9th Annual Tax Thread - 2011

[marmasatt]

Nope, no rejections from TT. I've tried calling the 800 number a couple of times, but hang up after being on hold for an hour. Any easier way to get in touch?

All, how does this change if I do have a rejection msg? Apparently our bank has closed the account number that we provided for our deposit. We filed the 2nd week in January and still don't have our refund. It says another 4-6 weeks from when you file if your refund gets rejected. Then you go to call the IRS and you can't talk to a live person. Then lastly, you think you are going to talk to a live person but still can't as it says updates are not available.

I feel like this is going to go on indefinitely. Why don't they just send a paper check to the address on file if they can't send your money?

 

[EagleKeeper]

All, how does this change if I do have a rejection msg? Apparently our bank has closed the account number that we provided for our deposit. We filed the 2nd week in January and still don't have our refund. It says another 4-6 weeks from when you file if your refund gets rejected. Then you go to call the IRS and you can't talk to a live person. Then lastly, you think you are going to talk to a live person but still can't as it says updates are not available.

I feel like this is going to go on indefinitely. Why don't they just send a paper check to the address on file if they can't send your money?

I do not know if the bank rejects the funds and notifies the Feds. If you actually got a rejection message from the Feds; file with the proper correction - possibly just the correct account number

Regretfully, the phone numbers are worthless. You can call on the dot or 1 minute later and not get a human person. Sometimes the lines are not even enabled at that time.

As I mentioned to another poster, you have to be proactive.
Go to a local IRS office and talk to a live person; make an appointment at the local office to see a person (to avoid wasting time waiting) or contact you local Congressional rep to have them intervene.

Last option with the IRS is to contact the taxpayer advocate - that is a different number than the standard IRS.

 

[PokerGuy]

Guys, first, thank you for the thread, it's very helpful.

My question:

I electronically filed my return to the IRS and it was accepted. I am due a refund of federal tax money. As part of my filing, I included sched D, my broker 1099B, div and int docs for my investments. My overall net result for 2011 was a small net loss.

One day after I filed my return, I got a schedule K-1 from United States Oil fund LP, an ETF designed to track sweet crude oil prices. Tne enclosed documents explained why you get a K-1 (the investment is set up as a partnership), but I'm not sure what to do with my filing. The K-1 showed a small loss, I owned some shares in the oil LP and sold them off at a small loss. I decided to fire up TT again and enter the K-1, and it increased my refund because the small loss was deducted from taxable income.

1) I'm assuming the K-1 will be reported to the IRS. My filing doesn't include the K-1. Should I send in an amended return to include the K-1 form?
2) If the loss on the K-1 is used to reduce taxable income, it's also reflected on the Sched D, so wouldn't that mean it's reflected twice in the return?

Any insight would be appreciated!

 

[Schfifty Five]

While doing my taxes just now, I think I made a mistake in my 2010 return in that I forgot to enter in my short term realized loss of about $900. In that same year, I had some long-term capital gains losses which I was able to deduct the full $3,000 from my income with a little bit left over to carry forward to 2011.

So my question is, am I allowed to just enter a carry forward short term loss of the $900 even though I forgot to report it on my 2010 return?

edit: Ok, I guess I could have googled first and found out that I will have to do an amended return.

 

[paulney]

Thank you very much for all your help in here.

I'd like to verify that the method I use for calculating home office deduction is appropriate:

My wife and I have a partnership. Everything that we do is done from the home office (which fully qualifies as a home office as far as IRS is concerned). At the end of the year, when I do partnership return, first I calculate profit/loss and generate K-1s both for my wife and I.

Now, because partnership is a pass-through return, there's no way to enter a home office deduction in there, but you can just add an expense as if one of us incurred it.

So now I switch to TurboTax Home edition, create a separate return copy just for home office calculation and figure out what my home office deduction would be. To do that, I sum up the figures in K-1 for my wife and me, enter that as profit in schedule C, then enter mortgage interest, taxes, utilities, etc in the 8829 worksheet.

Then I take the resulting deduction, switch back to TTax Business, enter that for the partnership return as expense, re-generate K-1s, go back to TTax Home and finally enter the new K-1 figures for our joint return.

Does this make sense?
Thanks.

 

[Xcobra]

Thank you very much for all your help in here.

I'd like to verify that the method I use for calculating home office deduction is appropriate:

My wife and I have a partnership. Everything that we do is done from the home office (which fully qualifies as a home office as far as IRS is concerned). At the end of the year, when I do partnership return, first I calculate profit/loss and generate K-1s both for my wife and I.

