5th Annual Tax Thread - 2007

[EagleKeeper]

Originally posted by: UNCjigga
Okay, so for 2007 my income went marginally above $70k so I can no longer deduct student loan interest. This hurts me, since I have no other deductions. Not married, no kids, don't own a home. My biggest expenses for '07 were rent, student loan payments, car payment, and gas. I also paid $2200 to repair some property damage, and had $600 in moving expenses (not relo, so not deductible). None of that's deductible. My employer allows me to work 1 day per week from home, and I maintain a home office to that end, but as I read the rules, I cannot deduct any of that because I still have an office at work. Is there anything I might be missing?

So far I owe $912 in Federal, $739 to State of Maryland, but DC is giving me a $426 credit. I will get the $600 refund, but I'm hoping there's some other deduction I may have overlooked?

Unless you have a living GF/SO that you are supporting, some offspring that you just found out about, you are out of luck.

Having been out of school in all of 2007, there is nothing else that will be useful.

You should also monitor your Federal tax situation very closely - you are almost at the line where a penalty will be accessed when you owe more than $1000 in taxes. If you keep everything as is, consider paying a seperate check to Uncle before the end of '08 for a few hundred to avoid a penalty.

 

[UNCjigga]

Originally posted by: EagleKeeper

Originally posted by: UNCjigga
Okay, so for 2007 my income went marginally above $70k so I can no longer deduct student loan interest. This hurts me, since I have no other deductions. Not married, no kids, don't own a home. My biggest expenses for '07 were rent, student loan payments, car payment, and gas. I also paid $2200 to repair some property damage, and had $600 in moving expenses (not relo, so not deductible). None of that's deductible. My employer allows me to work 1 day per week from home, and I maintain a home office to that end, but as I read the rules, I cannot deduct any of that because I still have an office at work. Is there anything I might be missing?

So far I owe $912 in Federal, $739 to State of Maryland, but DC is giving me a $426 credit. I will get the $600 refund, but I'm hoping there's some other deduction I may have overlooked?

Unless you have a living GF/SO that you are supporting, some offspring that you just found out about, you are out of luck.

Having been out of school in all of 2007, there is nothing else that will be useful.

You should also monitor your Federal tax situation very closely - you are almost at the line where a penalty will be accessed when you owe more than $1000 in taxes. If you keep everything as is, consider paying a seperate check to Uncle before the end of '08 for a few hundred to avoid a penalty.

I was afraid you'd say that. My income actually goes up 10-12% this year--and I suspect I'll have to pay up again because of another better-than-expected bonus. Methinks later this summer (when new home starts are worst in US history and housing market bottoms out) will be the perfect time to drain the retirement fund and buy a home--thoughts?

 

[syzygy]

Here's an easy one:

Do I have to report interest earned off two checking accounts and one money
market savings account ?

Total interest earned from all three is around 3,000.00

I make around 30K.

Thanks.

 

[Ns1]

Originally posted by: syzygy
Here's an easy one:

Do I have to report interest earned off two checking accounts and one money
market savings account ?

Total interest earned from all three is around 3,000.00

I make around 30K.

Thanks.

Yes. They will send you a 1099-int, if they haven't already...

 

[Kroze]

I am so screwed, I just got a letter from the IRS and according to them, I owed $16k

Can someone help me?

 

[EagleKeeper]

Originally posted by: Kroze
I am so screwed, I just got a letter from the IRS and according to them, I owed $16k

Can someone help me?

Why they think so.

The letter should indicate if it is for unreported income, under reporting income, submital of false data, etc.

Then you need to evaluate they claim to determine why they are stating so.
Valid or not, contact the office - do not ignore it.

You will more than likely need to have a face to face with an auditor to explain why you feel that they are wrong (if they are).

If they have the facts and you screwed up, then you can either attempt to negotiate a settlement, payments, or contact one of the TV ads that claim to be able to cut your back taxes owed to peanuts.

 

[ariltep]

Got a quick question. Just wondering if I have to file in both states or just one. My primary state that I resided at the time working in MA was CT and tax was deducted in that other state also. I use worked for a place that was located in Massachusettes for about a month and the position was closed.

I then worked in Conneciticut where I reside for the rest of the year of 2007. I made about 1300 dollars during the time that I was with the company in Massachusettes and tax was deducted.

I do have to file in both states, correct when filing using Turbo Tax?

Thanks for any info..

 

[Ns1]

Originally posted by: Kroze
I am so screwed, I just got a letter from the IRS and according to them, I owed $16k

Can someone help me?

