9th Annual Tax Thread - 2011

[EagleKeeper]

Do most tax places give an estimate of your return before they charge you?

Or hell can anyone do it here? I only have 2 forms, a W2 and a 1098-E.

Seriously, just use an online tax site. It's not that difficult to follow. I always use www.taxcut.com for returns I do for my friends. I don't do the PA return on there though, as it costs money. However, PA has a way to file directly for free on the Dept of Revenue's website, so I do that for them. Check if your state has something similar.

Most online sites will allow you to waste time entering the data and providing you the numbers.
If you have to pay a fee for filing, they will disable the Print and not file until you give them the plastic or authorize the fee to be taken from a refund.

But you will get the total refund or payment due number to use as a reference.

Make sure when using an online site, that you select / start with the Free filing options and do not accidentally accept any of the bug to upgrade messages.

 

[EagleKeeper]

So then if that box is 2213.50 and I made 10 payments on the loan in 2011 then I can for box2 in the tax program I would put in 92.98 (2213.50 / 240 * 10) for this year, then each year after this I can do 111.58?

Correct

 

[highland145]

I don't think anything but an IRA can take place after end of year.

I'd gladly wash out $2200 in taxes for $2200 in contact lens solution and misc health products.

I should have googled it in the 1st place but some good news for you.

Contribution Deadlines
HSA contributions for a given year must be made on or before the due date (without extensions) for filing tax returns for that year. That means for most years contributions must be made on or before April 15 of the following calendar year.

http://www.hsatrusteeservices.com/contributions
But I'd double check and still don't know if the whole contribution is deductible or just the disbursements.

 

[alkemyst]

I should have googled it in the 1st place but some good news for you.
http://www.hsatrusteeservices.com/contributions
But I'd double check and still don't know if the whole contribution is deductible or just the disbursements.

I don't have an HSA in place however, also AFAIK it's an income reduction. I'd have to come up with probably close to $10k to get that $2k washed.

If someone knows better I can go that route.

 

[The-Noid]

If I made five estimated state tax payments during the year (first at January deadline, fifth on the second week of December for Jan 2012 deadline) can I deduct all five payments from my Federal tax?

 

[alkemyst]

If I made five estimated state tax payments during the year (first at January deadline, fifth on the second week of December for Jan 2012 deadline) can I deduct all five payments from my Federal tax?

Only if you overpaid

 

[The-Noid]

Only if you overpaid

I will deduct all payments and then the amount of overpayment should come back on my 2012 return as income. That would make sense.

On an aside. I continue to carry a over payment balance year in and year out (apply to next years return) but still send in what my accountant says for 1040 payments. Is it time at this point I just start checking refund?

 

[IHAVEAQUESTION]

Great info. Thanks!

Most tax S/W charges you for state support. Either on the back end or up front.

Best option if you are willing to go w/ paper is borrow someone's CD and install the Federal and then download the state. Enter the necessary data and printout the forms for the state.

Other option is to enter the TT web site through www.statetaxfreedom.com If they have an agreement with your state (list at bottom of page), for filing, that may be the way to go. If no agreement exists and you qualify for free Federal, they charge $15 for a state.

Both options presented require you reentering data. They do not allow you to export from their web system to a raw tax file.

 

[alkemyst]

I will deduct all payments and then the amount of overpayment should come back on my 2012 return as income. That would make sense.

On an aside. I continue to carry a over payment balance year in and year out (apply to next years return) but still send in what my accountant says for 1040 payments. Is it time at this point I just start checking refund?

The dollar amount you have paid means nothing without knowing your tax liability. If you paid in during the year too much, it would be refunded...if you didn't pay enough, you owe.

 

[The-Noid]

The dollar amount you have paid means nothing without knowing your tax liability. If you paid in during the year too much, it would be refunded...if you didn't pay enough, you owe.

Which is why this countries tax system is so stupid. Estimated tax payments has to be one of the dumbest systems ever created.

Pay 110%, Send in extra based on mock return, file extension, apply balance, Pay 110%. At some point I am going to catch up...

 

[MrChad]

Question about Roth IRA income and contribution limits.

1. For 2012, my AGI needs to be below $173,000 (as Married filing Jointly) to full contribute to a Roth IRA. What happens if I contribute the full amount now, but at the end of the year it turns out that my AGI has risen above the $173,000 level (e.g. because I received a raise mid-year)? Is there a penalty I pay?

