7th Annual Anandtech Tax Time Thread

[EagleKeeper]

As an update to my situation, looks like I'm going to have about 80% of my taxes paid by April 15th. Still going to owe 20%. Would it help to just call one of their representatives at this point and say "So I underestimated my first year as a contractor, so I'm going to owe some money, but i'll have it to you guys by the end of the month" (which is true).

Would calling them help?

You can file a payment plan, Payment Options Available for Those Who Can’t Pay in Full, with your taxes when you file.
Previously, if you could pay the due amount within 3 months - there was not administrative fee. Otherwise an administrative fee that would get tacked on.

 

[EKKC]

I just wanted to point this out: "To qualify, you must have owned and used the same home as your principal residence for at least five consecutive years of the eight-year period ending on the date you buy your new principal residence."

i read that but it's so confusing, what is 5 cons. years of a 8 year period? I would assume im eligible:

closing of current coop apt: November 2004
move in of current coop apt: January 2005

entered into binding contract of new house: end of March 2010
expected closing of new house: May or June, 2010

as you can see I have more than 5 years in between, but the 8 year period part is just foreign language to me

 

[alkemyst]

many people rent out their 'primary' residence. This rule seals that loophole.

You will have to make the new home your primary residence as well.

 

[onza]

i read that but it's so confusing, what is 5 cons. years of a 8 year period? I would assume im eligible:

closing of current coop apt: November 2004
move in of current coop apt: January 2005

entered into binding contract of new house: end of March 2010
expected closing of new house: May or June, 2010

as you can see I have more than 5 years in between, but the 8 year period part is just foreign language to me

Own the house for EIGHT years, but you have to LIVE in it for FIVE of those years. Pretty clear.

You would have needed to purchase in 2002 to meet the 8 year requirement. In other words you are SOL on the 6,500 credit.

 

[Blackjack200]

Updated: This is what I found on the IRS website:

However, the credit operates much like an interest-free loan, because it must be repaid over a 15-year period. So, for example, an eligible taxpayer who buys a home today and properly claims the maximum available credit of $7,500 on his or her 2008 federal income tax return must begin repaying the credit by including one-fifteenth of this amount, or $500, as an additional tax on his or her 2010 return.

http://www.irs.gov/newsroom/article/0,,id=186831,00.html

So it looks like I have to repay this starting in 2011. And I was off a bit on my numbers. $7,500 loan that need to be paid in 15 installments = $500 per year.

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Original:

Sorry if this has been asked and answered but...

I got a $15,000 check from the gov'ment for purchasing a home in June of 2008. This was not straight credit, but an interest free loan that was supposed to be paid back 10% per year for 10 years (paid as increased tax liability). I bought the house a few months before they changed the incentive to a straight credit (FML)

I'm pretty sure I paid $1,500 on my 2008 return for this. I remember they were discussing converting the loan to a credit that wouldn't have to be repaid, but AFAIK, this never happened.

The weird thing is, I'm telling Turbo Tax about this, and Turbo Tax insists that as long as I still own the house and live in it (which I do) I don't have to pay one red freaking cent.

What's going on here?

Edit: Just saw this in the OP:

Those that filed for the 2008 "loan" when purchasing in 2009 can file an amended return to turn the loan into a credit.
Those that have filed for 2008 and purchased in 2009 can file an amended return for 2008 or apply for the credit on the 2009 filing.
All taxpayers listed on the return MUST qualify as "first timers"
If purchasing with a SO, each can claim a proportion of the available credit. This does not mean that each can claim up to 8K for a 160K house.

But I didn't buy in 2009, I bought in 2008. Can I just send my return in and let the IRS sort it out?

 

[StageLeft]

Can someone please answer this one, stat?

Last year I put $1500 into a scottrade account. I bought some stock, sold some stock, basically dicked around and honestly ended up I think in the hole. Anyway, on turbotax now I imported my 1099 from scottrade and I have the paper copy in front of me. There's only $4 in dividends but "proceeds from broker transactions" (sales) are almost $7k and were reported as income, so my tax bill just went up by more than the $1500 for pete's sake once I got this data into Turbotax! The "non-reportable" part of the 1099 shows I _actually_ put in more than the $7k, so my net gain/loss is in fact negative; if anything I should be paying less taxes.

