ATOT's Second Annual Tax Time Thread!

[EagleKeeper]

Originally posted by: rudeguy
just wanted to pop in and thank you guys again for all your help. We all owe you a big thanks and an even bigger :beer:

You are welcome to come over and visit in order to deliver the :beer:

And you do not even have to help with any homework

 

[rudeguy]

Originally posted by: EagleKeeper

Originally posted by: rudeguy
just wanted to pop in and thank you guys again for all your help. We all owe you a big thanks and an even bigger :beer:

You are welcome to come over and visit in order to deliver the :beer:

And you do not even have to help with any homework

oh shoot...you are in Vegas too?? I might have to take you up on that offer some time.

 

[Mill]

I have a coworker who needs to file 2003 AND 2004 taxes as a self-employed consultant for a theme park. Who should I advise her to go to for her taxes (In B'ham, AL)? Would an H & R block do it OK? Like I said, she didn't file 2003, so she thinks that she is not eligible to file for an extension now for 2004. Is that right?

Edit: Let me add that she has an assload of deductions and paperwork from a plethora of sources. Realize this is last minute, but is H & R Block capable of handling this, or is there any possible way to get an extension/file amended later on?

 

[EagleKeeper]

Originally posted by: Mill
I have a coworker who needs to file 2003 AND 2004 taxes as a self-employed consultant for a theme park. Who should I advise her to go to for her taxes (In B'ham, AL)? Would an H & R block do it OK? Like I said, she didn't file 2003, so she thinks that she is not eligible to file for an extension now for 2004. Is that right?

Edit: Let me add that she has an assload of deductions and paperwork from a plethora of sources. Realize this is last minute, but is H & R Block capable of handling this, or is there any possible way to get an extension/file amended later on?

Extensions are possible for 2004.

She will need to pay estimated taxes owed; the extension is just a grace for the paperwork.

She should file a 2003 tax return.

Block may be able to help her after the rush from procrastinators slow down.

It will be expensive; normal state/Fed will run close to $100. And that is those returns that are shown in the Tax Filing for Dummies book.

Also, they will not have easy access to 2004 information; therefore the time and cost will escalate.


Best bet is to get ahold of Tax S/W for 2003, fill out and file. Then bend over and drop the britches.

After the 2003 return is prepared, then complete the 2004 return; Using the same S/W will make the importing of information easier.

Then file everything together and prepare for some nasty letters right before Xmas.
When the letters arrive, swallow a bottle of antacid and advil before opening

 

[Slickone]

Thanks EagleKeeper...


OK, I have one extra income, a check for $500, from a company. My dad's a pilot, and I flew co-pilot (not officially since my medical and commercial pilot's license aren't current) with him one day. My dad split part of his pay for my help, so the company owner sent me a check later. I have the pay stub from that. I have no other forms from that. On Taxact, I am at the "Other Income - Miscellaneous" section, which says:
-----
Did you receive other income from miscellaneous sources such as prizes or awards?

Miscellaneous income also includes the following:
Reimbursements for items deducted in a prior year (home mortgage interest, real estate taxes, medical expenses)
Income from an activity not engaged in for profit
Loss on certain corrective distributions of excess deferrals
Cancellation of non business debt, Form 1099-C
-----

So two pages later, it says:
"If you received other income from miscellaneous sources, enter a description of the income source below and the amount received."

So I assume this is where I put put this in. I was going to put in 'Pilot Services' since my dad always puts this. But since I was not the pilot in command, and couldn't have been a pilot legally anyway, with no current medical, what should I put? Would they check into this?

 

[EagleKeeper]

Originally posted by: Slickone
Thanks EagleKeeper...


OK, I have one extra income, a check for $500, from a company. My dad's a pilot, and I flew co-pilot (not officially since my medical and commercial pilot's license aren't current) with him one day. My dad split part of his pay for my help, so the company owner sent me a check later. I have the pay stub from that. I have no other forms from that. On Taxact, I am at the "Other Income - Miscellaneous" section, which says:
-----
Did you receive other income from miscellaneous sources such as prizes or awards?

