5th Annual Tax Thread - 2007

[EagleKeeper]

Originally posted by: Kroze
I've sold & bought mutual funds in 2007 and got the statement from Fidelity and I don't know how to file it or whether to put it in my tax return at all.

On the statement it said:

Short-Term Realized gain/loss ------------ $3,548.93
Long-Term Realized gain/loss ------------- $1,763.20

It also said that it's not reported to the IRS and it is provided for my assistance in tax return preparation...???

That info will go on the Schedule D.

 

[Reel]

I e-filed my taxes last night then received a 1099-R in today's mail (shit ). I did a direct rollover so it is not taxable and no tax was withheld. Will I need to amend my return or does it not show up/affect my filed return? Thanks.

 

[EagleKeeper]

Originally posted by: Reel
I e-filed my taxes last night then received a 1099-R in today's mail (shit ). I did a direct rollover so it is not taxable and no tax was withheld. Will I need to amend my return or does it not show up/affect my filed return? Thanks.

A direct rollover will not affect your return.

 

[AMDZen]

Last year there was a website you could go to get status on your return after you filed it. Anyone know if its around this year an have a link?

 

[Capitalizt]

Thanks to all those contributing to this thread.

Here is an odd question: I have contributed to a Roth IRA for several years now. Last year my tax person asked me if I wanted to include my tax basis with the return in case I wanted to take an early distribution one day. He did so, but instead of recording it as a Roth IRA, he recorded it as a traditional IRA basis. (taxable on withdrawal)

I'm going through Turbotax to file an amended return, but don't see an IRS form that I can change to let the IRS know this is after-tax money.. I would hate to get audited 20 years from now and have them claim that the money was in a traditional IRA all these years, and be forced to pay taxes on the gains it made.

The only thing I found is an "IRA basis worksheet", but it says "Keep for your Records" on top. It is not an official form the IRS would use..

Any ideas?

 

[EagleKeeper]

Originally posted by: AMDZen
Last year there was a website you could go to get status on your return after you filed it. Anyone know if its around this year an have a link?

It is referenced on the first page of the IRS web site.

 

[Kroze]

Originally posted by: EagleKeeper

Originally posted by: Kroze
I've sold & bought mutual funds in 2007 and got the statement from Fidelity and I don't know how to file it or whether to put it in my tax return at all.

On the statement it said:

Short-Term Realized gain/loss ------------ $3,548.93
Long-Term Realized gain/loss ------------- $1,763.20

It also said that it's not reported to the IRS and it is provided for my assistance in tax return preparation...???

That info will go on the Schedule D.

am i going to get taxed on it?

If it's not reported to the IRS, how would they know if i even have it?

 

[Mermaidman]

1099-misc

One of my clients changed the way that it reports its payments to me on the 1099! The new 1099 includes not only the payments for the hours I billed, but also travel expenses!!

Using hypothetical numbers for 2007, I charged $60,000 for hourly work, and submitted travel expenses of $20,000. The 1099-misc I received states $80,000 in box 7 (nonemployee compensation). WTF?! How do I deduct $20K of travel expenses? I've never had to do this in previous years, and my other clients do not include travel expenses. This really irks me. Travel expenses is not income and shouldn't even be on the 1099!

 

[AMDZen]

Originally posted by: EagleKeeper

Originally posted by: AMDZen
Last year there was a website you could go to get status on your return after you filed it. Anyone know if its around this year an have a link?

It is referenced on the first page of the IRS web site.

Thanks. I googled and couldn't find it but I guess I should of checked their site

 

[EagleKeeper]

Originally posted by: Kroze

Originally posted by: EagleKeeper

Originally posted by: Kroze
I've sold & bought mutual funds in 2007 and got the statement from Fidelity and I don't know how to file it or whether to put it in my tax return at all.

On the statement it said:

Short-Term Realized gain/loss ------------ $3,548.93
Long-Term Realized gain/loss ------------- $1,763.20

It also said that it's not reported to the IRS and it is provided for my assistance in tax return preparation...???

That info will go on the Schedule D.

am i going to get taxed on it?

If it's not reported to the IRS, how would they know if i even have it?

