5th Annual Tax Thread - 2007

[alkemyst]

Originally posted by: 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.

I would wait for the W2 prior to anything.

 

[alkemyst]

Originally posted by: 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.

Where did you work and live during the income period?

 

[maziwanka]

worked NYC, lived NJ - w2 form has my NYC school address that i use during the fall and spring semesters

 

[TheBloodguard]

Originally posted by: alkemyst

Originally posted by: 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.

You wouldn't...that's a stock purchase/exchange. You need to report the gain though.

Thanks, I'll report it as a gain under D

 

[duragezic]

I made a separate thread as I didn't want to waste the excellent resources of the tax gurus in here! But it was suggested I put it in here anyway

I don't have a 1099 from either of my credit unions and I want to file my return now. I know the amount of interest I earned from both from the end-of-year statements I can access electronically. One is like $0.65 and the other is like $0.35.

Is this too little of interest to be taxable? So could I just finish my return without entering any interest earned?

The reason I ask is all of my 1040EZ and state forms from the past four years have all blanks for 1099 taxes withheld. So I probably entered the 1099 into TurboTax but it determined it wasn't pertinent? Although I have the numbers, I don't know the "official" name (as listed on the 1099) of the credit unions, since they are probably abbreviated.

 

[alkemyst]

Originally posted by: maziwanka
worked NYC, lived NJ - w2 form has my NYC school address that i use during the fall and spring semesters

Personally, I'd call the tax office. If you were at school while working you need to pay NY state though.

Many people with more than one home try to get out of state tax by claiming to live elsewhere. It's one of the more suspect things to get you audited.

 

[alkemyst]

Originally posted by: TheBloodguard

Originally posted by: alkemyst

Originally posted by: 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.

K
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.

You wouldn't...that's a stock purchase/exchange. You need to report the gain though.

Thanks, I'll report it as a gain under D

I misread that...I thought you recieved the W2 and it was not listed. This may fall under a corporate stock deal and not be handled like a regular stock purchase. Wait for your W2, it makes no sense to guess.

 

[maziwanka]

Originally posted by: alkemyst

Originally posted by: maziwanka
worked NYC, lived NJ - w2 form has my NYC school address that i use during the fall and spring semesters

Personally, I'd call the tax office. If you were at school while working you need to pay NY state though.

Many people with more than one home try to get out of state tax by claiming to live elsewhere. It's one of the more suspect things to get you audited.

wasn't at school while working. it was a summer internship. thanks for the info though

 

[EagleKeeper]

Originally posted by: duragezic
I made a separate thread as I didn't want to waste the excellent resources of the tax gurus in here! But it was suggested I put it in here anyway

I don't have a 1099 from either of my credit unions and I want to file my return now. I know the amount of interest I earned from both from the end-of-year statements I can access electronically. One is like $0.65 and the other is like $0.35.

Is this too little of interest to be taxable? So could I just finish my return without entering any interest earned?

The reason I ask is all of my 1040EZ and state forms from the past four years have all blanks for 1099 taxes withheld. So I probably entered the 1099 into TurboTax but it determined it wasn't pertinent? Although I have the numbers, I don't know the "official" name (as listed on the 1099) of the credit unions, since they are probably abbreviated.

Interest under $1 is ignored

 

[jiggahertz]

On my 2006 state (MA) return I originally received a return of $50 when I filed. In early 2007, I paid ~$200 towards my state taxes/penalties/interest for undeclared income in 2006. My question is, for 2007 can I write off the $200-$50 paid for state taxes? I assume I cannot deduct the penalties/interest that were included in the $200 payment and need to find the exact amount that actually went towards income tax? Is this true?

 

[BaNzaiDags]

two questions:

1. If I bought my house 4/04 and sold 7/07 i don't have to pay capital gains since i made less then $250k? when i went through turbo tax.. it said since i lived there for atleast 24 months.. i don't have to report the income.

2. Can i file HOH, i have a dependent that is living with me, but my girlfriend is claiming him as a dependant... he lived with us all last year. Turbo tax shows i can claim HOH and he would be a "nondependent" so i can qualify.