Now, because partnership is a pass-through return, there's no way to enter a home office deduction in there, but you can just add an expense as if one of us incurred it.

So now I switch to TurboTax Home edition, create a separate return copy just for home office calculation and figure out what my home office deduction would be. To do that, I sum up the figures in K-1 for my wife and me, enter that as profit in schedule C, then enter mortgage interest, taxes, utilities, etc in the 8829 worksheet.

Then I take the resulting deduction, switch back to TTax Business, enter that for the partnership return as expense, re-generate K-1s, go back to TTax Home and finally enter the new K-1 figures for our joint return.

Does this make sense?
Thanks.

Why don't you just take the home office deduction on your personal return to avoid all the trouble? I am not sure why you are trying to do the above. In reality, the deduction should be taken on the individual's tax returns.

 

[Xcobra]

Guys, first, thank you for the thread, it's very helpful.

My question:

I electronically filed my return to the IRS and it was accepted. I am due a refund of federal tax money. As part of my filing, I included sched D, my broker 1099B, div and int docs for my investments. My overall net result for 2011 was a small net loss.

One day after I filed my return, I got a schedule K-1 from United States Oil fund LP, an ETF designed to track sweet crude oil prices. Tne enclosed documents explained why you get a K-1 (the investment is set up as a partnership), but I'm not sure what to do with my filing. The K-1 showed a small loss, I owned some shares in the oil LP and sold them off at a small loss. I decided to fire up TT again and enter the K-1, and it increased my refund because the small loss was deducted from taxable income.

1) I'm assuming the K-1 will be reported to the IRS. My filing doesn't include the K-1. Should I send in an amended return to include the K-1 form?
2) If the loss on the K-1 is used to reduce taxable income, it's also reflected on the Sched D, so wouldn't that mean it's reflected twice in the return?

Any insight would be appreciated!

Yes, you need to amend the return and include the K-1. Since you sold it, all the losses can be taken. The shares bought and sold are irrelevant as the K-1 reflects income or loss the partnership generated which gets passed down to you.

 

[paulney]

Why don't you just take the home office deduction on your personal return to avoid all the trouble? I am not sure why you are trying to do the above. In reality, the deduction should be taken on the individual's tax returns.

To calculate the deduction this way, I have to fill out schedule C which requires me entering income. But this income is reported on K-1, so now it looks as if I have twice the income, etc. It's more headache this way.

 

[Kwatt]

I keep getting revised 1099's from scottrade. So for I am at rev. 3.
The changes are for the qualified/non-qualified dividend and nondividend distributions.
The latest change added gain distributions lowered both qualified/non-qualified dividends.
Requiring me to recalculate.

My online account only list dividends (no nondividend distributions for this company) and the company reports do not mention any capital gain distributions only dividends.

Is this a common problem or is it just me? And how do I file my 1040 if the changes keep taking place? ANSWER _ The company changed the status of the distributions.


A question about a different company:
How should I report dividends when the ex-date (when the dividends are earned) is in 2011 and the payout date has yet to be determined and may not be paid at all?


.

 

[PokerGuy]

Yes, you need to amend the return and include the K-1. Since you sold it, all the losses can be taken. The shares bought and sold are irrelevant as the K-1 reflects income or loss the partnership generated which gets passed down to you.

I'm a confused about the shares bought and sold being irrelevant, let me post an example to see if I can clarify my question

I bought 10 shares of the ETF at $10. Cost basis $100. Then, a month later, I sold all 10 shares for $90. The 1099B info from the broker reflects a cost of $100 and receipts of $90 from the sale, so a $10 capital loss. That $10 capital loss goes on schedule D, so it is used to offset other capital gains.

Now I get the K-1, and it shows this: capital contribution to partnership: $100. Losses from partnership: $10, Capital distribution: $90. The $10 loss from the K-1 reduces taxable income.

Wouldn't this mean the same $10 is reflected as both a capital loss as well as a loss derived from the partnership? Shouldn't it only be taken as a capital loss or loss from the partnership (K-1) instead of both?

 

[EagleKeeper]

I keep getting revised 1099's from scottrade. So for I am at rev. 3.
The changes are for the qualified/non-qualified dividend and nondividend distributions.
The latest change added gain distributions lowered both qualified/non-qualified dividends.
Requiring me to recalculate.

My online account only list dividends (no nondividend distributions for this company) and the company reports do not mention any capital gain distributions only dividends.

Is this a common problem or is it just me? And how do I file my 1040 if the changes keep taking place? ANSWER _ The company changed the status of the distributions.


A question about a different company:
How should I report dividends when the ex-date (when the dividends are earned) is in 2011 and the payout date has yet to be determined and may not be paid at all?