Information from the Schedule D gets transfered to the 1040 for taxable income determination.

The gain/loss does not get reported to the IRS by the brokerage - just the sale is reported.
Therefore if you do not report a gain/loss, the processed from the sale are treated as pure taxable profit when the IRS comes a knocking due to unreported income.

 

[EagleKeeper]

Originally posted by: Mermaidman
1099-misc

One of my clients changed the way that it reports its payments to me on the 1099! The new 1099 includes not only the payments for the hours I billed, but also travel expenses!!

Using hypothetical numbers for 2007, I charged $60,000 for hourly work, and submitted travel expenses of $20,000. The 1099-misc I received states $80,000 in box 7 (nonemployee compensation). WTF?! How do I deduct $20K of travel expenses? I've never had to do this in previous years, and my other clients do not include travel expenses. This really irks me. Travel expenses is not income and shouldn't even be on the 1099!

The 1099 is for expenses that they incurrred and paid to you.

You now use the Schedule C to report the income and deduct your expenses.

 

[Squisher]

My granddaughter that lives with me and is claimed as one of my dependants receives approx. $6,000/yr. in social security. The daughter, the child's mother, doesn't work and is also claimed as one of my dependants.

Does my daughter or I have to file this money as income?

 

[Mermaidman]

Originally posted by: EagleKeeper

Originally posted by: Mermaidman
1099-misc

One of my clients changed the way that it reports its payments to me on the 1099! The new 1099 includes not only the payments for the hours I billed, but also travel expenses!!

Using hypothetical numbers for 2007, I charged $60,000 for hourly work, and submitted travel expenses of $20,000. The 1099-misc I received states $80,000 in box 7 (nonemployee compensation). WTF?! How do I deduct $20K of travel expenses? I've never had to do this in previous years, and my other clients do not include travel expenses. This really irks me. Travel expenses is not income and shouldn't even be on the 1099!

The 1099 is for expenses that they incurrred and paid to you.

You now use the Schedule C to report the income and deduct your expenses.

Thanks. I file as a sole proprieter--Hopefully, $20K of travel expenses will not raise a flag at the IRS!
BTW, why does this thread rate only 2 stars?

 

[EagleKeeper]

Originally posted by: Squisher
My granddaughter that lives with me and is claimed as one of my dependants receives approx. $6,000/yr. in social security. The daughter, the child's mother, doesn't work and is also claimed as one of my dependants.

Does my daughter or I have to file this money as income?

One of the three of you must file a return showing this income.

 

[Qacer]

Is end of year interest earned the same as interest income?

I'm curious because I have not received my 1099-int from my bank and would like to send in my tax return already. I am only missing this one info.

On my bank account, I looked at the statement for December 2007. It shows that my end of year interest earned was $0.88.

 

[EagleKeeper]

Originally posted by: Qacer
Is end of year interest earned the same as interest income?

I'm curious because I have not received my 1099-int from my bank and would like to send in my tax return already. I am only missing this one info.

On my bank account, I looked at the statement for December 2007. It shows that my end of year interest earned was $0.88.

Different verbage - same meaning

 

[StageLeft]

1) In 2006 I was refunded some money by NY State and got a 1099 for that overpayment, which I need to declare on this year's tax form to make everything cosher. I also was refunded a few hundred dollars by Alabama and yet they didn't send a 1099. I don't really need it, do I? I presume I can just say on my tax form I have one and presume it was lost in the mail or something?

2) I have a 1098 for my mortgage interest from last year. It's online and on the same page, but below the form (not in any of its boxes) is the amount of property taxes I paid. Should I have received something from my county clerk or similar for property taxes, or are they normally put on the 1098? I understand property taxes are all tax deductible, but I certainly have received no form from anybody on them. I just looked at the 1098 I get from wells fargo and it specifically has a "real estate taxes paid" section, but countrywide's does not. I looked at the 1098 again on countrywide and box 5 is untitled and has no value. In their faq they have "Box 5. The interest recipient may use this box to give you other information, such as the address of the property that secures the debt, real estate taxes, or insurance paid from escrow." ,so this is where the real estate taxes go. How could they have screwed this up, though...?

