5th Annual Tax Thread - 2007

[EagleKeeper]

Originally posted by: aceO07
I just moved to a different state last year. Left old job at end of May and began new job starting August in a new state.

Are there any special considerations I should take note of when I do taxes? Are there any deductions that I can take? Do I need receipts for moving expenses?

I basically complete taxes for both states right? And let previous state know that I moved on the forms?

All expenses related to the move are deductible using the Form 3903.
Receipts are need to back up your claims of expenses if Uncle comes a knocking.

If you are able to itemize, expenses incurred/related in looking for any new position are able to be deducted using the Form 2106.

Most Tax S/W will not easily support multiple states within the same year - expect to do that by hand after you have completed the Fed

 

[Yossarian]

Originally posted by: mav451
Interest Income:

This is my very first year filing taxes, so I used the free version of TurboTax (which looks like it uses 1040EZ). I got through everything and e-filed i Sunday morning only to realize this afternoon that I forgot to include the interest from my checking account.

That interest is $18.94. I don't remember getting a 1099 form for that and based on hearsay (both from bank and friends), they said that <$100 it didn't have to be filed. So I didn't think anything of it. But now, that I've been reading online, it seems that the limit is far lower - $10? Now I'm shitting my pants - am I gonna get audited?

I'm gonna call the IRS line later when I get home from work, but am I really getting stressed out. I've been looking up the Amended Tax Return (1040X) form in the meantime and preparing for the worst.

calm down, you aren't going to get audited for 19 in interest.

 

[EagleKeeper]

Originally posted by: mav451
Interest Income:

This is my very first year filing taxes, so I used the free version of TurboTax (which looks like it uses 1040EZ). I got through everything and e-filed i Sunday morning only to realize this afternoon that I forgot to include the interest from my checking account.

That interest is $18.94. I don't remember getting a 1099 form for that and based on hearsay (both from bank and friends), they said that <$100 it didn't have to be filed. So I didn't think anything of it. But now, that I've been reading online, it seems that the limit is far lower - $10? Now I'm shitting my pants - am I gonna get audited?

I'm gonna call the IRS line later when I get home from work, but am I really getting stressed out. I've been looking up the Amended Tax Return (1040X) form in the meantime and preparing for the worst.

File the 1040X and send in the check for the extra few $$.

The IRS at worst, will send you a form letter stating a discrepancy was detected and ask you to comment.

Sending in the 1040x will prevent that from happening.

 

[Ilmater]

Originally posted by: Ilmater
So... my parents gave me $15k after my grandmother died. They wanted me to put it into a CD and use it as a downpayment on a home. Instead, I used it to pay off debt (which was the better option, according to both me and my financial advisor). However, my mom does my taxes, and now she's asking me to give her the interest from the CD to put on my taxes.

I plan on lying to her because I really don't want to mess with it, but my question is this:

If I tell her that I have like $350 in interest from this thing and she reports it, will the income tax come back from the IRS with an error? Will it tell her that I shouldn't have that income?

Answers to your obvious questions:

1) She does my taxes because she's a partner in a CPA firm... it's what she does for a living. Why would I pay someone else?
2) I lie because my mom has no debt and never has. She has zero desire for material things and never spends a dime on herself. To her, debt is a sin worse than murder, and she can't comprehend it.

I really do need to know the answer to this question. Could someone please help me out.

 

[Ns1]

Originally posted by: Ilmater

Originally posted by: Ilmater
So... my parents gave me $15k after my grandmother died. They wanted me to put it into a CD and use it as a downpayment on a home. Instead, I used it to pay off debt (which was the better option, according to both me and my financial advisor). However, my mom does my taxes, and now she's asking me to give her the interest from the CD to put on my taxes.

I plan on lying to her because I really don't want to mess with it, but my question is this:

If I tell her that I have like $350 in interest from this thing and she reports it, will the income tax come back from the IRS with an error? Will it tell her that I shouldn't have that income?

Answers to your obvious questions:

1) She does my taxes because she's a partner in a CPA firm... it's what she does for a living. Why would I pay someone else?
2) I lie because my mom has no debt and never has. She has zero desire for material things and never spends a dime on herself. To her, debt is a sin worse than murder, and she can't comprehend it.

I really do need to know the answer to this question. Could someone please help me out.

