5th Annual Tax Thread - 2007

[cpals]

Marriage Question:

I got married last year and we got my wife's name changed with the Social Security office. However, when we got her job's W-2 it has her maiden name on it; I think I read somewhere that the IRS won't take our return because of this... truth?


House Question:

We also purchased a house last year and we both moved to our new house. My W-2 has my current address, but hers has her parents address. Also, we never updated anything with the IRS... will it just be updated when we send in our return?

Thank you.

 

[aeroguy]

My wife is in Grad School and is required to complete a certain number of hours at an internship.

She is an unpaid intern at Children's Rehabilitation Services (which is part of the Alabama Department of Rehabilitation Services, which is state run.

Is the mileage she travels to and from her unpaid internship tax deductible? I assume not, but thought I'd ask anyway.

Thanks in advance,
Nick

Edit:
So I guess the full story is that my wife does 3 things:
1. Employed and paid as a social worker at a state social service job 2.5 days (18 hours) per week (her regular job).
2. A student going to class 2 days/nights per week getting her Master of Social Work degree (i.e. she has class Mon 1-4PM and 6-9PM and Weds 6-9PM).
3. An unpaid intern at a completely different state social service job 2 days (16 hours) per week. She needs to complete a certain number of hours to graduate.

It was said by the OP:
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).

So if my wife is getting her Master of Social Work degree and she is employed as a social worker, she can deduct that mileage? Is it just when she travels from work to school? I'm really confused.

 

[alkemyst]

damn, so far even with the sales tax credit ($844) I am at $1480 with a $33 penalty for low withholding. I made $2k less this year than last and had thought I'd be in a house earlier in the year. I did claim insulation ($50), and the new door I installed ($165) under energy credits and netted a whopping $21

I may try to use my withholding as taxes paid and see if that removes the penalty...don't know about the other $1450. I donated one sofa with a sleeper (it was a nice sofa/sleeper) and put $200 for that. I donated clothes too but had no reciept so I didn't claim them (5 pants, a couple suits (pants a little faded from cleaning more than the jacket and a bunch of suit type shirts I don't wear anymore since I don't need a tie), I donated about $100 in cash to petsmart/petsupermarket/adoptions over the year too, but no receipts. This year I am just going to do it online at year end.

 

[alkemyst]

Originally posted by: cpals
Marriage Question:

I got married last year and we got my wife's name changed with the Social Security office. However, when we got her job's W-2 it has her maiden name on it; I think I read somewhere that the IRS won't take our return because of this... truth?


House Question:

We also purchased a house last year and we both moved to our new house. My W-2 has my current address, but hers has her parents address. Also, we never updated anything with the IRS... will it just be updated when we send in our return?

Thank you.

Never heard that problem. If her social security number is the same, I don't think it matters. The problem may be in the check they issue if you get a refund...

You fill in your current address on the tax form, the W2 address is not so important in this.

 

[FP]

e-filed my federal return today and completely forgot to deduct the union dues my wife pays at the job she started on 07'.

Can I claim those deductions in 08' or am I basically out of the money?

 

[EagleKeeper]

Originally posted by: binister
e-filed my federal return today and completely forgot to deduct the union dues my wife pays at the job she started on 07'.

Can I claim those deductions in 08' or am I basically out of the money?

If you filed a 1040 w/ schedule A, then you should file an ammended 1040X return with the difference.

You can not take credit for payments for 07 in 08

 

[EagleKeeper]

Originally posted by: aeroguy
My wife is in Grad School and is required to complete a certain number of hours at an internship.

She is an unpaid intern at Children's Rehabilitation Services (which is part of the Alabama Department of Rehabilitation Services, which is state run.

Is the mileage she travels to and from her unpaid internship tax deductible? I assume not, but thought I'd ask anyway.

Thanks in advance,
Nick

Edit:
So I guess the full story is that my wife does 3 things:
1. Employed and paid as a social worker at a state social service job 2.5 days (18 hours) per week (her regular job).
2. A student going to class 2 days/nights per week getting her Master of Social Work degree (i.e. she has class Mon 1-4PM and 6-9PM and Weds 6-9PM).
3. An unpaid intern at a completely different state social service job 2 days (16 hours) per week. She needs to complete a certain number of hours to graduate.

