6th Annual Anandtech Tax Time Thread

[JS80]

Originally posted by: CPA

Originally posted by: JS80
LULZ WTF WHY DO I OWE AMT? MY WIFE WORKED HALF THE YEAR AND WE DON'T EVEN HAVE A MORTGAGE.

You make too much money.

woo

Check here to treat the AMT and the listed credits according to the prior law for planning purposes.

just increased my tax refund by $3k

 

[rasczak]

not for this year, but more for next year.

I currently have a tax withholding of 6. I barely pay any taxes now, but I am starting a second part time job tonight. When I fill out the W2 (or 4), should I put down a zero, to have the max taken out of my second check? As well, my wife is going back to work, what would be a good amount to have witheld from her monthly checks?

We are currently a single income family in San Diego.

Thanks!

 

[IHateMyJob2004]

My wife has her own in home day care.

She received a check in Dec 2008 but cashed it in Jan 2009. In what year is that income considered taxable? 2008 or 2009?

 

[EagleKeeper]

Originally posted by: rasczak
not for this year, but more for next year.

I currently have a tax withholding of 6. I barely pay any taxes now, but I am starting a second part time job tonight. When I fill out the W2 (or 4), should I put down a zero, to have the max taken out of my second check? As well, my wife is going back to work, what would be a good amount to have witheld from her monthly checks?

We are currently a single income family in San Diego.

Thanks!

A rough rule of thumb is to add up the number of people in the family and add 1.
That is the total sum of W4 exemptions for the family unit when working.

If there are multiple jobs, then add the exemptions put in place for EACH job


Example: Job 1 has a W4 number of 3, Job 2 has a W4 number of 2. Total W4 numbers is 5.
That should come close to a family of 4 with full time income from both jobs.

For partime jobs, much depends on the primary income amount.
IF the amount if greater than 50% of the parttime job (per week), set the part time to 0.
Else set the partime to 1.

 

[EagleKeeper]

Originally posted by: IHateMyJob2004
My wife has her own in home day care.

She received a check in Dec 2008 but cashed it in Jan 2009. In what year is that income considered taxable? 2008 or 2009?

It should be 2008, especially if it was for services provided in '08.
If it was for services to be provided in '09, then it could go either way without problems.

For the home business, dig deep. There are a lot of misc items that can be deducted (fully or proportionally).

 

[IHateMyJob2004]

Originally posted by: EagleKeeper

Originally posted by: IHateMyJob2004
My wife has her own in home day care.

She received a check in Dec 2008 but cashed it in Jan 2009. In what year is that income considered taxable? 2008 or 2009?

It should be 2008, especially if it was for services provided in '08.
If it was for services to be provided in '09, then it could go either way without problems.

For the home business, dig deep. There are a lot of misc items that can be deducted (fully or proportionally).

My wife has looked into it. Might as well double check.

1) Playscape($1000) .... we only bought it because of day care but we have 2 children. So there was a question about deducting it. My wifes research says that it is deductible. When I say it was for ay care, sure it was also for our kids in part, but without the income from day care we would never have bought it.

2) Taking the kids in day care on short trips to the library and town park. I told her to track her mileage and she has. So, we know the mileage and I am almost certain that this is deductible. The only thing is, what is the rate per mile that we can deduct the mileage at?

3) In 2008, we were paid a down payment to hold a slot for an unborn child in 2009. That money is a credit that these people will use in 2009. That is, they gave us $500 and that will pay for services in 2009. So, is this 2008 or 2009 taxable income?

 

[pontifex]

Is there anything in the tax forms about losing your job? I lost my job due to budget cutbacks. Although, since my position wasn't formally terminated until 1/2/2009, it would probably go on next year's taxes, right?

 

[EagleKeeper]

Originally posted by: IHateMyJob2004

Originally posted by: EagleKeeper

Originally posted by: IHateMyJob2004
My wife has her own in home day care.

She received a check in Dec 2008 but cashed it in Jan 2009. In what year is that income considered taxable? 2008 or 2009?

It should be 2008, especially if it was for services provided in '08.
If it was for services to be provided in '09, then it could go either way without problems.

For the home business, dig deep. There are a lot of misc items that can be deducted (fully or proportionally).

My wife has looked into it. Might as well double check.

1) Playscape($1000) .... we only bought it because of day care but we have 2 children. So there was a question about deducting it. My wifes research says that it is deductible. When I say it was for ay care, sure it was also for our kids in part, but without the income from day care we would never have bought it.

2) Taking the kids in day care on short trips to the library and town park. I told her to track her mileage and she has. So, we know the mileage and I am almost certain that this is deductible. The only thing is, what is the rate per mile that we can deduct the mileage at?

3) In 2008, we were paid a down payment to hold a slot for an unborn child in 2009. That money is a credit that these people will use in 2009. That is, they gave us $500 and that will pay for services in 2009. So, is this 2008 or 2009 taxable income?