.

w/ respect to Scott Trade
1) Contact them and find out/complain why they are having such problems getting their ducks in order. Maybe also file a complain with the SEC.
2) File now with what you have; March 15 is the deadline for 1099s
3) If new items come in; save until July; then recalculate and see if you need to file an amended

w/ respect to dividend payout.
When they are declared is not critical.
when they actually are paid is the year that you declare them.

 

[Xcobra]

To calculate the deduction this way, I have to fill out schedule C which requires me entering income. But this income is reported on K-1, so now it looks as if I have twice the income, etc. It's more headache this way.

Well shouldn't the K-1 income flow to Sch E anyway? At least I thought.

 

[Xcobra]

I'm a confused about the shares bought and sold being irrelevant, let me post an example to see if I can clarify my question

I bought 10 shares of the ETF at $10. Cost basis $100. Then, a month later, I sold all 10 shares for $90. The 1099B info from the broker reflects a cost of $100 and receipts of $90 from the sale, so a $10 capital loss. That $10 capital loss goes on schedule D, so it is used to offset other capital gains.

Now I get the K-1, and it shows this: capital contribution to partnership: $100. Losses from partnership: $10, Capital distribution: $90. The $10 loss from the K-1 reduces taxable income.

Wouldn't this mean the same $10 is reflected as both a capital loss as well as a loss derived from the partnership? Shouldn't it only be taken as a capital loss or loss from the partnership (K-1) instead of both?

Gotcha. In that case, then you already reported the transaction. No need to amend for the K-1. IRS will not come back to you about it; it's a $10 loss and it's easy to prove you've reported it. I wouldn't worry.

 

[DigitalCancer]

I need some help!

So...my wife and I pulled out our 401k to help with a down-payment...they sent us Form 1099-R w/ a distribution code of '1'. I questioned this and thought it should be a '2' instead (no penalty for a hardship) and I was doing our taxes online through TaxAct and I had my wife finish up a few things on it and she ended up submitting them with the '2' instead of the '1' and I now believe it to be wrong b/c I think it only applies to an IRA.

I need to amend my return and I have NO idea how to state that I need to change the Distribution code from a '2' to a '1' and then I'll owe an additional $510. I tried to do this with TaxAct but when looking at the amended form it states that I am due the $510 and that I had overpaid which is wrong!

Any help on getting this amended so that I can get it cleared up would be greatly appreciated.

 

[Kwatt]

w/ respect to Scott Trade
1) Contact them and find out/complain why they are having such problems getting their ducks in order. Maybe also file a complain with the SEC.
2) File now with what you have; March 15 is the deadline for 1099s
3) If new items come in; save until July; then recalculate and see if you need to file an amended

w/ respect to dividend payout.
When they are declared is not critical.
when they actually are paid is the year that you declare them.

After spending an hour or so on the phone with Scottrade.
The dividend paying company (SBRA) changed the status of the dividends to partial dividend/partial non-dividend distributions at the end of January.


As to the dividend payout.
Thanks for clearing that up.

Thank You



.

 

[Xcobra]

I need some help!

So...my wife and I pulled out our 401k to help with a down-payment...they sent us Form 1099-R w/ a distribution code of '1'. I questioned this and thought it should be a '2' instead (no penalty for a hardship) and I was doing our taxes online through TaxAct and I had my wife finish up a few things on it and she ended up submitting them with the '2' instead of the '1' and I now believe it to be wrong b/c I think it only applies to an IRA.

I need to amend my return and I have NO idea how to state that I need to change the Distribution code from a '2' to a '1' and then I'll owe an additional $510. I tried to do this with TaxAct but when looking at the amended form it states that I am due the $510 and that I had overpaid which is wrong!

Any help on getting this amended so that I can get it cleared up would be greatly appreciated.

Once you make the changes in the tax software, it should automatically calculate how much additional tax you owe. Look at the 1040X and you should see columns with the original amounts vs the new ones. I believe the 1040X also asks you what amount of refund or taxes you paid with the original return. Make sure you enter that as well so it calculates the NET amount you owe. It shouldn't be difficult. The software should know what you entered originally and what the correct input is.

 

[EagleKeeper]

I need some help!

So...my wife and I pulled out our 401k to help with a down-payment...they sent us Form 1099-R w/ a distribution code of '1'. I questioned this and thought it should be a '2' instead (no penalty for a hardship) and I was doing our taxes online through TaxAct and I had my wife finish up a few things on it and she ended up submitting them with the '2' instead of the '1' and I now believe it to be wrong b/c I think it only applies to an IRA.