2. Is the $5000 contribution limit per household? Can both my wife and I open Roth IRA accounts and contribute $5000 each?

 

[Ricemarine]

For 2011, I've been living in my own apartment, paid my own bills, took out student loans for the 2010-2011 academic year, and paid my tuition for my final quarter. My parent's provided $1000 in financial support when I was short on paying my bills, and kept me on their car/medical/vision/dental insurance. If I had to count the days I stayed their place, it would be around 45 days. My AGI would be $15,500. For 2012, I work full-time with medical/vision/dental insurance. Should I file as an independent or a dependent?

Thanks.

 

[alkemyst]

401k loan question: In 2010 when my mortgage company decided to report that I wasn't making mortgage payments (I was, the loan was sold and the paperwork botched up...I have a lawyer involved) I had to take out a 401k loan to move some my school loan money that was on 5-6% fixed rate credit cards that got rate bumped to over 24%. My interest payment went from $200 a month to over $1200. The rest I was able to put under a personal loan my wife took out which I paid off.

Anyhow, I had paid off over half the loan by the time I switched employers. I was under the impression I'd be responsible for only the taxes on what was left. My 1099-R showed up yesterday with the full amount listed as a distribution.

The broker is not open until Monday. Anyone know how this works? It's about $1500 in taxes.

 

[alkemyst]

For 2011, I've been living in my own apartment, paid my own bills, took out student loans for the 2010-2011 academic year, and paid my tuition for my final quarter. My parent's provided $1000 in financial support when I was short on paying my bills, and kept me on their car/medical/vision/dental insurance. If I had to count the days I stayed their place, it would be around 45 days. My AGI would be $15,500. For 2012, I work full-time with medical/vision/dental insurance. Should I file as an independent or a dependent?

Thanks.

Independent will always be beneficial to you...however, if your parents are indeed providing more than 50% of your upkeep then I'd let them choose.

The slippery slope is when the adult child now is paying their own way and the parents don't want to give up their deduction. That can be a mess.

 

[alkemyst]

Question about Roth IRA income and contribution limits.

1. For 2012, my AGI needs to be below $173,000 (as Married filing Jointly) to full contribute to a Roth IRA. What happens if I contribute the full amount now, but at the end of the year it turns out that my AGI has risen above the $173,000 level (e.g. because I received a raise mid-year)? Is there a penalty I pay?

2. Is the $5000 contribution limit per household? Can both my wife and I open Roth IRA accounts and contribute $5000 each?

In some places your company will refund the over contribution. If you manage your own acct, you will need to control that. You have until April 15 to correct this. The penalty for not doing so is 6% and that repeats every year until you correct it...it's not a one time hit.

Both spouses can normally contribute the $5000 each. However your spouse has to have employment making at least the contributed amount. You can't fill these baskets for a stay at home mom/wife unfortunately.

 

[alkemyst]

Which is why this countries tax system is so stupid. Estimated tax payments has to be one of the dumbest systems ever created.

Pay 110%, Send in extra based on mock return, file extension, apply balance, Pay 110%. At some point I am going to catch up...

I am not sure what your confusion is. Usually estimated tax payments are only required if you run your own business or underpaid during a year and had to take out a IRS loan.

Like all withholding, it's just that held money until it's time to file. Anything you overpaid, you will get back...anything you underpaid you owe.

You had a state tax question as part of this and those we don't answer here because of the complexity of every state's rules.

 

[The-Noid]

I am not sure what your confusion is. Usually estimated tax payments are only required if you run your own business or underpaid during a year and had to take out a IRS loan.

Like all withholding, it's just that held money until it's time to file. Anything you overpaid, you will get back...anything you underpaid you owe.

You had a state tax question as part of this and those we don't answer here because of the complexity of every state's rules.

Thanks for the clarification. Yes I know why I make estimated tax payments. No I do not owe the IRS money.

 

[alkemyst]

Thanks for the clarification. Yes I know why I make estimated tax payments. No I do not owe the IRS money.

Thanks for editing that post. I'd let your accountant handle it since you have one.

 

[EagleKeeper]

401k loan question: In 2010 when my mortgage company decided to report that I wasn't making mortgage payments (I was, the loan was sold and the paperwork botched up...I have a lawyer involved) I had to take out a 401k loan to move some my school loan money that was on 5-6% fixed rate credit cards that got rate bumped to over 24%. My interest payment went from $200 a month to over $1200. The rest I was able to put under a personal loan my wife took out which I paid off.

