax receipt I was given and my completion of form 8283 are sufficient for this deduction.

 

[EagleKeeper]

Originally posted by: ballmode
I made $12193.83 in 2007. I put that I get $4000 for the tuition credit, I claimed myself, yet only am getting back $595.xx

does this seem right?

Reason why I ask is because I claimed 1 (myself)

My friend made $10,800 claimed 0 and is getting about 1000 back.

You got your the difference every week.

He wanted Uncle to act as a savings account w/ no interest.

The difference is in the amount withheld from the paycheck in Federal taxes based on the wW4 numbers that you provided.