6th Annual Anandtech Tax Time Thread

[JDub02]

OK, tax gurus ... what would be the benefits of married filing separately? I don't really see much difference, but I can't really think of when I'd want to do that.

 

[SirChadwick]

Originally posted by: JDub02
OK, tax gurus ... what would be the benefits of married filing separately? I don't really see much difference, but I can't really think of when I'd want to do that.

Good question. I just got married last year and would like to know also.

 

[CPA]

Originally posted by: SirChadwick

Originally posted by: JDub02
OK, tax gurus ... what would be the benefits of married filing separately? I don't really see much difference, but I can't really think of when I'd want to do that.

Good question. I just got married last year and would like to know also.

There really isn't much of an advantage anymore. There used to be when the "marriage penalty" was more significant. If you have large medical or casualty losses, it may benefit to file seperately, only because of the % of AGI component. Even then it could be a wash.

 

[EagleKeeper]

Originally posted by: BlahBlahYouToo
i've decided my taxes are too complicated to do (2 states, investment accounts, 2 properties, etc.).
what's the average cost for a competent tax accountant, not HR block plz.

I know of people that are paying $300-500 when they have rental property in play.

Taxes turned over to someone else is dependent on paperwork that you give them.

Most personal returns will have them just punch the numbers into a program and get the results.

 

[pkananen]

Originally posted by: EagleKeeper

Originally posted by: pkananen
If my 1099-MISC has 0.00 for every line item....do I need to report it?

You have a flawed 1099

Technically,you do not need to report the income. However, there is a good chance that the 1099 will get fixed and you will then have to file a 1040X. More paperwork that way.

Well, the 1099-INT and 1099-DIV had non-zero line items, and I reported that.

 

[pontifex]

i started doing my taxes using taxact.com (i used them for the past 2 years).

A few things are confusing me. My total income for 2007 on my federal form and my state form are different. also, in 2006 i made more money than i did in 2007, according to my W2 forms. Either I'm really confused here or my employer lowered my salary and i didn't notice it?

Now in 2008, my adjusted gross income is showing $6665 higher than it was in 2007. I did get a small raise in 2008 and a few bonuses but i don't think it was anywhere near $6665, maybe half that.

Either i'm just being completely stupid and/or missing something or something just doesn't make sense.

I hate dealing with this kind of crap because i really have no fucking idea what any of it means.

 

[CPA]

Originally posted by: pontifex
i started doing my taxes using taxact.com (i used them for the past 2 years).

A few things are confusing me. My total income for 2007 on my federal form and my state form are different. also, in 2006 i made more money than i did in 2007, according to my W2 forms. Either I'm really confused here or my employer lowered my salary and i didn't notice it?

Now in 2008, my adjusted gross income is showing $6665 higher than it was in 2007. I did get a small raise in 2008 and a few bonuses but i don't think it was anywhere near $6665, maybe half that.

Either i'm just being completely stupid and/or missing something or something just doesn't make sense.

I hate dealing with this kind of crap because i really have no fucking idea what any of it means.

Did you change 401K contributions, medical/dental contributions or flexible spending withholdings in any of those years? Your Box 1 reportable income is reduced for all of those.

 

[pontifex]

Originally posted by: CPA

Originally posted by: pontifex
i started doing my taxes using taxact.com (i used them for the past 2 years).

A few things are confusing me. My total income for 2007 on my federal form and my state form are different. also, in 2006 i made more money than i did in 2007, according to my W2 forms. Either I'm really confused here or my employer lowered my salary and i didn't notice it?

Now in 2008, my adjusted gross income is showing $6665 higher than it was in 2007. I did get a small raise in 2008 and a few bonuses but i don't think it was anywhere near $6665, maybe half that.

Either i'm just being completely stupid and/or missing something or something just doesn't make sense.

I hate dealing with this kind of crap because i really have no fucking idea what any of it means.

