5th Annual Tax Thread - 2007

[jmolayal]

Hey gang, here's my situation.

In 2007 I purchased a foreclosure for $7000. I invested another $15000 in repairs and maintenance. The home was purchased under an LLC, which I solely own. My question is this: I'm filling out Turbotax for Rental properties and its asking me questions about the property. It doesn't ask anything about the LLC. Does the LLC file its own taxes? Or can I just list the numbers out under me?

I'm also concerned because the renovation expenses made my return value skyrocket. I suppose that is to be expected, since the property only received $250 in income for the year, against a $22k investement. Am I right in my thinking here?

Thanks for the help guys!

- Jaison

 

[EagleKeeper]

Originally posted by: jmolayal
Hey gang, here's my situation.

In 2007 I purchased a foreclosure for $7000. I invested another $15000 in repairs and maintenance. The home was purchased under an LLC, which I solely own. My question is this: I'm filling out Turbotax for Rental properties and its asking me questions about the property. It doesn't ask anything about the LLC. Does the LLC file its own taxes? Or can I just list the numbers out under me?

I'm also concerned because the renovation expenses made my return value skyrocket. I suppose that is to be expected, since the property only received $250 in income for the year, against a $22k investment. Am I right in my thinking here?

Thanks for the help guys!

- Jaison

If you have a separate tax ID # for the LLC, then you should file a tax return for the LLC separate from you.

If you have not requested a separate tax ID #, then you would just use the Schedule C and Schedule E, using the name of the LLC where requested. Both the Schedules will then go with your personal 1040.

Remember, the return value only applies when you sell the property. The "current loss" will be applied to your regular income as will the rental income

 

[jmolayal]

Thanks Eagle! The LLC does not have its own Tax ID. Curious though, Turbotax didn't ask me for the name of the LLC anywhere. Any idea why?

- Jaison

 

[EagleKeeper]

Originally posted by: jmolayal
Thanks Eagle! The LLC does not have its own Tax ID. Curious though, Turbotax didn't ask me for the name of the LLC anywhere. Any idea why?

- Jaison

It will if you use the Schedule C
The Schedule E does not require a name

 

[StageLeft]

*Easy*

Contributions to 529 plans are deductible in most states on the state return (never the federal). NY State qualifies. However, using taxcut online, I see nowhere to plug this in. The closest I can find is a deduction for college tuition, and this isn't quite that... any ideas? Otherwise, I'm all done. Time to go shopping.

EDIT: pathetic. I just found this

I?ve also run into a glitch in the online Taxcut software. It will not deduct 529 contributions on our state return. This will definitely improve our NYS refund. When I asked the online technician how long this would take to resolve, I was told four business days!

How TF could they miss such a major aspect of taxes? I guess I have to, YET AGAIN, go to turbo tax just like I did last year because taxcut missed things. If Turbotax handles this, I don't know that i'll bother with taxcut again. I already got burned last year by its inability to handle part year residency for AL and NY (something like that; I had to go with Turbo to get it to work). I can see why turbo charges more, it simply works. Taxactonline last year was no good but maybe I'll give it a run, too.

 

[alkemyst]

Originally posted by: pinoy
2. My wife and I donated a goods (toys, bikes, clothes, etc.) to Salvation Army on several ocassions (we always asked for receipts). Is there a site where we can get an idea the value of goods we donated?

Basic one from salvation army: Link


TurboTax has a built-in tool called ItsDeductibleOnline. It gives values for low, average and high on many goods that get donated.

 

[kasparov]

Two quick tax related questions for all of you:

1) I was resigned from my job and it took me months to find another job. My sister lent me $10,000 for basic expenses. Would it be possible to claim this $10,000 as income on my tax return and have it not show up on her tax return? I.e. I would like to pay the taxes on the money my sister lent me...

2) Since I resigned from my previous job, it took me considerable time and effort to find another job in my field. I had to live in NY to find the job (I could have lived with my mother in NH); I used the subway to get from one job interview to another; and I bought a computer in order to be able to apply to various jobs. Would all these expenses be tax deductible?

 

[EagleKeeper]

Originally posted by: kasparov
Two quick tax related questions for all of you:

1) I was resigned from my job and it took me months to find another job. My sister lent me $10,000 for basic expenses. Would it be possible to claim this $10,000 as income on my tax return and have it not show up on her tax return? I.e. I would like to pay the taxes on the money my sister lent me...

2) Since I resigned from my previous job, it took me considerable time and effort to find another job in my field. I had to live in NY to find the job (I could have lived with my mother in NH); I used the subway to get from one job interview to another; and I bought a computer in order to be able to apply to various jobs. Would all these expenses be tax deductible?

1) Not unless your sister want to contract out to you.