Generally speaking, if you got a 1099 that means that the IRS also got the 1099. If you file your return and it doesn't match with the IRS computers, it kicks it out as an error and you get a nice little letter in the mail. Generally speaking.

But in your situation, I don't think it'll matter since the IRS is just gonna make money off you for doing nothing. Maybe EK will chime in here.

 

[EagleKeeper]

The IRS is not going to care if you declare and pay extra taxes.

However, you are going to have to do this every year to hide from your mother.

 

[Ns1]

Originally posted by: EagleKeeper
The IRS is not going to care if you declare and pay extra taxes.

However, you are going to have to do this every year to hide from your mother.

:laugh:

 

[Ilmater]

Originally posted by: EagleKeeper
The IRS is not going to care if you declare and pay extra taxes.

However, you are going to have to do this every year to hide from your mother.

Heh, it won't be a problem after I buy a house this year. The whole idea is that she was supposed to be giving me it for a downpayment, but it made more sense to use it to pay down debt.

Thanks a lot for the help.

 

[d33pt]

Originally posted by: EagleKeeper

Originally posted by: d33pt
I bought a home in 2007. On the closing statement I have the following fees. Can I deduct both as points paid?

Loan Origination Fee to Mortgage Broker Company
Loan Discount Fee to Lender

How about other fees like these:
Appraisal
Mortgage Processing fee

Generally, what fees can be deducted from this statement?

Thanks.

The loan fees are the points - those can be deducted.
Anything else that states "Fee" is not unless it shows being paid to a government entity.

Also anything that states the word "Tax" can be deducted as if it were points.

This is true even if the "Loan Origination Fee" is not listed in Box 2 on Form 1098 from the Lender? Only the "Loan Discount Fee" is listed there. Do I just add both together and put them in the "Points" line?

 

[EagleKeeper]

Originally posted by: d33pt

Originally posted by: EagleKeeper

Originally posted by: d33pt
I bought a home in 2007. On the closing statement I have the following fees. Can I deduct both as points paid?

Loan Origination Fee to Mortgage Broker Company
Loan Discount Fee to Lender

How about other fees like these:
Appraisal
Mortgage Processing fee

Generally, what fees can be deducted from this statement?

Thanks.

The loan fees are the points - those can be deducted.
Anything else that states "Fee" is not unless it shows being paid to a government entity.

Also anything that states the word "Tax" can be deducted as if it were points.

This is true even if the "Loan Origination Fee" is not listed in Box 2 on Form 1098 from the Lender? Only the "Loan Discount Fee" is listed there. Do I just add both together and put them in the "Points" line?

All the allowed fees and additional taxes can be placed on the Points line.

 

[maziwanka]

Ok. So my situation is a bit complicated . . .

I worked during the summer for a law firm based in New York City (13 weeks total). 8 of those weeks I worked in the firm's NYC office and the last 5 weeks in worked in its London office.

I will certainly be filing a federal tax return and I've decided to file as a New York resident since i go to school and lived in NYC most of the year.

Now, I received two different W-2s in the mail. One was for my federal taxes and listed my gross income as my weekly salary x 13 (for the 13 weeks I worked). For the other W-2 for NY, my gross income was my weekly salary x 8.

I don't think I was assessed state taxes for the salary I made while I was in London, nor do I think I was assessed any taxes from England. I did however pay federal tax for everything I made.

What forms do I fill out in order to make sure everything is kosher? For my federal returns, am I fine filling out a 1040EZ only (i have no other income other than this summer internship and interest on savings accounts)? What about NY tax returns?

Thanks and I hope I wasn't confusing.

 

[EagleKeeper]

Ny state has their own tax forms.

Tax S/W may assist you.

 

[maziwanka]

Originally posted by: EagleKeeper
Ny state has their own tax forms.

Tax S/W may assist you.

was this for me?

 

[EagleKeeper]

Yes

 

[weirdichi]

My educational institution did not provide me with a 1098 because my tuition covered by the scholarship that I received. Can I still claim the tuition expense on my taxes even though it was covered by my scholarship?

I want to say no, but then there is a place in TubroTax that has me input my scholarships, but since I didn't get a 1098-T form from my school, I cannot input the tuition expenses as well. I found out what the total tuition cost of school was for me, minus the scholarship from the admin a few days ago and I'm not sure what to do now. Any help would be great. Thank you.