I'm sure your local CPA/EA can help you. Or you can ask the box

 

[davidsi]

I was a student in 2006-2007 spring. I paid my tution for spring 2007 on dec 29 2006. i did not claim my lifetime credit for that year since i did not have a job in 2006. is it posisble to claim my tuiton for this years tax return thanks.

 

[Ns1]

Originally posted by: davidsi
I was a student in 2006-2007 spring. I paid my tution for spring 2007 on dec 29 2006. i did not claim my lifetime credit for that year since i did not have a job in 2006. is it posisble to claim my tuiton for this years tax return thanks.

Nope. It's lost forever.

Also, you SURE about this? My 1098-T shows the tuition amount in 2006, but it also states that it's the amount BILLED. I had to call and get my full statement in order to confirm the tuition was paid in 2k7 instead. That lifetime learning credit is great.

 

[davidsi]

Originally posted by: Ns1

Originally posted by: davidsi
I was a student in 2006-2007 spring. I paid my tution for spring 2007 on dec 29 2006. i did not claim my lifetime credit for that year since i did not have a job in 2006. is it posisble to claim my tuiton for this years tax return thanks.

Nope. It's lost forever.

Also, you SURE about this? My 1098-T shows the tuition amount in 2006, but it also states that it's the amount BILLED. I had to call and get my full statement in order to confirm the tuition was paid in 2k7 instead. That lifetime learning credit is great.

yeah, sucks. it was taken out of my loan and it was definitely on 12/29/06

 

[LostUte]

Question about the moving expenses deduction. My wife and I moved nearly 2000 miles for me to attend grad school. Once we arrived, she got a new full-time job in our new location. We obviously meet the distance requirement. She will also reach the 39 weeks of employment within 12 months requirement.

Technically, the reason we moved here was grad school. That said, are we eligible to claim moving expenses since she is working full-time here?

 

[EagleKeeper]

Originally posted by: LostUte
Question about the moving expenses deduction. My wife and I moved nearly 2000 miles for me to attend grad school. Once we arrived, she got a new full-time job in our new location. We obviously meet the distance requirement. She will also reach the 39 weeks of employment within 12 months requirement.

Technically, the reason we moved here was grad school. That said, are we eligible to claim moving expenses since she is working full-time here?

IRS only worries about technicalities when it is in their favor.

As long as the move meets the change of employment requirements, it is valid.

 

[IronWing]

I sent in my paper return more than seven weeks ago. It was a very simple 1040 with standard deduction and a 5695 energy credit form. Should I be worried that I haven't heard boo out of the IRS or received a refund yet (direct deposit)? The state refund came in over a month ago.

 

[EagleKeeper]

State returns allways take less time.

Use the IRS website to find the return status.

Paper returns always take min 3-4 weeks longer

 

[episodic]

Ok, I'm going nuts.
Online taxes done
I efiled state and federal.

The instructions where not written well and their own help can't decipher them.

I owe the IRS. I have to pay in. I owe the state. I have to pay in.

I have form 8453-0l - Declaration of E Filing
DO I put form 1040-v in the same envelope as for 8453-OL - with payment - or in separate envelopes.

What do I do with my federal copies of the w-2's? Do they get mailed since I efiled?

 

[EagleKeeper]

Originally posted by: episodic
Ok, I'm going nuts.
Online taxes done
I efiled state and federal.

The instructions where not written well and their own help can't decipher them.

I owe the IRS. I have to pay in. I owe the state. I have to pay in.

I have form 8453-0l - Declaration of E Filing
DO I put form 1040-v in the same envelope as for 8453-OL - with payment - or in separate envelopes.

What do I do with my federal copies of the w-2's? Do they get mailed since I efiled?

Save a stamp - put the payment in the same envelope as the 8453.

E filing avoids the need to send in the W2s

 

[pyonir]

I had a licensed business in 2007 (a first for me). I made money from this business and i was the only employee. I file two seperate returns, correct? One for myself and one for my business?

Since i paid my state sales tax (Arizona) quarterly, i do not need to file a state return for the business, do i?

I purchased some things for my business with my own money, before getting the business license (I did not conduct business without the license however). Is that going to be an issue when/if i file seperately (i'd like to claim the things i purchased, to reduce my federal tax on my business transactions)? Is it simple enough to file business forms that i can do it on my own, or should i hire someone?

I only made less than $800 from my business in 2007.

Any help/advice would be appreciated and thank you in advance.

 

[EagleKeeper]

Originally posted by: pyonir
I had a licensed business in 2007 (a first for me). I made money from this business and i was the only employee. I file two separate returns, correct? One for myself and one for my business?