Why are the purchases not reported? How can I reconcile this?

Second question: I got a Schedule K-1 from one of the company's I bought stock in. Do I need to bother with it? I had assumed that gain/loss would be fine from the scottrade 1099 (and this stock is one of the ones listed in it).

 

[Xcobra]

Can someone please answer this one, stat?

Last year I put $1500 into a scottrade account. I bought some stock, sold some stock, basically dicked around and honestly ended up I think in the hole. Anyway, on turbotax now I imported my 1099 from scottrade and I have the paper copy in front of me. There's only $4 in dividends but "proceeds from broker transactions" (sales) are almost $7k and were reported as income, so my tax bill just went up by more than the $1500 for pete's sake once I got this data into Turbotax! The "non-reportable" part of the 1099 shows I _actually_ put in more than the $7k, so my net gain/loss is in fact negative; if anything I should be paying less taxes.

Why are the purchases not reported? How can I reconcile this?

Second question: I got a Schedule K-1 from one of the company's I bought stock in. Do I need to bother with it? I had assumed that gain/loss would be fine from the scottrade 1099 (and this stock is one of the ones listed in it).

Well, the "non-reportable" details contain your basis for your stocks. To be honest I haven't gotten curious enough to find why they aren't reported. In the end, your sales proceeds will be offset by the basis of that stock. It seems like you have a loss. The loss is limited to (3,000), (1,500) if filing MFS. The software should ask you about your basis and it will do the calc automatically. And YES, you need to report that K-1 income/loss. Not sure how Turbotax handles that as I don't use that for myself. Someone might know exactly.

 

[StageLeft]

Well, the "non-reportable" details contain your basis for your stocks. To be honest I haven't gotten curious enough to find why they aren't reported. In the end, your sales proceeds will be offset by the basis of that stock. It seems like you have a loss. The loss is limited to (3,000), (1,500) if filing MFS. The software should ask you about your basis and it will do the calc automatically. And YES, you need to report that K-1 income/loss. Not sure how Turbotax handles that as I don't use that for myself. Someone might know exactly.

Thanks. I'm glad I have some KY at home because it turns out TT wants $25 for me to calculate this information, but I did (I think) find the section

Oh sweet, this is an ice little scam turbotax has going on. Basically I just paid $25 for a single screen. I guess I "have" to unless I just redid this all in taxact (normally I do that but I cannot be bothered right now).

 

[manlymatt83]

OK, filed my taxes today. I owe $9k to the IRS and $5k to the state of Massachusetts. I can pay $7k before April 15th - how should I split it up?

Also, apparently Massachusettes has an extension to May 11?

 

[Xcobra]

OK, filed my taxes today. I owe $9k to the IRS and $5k to the state of Massachusetts. I can pay $7k before April 15th - how should I split it up?

Also, apparently Massachusettes has an extension to May 11?

Well I think State penalties tend to be higher than federal. Might want to look it up.

 

[eLiu]

I have several questions about over-contributing to a Roth IRA. First, some background:

I'm a graduate student supported by a DOE fellowship. I do not receive a W-2; there is no automatic withholding program. Thus I have 0 "earned income" or "compensation" (i.e. box1, form W-2).

Last year, I opened a Roth IRA acct with ETrade, thinking that starting to save for retirement would be a good idea. Too bad the government disagrees. I didn't realize that I'm not allowed to hold an IRA until very recently.

Anyway I contributed 10,000 to that Roth: 5000 under the 08 limit & 5000 under the 09 limit. I invested it all in stocks/mutual funds; the acct is currently worth about 16k.

As I understand it, if I don't withdraw ALL of the money before tax-day, I will owe a 6% excise tax on 10,000.

So fine, I'll close the account. I instructed Etrade to shut it down & distribute/deposit the cash/securities to my regular trading account. But I am horribly confused on what taxes/penalties I will owe. In the account, there is:
$10.50 cash
210 shares DHT (stock)
354 shares HGSI (stock)
18.482 shares VFINX (large cap index fund: all stocks)
45.129 shares OAKBX ("equity and growth" fund: has stocks AND treasury bills)
Current value is ~16k, which includes dividends earned from the 2 funds.

It sounds like the assets will just be moved into my regular trading acct, as opposed to me having to sell & re-buy them.