It was said by the OP:
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).

So if my wife is getting her Master of Social Work degree and she is employed as a social worker, she can deduct that mileage? Is it just when she travels from work to school? I'm really confused.

Grad school tuition is handled (assuming not reembursed) using the LLC or the Form 2106 (which ever is better)

Below must use the Form 2106
Mileage to/from class is deductible (as you surmised)
Expenses related to class are dedcutible

Since the mileage to the interternship is a condition of the degree, that mileage is deductible.

If there were tolls involved for the education, that would also be an expense.

 

[aeroguy]

Originally posted by: EagleKeeper

Grad school tuition is handled (assuming not reembursed) using the LLC or the Form 2106 (which ever is better)

Below must use the Form 2106
Mileage to/from class is deductible (as you surmised)
Expenses related to class are dedcutible

Since the mileage to the interternship is a condition of the degree, that mileage is deductible.

If there were tolls involved for the education, that would also be an expense.

Thank you very much.

Edit: These are all the full 48.5 cents per mile deduction?

 

[CPA]

Originally posted by: alkemyst

Originally posted by: cpals
Marriage Question:

I got married last year and we got my wife's name changed with the Social Security office. However, when we got her job's W-2 it has her maiden name on it; I think I read somewhere that the IRS won't take our return because of this... truth?


House Question:

We also purchased a house last year and we both moved to our new house. My W-2 has my current address, but hers has her parents address. Also, we never updated anything with the IRS... will it just be updated when we send in our return?

Thank you.

Never heard that problem. If her social security number is the same, I don't think it matters. The problem may be in the check they issue if you get a refund...

You fill in your current address on the tax form, the W2 address is not so important in this.

Just have your company correct it and issue you a W2c, but you should be okay with what you have. If anything, you may get a letter asking about the discrepancy and you will just have to send in proof of the name change. I would just file as is.

 

[Miramonti]

Question: Do fulltime daytraders need to pay capital gains and self-employment taxes?


Answer: No to both.

I've never met a tax professional outside the trading industry that knew both of these tho. (and I fought the Irs in tax court over not paying SE taxes and won.) They state these two issues clearly in pub 550 now, including electing 'mark-to-market' accounting to avoid paying capital gains. Fwiw.

 

[Turin39789]

Originally posted by: 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.

I saw that alkemyst pretty much confirmed that I need to be good on this one.

Any cpa want to weigh in? I'm just confused as why they don't have that money reported on one form or another.

 

[blurredvision]

Quick and easy question. I'm a yearly e-filer that always files basic W-2's and that's it....I've never dabbled in getting extra deductions and stuff like that, mainly because my life is pretty bland when it comes to finances . Last year was my first full year of owning a home, however, and I have the form 1098 for my mortgage interest. So, a couple of questions:

• Total interest paid for 2007 was just under $7k (this is in Box 1). Is this enough to be a deductible?
  • If so, do I need to start reading up on itemizing (I've heard of it, but never had to fool with it)?
  • If not, do I need to even worry about including it on my file? For my 2006 return, the year I purchased my home, I didn't even look into this, so I want to make sure I don't get myself into trouble in the future.
• Box 5 shows the real estate taxes paid. Is this deductible?

Thanks for any help!

 

[EagleKeeper]

Originally posted by: blurredvision
Quick and easy question. I'm a yearly e-filer that always files basic W-2's and that's it....I've never dabbled in getting extra deductions and stuff like that, mainly because my life is pretty bland when it comes to finances . Last year was my first full year of owning a home, however, and I have the form 1098 for my mortgage interest. So, a couple of questions:

• Total interest paid for 2007 was just under $7k (this is in Box 1). Is this enough to be a deductible?
  • If so, do I need to start reading up on itemizing (I've heard of it, but never had to fool with it)?
  • If not, do I need to even worry about including it on my file? For my 2006 return, the year I purchased my home, I didn't even look into this, so I want to make sure I don't get myself into trouble in the future.
• Box 5 shows the real estate taxes paid. Is this deductible?

