9th Annual Tax Thread - 2011

[RavenSEAL]

#56

WOW, I completely missed it as I read over the thread

Thanks for the response! :biggrin:

 

[jteef]

I can not quickly comment on your loophole.

I do know that you have until April to fund 2011 accounts.
You can sell investments to create a loss as long as you do not repurchase the same investment within a set period of time.

w/ respect to sales tax.
You can only deduct the sales tax if you do not deduct your state income tax on the Schedule A.

The sales tax deduction is based on receipts or a tax table. Large ticket items (usually over 1K) can be added into the tax table value.

The tax deduction would be based on the date of payment of the tax

regarding the sales tax deduction; i live in florida with no income tax, so I deduct sales + large ticket items as allowed (i.e. recent car purchase). If the county charges a 3% convenience fee to pay with a credit card, can I include that in the sales tax deduction?

 

[EagleKeeper]

regarding the sales tax deduction; i live in florida with no income tax, so I deduct sales + large ticket items as allowed (i.e. recent car purchase). If the county charges a 3% convenience fee to pay with a credit card, can I include that in the sales tax deduction?

The convenience fee is not part of the sales tax.

 

[JS80]

1) Is there a separate 2012 thread?
2) What software do you guys use for LLCs?

 

[CPA]

1) Is there a separate 2012 thread?
2) What software do you guys use for LLCs?

1) there will be at year's end

2) Feds don't recognize an LLC as a taxable entity. How are you filing - Sole Proprietorship, Corporation? You don't need special software for an LLC, you just need to know how you're filing and that will dictate what schedules you use.

 

[EagleKeeper]

1) Is there a separate 2012 thread?
2) What software do you guys use for LLCs?

1) What would be the purpose of having 2011 information being combined with 2012 information?
As with the other yearly threads, we link the previous threads for reference

2) As CPA stated, the LLC is a paper/legal product. It is the entity behind it that counts.

Standard personal tax S/W will work easily for you unless you are big enough to require bookkeepers and accountants during the year.

At that point; the owner/filer has more paperwork than they can safely get their arms around and should retain a professional.

 

[JS80]

Should have detailed, opting to file as partnership. It's a dual member LLC. Don't I have to fill out a 1065 and then issue the members a K-1? Do I even need software for the (no) volume I'm doing? I had no revenue last year and it's basically an R&D center with no employees/salaries. Just burning investment capital to build software to sell this year.

noob on the #1 question...i thought this was last year's thread lol

 

[yh125d]

So my employer started IRAs this year, and I wound up with ~1250 deducted for it this year, but our HR is waaaaaay behind on getting those withholded funds actually deposited in our IRAs, as in there should be $2500 right now ($1250+ match) but theres only about $600. Will I still get the tax break for the full amount deducted, or will I only be able to deduct what was actually deposited into the IRA?

 

[Drekce]

Question:

I almost bought a new house this year. In fact, I gave a builder a $10,000 deposit and then backed out a few months later, forfeiting my deposit. Was I stupid for doing this, yes, but not as stupid as I would have been if I had actually closed.

Anyway, are there any ways that I can claim any sort of write off on that $10,000 donation to Meritage Homes?

Thanks for all you guys do.

 

[EagleKeeper]

So my employer started IRAs this year, and I wound up with ~1250 deducted for it this year, but our HR is waaaaaay behind on getting those withholded funds actually deposited in our IRAs, as in there should be $2500 right now ($1250+ match) but theres only about $600. Will I still get the tax break for the full amount deducted, or will I only be able to deduct what was actually deposited into the IRA?

You only get the fax break for what you contribute. The employer has until April to place their share into the account. You never get a tax break for the employer share

 

[EagleKeeper]

Question:

I almost bought a new house this year. In fact, I gave a builder a $10,000 deposit and then backed out a few months later, forfeiting my deposit. Was I stupid for doing this, yes, but not as stupid as I would have been if I had actually closed.

Anyway, are there any ways that I can claim any sort of write off on that $10,000 donation to Meritage Homes?

Thanks for all you guys do.

Not legally

 

[yh125d]

You only get the fax break for what you contribute. The employer has until April to place their share into the account. You never get a tax break for the employer share

I've had 1250 deducted for my IRA, and my employer has matched it so actually in my account should be 2500, of which the 1250 I withheld should be deductible. But there's only $600 actually deposited in my IRA so far (presumably 300/300 me/boss) and the rest I guess is just in whatever withholding account my boss has it in. My question is will I actually be able to deduct the full 1250 I've already had withheld or only the 300 that has actually been deposited so far

 

[EagleKeeper]

If the 1250 has been deducted from your pay; that is what will show up on your W2 line item

 

[Mermaidman]

I submitted a monthly invoice to a client in December. If the client pays me in 2012 (i.e. the check is dated in 2012), but the amount is included in the 1099 form for 2011, then is it considered 2011 or 2012 income?

I think the answerS are obvious now that I'm typing the question, but humor me anyway. :\


edit: Thanks for the replies below.

 

[EagleKeeper]

I submitted a monthly invoice to a client in December. If the client pays me in 2012 (i.e. the check is dated in 2012), but the amount is included in the 1099 form for 2011, then is it considered 2011 or 2012 income?

I think the answerS are obvious now that I'm typing the question, but humor me anyway. :\
TiA

Your choice

Income was not received in 2011, so you should declare it for 2012.

BUT

Be prepared to show the IRS why you are not declaring the 1099 income in 2011. ()

Best to get the client to properly do the 1099 based on when the payment was made

 

[jayzds]

I submitted a monthly invoice to a client in December. If the client pays me in 2012 (i.e. the check is dated in 2012), but the amount is included in the 1099 form for 2011, then is it considered 2011 or 2012 income?