 

[CPA]

Originally posted by: 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.

You may have jumped a tax bracket. And, no, there is no tax incentive to being married. In fact, until Bush fixed it, there used to be a "marriage penalty".

 

[CPA]

Originally posted by: BaNzaiDags
two questions:

1. If I bought my house 4/04 and sold 7/07 i don't have to pay capital gains since i made less then $250k? when i went through turbo tax.. it said since i lived there for atleast 24 months.. i don't have to report the income.

2. Can i file HOH, i have a dependent that is living with me, but my girlfriend is claiming him as a dependant... he lived with us all last year. Turbo tax shows i can claim HOH and he would be a "nondependent" so i can qualify.

1. Correct, you don't have to report it.

2. Assuming this is your girlfriend's child, straight out of IRS.gov:

Example 4?girlfriend's child.

The facts are the same as in Example 3 except your girlfriend's 10-year-old son also lived with you all year. He is not your qualifying child and, because he is your girlfriend's qualifying child, he is not your qualifying relative (see Not a Qualifying Child Test, later). As a result, he is not your qualifying person for head of household purposes.

Meaning, you can't file HOH, unfortunately. Your girlfriend, however, can. Keep in mind, you both can not claim him and if doing so, the IRS will immediately flag both of your returns.

 

[EagleKeeper]

Originally posted by: jiggahertz
On my 2006 state (MA) return I originally received a return of $50 when I filed. In early 2007, I paid ~$200 towards my state taxes/penalties/interest for undeclared income in 2006. My question is, for 2007 can I write off the $200-$50 paid for state taxes? I assume I cannot deduct the penalties/interest that were included in the $200 payment and need to find the exact amount that actually went towards income tax? Is this true?

For the Federal, if you itemize this year, you can write off the extra MA taxes that you paid in 2007. You can not write off the interest and penalties.

What ever paperwork that the state sent you for the repayment should have a breakdown.

 

[TangoJuliet]

Originally posted by: alkohoLiK
Anyone

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?

 

[EagleKeeper]

Originally posted by: alkohoLiK

Originally posted by: alkohoLiK
Anyone

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?

Contact the NYC tax department and ask.

 

[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

 

[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.

 

[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?

 

[alkemyst]

Originally posted by: maziwanka

Originally posted by: alkemyst

Originally posted by: maziwanka
worked NYC, lived NJ - w2 form has my NYC school address that i use during the fall and spring semesters

Personally, I'd call the tax office. If you were at school while working you need to pay NY state though.

Many people with more than one home try to get out of state tax by claiming to live elsewhere. It's one of the more suspect things to get you audited.

wasn't at school while working. it was a summer internship. thanks for the info though

I refered to at school meaning in NYC. If your address was in NYC (assuming you had a dorm or apartment at the time/some place you lived whether you stayed there or not), your work/internship is in NYC and then you claim you lived in NJ with parents it's going to be a flag.

 

[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?

 

[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'.

 

[poncherelli2]

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'.

Could you explain what is necessary to deduct it, or how I can tell if it was recapitalized and "not paid."

On a broader scale I was envisioning my taxes looking something like the following and just using a cheap efile:

Income = W2 wages + various interest and dividends from accounts
Deductions = Standard + Personal + Educational + Student Loan interest

My situation should be pretty simple, does that sound about right?

 

[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.

 

[maziwanka]

Originally posted by: alkemyst

Originally posted by: maziwanka

Originally posted by: alkemyst

Originally posted by: maziwanka
worked NYC, lived NJ - w2 form has my NYC school address that i use during the fall and spring semesters

Personally, I'd call the tax office. If you were at school while working you need to pay NY state though.

Many people with more than one home try to get out of state tax by claiming to live elsewhere. It's one of the more suspect things to get you audited.

wasn't at school while working. it was a summer internship. thanks for the info though

I refered to at school meaning in NYC. If your address was in NYC (assuming you had a dorm or apartment at the time/some place you lived whether you stayed there or not), your work/internship is in NYC and then you claim you lived in NJ with parents it's going to be a flag.

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.