Thanks for any help!

Use the Schedule A at all costs.
Real Estae taxes are deductible
Interest on the property is deductible
Charity including forced United Way(payroll withholding), etc
Expenses related to the work over and beyond commuting
State Income taxes

You purchased the property in 06, some closing costs are also deductible, review your taxes and paperwork - some closing costs are deductible. You may want to file an ammeded 1040X to capture that.

Much will depend on your overall situation - being in a state that has income tax; it would be of a benefit to file the Schedule A

 

[soup006]

My wife started working in our county school system as a Speech Language Pathologist in August. The first two weeks she worked, she received substitute pay because the board of ed hadn't officially approved her. She received a 1099-MISC for this money as nonemployee compensation. I read that generally nonemployee compensation is considered self employment. She didn't have her own business or anything. How should I file this? Do I need to consider it self employment or can I just keep it as miscellaneous income?

 

[EagleKeeper]

Originally posted by: aeroguy

Originally posted by: EagleKeeper

Grad school tuition is handled (assuming not reembursed) using the LLC or the Form 2106 (which ever is better)

Below must use the Form 2106
Mileage to/from class is deductible (as you surmised)
Expenses related to class are dedcutible

Since the mileage to the interternship is a condition of the degree, that mileage is deductible.

If there were tolls involved for the education, that would also be an expense.

Thank you very much.

Edit: These are all the full 48.5 cents per mile deduction?

Only if you use the Form 2106.
The LLC will not allow mileage or expenses.

You can not use both at the same time for the same schooling.

 

[EagleKeeper]

Originally posted by: soup006
My wife started working in our county school system as a Speech Language Pathologist in August. The first two weeks she worked, she received substitute pay because the board of ed hadn't officially approved her. She received a 1099-MISC for this money as nonemployee compensation. I read that generally nonemployee compensation is considered self employment. She didn't have her own business or anything. How should I file this? Do I need to consider it self employment or can I just keep it as miscellaneous income?

Much depends on the amount. there is a limit to misc income.

If she uses the Schedule C, then she can also deduct costs relating to the work. Mileage and any potential expenses related to obtaining the position.

Also,how did she qualify for the position - required training expenses/misc could also be deductible for 07.

 

[soup006]

Originally posted by: EagleKeeper

Originally posted by: soup006
My wife started working in our county school system as a Speech Language Pathologist in August. The first two weeks she worked, she received substitute pay because the board of ed hadn't officially approved her. She received a 1099-MISC for this money as nonemployee compensation. I read that generally nonemployee compensation is considered self employment. She didn't have her own business or anything. How should I file this? Do I need to consider it self employment or can I just keep it as miscellaneous income?

Much depends on the amount. there is a limit to misc income.

If she uses the Schedule C, then she can also deduct costs relating to the work. Mileage and any potential expenses related to obtaining the position.

Also,how did she qualify for the position - required training expenses/misc could also be deductible for 07.

The amount is 2250.00. There was no required training and we did not keep any mileage records, etc since it really only lasted for a couple weeks or less.

 

[EagleKeeper]

Originally posted by: soup006

Originally posted by: EagleKeeper

Originally posted by: soup006
My wife started working in our county school system as a Speech Language Pathologist in August. The first two weeks she worked, she received substitute pay because the board of ed hadn't officially approved her. She received a 1099-MISC for this money as nonemployee compensation. I read that generally nonemployee compensation is considered self employment. She didn't have her own business or anything. How should I file this? Do I need to consider it self employment or can I just keep it as miscellaneous income?

Much depends on the amount. there is a limit to misc income.

If she uses the Schedule C, then she can also deduct costs relating to the work. Mileage and any potential expenses related to obtaining the position.

Also,how did she qualify for the position - required training expenses/misc could also be deductible for 07.

The amount is 2250.00. There was no required training and we did not keep any mileage records, etc since it really only lasted for a couple weeks or less.