Did you change 401K contributions, medical/dental contributions or flexible spending withholdings in any of those years? Your Box 1 reportable income is reduced for all of those.

ok, i did start a 401k plan while there, but i don't recall which year that was. it may have been in 2007 but I thought it was earlier than 2007.

 

[EagleKeeper]

Compare your SS lines for 2007 and 2008. That does not take into account any deductions.
That will show slaray adjustments easily.

Then look at the 401K and MEdical deductions as CPA suggested.



You can also go line by line on 2007's 1040 vs 2008's 1040 to see where the differences may be.

 

[JDub02]

I know I can add money to an IRA now and have it count toward 2008. Can I do the same for 401k contributions?

 

[CPA]

Originally posted by: JDub02
I know I can add money to an IRA now and have it count toward 2008. Can I do the same for 401k contributions?

No.

 

[JDub02]

Originally posted by: CPA

Originally posted by: JDub02
I know I can add money to an IRA now and have it count toward 2008. Can I do the same for 401k contributions?

No.

didn't think so, but i had to ask.

taxes suck. maybe i'll set up a non profit organization and give away all of my money to that, then have them pay my bills because their headquarters will be in my apartment.

 

[Shortcut]

i withdrew < $10k from my roth ira to buy a house in '08. on my roth ira 1099r, the distribution code is j.

what should i do when i fill out my tax forms to make sure this transaction is characterized correctly?

 

[puffpio]

Question about deducting home improvements:

From what I've read, I can deduct the sales tax on materials/goods for home improvements (not for home repairs). The problem I have is that the contracters I used for home improvements did not itemize the materials and labor. How can I effectively calculate/estimate the materials portion to figure out the sales tax on it?

 

[JDub02]

Question about the home office deduction ...

my wife is a teacher. she uses part of our apartment has her "office" to plan, grade papers, etc. would that area qualify us for the home office deduction? my understanding of how that works is that we would take the area of the room as a percentage of our apartment and deduct that percentage of our rent. the only thing i don't get is the line "at the convenience of the employer" ... no idea what that means.

related to that, my wife has been thinking about starting a photography business on the side. could we write off the camera, lenses, computer, etc. if they're used for the business? would that qualify for "home office" if the teacher part doesn't?

Thanks.

 

[winnar111]

Originally posted by: JDub02
Question about the home office deduction ...

my wife is a teacher. she uses part of our apartment has her "office" to plan, grade papers, etc. would that area qualify us for the home office deduction? my understanding of how that works is that we would take the area of the room as a percentage of our apartment and deduct that percentage of our rent. the only thing i don't get is the line "at the convenience of the employer" ... no idea what that means.

related to that, my wife has been thinking about starting a photography business on the side. could we write off the camera, lenses, computer, etc. if they're used for the business? would that qualify for "home office" if the teacher part doesn't?

Thanks.

Schedule C your photography business, but if you're only thinking of starting it, I assume you haven't for the year 2008.

Originally posted by: EagleKeeper

Originally posted by: edro
My fiance just finished her first full year of working from home.
She works for another company, but travels for work and works out of her home office.

What all can she deduct?
Her grandfather told her that she could deduct 1/4 of her heat / electric / internet bill (1 room out of 4, her office).
I think that is a stretch, but I think she could deduct something.

Any advice for people who work from home, for another company?

Thanks!

If she works from home for the benefit of the company, she can deduct the proportional square footage or room use as a home office for costs. that includes what was described above, plus also the rent. If the HO is not used for anything else.

However, she should get a statement from the employer stating that she is working from home for their convience. Otherwise the IRS will disallow the home office. Claiming a HO increases the audit risk.

 

[JDub02]

winnar111, thanks.

we didn't get any kind of statement. i think it's just expected that teachers work at home. glad i'm not a teacher.

i realize that the photography business won't be for 2008, but it doesn't hurt to plan for 2009.

 

[CPA]

Originally posted by: puffpio
Question about deducting home improvements:

From what I've read, I can deduct the sales tax on materials/goods for home improvements (not for home repairs). The problem I have is that the contracters I used for home improvements did not itemize the materials and labor. How can I effectively calculate/estimate the materials portion to figure out the sales tax on it?