So do I owe early withdrawal fee (10%) on (16000 - 10000) ?
Or do I only owe the 10% fee on the dividends from the mutual funds & the 10.50 cash? (And I'll owe 10% on the securities when/if I sell them.)
Or is it something else entirely?

I assume I also owe some income tax on the earnings from my Roth. Do I just owe on the interest for now? Will I be forced to pay capital gains taxes on the securities as well? Or will that be delayed until I actually sell the securities?

What form(s) will I need to fill out to report all of this correctly to the IRS? I think I should receive a 1099R with the distribution. I think I will need to file 8086 and 5329 too?

Another question actually: shouldn't etrade have prevented me from establishing a roth in the first place? UGhhhhhhhhhh!

Thanks guys,
-Eric

Also, f*ck you government. How is it that I have taxable income but no earned income? You don't think being a graduate student involves work? I didn't earn my fellowship? Why aren't I allowed a retirement account?! /rant

 

[eLiu]

OK, filed my taxes today. I owe $9k to the IRS and $5k to the state of Massachusetts. I can pay $7k before April 15th - how should I split it up?

Also, apparently Massachusettes has an extension to May 11?

Yeah it seems like MA residents have an extension on federal AND state taxes for residents of Bristol, Essex, Middlesex, Norfolk, Plymouth, Suffolk and Worcester Counties.

So presumably if you live in one of those counties, you have until May 11 to gather up the additional 7k?

Sources:
Federal:
http://www.irs.gov/newsroom/article/0,,id=220830,00.html

MA State:
http://www.mass.gov/?pageID=dorterm...eases_2010_filing_deadline_extended&csid=Ador

http://www.mass.gov/?pageID=dorterm...lcontent&f=dor_rul_reg_tir_tir_10_7&csid=Ador

 

[manlymatt83]

Yeah it seems like MA residents have an extension on federal AND state taxes for residents of Bristol, Essex, Middlesex, Norfolk, Plymouth, Suffolk and Worcester Counties.

So presumably if you live in one of those counties, you have until May 11 to gather up the additional 7k?

Sources:
Federal:
http://www.irs.gov/newsroom/article/0,,id=220830,00.html

MA State:
http://www.mass.gov/?pageID=dorterm...eases_2010_filing_deadline_extended&csid=Ador

http://www.mass.gov/?pageID=dorterm...lcontent&f=dor_rul_reg_tir_tir_10_7&csid=Ador

Right. I don't want to take advantage of that though as I was not one affected by the flooding, so I'm making my best efforts to get everything in by the 15th.

 

[dxkj]

I searched internship and graduate and didn't see any answers so I thought Id toss out a quick tax question.

My wife is a graduate student and in 2009 she applied for several internships and traveled to several interviews which included mileage driving to some, as well as plane flights, hotel stays, and meals, etc.

Ive read that it is possible to deduct travel expenses while looking for jobs and interviewing, but is it the same for a graduate student when looking for (paid) internships at the very least? Any help appreciated, I think I know where to fill out the proper information for general travel expenses for business.

 

[EagleKeeper]

I searched internship and graduate and didn't see any answers so I thought Id toss out a quick tax question.

My wife is a graduate student and in 2009 she applied for several internships and traveled to several interviews which included mileage driving to some, as well as plane flights, hotel stays, and meals, etc.

Ive read that it is possible to deduct travel expenses while looking for jobs and interviewing, but is it the same for a graduate student when looking for (paid) internships at the very least? Any help appreciated, I think I know where to fill out the proper information for general travel expenses for business.

You will have to use the Schedule A and fill out the Form 2106 to handle job search expenses.

 

[joe678]

Does filing as married, either jointly or separately generally trigger AMT more easily than single? I've found in filing this year to have pretty much the same circumstances, albeit roughly 10k higher in earnings. The only other factor was now filing married, otherwise similar interest, real estate tax deductions. I tried deducting graduate school expenses as well over the 2% minimum but AMT nixes that pretty quick.

Is there anyway around this so called AMT?

 

[Pollock]

I have an internship this summer and have the option to be paid $6000 via either stipend or scholarship. Which option would minimize my tax profile? I already receive overage each quarter from my current scholarships, so I don't know if that would complicate it. I also made ~$9000 last quarter with another co-op and had no federal income tax withholding (claimed dependent).

Just trying to find the best option.