 

[EagleKeeper]

Originally posted by: weirdichi
My educational institution did not provide me with a 1098 because my tuition covered by the scholarship that I received. Can I still claim the tuition expense on my taxes even though it was covered by my scholarship?

I want to say no, but then there is a place in TubroTax that has me input my scholarships, but since I didn't get a 1098-T form from my school, I cannot input the tuition expenses as well. I found out what the total tuition cost of school was for me, minus the scholarship from the admin a few days ago and I'm not sure what to do now. Any help would be great. Thank you.

If the scholarship covers the tuition costs, do not enter anything.
Otherwise enter for the tuition costs, the difference between the scholarship and the overall tuition costs - (not including lab and other fees).

You do not need the 1098 - it is intended to assist you in entering the data.

 

[weirdichi]

Originally posted by: EagleKeeper

Originally posted by: weirdichi
My educational institution did not provide me with a 1098 because my tuition covered by the scholarship that I received. Can I still claim the tuition expense on my taxes even though it was covered by my scholarship?

I want to say no, but then there is a place in TubroTax that has me input my scholarships, but since I didn't get a 1098-T form from my school, I cannot input the tuition expenses as well. I found out what the total tuition cost of school was for me, minus the scholarship from the admin a few days ago and I'm not sure what to do now. Any help would be great. Thank you.

If the scholarship covers the tuition costs, do not enter anything.
Otherwise enter for the tuition costs, the difference between the scholarship and the overall tuition costs - (not including lab and other fees).

You do not need the 1098 - it is intended to assist you in entering the data.

Ok, just to make sure then. I had two other comm coll classes that I paid for. That added with my graduate tution is about 6000. Scholarship for graduate class was 5000. I enter 1000, right?

 

[EagleKeeper]

Originally posted by: weirdichi

Originally posted by: EagleKeeper

Originally posted by: weirdichi
My educational institution did not provide me with a 1098 because my tuition covered by the scholarship that I received. Can I still claim the tuition expense on my taxes even though it was covered by my scholarship?

I want to say no, but then there is a place in TubroTax that has me input my scholarships, but since I didn't get a 1098-T form from my school, I cannot input the tuition expenses as well. I found out what the total tuition cost of school was for me, minus the scholarship from the admin a few days ago and I'm not sure what to do now. Any help would be great. Thank you.

If the scholarship covers the tuition costs, do not enter anything.
Otherwise enter for the tuition costs, the difference between the scholarship and the overall tuition costs - (not including lab and other fees).

You do not need the 1098 - it is intended to assist you in entering the data.

Ok, just to make sure then. I had two other comm coll classes that I paid for. That added with my graduate tution is about 6000. Scholarship for graduate class was 5000. I enter 1000, right?

Correct

 

[PolymerTim]

OK, I searched through this thread but didn't see my exact situation. So here I go.

I am currntly a gradute student and make in 20k-25k range. Up until 2007, my pay came in the form of a research assistantship through a government grant. Because it is a research assistantship, the money is taxable. But with such a low income and having 1 child, I usually ended up raking in the credits and geting paid a lot more than I owed (usually from EIC and child tax credit).

So this year I call up my payroll dept to find out why I didn't get a W-2. Turns out that my funding source changed to a private company and the money was coming in in the form of a fellowship grant, which is of course non-taxable. Now I find myself in the strange situation of having no earned income, even though, from my side of the fence, nothing has changed.

So my question is, how does this affect all of my credits? I think the answer is I get nothing and I'm SOL, but I just wanted to check with you guys. Is it really true that even though I made $22,800 this year that, because it was non-taxable, I do not qualify for EIC, child tax credits, or even these new tax rebates.

I can't wait till I have a real job!

 

[Ns1]

Earned income generally means wages, salaries, tips, other taxable employee pay, and net earnings from self-employment. Employee pay is earned income only if it is taxable. Nontaxable employee pay, such as certain dependent care benefits and adoption benefits, is not earned income. But there is an exception for nontaxable combat pay, which you can choose to include in earned income. Earned income is explained in detail in Rule 7 in chapter 1.

 

[PolymerTim]

Now I'm really confused. I just reviewed the rule 7 as suggested and found the following referring to fellowships:

Scholarship and fellowship grants not reported on Form W-2. Also, enter ?SCH? and the amount on the dotted line next to line 7. However, if you were a degree candidate, include on line 7 only the amounts you used for expenses other than tuition and course-related expenses. For example, amounts used for room, board, and travel must be reported on line 7.

