9th Annual Tax Thread - 2011

[EagleKeeper]

I know a guy that was married with 2 kids, 1 house, 1 wife, all the good stuffs.

Now he is divorced, live in an apartment, his 2 kids are with his ex, he is paying child support for those 2 kids but no alimony.

All he has now is his salary, his interest payment from a bank (from CD and savings), and Health Saving Account.

Can he do anything to maximize his tax return/minimize his tax? He can not claim his kids as dependents, right? TIA.

Child support/dependents depends on the agreement with the custodial parent.

It might be best to talk to the ex to determine which may end up better.
If he claims the kids he may get a larger refund delta than if she claims the kids.
IF so, he can provide to her what she lost as a delta and he may come out a few $$ more.
That requires cooperation and her opening up her return to him to see what the impact of the kids have on her return.

Or being that there are two, each gets one to claim.

But under what you described; there is nothing he can do to help himself at this point.

 

[EagleKeeper]

Tried searching but didn't see anything that specifically matches my situation...

1) Married filing jointly
2) In calendar 2011, I was a fulltime medical student. Received 1098T, no W2.
3) In calendar 2011, my wife was a full-time medical student Jan1-Jun30, and then became some category of graduate student (doing a research year) so that her student loans do not enter repayment. However, no tuition is charged, and she is paid a graduate student stipend. At our school, the "semester" including Jan1-Jun30 was billed in Dec 2010. She received a W2, no 1098T.
4) Our school requires that we pass two exams in order to graduate (USMLE 1, USMLE 2).
5) However, passing these two exams (along with USMLE 3) is required for initial licensure to practice medicine in the US.
6) I paid about $600 for my testing fees, my wife paid about $1700 in fees and another $300 or so to travel to sit for one of those exams. (One of the exams only has a dozen or so testing facilities throughout the country)

So my questions:
1) Can these fees be used for deduction purposes?
2) If yes, it looks like one of us can claim deductions and the other a credit. Could we deduct my wife's fees and have me claim a credit? (She earned the income, I did not; but we are filing jointly)

Those fees are a deduction using the Schedule A Form 2106
The 1098-T is applied against the 1040 itself as an educational expense
Her W2 will be treated as normal income.

I would expect that you do not have 6K worth of expenses to justify the Schedule A, so writing off the test fees will not work; they are not part of the tuition.

So you are left with the educational credits using the 1098-T and the W2 to work with.
15 minutes tops

 

[Zerhyn]

I appreciate the advice EagleKeeper. Time to start having fun.

 

[Zerhyn]

For your (Oregon); you will have to file a non-resident tax return for CA.

I have yet to become a resident of Oregon. Should I still file as a non-resident for CA?

 

[antef]

Hi, I have a question.

I moved this year and my new city wants a copy of my local tax return from the city I lived in before moving. However I filed this awhile ago and don't currently have a copy available and we're just about out of time now.

Do they really have a right to demand tax return copies from other municipalities? What might happen if I simply don't include it?

 

[EagleKeeper]

I have yet to become a resident of Oregon. Should I still file as a non-resident for CA?

Where is your driver's license or voter registration from?

That should be what is considered your state of residence.

All other states that you earned income from will have to have a non-resident tax filing.

 

[EagleKeeper]

Hi, I have a question.

I moved this year and my new city wants a copy of my local tax return from the city I lived in before moving. However I filed this awhile ago and don't currently have a copy available and we're just about out of time now.

Do they really have a right to demand tax return copies from other municipalities? What might happen if I simply don't include it?

Suspect that you have to pay a separate income tax to the municipalities and they are trying to ensure that they get credit from what you paid;

If they require it and you do not provide it; they may recalculate your tax as if you did not pay anything elsewhere and all income was earned under their tax code.

You can always request a copy of what you filed. And take a lesson from the experience. Keep copies all the time.

 

[lozina]

Anyone familiar with NY State online tax parments?

Ugh this is driving me nuts I can't figure out how to pay my taxes. The taxes were prepared by an accountant but he left it to me to pay online. I log into the NY State site but I dont know where to pay. There's this e-file thing and then FreeFile. If I click FreeFile I end up at H&R Block's web site. I don't get it....