Miscellaneous income also includes the following:
Reimbursements for items deducted in a prior year (home mortgage interest, real estate taxes, medical expenses)
Income from an activity not engaged in for profit
Loss on certain corrective distributions of excess deferrals
Cancellation of non business debt, Form 1099-C
-----

So two pages later, it says:
"If you received other income from miscellaneous sources, enter a description of the income source below and the amount received."

So I assume this is where I put put this in. I was going to put in 'Pilot Services' since my dad always puts this. But since I was not the pilot in command, and couldn't have been a pilot legally anyway, with no current medical, what should I put? Would they check into this?

They will not check into it unless other things do not pass the smell test.

Best thing to play CYA is to put Flight Services

You were providing services on a flight; Details are between you and others who have a need to know.

As an FYI; You could put this income on a Schedule C and then generate some expenses against that income. Reduces the liability of the extra income toward zero or less than if you choose to.

 

[Slickone]

I don't quite understand what you're saying about why to use the Sch. C.
I usually do a Sch. A for my home, but never have done a Sch. C. It looks foreign to me, and I'm not sure how TaxAct will handle it, or if it will put up a red flag to the IRS.

I saved my session and will continue in the morning.
Thanks again.

 

[MrBlahh]

I probably shouldnt have saved this for the last minute but...

I recently graduated from college and havent been able to find a full time job. The last year I have been basically unemployed except I do stuff like computer tech work and other odd jobs for people. I also sold some stuff on ebay. I didnt keep any kind of records but Ive estimated that I made something like $3-4K during the past year and about $300 on ebay. Its all been in cash. Do I need to file taxes? After looking through the forms and booklets from the IRS it looks as though I might have to say that Im self employed, does this sound right?

If anyone can help me Id very much appreciate it.

 

[Mill]

Originally posted by: EagleKeeper

Originally posted by: Mill
I have a coworker who needs to file 2003 AND 2004 taxes as a self-employed consultant for a theme park. Who should I advise her to go to for her taxes (In B'ham, AL)? Would an H & R block do it OK? Like I said, she didn't file 2003, so she thinks that she is not eligible to file for an extension now for 2004. Is that right?

Edit: Let me add that she has an assload of deductions and paperwork from a plethora of sources. Realize this is last minute, but is H & R Block capable of handling this, or is there any possible way to get an extension/file amended later on?

Extensions are possible for 2004.

She will need to pay estimated taxes owed; the extension is just a grace for the paperwork.

She should file a 2003 tax return.

Block may be able to help her after the rush from procrastinators slow down.

It will be expensive; normal state/Fed will run close to $100. And that is those returns that are shown in the Tax Filing for Dummies book.

Also, they will not have easy access to 2004 information; therefore the time and cost will escalate.


Best bet is to get ahold of Tax S/W for 2003, fill out and file. Then bend over and drop the britches.

After the 2003 return is prepared, then complete the 2004 return; Using the same S/W will make the importing of information easier.

Then file everything together and prepare for some nasty letters right before Xmas.
When the letters arrive, swallow a bottle of antacid and advil before opening

BTW, thanks.

 

[Zee]

thank you eaglekeeper

edit: whoa, how come you are not elite? :|

 

[CycloWizard]

How much does it actually cost (generally speaking) to have an accountant prepare your federal and state taxes? I filed in three states and I think I'm gonna lose it if I ever have to do this again. I just have two W-2s - no other forms or anything.

 

[LordSnailz]

I'm going to feel stupid about this one -- just filed both my federal and state but realized that I did not include my interest earned from ingdirect ... the interet was about 240? Should I fill out an amendment for both state and federal or just forget about it?

 

[tallest1]

I have two easy questions:

1) In have in front of me my 1098-T which has the total payments recieved (scholarships) for tuition and related expenses. Since I graduated last december, I don't need the Hope or Lifetime learning credit. Do I put in the payments recieved amount anyway?

2) I appears that Free Filing still charges for my Florida State Return. I finished filling out the forms for that and got a "Your balance due to the state of Florida is less than $60. You do not need to pay amounts under $60. " message. Does that mean I can skip filing state taxes altogether and not have to shell out $25 to H&Rblock?

 

[EagleKeeper]

Originally posted by: Lazee
thank you eaglekeeper

edit: whoa, how come you are not elite? :|

My lips can not pucker enough.