So if I understand this correctly, I should still put my fellowship money on line 7, even though it is not taxable? The only problem is that when I work through the rest of the form down to the calculation of tax, it never asks for or subtracts any non-taxable income. Am I missing a step? Maybe there are taxable scholarships and fellowships and mine still shouldn't be put here? I don't even care so much about all the credits now (since I know they explicitly ask for "earned" income), but I at least want to get this filed properly.

Thanks guys,
Tim

 

[Ns1]

Basically, the fellowship is nontaxable to you to the extent of tuition and fees.

So, for sake of argument, let's say your tuition/fees are 20k for the year. IF you receive a fellowship grant for 20k, it's completely non taxable because it's used for tuition/fees. If you receive 26k, 6k is taxable (as only the "qualified scholarship" portion is non-taxable)

To quote your statement, "amounts used for room, board, and travel must be reported on line 7"

That said, quoting my handbook here,

"The exclusions for qualified scholarships and qualified tuition reductions don't apply to any amount received that represents payment for teaching, research, or other services performed by the student as a condition for receiving the qualified benefit. This no-payment for services rule doesn't apply to amounts received under certain health professions scholarship programs."

 

[biff 24 2000]

hey guys i have question about filing my federal tax return. I'm active duty military and taxslayer.com will file my taxes for free, so i used it and put in all my W-2 info an my refund came out to be 1,010. that is the same amount of my federal tax income withheld, so it says I'm getting back all my money? that cant be right can it? so i wanted to see what another site would say and turbo tax said i would get a return of like 357. so I'm confused. any help please, thanks.

 

[EagleKeeper]

Originally posted by: biff 24 2000
hey guys i have question about filing my federal tax return. I'm active duty military and taxslayer.com will file my taxes for free, so i used it and put in all my W-2 info an my refund came out to be 1,010. that is the same amount of my federal tax income withheld, so it says I'm getting back all my money? that cant be right can it? so i wanted to see what another site would say and turbo tax said i would get a return of like 357. so I'm confused. any help please, thanks.

It is very possible that with credits, your total taxes due will be zero. Therefore any Federal taxes paid will be refunded to you.

 

[PolymerTim]

Originally posted by: Ns1
Basically, the fellowship is nontaxable to you to the extent of tuition and fees.

So, for sake of argument, let's say your tuition/fees are 20k for the year. IF you receive a fellowship grant for 20k, it's completely non taxable because it's used for tuition/fees. If you receive 26k, 6k is taxable (as only the "qualified scholarship" portion is non-taxable)

To quote your statement, "amounts used for room, board, and travel must be reported on line 7"

That said, quoting my handbook here,

"The exclusions for qualified scholarships and qualified tuition reductions don't apply to any amount received that represents payment for teaching, research, or other services performed by the student as a condition for receiving the qualified benefit. This no-payment for services rule doesn't apply to amounts received under certain health professions scholarship programs."

I see your point, the problem is that my entire fellowship is considered non-taxable from the beginning, which is why my school never sent me a W-2 like they always did in the past when my money came through different sources. I was talking to another tax guy and he assured me that, even though it is not explicit in the instructions for line 7, only taxable fellowships should be considered here. I also talked to the business manager for our department and she tried to explain why this fellowship is not taxable. Its a bit confusing, but here is what I think she said:
-My previous source of funds came from a government grant and the government was paying me to work on the grant. Essentially, there was a deliverable product in the form of the results of my work and thus the payment was taxable.
-Now, my money comes from a private industry fellowship. This fellowship, according to my business manager, has no deliverable, technically. She says they are essentially just supporting my graduate research and only paying its costs.

But the funny thing is that my stipend is of course factored into these costs and so the private fellowship (just like the government grant before it) first pays my tuition and fees and then pays my stipend. In practice, there is absolutely no difference between what I was doing before and what I'm doing now, or even the amount of money I'm getting and what I'm doing. But I think it is safe to say now, after hearing from at least 3 different people with varying but significant amounts of tax experience, that my fellowship can in no way be included in my adjusted gross income. So no credits for me.

Thanks to everyone for helping to clarify things. I think this is just one of those quirky areas of the tax law and there's not much I can do about it.

-Tim