 

[bucwylde23]

I think I have pretty much everything figured out so far except this 1099-MISC form.

I did some work for a local computer shop last year and he sent me a 1099-MISC.

Box 7 (nonemployee compensation) has the $585.00 filled in.

How am I supposed to claim this? I'm using turbotax but for some reason I can't make any sense of this.

Thanks!

 

[EagleKeeper]

Originally posted by: chrisg22
I think I have pretty much everything figured out so far except this 1099-MISC form.

I did some work for a local computer shop last year and he sent me a 1099-MISC.

Box 7 (nonemployee compensation) has the $585.00 filled in.

How am I supposed to claim this? I'm using turbotax but for some reason I can't make any sense of this.

Thanks!

You have 2 choices

1) Declare this as Misc income.
TurboTax has a section entry for this when you select the Income category
Doing so will cause an immediate increase in taxes and also self-employment related taxes.

2) Place this as Business Income
TurboTax has a section entry for this when you select the Income category.
Doing so, will allow you to now write off part if not all or even more of the income by listing any expenses that are related (directly/indirectly) to this income generation.

Clues/ideas for such are scattered throough all the tax threads.

 

[EagleKeeper]

Originally posted by: Skoorb
1) In 2006 I was refunded some money by NY State and got a 1099 for that overpayment, which I need to declare on this year's tax form to make everything cosher. I also was refunded a few hundred dollars by Alabama and yet they didn't send a 1099. I don't really need it, do I? I presume I can just say on my tax form I have one and presume it was lost in the mail or something?

2) I have a 1098 for my mortgage interest from last year. It's online and on the same page, but below the form (not in any of its boxes) is the amount of property taxes I paid. Should I have received something from my county clerk or similar for property taxes, or are they normally put on the 1098? I understand property taxes are all tax deductible, but I certainly have received no form from anybody on them. I just looked at the 1098 I get from wells fargo and it specifically has a "real estate taxes paid" section, but countrywide's does not. I looked at the 1098 again on countrywide and box 5 is untitled and has no value. In their faq they have "Box 5. The interest recipient may use this box to give you other information, such as the address of the property that secures the debt, real estate taxes, or insurance paid from escrow." ,so this is where the real estate taxes go. How could they have screwed this up, though...?

1) The 1099-Gs are for your reference. If you know the amounts, then you can just enter them as a total in the form. If using Tax S/W, you will be prompted for them. All that is usually prompted is the State and the Amount.

2) The locality is not required to send you a property tax statement. The mortgage statement showing interest will usually show the property taxes when they send you the 1098 showing interest paid. However, it is not required, just a courtesy.

Call Countrywide to get the amount of property taxes that they paid for you.

Also, you may wish to check that all your property taxes were paid.

 

[grohl]

Question regarding when to deduct fees for investment services - in 2007 I spent a good chunk of change in lawyer fees for wills and estate planning. My understanding is that fees can be deducted for estate planning and not wills - how do I break this up or am I just really off base here?

 

[StageLeft]

Two more

1) Sold a house last year and made some money on it. We had owned it for less than 4 years and made perhaps $20k. I do not need to mention this on taxes, right? I did get some kind of a payoff statement from the mortgage lender, but otherwise just have the 1098 related to what we did for mortgage interest before its sale.

2) Moving expenses: Let's say I made $100k last year (I didn't ) and paid $10k in fed taxes. Let's say that my employer gave me $20k in various otherwise-deductable moving expenses (i.e. if I'd paid them myself, I could deduct them). Let's say tax on these would have been $2k. My W2 has been brought up to $120k as income and $12k in taxes. I suppose I essentially file taxes as if I had no moving expenses, right, so that the extra $20k in income's tax liability is negated by the $2k extra they paid and it's a wash? Obviously, if I tried to deduct these moving expenses I would essentially be getting paid and screwing the system, so that cannot be right. Thing is, on form 3903 (moving expenses), line 3 (total expenses) works out to the $20k and line 4 works out to $0. Employer paid me $20k, but this is part of the box 1 on W2, and question 5 indicates that I could deduct these, which makes no sense, because I received the bumped wages and bumped taxes to negate that higher tax burden...

