9th Annual Tax Thread - 2011

[Imported]

are you saying box 2a says "UNKNOWN"?

Yes, Box 2a says UNKNOWN.

 

[EagleKeeper]

Yes, Box 2a says UNKNOWN.

Select Tools
Select Topic Search
Enter 1099-R
Select Go To
Enter data for form

 

[CPA]

Yes, Box 2a says UNKNOWN.

then he doesn't have taxable income. Use the amount in box 9b for his nontaxable proceeds.

 

[AlienCraft]

My employer has decided to not file a 1099 form for the aprox. $20k dollars that they have previously filed. Seriously, according to my supervisor, they are not reporting any of it and that's that. :'(

This payment has been labeled the lease payment for their use of our vehicle for delivering their stuff.
Soooo..... I guess I'll just file on the W-2 income and do an Amended filing if they come back looking for more?

*** All other tax considerations aside ***Pretty fucked for a Mid Level corporation to duck out of such things. Considering all the people who they put at risk, not to mention having State of California come looking for money they're owed, no?

 

[CPA]

My employer has decided to not file a 1099 form for the aprox. $20k dollars that they have previously filed. Seriously, according to my supervisor, they are not reporting any of it and that's that. :'(

This payment has been labeled the lease payment for their use of our vehicle for delivering their stuff.
Soooo..... I guess I'll just file on the W-2 income and do an Amended filing if they come back looking for more?

*** All other tax considerations aside ***Pretty fucked for a Mid Level corporation to duck out of such things. Considering all the people who they put at risk, not to mention having State of California come looking for money they're owed, no?

Is this money they paid you?

If so, and you don't report it, regardless of receiving a 1099, you could be in just as much trouble.

 

[EagleKeeper]

You should declare that income using the Schedule C

And then because it was leased from you, deduct/expense off costs related to the lease using the same form.
Then you can also write off some indirect costs with supporting the lease.

As CPA states, you are not setting yourself up.
If the IRS ever looks at the "lease"; they can start to trace the lease payments.

 

[saver]

Which date is the actual date of sale
I bought land in 2007 and sold it in 2011. I need the correct dates for the tax form.

The Putnam County Property Assessment Data Sheet says under section Sale Information:

08/08/2007 I bought it.
12/19/2011 I sold it.

I thought those would be the dates but the Realtor told me to use the dates on the HUD Settlement Statements which would be:

08/14/2007 and 12/21/2011 respectively.

Which do I use?

 

[EagleKeeper]

It will not make a difference of a couple days. As long as you use the same set of dates.

 

[AlienCraft]

Is this money they paid you?

If so, and you don't report it, regardless of receiving a 1099, you could be in just as much trouble.

Yes, it's paid to me. I guessed that NOT reporting it is the worst choice.

 

[AlienCraft]

You should declare that income using the Schedule C

And then because it was leased from you, deduct/expense off costs related to the lease using the same form.
Then you can also write off some indirect costs with supporting the lease.

As CPA states, you are not setting yourself up.
If the IRS ever looks at the "lease"; they can start to trace the lease payments.

Been there, filed that before. I guess we'll just do it like we ordinarily have and not worry about the lack of form 1099.
This is the first year they've not given us 1099's. They are currently under scrutiny as there is a class action suit filed regarding wage issues.

 

[Imported]

Select Tools
Select Topic Search
Enter 1099-R
Select Go To
Enter data for form

then he doesn't have taxable income. Use the amount in box 9b for his nontaxable proceeds.

Thank you!

 

[Imp]

Crap. Realized I need a "professional" to do my taxes. Capital gains are too screwed up, and I'm too lazy to learn. I did it last year, but turns out I wasn't doing it right by not using average costs, bla bla bla....

 

[EagleKeeper]

Crap. Realized I need a "professional" to do my taxes. Capital gains are too screwed up, and I'm too lazy to learn. I did it last year, but turns out I wasn't doing it right by not using average costs, bla bla bla....

Professional is not going to help you out of your mess. All you are doing is paying them to point it out and ask you to provide the proper info.

You play the market; keep the records.

Otherwise when you sell, Uncle will treat the sale as 100% gain.

If you are in Canada based on your profile, it may be different; I expect the basic concept is still the same.

 

[Imp]

Professional is not going to help you out of your mess. All you are doing is paying them to point it out and ask you to provide the proper info.

You play the market; keep the records.

Otherwise when you sell, Uncle will treat the sale as 100% gain.

If you are in Canada based on your profile, it may be different; I expect the basic concept is still the same.

Okay, one day later, post freak-out, I figured most of it out, and think I finished. I'll do the actual tax filing tomorrow. Still a bit confused about "superficial losses", but once my cold subsides and my brain isn't dosed up on Tylenol, I think I'm good.

I do keep track of every single transaction within minutes that I buy/sell, but I also get an annual transaction record for all transactions and dividend payments. I freaked out seeing the 10 pages of transactions... I was thinking an accountant may help me compile them and add them properly, then realized they'd probably bill me for that, (up the ass - it took me 4 hours) so thank goodness I'm cheap.

So, turns out I made more in dividends last year than I earned by buying/selling. And I thought dividends was for losers...

 

[EagleKeeper]

Okay, one day later, post freak-out, I figured most of it out, and think I finished. I'll do the actual tax filing tomorrow. Still a bit confused about "superficial losses", but once my cold subsides and my brain isn't dosed up on Tylenol, I think I'm good.

I do keep track of every single transaction within minutes that I buy/sell, but I also get an annual transaction record for all transactions and dividend payments. I freaked out seeing the 10 pages of transactions... I was thinking an accountant may help me compile them and add them properly, then realized they'd probably bill me for that, (up the ass - it took me 4 hours) so thank goodness I'm cheap.