1) Fully deductible. The intent was for the business, consider your kids using it as advertising.

2) The mileage rate is identified in the OP. You may wish to compare the value of using the mileage vs the expenses. The expenses will get you depreciation of the vehicle, insurance and maintainence costs. (Proportional to mileage use). It is best to look at both options (Some tax S/W will allow you to enter all the info and then make a recommendation.)

3) I would take the $500 as 2009 income. It was not for any services performed in 2008.

Look at any improvements you may have made to the house to support the day care.
Utilities & entertainment can be proportional to the footage (or rooms) percentage of the house used for the day care.

 

[EagleKeeper]

Originally posted by: pontifex
Is there anything in the tax forms about losing your job? I lost my job due to budget cutbacks. Although, since my position wasn't formally terminated until 1/2/2009, it would probably go on next year's taxes, right?

There is nothing to benefit you when you have lost your job.

If you get severance pay or vacation payout, then that will show up on the W2 for when the payment was made.

If you collect unemployment, remember it will be taxable at the end of the year.

 

[shikhan]

So for the last two years, I've done my own taxes - they've been pretty simple, just job, some reloc, and some stocks that got a bit messy.

This year, I'm debating if I should get an accountant. I got married, which in itself shouldn't make it too complicated, but she is a student who is here on a F1 visa, so I'm wondering what parts of her expenses I will be able to claim and which I can't.

 

[EagleKeeper]

Originally posted by: shikhan
So for the last two years, I've done my own taxes - they've been pretty simple, just job, some reloc, and some stocks that got a bit messy.

This year, I'm debating if I should get an accountant. I got married, which in itself shouldn't make it too complicated, but she is a student who is here on a F1 visa, so I'm wondering what parts of her expenses I will be able to claim and which I can't.

There should be no expenses that you can claim.
If she has a tax ID or a SS#, then you can claim married-joint.

Otherwise, you have to file as before, single

 

[shikhan]

Originally posted by: EagleKeeper

Originally posted by: shikhan
So for the last two years, I've done my own taxes - they've been pretty simple, just job, some reloc, and some stocks that got a bit messy.

This year, I'm debating if I should get an accountant. I got married, which in itself shouldn't make it too complicated, but she is a student who is here on a F1 visa, so I'm wondering what parts of her expenses I will be able to claim and which I can't.

There should be no expenses that you can claim.
If she has a tax ID or a SS#, then you can claim married-joint.

Otherwise, you have to file as before, single

Ah, i forgot to mention - she does have a SS#. Since I was planning to file married-joint, does this mean we can claim her education as well?

 

[EagleKeeper]

Originally posted by: shikhan

Originally posted by: EagleKeeper

Originally posted by: shikhan
So for the last two years, I've done my own taxes - they've been pretty simple, just job, some reloc, and some stocks that got a bit messy.

This year, I'm debating if I should get an accountant. I got married, which in itself shouldn't make it too complicated, but she is a student who is here on a F1 visa, so I'm wondering what parts of her expenses I will be able to claim and which I can't.

There should be no expenses that you can claim.
If she has a tax ID or a SS#, then you can claim married-joint.

Otherwise, you have to file as before, single

Ah, i forgot to mention - she does have a SS#. Since I was planning to file married-joint, does this mean we can claim her education as well?

As long as her education meets the guidelines for the Hope or LLC (depending on school year) those authorized expenses should be able to be written down.

 

[mb]

Originally posted by: EagleKeeper

Originally posted by: mb

Originally posted by: EagleKeeper
Now, let the questions begin.

Why do I always have to do all the work for my company's 1099s each year?

Possibly because everyone else is able to figure out how to keep their heads below the work radar

Ok, I've got a real 1099 question this time!

We occasionally sell houses to people and lease them back. Usually we pay rent directly to the individual and 1099 that individual.

We are currently paying rent on one of the houses to a trust fund account at a bank on behalf of an individual. The W9/federal ID I have is for the bank, and currently the system is setup to kick out a 1099 to the bank. Is this OK? Or do we need to get a W9 from the individual and 1099 him instead?

Thanks!

 

[Bignate603]

I've got a question about financial aid.

My wife and I were both in school last year. We both were eligible for financial aid and she also had a scholarship. My financial aid didn't cover my tuition but her aid and scholarship left her with money in her pocket. Now, from what I understand the scholarship and financial aid are not taxable if they are used for tuition or other approved school expenses. Can we apply her aid and scholarships towards my tuition so that we don't end up being taxed for that money?

 

[EagleKeeper]

Originally posted by: Bignate603
I've got a question about financial aid.

My wife and I were both in school last year. We both were eligible for financial aid and she also had a scholarship. My financial aid didn't cover my tuition but her aid and scholarship left her with money in her pocket. Now, from what I understand the scholarship and financial aid are not taxable if they are used for tuition or other approved school expenses. Can we apply her aid and scholarships towards my tuition so that we don't end up being taxed for that money?