EDIT: Reviewing 2), it seems to be what I did last year. I was given a bunch of moving expenses back but instead of playing around with various forms and what not, my employer simply padded my income and in turn my taxes so that I wuold simply file as one making higher income. If they didn't estimate my taxes properly for the extra income, it's possible they either gave me too much or too little extra tax withholdings for the extra padding, but it wouldn't be a large effect, likely. I just looked at the relocation summary and it explictely states $0 for tax assistance, but I DEFINITELY had my W2 substantially padded for taxes withheld, so I did actually get the assistance, no doubt about it.

 

[EagleKeeper]

Originally posted by: grohl
Question regarding when to deduct fees for investment services - in 2007 I spent a good chunk of change in lawyer fees for wills and estate planning. My understanding is that fees can be deducted for estate planning and not wills - how do I break this up or am I just really off base here?

I can not find anything in the IRS Web site dealing with this specific issue.
However, using common sense and some knowledge:

Estate Planning falls under long term investments - fees can be used to reduce the cost basis when the estate is executed, not before.

Wills are just considered a personal expense - it adds nothing regarding financial benefits to your bottom line.
Peace of mind does not have a monetary value to Uncle.

Fees for financial investments are deductible - again, they are used against the cost basis at sale - not upon purchase of the investment.

 

[EagleKeeper]

Originally posted by: Skoorb
Two more

1) Sold a house last year and made some money on it. We had owned it for less than 4 years and made perhaps $20k. I do not need to mention this on taxes, right? I did get some kind of a payoff statement from the mortgage lender, but otherwise just have the 1098 related to what we did for mortgage interest before its sale.

2) Moving expenses: Let's say I made $100k last year (I didn't ) and paid $10k in fed taxes. Let's say that my employer gave me $20k in various otherwise-deductable moving expenses (i.e. if I'd paid them myself, I could deduct them). Let's say tax on these would have been $2k. My W2 has been brought up to $120k as income and $12k in taxes. I suppose I essentially file taxes as if I had no moving expenses, right, so that the extra $20k in income's tax liability is negated by the $2k extra they paid and it's a wash? Obviously, if I tried to deduct these moving expenses I would essentially be getting paid and screwing the system, so that cannot be right. Thing is, on form 3903 (moving expenses), line 3 (total expenses) works out to the $20k and line 4 works out to $0. Employer paid me $20k, but this is part of the box 1 on W2, and question 5 indicates that I could deduct these, which makes no sense, because I received the bumped wages and bumped taxes to negate that higher tax burden...

EDIT: Reviewing 2), it seems to be what I did last year. I was given a bunch of moving expenses back but instead of playing around with various forms and what not, my employer simply padded my income and in turn my taxes so that I wuold simply file as one making higher income. If they didn't estimate my taxes properly for the extra income, it's possible they either gave me too much or too little extra tax withholdings for the extra padding, but it wouldn't be a large effect, likely. I just looked at the relocation summary and it explictely states $0 for tax assistance, but I DEFINITELY had my W2 substantially padded for taxes withheld, so I did actually get the assistance, no doubt about it.

1) Being married, you need to make over $500K profit before worring about capital gain.

2) Sometimes, the employer will take taxes out of re-embursements, other times they will pay the estimated taxes for you based on the added tax burden of the re-embursements.

Direct payments to a third party are not considered to be taxable - money paid to you directly for expenses becomes taxable under new rules.

The original problem is that there is no tracking on who files for the 3903 fromt he employer's or IRS perspective.

If taxes were paid by the employer for you, it would be unethical for you to then attempt to file the 3903. However, as we all know law and ethics are like oil and water.

 

[StageLeft]

Thanks, Eagle. Ultimately, I didn't actually pay anything that was not given back to me in a check, and given that some moving expenses are deductible and some aren't (i.e. some have to be addressed at tax time and some don't) and it was a world-class firm handling the expenses on my employer's behalf, the extra income in my Box 1 was sorted out by padding the taxes, so I will simply file as if I had no moving expenses and that appears to be the proper way to do it. Wow, I think that may be all my questions covered!