So, turns out I made more in dividends last year than I earned by buying/selling. And I thought dividends was for losers...

there are tracking programs for transactions out there for a few $$.

Or just as good, use Excel with different columns for each piece of info.

With either option, then you can easily look at the brokerage report and ensure that everything is tagged.

 

[sactoking]

Somewhat complicated question here:

My wife is self-employed and we formed an LLC for her business. She and I are the only two members and we elected to be treated as a multi-member LLC instead of a single-member LLC because Nevada affords certain additional legal protections for multi-member LLCs.

We're now looking at filing Form 2553 to have the partnershp taxed as an S-Corp for the distribution SE tax benefits. She handles most of the business activity except the bookkeeping and taxes, which I do. We don't have an issue paying her a reasonable wage under the S-Corp rules but my work makes things difficult. Is it possible to pay me a very low wage (like $5,000) under the premise that I only work 25 hours per year and have that pass the IRS "reasonable wage" test? I was concerned that showing that few hours would make participation a passive activity for me but under the Pub 925 rules I can count my spouse's activity as my own, so I don't think that should be a problem.

Our Operating Agreement stipulates that she gets 75% of the revenue and I get 25% but I'm under the impression that that does not have any bearing on the wages paid.

Edit: Also, we have a small (~$900) §129 carryover from 2010. Would the change to S-Corp taxation affect that carryover at all?

Edit2: In doing some research it looks like if we elect s-corp treatment then we will be subject to FUTA, SUTA, and our state's Modified Business Tax since we will be a "corporation" paying "wages", but if we stay a disregarded LLC then we won't pay any of those taxes. It looks like we should only elect sub-s if the total taxable income will be greatly in excess of the distributions required to pay our bills.

 

[Dear Summer]

I am supposed to receive a refund from the state of CA.
I already got my federal refund.
I got a mail from the state of CA (not sure which department but it is in Sacramento, CA) to mail back copies of my W2 forms and social security card to verify by SS #. I sent all of what I could and haven't heard anything. How do I get my refund?

 

[EagleKeeper]

I am supposed to receive a refund from the state of CA.
I already got my federal refund.
I got a mail from the state of CA (not sure which department but it is in Sacramento, CA) to mail back copies of my W2 forms and social security card to verify by SS #. I sent all of what I could and haven't heard anything. How do I get my refund?

1) Did you send by certified mail.
2) Use the CA tax site to find number to call.

More than likely, CA has someone else filing a return using your number.

Given what I know of CA system, they will send you a check and then send a letter to the address that also filed asking for verification and not follow up on who is legit and who is fake. For a few dollars, it will not be worth their time. However, expect this from now on when filing in CA

 

[Imp]

Boo ya, just filed mine electronically: 1.5 hours with software + 4 hours adding cap gains.

I'm getting $666 back! Gonna be one hell of a year.

 

[Xellos2099]

I need a little help here. I am helping my parents doing the tax and this year there are some tricky topic like mutual funds average cost. I completely understand that IRS do';t care if I under claim the cost basis but want to be as accurate as possible without spending too much time on it.

Calculation average is easy enough but it get pretty confusing if we count the reinvestment. Let me give an example. According the the broker, the fund started on 2003.

Amount_________Price____Share$_____Share____share balance
Purchase_______$7762.08 $8.66_____ 895.844___ 895.844
dividend reinvest $105.71 _$12.06 ____8.765_____ 904.609



2003 Summary $11180.97 $12.36 904.609


Am I suppose to calculate the average base on the year end summary price or the purchase price during the year? And repeat each yer and take the average?

 

[EagleKeeper]

In theory, you should determine the prices based at the date of the transaction.

The IRS does allow averaging across the year for dividend re-investments.

Tax is supposed to be paid every year on the dividends; so you just need to account for the value of the dividend w/ respect to the cost basis. A statement is received from the borkerage/fund manager

Doing so, now means you only have to be worried about the capital gains when the fund shares are sold.

 

[Xellos2099]

I think my Dad want to do the average cost basis method. Which I am not quite sure how to do it with all the reinvestment at different price.

 

[Maximus96]

Hi. I started my photography business this year and am confused on how to categorize some items, such as PO Box and UPS mail box registration.

I understand some of the bigger ticket items like lenses and cameras go under the Depreciation/Section 179 Deduction, but what about smaller items like filters, background fabric, bags, cases, lens hoods, etc. These little things typically costs under $100 or less. Are they counted as Supplies?

Does camera batteries and memory cards go under Office Expenses or Supplies?

Also, membership fees to Canon Professional Services, does that go under "Legal/Professional Services"?

thank you!

 

[EagleKeeper]

I think my Dad want to do the average cost basis method. Which I am not quite sure how to do it with all the reinvestment at different price.

Bite the bullet and do it right

Average cost will only work for a few transactions of the same amounts.
Setup a spreadsheet where you can then enter in the individual numbers and let the calculations work themselves out.

 

[EagleKeeper]

Hi. I started my photography business this year and am confused on how to categorize some items, such as PO Box and UPS mail box registration.

I understand some of the bigger ticket items like lenses and cameras go under the Depreciation/Section 179 Deduction, but what about smaller items like filters, background fabric, bags, cases, lens hoods, etc. These little things typically costs under $100 or less. Are they counted as Supplies?

Also, membership fees to Canon Professional Services, does that go under "Legal/Professional Services"?

PO Box and such should go under mailing and/or office
179 deduction allows up to 50K to be written off up front. Stick them there unless you are bumping up against the 179 limits