2) Expenses used in a job search are deductible via the Schedule A and the Form 2106

 

[alkemyst]

Originally posted by: kasparov
Two quick tax related questions for all of you:

1) I was resigned from my job and it took me months to find another job. My sister lent me $10,000 for basic expenses. Would it be possible to claim this $10,000 as income on my tax return and have it not show up on her tax return? I.e. I would like to pay the taxes on the money my sister lent me...

2) Since I resigned from my previous job, it took me considerable time and effort to find another job in my field. I had to live in NY to find the job (I could have lived with my mother in NH); I used the subway to get from one job interview to another; and I bought a computer in order to be able to apply to various jobs. Would all these expenses be tax deductible?

Sounds like you'd like to create some scenarios to get a tax return (#1) and free/reduced PC (#2). If you truly want to pay taxes on money that was lent to you, I don't know what to say about that.

For #1, you sister would have to 'employ' you. She wouldn't need to have a business, just a need for labor/work from you. However, without you having an existing business in place or license, you'd need to get creative...documentation would be key here as it screams audit.

#2, again documentation would be needed. The computer would have to be pro-rated for the business vs personal use.

 

[Ns1]

Hey, maybe one of you guys more knowledgeable in taxes can help me out here

I didn't receive a 1098-T for this year. Apparently it's in my 2006 1098-T. It's important to note that the school filled out "box 2, amount BILLED to student".

If my understanding is correct, the lifetime learning credit refers to amount PAID by the student. SO what would I need to substantiate my lifetime learning credit claim? A billing statement from the school noting tuition received?

Also, I don't see anywhere in the pub's saying I can't "double up" on learning credits/deductions. That is, I can take the lifetime learning credit for the tuition I paid in 2007, AND student interest deduction for my student loans paid in 2007.

Feedback?

 

[EagleKeeper]

Originally posted by: Ns1
Hey, maybe one of you guys more knowledgeable in taxes can help me out here

I didn't receive a 1098-T for this year. Apparently it's in my 2006 1098-T. It's important to note that the school filled out "box 2, amount BILLED to student".

If my understanding is correct, the lifetime learning credit refers to amount PAID by the student. SO what would I need to substantiate my lifetime learning credit claim? A billing statement from the school noting tuition received?

Also, I don't see anywhere in the pub's saying I can't "double up" on learning credits/deductions. That is, I can take the lifetime learning credit for the tuition I paid in 2007, AND student interest deduction for my student loans paid in 2007.

Feedback?

Interest is a different category than tuition.
For the tuition claims (any of the three types) you need either a 1098-T or some receipt from the school showing the amount paid and for what.

 

[Ns1]

Originally posted by: EagleKeeper

Originally posted by: Ns1
Hey, maybe one of you guys more knowledgeable in taxes can help me out here

I didn't receive a 1098-T for this year. Apparently it's in my 2006 1098-T. It's important to note that the school filled out "box 2, amount BILLED to student".

If my understanding is correct, the lifetime learning credit refers to amount PAID by the student. SO what would I need to substantiate my lifetime learning credit claim? A billing statement from the school noting tuition received?

Also, I don't see anywhere in the pub's saying I can't "double up" on learning credits/deductions. That is, I can take the lifetime learning credit for the tuition I paid in 2007, AND student interest deduction for my student loans paid in 2007.

Feedback?

Interest is a different category than tuition.
For the tuition claims (any of the three types) you need either a 1098-T or some receipt from the school showing the amount paid and for what.

Yup, so barring a 1098-T is a billing summary sufficient? Remember, the 1098-T shows amount billed, not paid

If I'm not mistaken then, my tax would go

income less deductions = AGI x tax rate = tax liability, less withholdings, less credits , = tax due/refund

more or less,yes?

 

[EagleKeeper]

Originally posted by: Ns1

Originally posted by: EagleKeeper

Originally posted by: Ns1
Hey, maybe one of you guys more knowledgeable in taxes can help me out here

I didn't receive a 1098-T for this year. Apparently it's in my 2006 1098-T. It's important to note that the school filled out "box 2, amount BILLED to student".

If my understanding is correct, the lifetime learning credit refers to amount PAID by the student. SO what would I need to substantiate my lifetime learning credit claim? A billing statement from the school noting tuition received?

Also, I don't see anywhere in the pub's saying I can't "double up" on learning credits/deductions. That is, I can take the lifetime learning credit for the tuition I paid in 2007, AND student interest deduction for my student loans paid in 2007.

Feedback?

Interest is a different category than tuition.
For the tuition claims (any of the three types) you need either a 1098-T or some receipt from the school showing the amount paid and for what.

Yup, so barring a 1098-T is a billing summary sufficient? Remember, the 1098-T shows amount billed, not paid

If I'm not mistaken then, my tax would go

income less deductions = AGI x tax rate = tax liability, less withholdings, less credits , = tax due/refund

more or less,yes?