I pay my Estimated Tax returns quarterly using the same site but for some reason this seems to be different?

 

[JS80]

Mother. Effin. Penson!!!

 

[DAGTA]

I received the following from my employer yesterday:

"It has come to our attention that employees who had Health Savings Account employer contributions in 2011 had an incorrect code in Box 12 of the W-2 for 2011. Our payroll provider entered a code of DD instead of W in Box 12. In the next couple of days, you will receive your form W-2c, which shows the correction from box 12 DD to box 12 W, which includes the employer contribution to your Health Savings Account. There is no change in the dollar amount in box 12; only the letter code is changed."


I have already filed my taxes. Do I need to amend my return for this mistake?

Thanks for your help!

 

[Aharami]

what are HSA distributions?
I have an HSA acct that my employer and I contribute to. Last year, I paid $2K using my HSA Debit card for part of my LASIK surgery, which shows up as a withdrawal from my HSA acct. Can this be considered a HSA distribution? If so, TaxACT is saying that I'm going to need a 1099-SA, but I never got one from my employer.

are HSA distributions tax deductible, or are they taxable?

 

[EagleKeeper]

HSA is already pretax so you do not attempt to list items draw from it on the Schedule A.
Your debit card attached to it for medical expenses acts like a distribution.

Unsure of answer to the 1099-SA; need to it lookup

 

[Xcobra]

Anyone familiar with NY State online tax parments?

Ugh this is driving me nuts I can't figure out how to pay my taxes. The taxes were prepared by an accountant but he left it to me to pay online. I log into the NY State site but I dont know where to pay. There's this e-file thing and then FreeFile. If I click FreeFile I end up at H&R Block's web site. I don't get it....

I pay my Estimated Tax returns quarterly using the same site but for some reason this seems to be different?

http://www.tax.ny.gov/pay/ind/pay_your_income_tax.htm

 

[Xcobra]

I received the following from my employer yesterday:

"It has come to our attention that employees who had Health Savings Account employer contributions in 2011 had an incorrect code in Box 12 of the W-2 for 2011. Our payroll provider entered a code of DD instead of W in Box 12. In the next couple of days, you will receive your form W-2c, which shows the correction from box 12 DD to box 12 W, which includes the employer contribution to your Health Savings Account. There is no change in the dollar amount in box 12; only the letter code is changed."


I have already filed my taxes. Do I need to amend my return for this mistake?

Thanks for your help!

I don't think it affected your returns. Code DD reports the cost of health insurance provided through your employer, which seems purely informational. It may be just worth it to go into the tax software and see if it makes a difference. The only thing may be filing form 8889 (HSAs) which reports the contributions to the plan. If you filed it anyway, you're OK I think.

 

[Xcobra]

what are HSA distributions?
I have an HSA acct that my employer and I contribute to. Last year, I paid $2K using my HSA Debit card for part of my LASIK surgery, which shows up as a withdrawal from my HSA acct. Can this be considered a HSA distribution? If so, TaxACT is saying that I'm going to need a 1099-SA, but I never got one from my employer.

are HSA distributions tax deductible, or are they taxable?

Like Eagle said, they are not deductible. The trustee which holds the HSA funds SHOULD have issued a 1099-SA. It would list the amount of distribution from the plan. Then on the tax software, you would just indicate how much of those funds were qualified medical expenses. May be worth contacting the trustee.

 

[fstime]

Do you still have to report your bank account information (checking,savings) in other countries even though you are a natural born citizen of that country who goes back and fourth every year and a permanent resident of the United States who files taxes here?

What about income earned from a foreign country for the same scenario?

 

[alkemyst]

yes foreign interest is taxable in the USA

 

[IAteYourMother]

Help with e-filing tax logistics.

I recently filed my 2011 tax return along with an estimated 2012 quarterly tax payment (1040ES) using the free file fillable forms online.

However, on 4/10/2012, only my 2011 taxes were withdrawn from my account, and nothing withdrawn for my quarterly payment. They were submitted together. Is it normal that they withdraw the quarterly payment later than the 2011 taxes?