I need to amend my return and I have NO idea how to state that I need to change the Distribution code from a '2' to a '1' and then I'll owe an additional $510. I tried to do this with TaxAct but when looking at the amended form it states that I am due the $510 and that I had overpaid which is wrong!

Any help on getting this amended so that I can get it cleared up would be greatly appreciated.

You may be ignoring your wife's instincts
IRS 401K Link

Many 401(k) plans allow employees to make a hardship withdrawal because of immediate and heavy financial needs. Generally, hardship distributions from a 401(k) plan are limited to the amount of the employees' elective contributions only, and do not include any income earned on the deferred amounts. Hardship distributions are not treated as eligible rollover distributions.

IRS 401K Hardship

A 401(k) plan may allow employees to receive a hardship distribution because of an immediate and heavy financial need. Hardship distributions from a 401(k) plan are limited to the amount of the employee’s elective deferrals and generally do not include any income earned on the deferred amounts. The employee cannot roll over hardship distributions to another plan or IRA. The law treats a distribution as a hardship distribution only if it is made both because of an immediate and heavy financial need of the employee and is necessary to satisfy that financial need. The employer determines whether an employee has an immediate and heavy financial need based on all relevant facts and circumstances; however, the law deems a distribution to be made because of an immediate and heavy financial need of the employee if the distribution is for:

• Medical care expenses previously incurred by the employee, the employee’s spouse, or any dependents of the employee or if necessary for these persons to obtain medical care;
• Costs directly related to the purchase of a principal residence for the employee (excluding mortgage payments);
• Payment of tuition, related educational fees, and room and board expenses, for the next 12 months of post-secondary education for the employee, or the employee’s spouse, children or dependents;
• Payments necessary to prevent the eviction of the employee from the employee’s principal residence or foreclosure on the mortgage on that residence;
• Funeral expenses for the employee’s deceased parent, spouse, etc.; or
• Certain expenses relating to the repair of damage to the employee’s principal residence.

Nearly all 401(k) plans contain these conditions for determining whether a distribution is necessary to satisfy an employee’s immediate and heavy financial need. These rules are designed to relieve the employer (and the employee) from looking at resources outside of the 401(k) plan.

Item bolded in red applies to your situation.

Contact the plan administrator and get a new document issued with the correct distribution code.

Printout a copy of the 401K hardship link and attach it to your copy of the return in case you get questioned.

No need to file any paperwork

 

[Cal166]

This is my first year doing my taxes with TurboTax and entering my Mortgage Interest Payments (Form 1098).

My question is that it prompts me to enter my property tax paid for 2011.

This is where I got a bit confused as I paid my monthly mortgage that includes the property taxes.

I should enter my property taxes paid for 2011 as requested by Turbotax?

TIA

 

[Xcobra]

This is my first year doing my taxes with TurboTax and entering my Mortgage Interest Payments (Form 1098).

My question is that it prompts me to enter my property tax paid for 2011.

This is where I got a bit confused as I paid my monthly mortgage that includes the property taxes.

I should enter my property taxes paid for 2011 as requested by Turbotax?

TIA

The 1098 usually tells you how much property tax you paid throughout the year. Chances are, the mortgage interest you see in the 1098 includes interest only. You should be able to confirm that with the bank or online. Regardless, they should both be stated separately on Sch A.

 

[EagleKeeper]

The loan servicer should provide you a statement showing taxes paid and interest paid

 

[Cal166]

Thanks All, I see it now on the 1098. Overlooked last night.

 

[EagleKeeper]

Thanks All, I see it now on the 1098. Overlooked last night.

Never ever do taxes when tired or not in 100% control of all senses.

 

[MustISO]

Question about Stock Options. Last year I had to exercise and sale (same day) my companies options. The income and taxes withheld are shown on my W2.

My question is about how to file. If I tell turbo tax I exercised and sold options wouldn't it then be adding additional income and taxes that are already accounted for on my W2. On the other hand, how would I document this for the govt without paying multiple times.

Thanks.

 

[alkemyst]

Never ever do taxes when tired or not in 100% control of all senses.

Also I would add to this based on the above I read:

one spouse does the taxes, it's really not something both can do unless both are sitting together 100% of the time.

 

[alkemyst]

Question about Stock Options. Last year I had to exercise and sale (same day) my companies options. The income and taxes withheld are shown on my W2.

My question is about how to file. If I tell turbo tax I exercised and sold options wouldn't it then be adding additional income and taxes that are already accounted for on my W2. On the other hand, how would I document this for the govt without paying multiple times.

Thanks.

I'd imagine TurboTax knows to handle it. You can easily test that out though in the software.