I think the answerS are obvious now that I'm typing the question, but humor me anyway. :\
TiA

I am assuming your cash basis and it is income when received in 2012. If your filing accrual basis then its income when invoiced.
I would say his 1099-Misc is incorrect. The 1099 may be correct and if it is correct and if your a cash basis filer. Then it is taxable income in 2012.

 

[JEDI]

a friend of mine lost his job over a year ago. he moved back in w/his parents.

since he had no income in 2011, he said he's not filing taxes.
i told him to file anyway. it's free and not worth the hassle incase the IRS red flags him for not filing when he filed for all other years.

i also told him in case he wants to get on welfare, medicaid, and food stamps he might need to file to prove he's in poverty?


Whats your opinion ATOT tax experts?

 

[EagleKeeper]

No income means no interest income, dividends, severance or unemployment payments in 2011.

If nothing; he does not need to file.
He has the option to file.

 

[sactoking]

Been a while since I did standard business tax so I want to make sure I'm on the right track.

My wife and I started an LLC this year and chose partnership tax treatment instead of proprietorship (for the extra legal protection it gives in NV). The company had no revenue and little in the way of expenses:
$400 in LLC fees and state business license
$180 for Quickbooks
$60 for business account checks

We also contributed a small amount of office furniture (~$200) and a laptop (~$600) as part of our initial equity contribution.

I'm working on the 1065, the B-1, the K, the K-1, and the 4562. By my estimation we should have the $400 in expenses deducted on Line 20 of the 1065, which would be passed on to each of us on the K-1 forms per our Operating Agreement equity share. The furniture, laptop, and software aren't deductible but I can declare them on the 4562 and take Section 179 depreciation. The 179 would normally be passed on to us on the K-1 forms but since we had no revenue the Section 179 gets deferred to 2012, at which point it will be passed on to the K-1 forms in addition to 2012's gain/loss and 2012's depreciation.

Does this scenario sound about right or am I missing something?

Like I said, I've been doing statutory taxes (excise) for too long.

 

[CPA]

IRA or ROTH IRA for a minor - any phase out on AGI?

17yr old child holds a part time job - earnings for the year should amount to roughly $3300 on the W2.

Does my AGI count for the child as I'll claiming HOH and I'm over the limit?

I'd like to take the maximum I can and put it in a IRA for the child.


Thanks

In short, you can invest up to his earnings or $5,000, whichever is less, in a Roth IRA in his name. Your AGI is not included in considering contribution limits. Of course, you can't deduct the contributions.

As a sidenote, it makes more sense setting up a Roth rather than a traditional IRA in his name, because he gains no immediate tax benefit in a traditional IRA at this point.

 

[Dr. Detroit]

In short, you can invest up to his earnings or $5,000, whichever is less, in a Roth IRA in his name. Your AGI is not included in considering contribution limits. Of course, you can't deduct the contributions.

As a sidenote, it makes more sense setting up a Roth rather than a traditional IRA in his name, because he gains no immediate tax benefit in a traditional IRA at this point.

Ugh! Was hoping for a deduction. ROTH it is.

Thanks!

 

[note235]

haha did not see this thread

i was wondering:
In the last 2 months of 2011 I made some investments in the stock market and I had a net loss of about $100 (from -$700), currently I am a student and unemployed and confused about getting tax prep ready for fafsa.

Basically I'm wondering if I should or need to file taxes?

 

[EagleKeeper]

haha did not see this thread

i was wondering:
In the last 2 months of 2011 I made some investments in the stock market and I had a net loss of about $100 (from -$700), currently I am a student and unemployed and confused about getting tax prep ready for fafsa.

Basically I'm wondering if I should or need to file taxes?

If you are on your own; you will need the tax return for FAFSA.

If you sold the stocks; you need to file the 1040 along with the Schedule D.
the loss can be deducted against any taxes and/or carried forward.

 

[malbojah]

Questions:

Normally, I just e-file state / fed as my tax situation is simple and get most of my fed deductions returned (make very little reported income). This year I received a life insurance payout and the company supplied me with a Treasury Form 712. I also got a tradition IRA transferred into my name (from the same deceased) and didn't have anything withheld (Oppenheimer, would have withheld $1k).

I take it the IRA is going to have to count as income (only around $10k), but what about the life insurance payout ($37k, saving it for a down payment on a house eventually) ?

 

[EagleKeeper]

Questions:

Normally, I just e-file state / fed as my tax situation is simple and get most of my fed deductions returned (make very little reported income). This year I received a life insurance payout and the company supplied me with a Treasury Form 712. I also got a tradition IRA transferred into my name (from the same deceased) and didn't have anything withheld (Oppenheimer, would have withheld $1k).

I take it the IRA is going to have to count as income (only around $10k), but what about the life insurance payout ($37k, saving it for a down payment on a house eventually) ?

IRS FAQ - Life Insurance

Question: Are proceeds paid under a life insurance contract taxable and do they have to be reported as income?


Answer: Generally, if you receive the proceeds under a life insurance contract because of the death of the insured person, the benefits are not includable in gross income and do not have to be reported:

• Any interest you receive would be taxable and would need to be reported just like any other interest received.
• If the policy was transferred to you for cash or other valuable consideration, the exclusion for the proceeds is limited to the sum of the consideration you paid, additional premiums you paid, and certain other amounts.
• There are some exceptions to this rule. For additional information, see Publication 525, Taxable and Nontaxable Income

.