You will have to file the Schedule C.
Determine the mileage now and record it.
Think on how she obtained the position.

Unless she walked in cold and the job was handed to her on a silver platter, there had to have been some related expenses.

THINK MAN, THINK

 

[brtspears2]

I did a small consulting job for a small company. I made somewhere around $250 but the company insists they do not have to issue a 1099-MISC since it is under $600. Is this true? How would I report this income?

 

[EagleKeeper]

Originally posted by: brtspears2
I did a small consulting job for a small company. I made somewhere around $250 but the company insists they do not have to issue a 1099-MISC since it is under $600. Is this true? How would I report this income?

An answer has been posted a couple of times within this thread.

 

[aolj]

My friend has a question on taxes. She is an international student studying her PhD. She received fellowship amount reported on the 1098-T for $10,150. Taxed were withheld for federal ($711) and state ($200). She also has income from W-2. The fellowship does not qualify for educational expenses. It was received for teaching purposes.

Where can she enter these two withheld amounts for federal and state tax in the filing process?

Thanks.

 

[erwin1978]

I like to file taxes every 3 years or so I'm not familiar with the procedures. Recently, I was hired as a freelance delivery driver on November of last year. I received a form 1099-MISC. I earned nearly $800. I was told by a friend to file taxes to get tax credit(whatever that means). I tried to file online with Turbotax and end up having to pay taxes. I said to myself, how is that possible? Isn't there a law that you don't have to file if your income is under a certain amount? My friend tells me to do it anyway for the tax credit? CPA please enlighten me.

 

[imported_elwood]

Two quick questions. I can't figure out what box 14 is for, it says "SEC414 - $1681.90" At first i thought this was my pension contribution (i work for the sheriffs dept.) but i checked online and it shows my total contribution as "$1,379.94". Should i call payroll and see if they can explain?

Another question, since i had my savings account i think at one time i had a total of $75 with a grand total accrued interest of 1cent. When i enter this it drops my refund by $10, why? Can i just leave it out or would they audit me for not showing my 1cent of interest income?


EDIT: My girlfriend has her wages garnished from some old credit card debt. How does this play into income taxes? Does she have to wait for some form from them or will the tax preparer know what to do with this. (she's having her taxes done by a professional, just trying to save her a trip if she needs to wait for a paper or something.)

 

[EagleKeeper]

Originally posted by: aolj
My friend has a question on taxes. She is an international student studying her PhD. She received fellowship amount reported on the 1098-T for $10,150. Taxed were withheld for federal ($711) and state ($200). She also has income from W-2. The fellowship does not qualify for educational expenses. It was received for teaching purposes.

Where can she enter these two withheld amounts for federal and state tax in the filing process?

Thanks.

There is a line item for the total amount of taxes withheld on the 1040 type tax forms.
The amount entered should be the sum of the Federal Tax (not SS/Medicare) withheld from the Fellowship and the W2.

On the relevant state filing form, the same will apply. Total the state tax withheld for each income.

With that amount of income, she should qualify for free -efileing of her taxes. That will make is easier inentering/totaling the proper amounts for both Federal and State.

 

[EagleKeeper]

Originally posted by: erwin1978
I like to file taxes every 3 years or so I'm not familiar with the procedures. Recently, I was hired as a freelance delivery driver on November of last year. I received a form 1099-MISC. I earned nearly $800. I was told by a friend to file taxes to get tax credit(whatever that means). I tried to file online with Turbotax and end up having to pay taxes. I said to myself, how is that possible? Isn't there a law that you don't have to file if your income is under a certain amount? My friend tells me to do it anyway for the tax credit? CPA please enlighten me.

You have self employment income. That requires paying your full share of the Self Employment taxes.

If you did not use the Schedule C, then you have roughly 16% tax due on the $800.

If you use the Schedule C and then expense off someof the incom, you will reduce the tax burden.

The tax credit(s) show up against earned income (usually W2s).

You have income, you must file unless the amount of taxes withheld create no liability.