Last year CPA mentioned it in passing; however, what will be will be.

 

[EagleKeeper]

Originally posted by: Slickone
I don't quite understand what you're saying about why to use the Sch. C.
I usually do a Sch. A for my home, but never have done a Sch. C. It looks foreign to me, and I'm not sure how TaxAct will handle it, or if it will put up a red flag to the IRS.

I saved my session and will continue in the morning.
Thanks again.

Schedule C covers self-employment income.
IF you are already using a Schedule A, then you can use the Form 2106 for business expenses. The thing with using the 2106 is that you have to rake off 2% of your income from those expenses before they have any affect.

Example:
You have income of $40K. with $1K of that is misc/self-employment
Therefore the first $800 of business expenses have no effect.

If you have $800 in business/job related expenses, you can not deduct that from the taxable income; Therefore you are still paying tax on the extra $1K.

Using the Schedule C with the same scenario; you can deduct the $800 in business related expenses from the $1K of income.

Therefore you are only getting taxed on the $200 of "profit/Net" vs the $1K of Gross

 

[EagleKeeper]

Originally posted by: MrBlahh
I probably shouldnt have saved this for the last minute but...

I recently graduated from college and havent been able to find a full time job. The last year I have been basically unemployed except I do stuff like computer tech work and other odd jobs for people. I also sold some stuff on ebay. I didnt keep any kind of records but Ive estimated that I made something like $3-4K during the past year and about $300 on ebay. Its all been in cash. Do I need to file taxes? After looking through the forms and booklets from the IRS it looks as though I might have to say that Im self employed, does this sound right?

If anyone can help me Id very much appreciate it.

It may be best to file the paperwork as self-employed.

Especially since you drew un-employment, that income will show up in the IRS system; It would be nice for them to see that is has been accounted for.

 

[Slickone]

Originally posted by: EagleKeeper

Originally posted by: Slickone
I don't quite understand what you're saying about why to use the Sch. C.
I usually do a Sch. A for my home, but never have done a Sch. C. It looks foreign to me, and I'm not sure how TaxAct will handle it, or if it will put up a red flag to the IRS.

I saved my session and will continue in the morning.
Thanks again.

Schedule C covers self-employment income.
IF you are already using a Schedule A, then you can use the Form 2106 for business expenses. The thing with using the 2106 is that you have to rake off 2% of your income from those expenses before they have any affect.

Example:
You have income of $40K. with $1K of that is misc/self-employment
Therefore the first $800 of business expenses have no effect.

If you have $800 in business/job related expenses, you can not deduct that from the taxable income; Therefore you are still paying tax on the extra $1K.

Using the Schedule C with the same scenario; you can deduct the $800 in business related expenses from the $1K of income.

Therefore you are only getting taxed on the $200 of "profit/Net" vs the $1K of Gross

I'd probably screw up trying to do that, and don't have any business expenses so I'm not sure why you mentioned them.

 

[MrBlahh]

Actually, I didnt draw unemplyment. I meant I havent been working besides the odd side jobs. Should I still file as self-employed?

Thanks

 

[EagleKeeper]

Originally posted by: CycloWizard
How much does it actually cost (generally speaking) to have an accountant prepare your federal and state taxes? I filed in three states and I think I'm gonna lose it if I ever have to do this again. I just have two W-2s - no other forms or anything.

Block charges $55 per state plus the cost of the Federal for generic (simple) returns.

 

[EagleKeeper]

Originally posted by: MrBlahh
Actually, I didnt draw unemplyment. I meant I havent been working besides the odd side jobs. Should I still file as self-employed?

Thanks

Your options; If there is no paper trail back to you then you may not have to.

It would be better to file because, when you start having to, Uncle may noticed, thinking that you have either been a bum or are trying to hide something.

 

[EagleKeeper]

Originally posted by: Slickone

Originally posted by: EagleKeeper

Originally posted by: Slickone
I don't quite understand what you're saying about why to use the Sch. C.
I usually do a Sch. A for my home, but never have done a Sch. C. It looks foreign to me, and I'm not sure how TaxAct will handle it, or if it will put up a red flag to the IRS.

I saved my session and will continue in the morning.
Thanks again.