Anyhow, I had paid off over half the loan by the time I switched employers. I was under the impression I'd be responsible for only the taxes on what was left. My 1099-R showed up yesterday with the full amount listed as a distribution.

The broker is not open until Monday. Anyone know how this works? It's about $1500 in taxes.

You need to get an accurate 1099 that reflects the repayment

 

[Ricemarine]

Independent will always be beneficial to you...however, if your parents are indeed providing more than 50% of your upkeep then I'd let them choose.

The slippery slope is when the adult child now is paying their own way and the parents don't want to give up their deduction. That can be a mess.

It does become quite an issue lol. Thanks for the response.

I think I'm still having issues determining the following however:
1) Since I did move out into an apartment for the entire tax year, can my parent's home still be considered the principal residence?
2) Does the car(/dental/vision/health insurance for a family of four + $1k > than the $10.5k I spent for expenses (rent, bills, tuition, food, etc.)? It may be that the cost of insurance easily surpasses my expenses, but I'd like a second opinion.
3) If 1) and 2) apply, are the deductions for claiming a dependent more beneficial overall than if I claimed independent?

Any help still appreciated. Thanks.

 

[EagleKeeper]

It does become quite an issue lol. Thanks for the response.

I think I'm still having issues determining the following however:
1) Since I did move out into an apartment for the entire tax year, can my parent's home still be considered the principal residence?
2) Does the car(/dental/vision/health insurance for a family of four + $1k > than the $10.5k I spent for expenses (rent, bills, tuition, food, etc.)? It may be that the cost of insurance easily surpasses my expenses, but I'd like a second opinion.
3) If 1) and 2) apply, are the deductions for claiming a dependent more beneficial overall than if I claimed independent?

Any help still appreciated. Thanks.

1) Unless you were a student - this in its own releases you from dependent status

Best to use tax s/w to determine which condition generates what refund.
Previously within this thread, I pasted the IRS rules for dependency. Check those out to see which side of the line you stand

 

[alkemyst]

You need to get an accurate 1099 that reflects the repayment

Thanks, going to be calling them Monday despite 2 weeks of travel.

 

[Doppel]

I assume this is an easy one.

I had a very paltry stock experience last year and the 1099 isn't available until Feb 15th. The entirety of my stock experience is:

1) Received .50 in dividend payments
2) In 2009 bought some stock and sold it last year at a loss.

Does anybody know off the top of their head which boxes in the 1099 I use for these to report both the dividend payment of half a dollar and the capital gains loss? I don't want to wait until feb 15th

EDIT: Sorted out now! Looks like just 1a and 1b on the 1099-DIV (although scottrade would never send one under $10 anyway, but I still technically have to report).

Then for the stock cost basis and proceeds, it walked me through so I've got that loss in there now

 

[steppinthrax]

I have a pretty complex tax situation this time around.

1. I broke out my pension and did a total distribution with a distribution code of "1" (early distribution). All the money from that distribution went for down payment and financing cost of my 2nd house. Our first house was converted into rental property for 5 months before the beginning of 2012. My question is could I get some sort of exception. I heard people have claimed "2nd house buyer" status and got an exception when they got a 1099-r.

2. I converted my first home to rental property in the month of 8/1/2011. So for 5 months it was a rental, but for the first 7 months it was my home. When entering in rental deductions do I take my property taxes and mortgage interest and compute it for just 5 months and then for personal deductions I compute it for just 7 months? So my deductions will be split for schedule E and schedule A?

3. I received a 1099-MISC from my real estate agent upon purchase of a new home. The idea was that he would give me some of his commission. This is very common. Upon doing research, I found that a decision had been made by the IRS that the monies received as part as commission from an agent and then used as down payment, are not taxable. However, there is still a reporting requirement. My question it how do I report the 1099-misc and "cancel it out" so it doesn't affect my taxable income?

 

[Merad]

For the ATOT tax gurus:

I'm going back to school full time this fall. I know the obvious things like tuition and loan interest are usually tax deductible, but what else is there that I can use to my advantage for next year's taxes? What about school supplies (computers, books, etc)? Application fees? Travel expenses? I'll take anything I can get.