You should not do so. The funds were intended for her use not both of you.

 

[Demon Bitch]

Is it true that filing for an extension reduces your chances of being audited?

 

[EagleKeeper]

Originally posted by: mb

Originally posted by: EagleKeeper

Originally posted by: mb

Originally posted by: EagleKeeper
Now, let the questions begin.

Why do I always have to do all the work for my company's 1099s each year?

Possibly because everyone else is able to figure out how to keep their heads below the work radar

Ok, I've got a real 1099 question this time!

We occasionally sell houses to people and lease them back. Usually we pay rent directly to the individual and 1099 that individual.

We are currently paying rent on one of the houses to a trust fund account at a bank on behalf of an individual. The W9/federal ID I have is for the bank, and currently the system is setup to kick out a 1099 to the bank. Is this OK? Or do we need to get a W9 from the individual and 1099 him instead?

Thanks!

Our theory is that the Trust should get the 1099.

It would be best to retain a local tax attourney on this one.

 

[EagleKeeper]

Originally posted by: Demon Bitch
Is it true that filing for an extension reduces your chances of being audited?

I would not put money on that theory.

If you do not cut corners, an audit will have no consequences.

 

[mAdMaLuDaWg]

Quick question going back to my first home purchase which I use as a rental with a roommate. How do I go about deducting the taxes/points I paid for the property? Do I declare it under rental income or do I declare it under my home purchase deduction. Same goes with depreciation/improvements, where do I deduct from? Can I split all taxes/improvements 50-50?

Also, it seems I have a NOL (Net Operating Loss). I can carry it back two years or carry it forward 20 years. I paid around $2.5k in taxes last year. Which do you recommend, also it seems I have to do that outside of TurboTax using Form 1040x correct? Is it worth the trouble or shall I just carry it forward?

BTW, I'm using TurboTax Premier if that helps any.

 

[EagleKeeper]

Originally posted by: mAdMaLuDaWg
Quick question going back to my first home purchase which I use as a rental with a roommate. How do I go about deducting the taxes/points I paid for the property? Do I declare it under rental income or do I declare it under my home purchase deduction. Same goes with depreciation/improvements, where do I deduct from? Can I split all taxes/improvements 50-50?

Also, it seems I have a NOL (Net Operating Loss). I can carry it back two years or carry it forward 20 years. I paid around $2.5k in taxes last year. Which do you recommend, also it seems I have to do that outside of TurboTax using Form 1040x correct? Is it worth the trouble or shall I just carry it forward?

BTW, I'm using TurboTax Premier if that helps any.

any adjustments back in time will require a 1040x; as you discovered, you can not cross years in the Tax s/W for a 1040X.

The NOL should only be able to be carried back if had the property during the previous two years. It may work without the ownership, but it would raise a flag. Where you just purchased the property, it would be advisable to carry the loss forward.

The Tax s/W should ask you for the total amounts paid and then determine the proper percentage to apply to the Schedule E (Rental) and the Schedule A. Everything should be adjusted according to the proportion percentage that you determined and provided to the S/W.

 

[jiggahertz]

I was considering donating jewelry to a charitable organization. I was looking at form 8283 where it asks for the fair market value (FMV). Would this be the value from an appraisal or an estimate/actual value of how much this charity could raise by selling it at auction for example. Also, would I need a special kind of appraisal for tax purposes?

 

[EagleKeeper]

Originally posted by: jiggahertz
I was considering donating jewelry to a charitable organization. I was looking at form 8283 where it asks for the fair market value (FMV). Would this be the value from an appraisal or an estimate/actual value of how much this charity could raise by selling it at auction for example. Also, would I need a special kind of appraisal for tax purposes?

Fair Market value if you were to sell it or insure it.
It would be best to have a statement from someone other than your local pawn broker to back you up if questioned.

 

[MoSuaveA]

Great thread.

Even though I received (and still have) my 1098-T forms for my grad school the past 2 filings (2006, 2007) I neglected to include them because I did not know I was eligible for Lifetime Learning because I was paying with borrowed funds (Stafford loans). Now that I actually did my homework, something I should have done in the past, I realize I missed out on this credit.

I filed my taxes online using TaxAct and have access to those returns. I know I have to file a 1040x in order to amend those returns. Some questions:

Is there anything else I need to file along with this form? (i.e. Form 8863 or a copy of my 2006 and 2007 filings, copy of my 1098-T's)
Is this something I can/should do myself or am I better off asking a professional?

Thanks for the help and great thread.

 

[alchemize]

This is more for planning 2009 taxes on a home I bought in 2008.

Bought a house in May 2008. Now I'm going to be moving (job). Don't want to take a huge loss on this house...can I rent out the house for a while, then sell the house and deduct any losses/sales expenses? Is there a time required to rent the house to make it a "rental property"?

I'm delving through 527/544 but this is tough reading