Are you asking in terms of the Schedule A sales tax deduction in lieu of state income tax deduction?

You will either need to call the contractor or estimate it. Personally, I wouldn't fret too much over the estimate.

 

[CPA]

Originally posted by: Shortcut
i withdrew < $10k from my roth ira to buy a house in '08. on my roth ira 1099r, the distribution code is j.

what should i do when i fill out my tax forms to make sure this transaction is characterized correctly?

If you're using software it should ask you if you used the money to purchase a home. BTW, the home purchase exemption only gets you out of paying the 10% penalty, not the taxes.

 

[puffpio]

Another Q

My wife is attending MBA school while working at the same time. The goal is that the degree will further her career. From what I read, we can deduct the entire tuition as a type of educational career expense, as long as her work doesn't pay for it AND getting the degree doesn't allow her to change fields.

Well, her work is NOT paying for it, and an MBA doesn't really make you eligible for new fields, just makes it easier to get into management and such. But she's in engineering right now and wants to move up into management..is that really switching fields or no?

Basically can we deduct her massive private school MBA tuition?

 

[winnar111]

Originally posted by: puffpio
Another Q

My wife is attending MBA school while working at the same time. The goal is that the degree will further her career. From what I read, we can deduct the entire tuition as a type of educational career expense, as long as her work doesn't pay for it AND getting the degree doesn't allow her to change fields.

Well, her work is NOT paying for it, and an MBA doesn't really make you eligible for new fields, just makes it easier to get into management and such. But she's in engineering right now and wants to move up into management..is that really switching fields or no?

Basically can we deduct her massive private school MBA tuition?

You have to be filing jointly, and can deduct up to $4000. However, depending on your AGI, the LLC might be another option.

 

[puffpio]

well currently we have been deducting the $4000 (more specifically $2000 due to our income level), but it's possible to deduct the entire thing as a business expense (more specifically, anything above 2% of our AGI)

 

[CPA]

Originally posted by: puffpio
well currently we have been deducting the $4000 (more specifically $2000 due to our income level), but it's possible to deduct the entire thing as a business expense (more specifically, anything above 2% of our AGI)

yes, if you itemize.

 

[Squisher]

kinda tax software specific (TurboTax)

The wife exercised stock options on two occasions. On both occasions the sale was reported on her pay stubs with seeing the accompanying sudden increase in taxes paid as we choose to do (the specific taxes from the sale weren't broken out). I also have the printouts from each sale.

The 1099-B from Fidelity and also the online import to TurboTax from Fidelity both only show the gross proceeds of the sale, no cost basis, no taxes paid (fed or state).

I have a choice of entering the info manually from the sales, but this might totally fubar the return because the info was already incorporated into W-2 info of box 1, in box 12 (V), and into total taxes paid.

Should I just not enter any info from the 1099-B?


Well, at least I've got the documentation when I get audited. Thanks Fidelity.

 

[tarak]

I was unable to qualify for the Economic Stimulus Payment (RRC) on my 2007 return due to a higher-than-normal AGI from exercising some stock options. The Q&A from 2007 states:

Q. I don?t qualify for a stimulus payment based on my 2007 return. But my tax situation will be different in 2008. Will I qualify for any special benefit?

A. Possibly. The 2008 tax instructions will include a worksheet to help those who did not qualify for a payment or those who received a reduced amount determine if they can obtain a benefit when they file their 2008 tax returns next year.

Can anyone point me to the worksheet for this? My searches keep pulling up info on the current Stimulus bill. I believe my situation will be even more complicated since my now-wife (unmarried in 2007 but now married in 2008) received the stimulus check last year, and we plan to file jointly this year. I'm hoping I will still be able to claim the $600 ($1200 joint - $600 wife received on 2007 return)

Thanks

EDIT: Nevermind - found the lovely Recovery Rebate Credit Information Center