 

[alkemyst]

Help with e-filing tax logistics.

I recently filed my 2011 tax return along with an estimated 2012 quarterly tax payment (1040ES) using the free file fillable forms online.

However, on 4/10/2012, only my 2011 taxes were withdrawn from my account, and nothing withdrawn for my quarterly payment. They were submitted together. Is it normal that they withdraw the quarterly payment later than the 2011 taxes?

do you expect them to withdraw for 2011 all four payments?

 

[IAteYourMother]

do you expect them to withdraw for 2011 all four payments?

Well for 2011 I didn't have to make quarterly payments because I started working partway through the year, so I was simply paying what I owed for that year, in addition to the estimated payment for this 2012 quarter.

 

[fstime]

yes foreign interest is taxable in the USA

I wasn't speaking in regard to interest.

Just reporting bank assets IF you are a dual citizen or foreign citizen + permanent resident of the USA.

I know if you are only a US citizen, it is certainly required to report assets, interest, and capital gains (correct?).

 

[Xcobra]

I wasn't speaking in regard to interest.

Just reporting bank assets IF you are a dual citizen or foreign citizen + permanent resident of the USA.

I know if you are only a US citizen, it is certainly required to report assets, interest, and capital gains (correct?).

If you own foreign assets, this could be a cluster f*** for you. Well it's not so bad, you just have to dig up a lot of information. You got form TDF 90.22.1 for foreign bank accounts (if the aggregate balances of your accounts exceeded $10K at any point, you need to file). Then for 2011, you got Form 8938 (Statement of Specified Foreign Financial Assets). The filing requirements for 8938 are a bit more complicated and suggest you take a look at the IRS website. There is some double reporting on 90-22.1 and 8938 but that doesn't mean you don't have to file both forms. Basically, if you a permanent resident during the year or a US citizen, the above applies to you regardless of what citizenship(s) you hold.

EDIT: Also, 90-22.1 is due to the department of the treasury by June 30, 2012. Form 8938 is actually due with your return. So by April 17th or October 15th if you filed an extension.

 

[Xcobra]

Help with e-filing tax logistics.

I recently filed my 2011 tax return along with an estimated 2012 quarterly tax payment (1040ES) using the free file fillable forms online.

However, on 4/10/2012, only my 2011 taxes were withdrawn from my account, and nothing withdrawn for my quarterly payment. They were submitted together. Is it normal that they withdraw the quarterly payment later than the 2011 taxes?

It could be that they have yet to process the payment. As far as we all know, their priority is 2011 for now until the deadline passes. I am sure they will process it afterwards. As long as you have proof that you mailed it in, you should be ok.

 

[alkemyst]

I wasn't speaking in regard to interest.

Just reporting bank assets IF you are a dual citizen or foreign citizen + permanent resident of the USA.

I know if you are only a US citizen, it is certainly required to report assets, interest, and capital gains (correct?).

T DF 90-22.1
http://www.irs.gov/pub/irs-pdf/f90221.pdf

8938
http://www.irs.gov/businesses/corporations/article/0,,id=251217,00.html

 

[Linflas]

Situation:
Brothers and I inherited a house in 1994 when my father died but the way the will was written we owned it but our mother could use it until her death if so desired. She rented it out but decided to turn it over to us in June 2011. I collected 3 months rent before the tenant moved out. It remained empty and unused for the remainder of the year.

Would it be better to just claim the entire rental income on my mothers return for 2011 and start fresh this year with it on our returns or is it possible to split it between the 2 returns? Is the basis I use the same basis my mother has been using or does it reset? Nothing has been done deed/government wise with the house, it is still listed "Mothers name" & ETAL CO-TRUSTEES.

Regarding this you answered:

You can split it rent among two returns;

It would be best to have the income go against the expenses for the Schedule E.

Then apply the Schedule E to which ever taxpayer it will benefit.

The piece I am trying to figure out now is from what I see in the software I need to have a cost basis for the house that I then multiply by a percentage to determine a depreciation deduction. Do I use the value of the house when she passed the rental responsibilty to me last July or do I have to figure out what the house was worth when my father passed in 1994?