Yes - remember there is a income limit and also a yearly limit on the tuition credit(s)

 

[Ns1]

Originally posted by: EagleKeeper

Originally posted by: Ns1

Originally posted by: EagleKeeper

Originally posted by: Ns1
Hey, maybe one of you guys more knowledgeable in taxes can help me out here

I didn't receive a 1098-T for this year. Apparently it's in my 2006 1098-T. It's important to note that the school filled out "box 2, amount BILLED to student".

If my understanding is correct, the lifetime learning credit refers to amount PAID by the student. SO what would I need to substantiate my lifetime learning credit claim? A billing statement from the school noting tuition received?

Also, I don't see anywhere in the pub's saying I can't "double up" on learning credits/deductions. That is, I can take the lifetime learning credit for the tuition I paid in 2007, AND student interest deduction for my student loans paid in 2007.

Feedback?

Interest is a different category than tuition.
For the tuition claims (any of the three types) you need either a 1098-T or some receipt from the school showing the amount paid and for what.

Yup, so barring a 1098-T is a billing summary sufficient? Remember, the 1098-T shows amount billed, not paid

If I'm not mistaken then, my tax would go

income less deductions = AGI x tax rate = tax liability, less withholdings, less credits , = tax due/refund

more or less,yes?

Yes - remember there is a income limit and also a yearly limit on the tuition credit(s)

Not a problem, thanks.

 

[sonambulo]

How long does a refund take if I e-file and do direct deposit to my bank account (it was already accepted by the IRS)

 

[EagleKeeper]

Originally posted by: sonambulo
How long does a refund take if I e-file and do direct deposit to my bank account (it was already accepted by the IRS)

When you e-file the provider informs you of the estimated time for a refund to be issued.

If you filed with tuition claims, the process just started on Monday 11 Feb.

Use your e-file setup to check for status.

 

[kasparov]

Much thanks EagleKeeper and alkemyst for clearing those questions up.

 

[siftings81]

Question about HSA contributions...

I need to lower my AGI another 1000 to qualify for the Retirement Saver's Credit. I already maxed out my IRA and the only thing I can think of doing is contributing after tax money to my HSA account. Couple things though...

I actually have two HSA accounts, one that I had all last year for a job I only work part time now(plan is ending this month), and the other just started this year for my full time job. I can still contribute for 2007, but can I do it for an account I can't contribute to next month? And yes, I will not exceed the contribution limits with this decision.

I could save around 450 in taxes if I contribute this 1000 of taxed income, sound like a good strategy?

 

[sonambulo]

Originally posted by: EagleKeeper
When you e-file the provider informs you of the estimated time for a refund to be issued.

If you filed with tuition claims, the process just started on Monday 11 Feb.

Use your e-file setup to check for status.

Thanks!

 

[hi tek]

I still haven't received my W-2 yet. Should I call my employer?

 

[EagleKeeper]

Originally posted by: hi tek
I still haven't received my W-2 yet. Should I call my employer?

Question was previously answered within this thread

 

[jersiq]

I sold my home in September, to move across the country.
In previous years I would get a bill from the County/ISD/MUD (which wasn't a bill because I escrowed my taxes, just a statement of the amount I had paid for that year)

I didn't get anything this year.
Can I just use the paperwork provided by the title company to input these values? Or do I have to nag the tax collectors for these functions to give me my paperwork?

 

[EagleKeeper]

Originally posted by: jersiq
I sold my home in September, to move across the country.
In previous years I would get a bill from the County/ISD/MUD (which wasn't a bill because I escrowed my taxes, just a statement of the amount I had paid for that year)

I didn't get anything this year.
Can I just use the paperwork provided by the title company to input these values? Or do I have to nag the tax collectors for these functions to give me my paperwork?

If you feel those numbers are accurate, use them.

Also, remember to file the Form 3903 - Relo Expenses

 

[erwin1978]

I went to the IRS website to try out the Sales Tax Deduction Calculator. It computer $500 general sales tax for me. Does that mean on average people paid $500 in sales tax in my area? Am I entitled to get that back then?

 

[EagleKeeper]

Originally posted by: erwin1978
I went to the IRS website to try out the Sales Tax Deduction Calculator. It computer $500 general sales tax for me. Does that mean on average people paid $500 in sales tax in my area? Am I entitled to get that back then?

The sales tax is able to be used as a deduction instead of the state income tax on the Schedule A.

The calculation is dependent on your income level. Sales tax on big ticket items can also then be added to the calculated amount.

Or you can collect every receipt for 2007 and add up the sales tax paid.

Your choice.

If you do not itemize, the sales tax deduction is meaningless to you.