 

[foghorn67]

I can't remember. Did we receive a stimulus check for $250 last year?
TurboTax is asking me, and I can't verify with the Social Security site.

Was this for every Tom, Dick and Harry? Or was it retired folks?

 

[slashbinslashbash]

Well, the "non-reportable" details contain your basis for your stocks. To be honest I haven't gotten curious enough to find why they aren't reported. In the end, your sales proceeds will be offset by the basis of that stock. It seems like you have a loss. The loss is limited to (3,000), (1,500) if filing MFS. The software should ask you about your basis and it will do the calc automatically. And YES, you need to report that K-1 income/loss. Not sure how Turbotax handles that as I don't use that for myself. Someone might know exactly.

Basically, the IRS only cares when you RECEIVE money from sale of a stock. It does not care what you pay out. Your broker is required to send a form in to the government of all "reportable" stuff, i.e. all proceeds from sales. You are responsible for reconciling it with the non-reportable stuff, i.e. all purchases. It's sort of like receiving a 1099 for contract work. The full amount is reported to the government by the person creating the 1099, but the taxpayer will deduct expenses etc. from that amount on their tax return.

Just a note to everybody -- this has probably been covered in this thread already, but I almost skipped over this because I generally use my last year's tax forms to help fill out this year's, and this line wasn't on last year's. Be sure to fill out Schedule "M" and the corresponding Line 63 on your 1040. You will get $400 as a CREDIT (not just a deduction) if you have middle-class-level income. This is the "Making Work Pay" tax credit.

 

[onza]

I can't remember. Did we receive a stimulus check for $250 last year?
TurboTax is asking me, and I can't verify with the Social Security site.

Was this for every Tom, Dick and Harry? Or was it retired folks?

https://sa1.www4.irs.gov/irfof-mwp/start.do

 

[Freejack2]

Mine might be a bit more complicated.
In 2009 I had a part time business which I drove 417 miles for. And I worked for an employer whom I drove 11,862 miles for (I have excluded commuter miles already). My employer only pays me 41 cents a mile. Can I claim the 14 cent per mile difference on my taxes, or is it not worth bothering as it's going to be less than the standard mileage deduction.

If it is worth filing, how do I file it? I tried to put the mileage in the employment expenses section but I don't see a way to enter the fact that my employer did pay 41cents of the 55cents a mile.
Thanks

 

[JPeac2]

All -

Question surrounding second home interest on a loan with two people signed. Myself and a friend own a sailboat that does fall under a second home. However, the other owner has offered I can claim 100% of the interest of the loan for the year. The loan has two names on it, but only one interest form for the year.

Can I legally claim all 100% of the interest on the loan, even though we split the loan payments every month?

Not sure if this matters, but we both fund a mutual checking account from our own independent bank accounts. From there, that mutual account pays the payment each month.

What do you think?

 

[alkemyst]

You can claim 100% of any part of a partnership like that. Just make sure your partner isn't doing a double dip. They will catch it, if not next year; within the next 7.

 

[slashbinslashbash]

Mine might be a bit more complicated.
In 2009 I had a part time business which I drove 417 miles for. And I worked for an employer whom I drove 11,862 miles for (I have excluded commuter miles already). My employer only pays me 41 cents a mile. Can I claim the 14 cent per mile difference on my taxes, or is it not worth bothering as it's going to be less than the standard mileage deduction.

If it is worth filing, how do I file it? I tried to put the mileage in the employment expenses section but I don't see a way to enter the fact that my employer did pay 41cents of the 55cents a mile.
Thanks

If your employer pays you 41 cents per mile, and you want to claim the 55 cent standard rate, you add the 41 cents * 11862 miles = $4863.42 to your gross income (assuming it's not already in there), and then deduct the $6524.10 as an expense.

 

[Freejack2]

If your employer pays you 41 cents per mile, and you want to claim the 55 cent standard rate, you add the 41 cents * 11862 miles = $4863.42 to your gross income (assuming it's not already in there), and then deduct the $6524.10 as an expense.

Thank you, though I'm a little confused. My employer didn't list it anywhere on my W2 statement. I think it was treated as a reimbursement and not income as it was a separate line on my paystub. Where do I list this on the w2 form in the tax site? Do I just add the 4863.42 to my income on line 1, or do I list it somewhere else?