Since i paid my state sales tax (Arizona) quarterly, i do not need to file a state return for the business, do i?

I purchased some things for my business with my own money, before getting the business license (I did not conduct business without the license however). Is that going to be an issue when/if i file separately (i'd like to claim the things i purchased, to reduce my federal tax on my business transactions)? Is it simple enough to file business forms that i can do it on my own, or should i hire someone?

I only made less than $800 from my business in 2007.

Any help/advice would be appreciated and thank you in advance.

Much depends on how the business is setup.

As a sole proprietorship or similar, you can just use the Schedule C with your own tax return. This allows you to write off any losses from the business against your own personal income. Also, you can more easily take indirect related costs and write those off.
Ideas are through out this thread and the previous tax threads.

Any tax S/W will help you through it - I have operated that way for over the past 15 years with no problems.

Do not get suckered into paying for the "business" versions - they are not different than the regular version with the exceptions of fancy formatting of the screens and more interactive advice or the ability to reach out and ask some other professional.
The forms that they end up printing and the calculations are the same.

We can not answer about your state tax; however, most Tax S/W will support staate filing and should be able to assist you in what needs to be files and when.

 

[edwardraff]

I have a mileage question I was hoping someone could help me with. I have a full time job where I get paid and get a W2. I also have a 2nd job where I as employed as a independent contractor (got a 1099).

1) My question is are the miles from my house and/or from the full time job to the location (varies from day to day) I have to be at on any given day for my independent contractor job deductible?
I have documentation of all the miles, however I think the answer is no as this is "commuting"

2) However what if I had a office at home, as I do quite a bit of work at home (for my independent contractor job) could I deduct the miles from home to my independent contractor job (wherever it is that day) at that point?

3) Beyond that it seems to me that the miles from my full time job to independent contractor job are "Commuting between two jobs", which is deductible per EagleKeeper's original post (mileage section pasted below), granted I may be misinterpreting what "two jobs" means. Would that make the miles form my fulltime job to my independent contractor position deductable.

I apologize if I missed the answer to this question earlier in the thread, but most of the mileage question I saw we related to education related miles.

Thanks for you help.

Originally posted by: EagleKeeper

Mileage

48.5 cents per mile for business miles driven;
20 cents per mile driven for medical or moving purposes; and
14 cents per mile driven in service to a charitable organization.

Commuting is not deductible expenses.
Commuting between two jobs is.
Mileage to/from school while working (if the education if not primary - ie it supports work) is a deductible expense on the Form 2106 (which requires 1040 and Schedule A).
If school can be considered is supportive of business income, the tuition, fees, books and mileage become a business expense on the Schedule C.
You can not claim mileage and expenses on the same vehicle.

 

[EagleKeeper]

Mileage from your home to the W2 job is commuting and not deductible.

Mileage from your home to the 1099 is deductible

Mileage from the W2 to the 1099 job is deductibe.

Both of the deductible situations should go on the Schedule C vs the 3903.

Also, look at the actual costs - it will also allow depreciation of the vehicle and insurance.
You can alos split the costs across two vehicles, one using milegage and the other using expenses.

Check which works out best for any vehicles in use.

 

[LordSnailz]

Question about taxes and IRA. My mom said that on the tax return that she had submitted and gotten the return for already, marked that she contributed $4k to her traditional IRA. But in fact, she hasn't yet, can she take her tax return and contribute to her 2007 tax return? She said that's what her tax person told her to do.

The second question is, if it is possible, does she have to do anything to notify the IRS that the IRA was started and funded or will that be handed automatically by Vanguard?

thanks in adv!

 

[EagleKeeper]

Originally posted by: LordSnailz
Question about taxes and IRA. My mom said that on the tax return that she had submitted and gotten the return for already, marked that she contributed $4k to her traditional IRA. But in fact, she hasn't yet, can she take her tax return and contribute to her 2007 tax return? She said that's what her tax person told her to do.

The second question is, if it is possible, does she have to do anything to notify the IRS that the IRA was started and funded or will that be handed automatically by Vanguard?

thanks in adv!

She has until 15 April to ensure that the amounts she reported actualy become true.

Any paperwork, will be taken care of by the trustee.

However, she needs to make sure that the trustee knows that the funds are to be appiled to the 2007 year,. Some will apply them to the 2008 year because that is when the acocunt is opened.

 

[LordSnailz]

awesome, thanks for the reply!

 

[TraumaRN]

I'd just like to say thanks to Uncle Sam this year...he treated me quite well.

And good luck to all those still filing.