Schedule C covers self-employment income.
IF you are already using a Schedule A, then you can use the Form 2106 for business expenses. The thing with using the 2106 is that you have to rake off 2% of your income from those expenses before they have any affect.

Example:
You have income of $40K. with $1K of that is misc/self-employment
Therefore the first $800 of business expenses have no effect.

If you have $800 in business/job related expenses, you can not deduct that from the taxable income; Therefore you are still paying tax on the extra $1K.

Using the Schedule C with the same scenario; you can deduct the $800 in business related expenses from the $1K of income.

Therefore you are only getting taxed on the $200 of "profit/Net" vs the $1K of Gross

I'd probably screw up trying to do that, and don't have any business expenses so I'm not sure why you mentioned them.

If you do not feel that you can determine any expenses relating to your mentioned income, then just file it as misc income.

 

[EagleKeeper]

Originally posted by: LordSnailz
I'm going to feel stupid about this one -- just filed both my federal and state but realized that I did not include my interest earned from ingdirect ... the interet was about 240? Should I fill out an amendment for both state and federal or just forget about it?

If you choose to forget about it AND Unlce audits you for another reason, then you can get spanked.

Your call.

If you used S/W, filling out ammended returns is easy; but they must be mailed in.

 

[EagleKeeper]

Originally posted by: tallest1
I have two easy questions:

1) In have in front of me my 1098-T which has the total payments recieved (scholarships) for tuition and related expenses. Since I graduated last december, I don't need the Hope or Lifetime learning credit. Do I put in the payments recieved amount anyway?

2) I appears that Free Filing still charges for my Florida State Return. I finished filling out the forms for that and got a "Your balance due to the state of Florida is less than $60. You do not need to pay amounts under $60. " message. Does that mean I can skip filing state taxes altogether and not have to shell out $25 to H&Rblock?

1) You need to fill out all the information relating to 2004 if you were in school and need to account for funds that will have been reproted to Uncle.

2) Puzzled:
When did Fla start having state income taxes?

Free filing coming in from the IRS site, will nail you for state tax returns.

Best bet is to come in through the statetaxfreedom.com site.

Check with the FLA state site on exactly what they are stating. If what you read on their site matches with waht you are thinking, then it sounds like you do not have to file.

However, we are not state tax advice givers.

 

[Fern]

Originally posted by: PMFleXXX

Originally posted by: Fern

Originally posted by: PMFleXXX
if i made money in tx (internship) and pa (campus job), but have my permanent address in MD (where I made no money), in which state(s) do i have to file taxes? TX has no state tax, i had a couple hundred withheld in PA, and haven't done anything in MD.

I believe I should only be filing PA, but TurboTax for some reason keeps saying i should pay taxes on my gross income (including what i made in TX) and not just what i made in PA. Thus, I owe PA a hefty amount in taxes! Is this right?

Thanks!

Notwithstanding any tax software issues, you should first determine in which state you are considered a resident. That state will likely require that you declare all income, no matter the source. Your state of residency will then give you a credit for taxes paid to another state where you made income. This of course causes problems when you earn money in a state with no personal income taxes like TX (there's no credit available, because there were no taxes paid to TX).

Be careful about Maryland. I had a client who moved from there to NY for a short while (not long enough to be a NY resident), and was then sent by the NY employer to Hong Kong for several years. When he returned Maryland wanted taxes for the income earned in HK, because Maryland cliamed he was still resident while living in HK for several years.

Cliff Notes: You're likely a resident in either ML or PA, and they will likely claim (correctly under tax law) that you owe them taxes on income earned in TX.

(Been a while ince I've done ML or PA taxes, so if another CPA has updated info on this, please chime in)

Fern

Originally posted by: EagleKeeper
TurboTax is a pain when you cross states as are most Tax S/W packages (both online and offline)

The best way is to treat it as a move from TX to PA.

OR

You have to manually let PA know that you had excluded income in TX.


IF this does not work, you will have to did into the TurboTax help system to find out how to tell it that you have excluded state income. And it may not accept it, becuase no tax was paid on that other income.

I'm confused now, should or should I not be paying taxes on income that I earned in Texas? And am I supposed to file just in my state of residency, or wherever I earned income?

Thanks!

If your residence is in ML, you'll need to file a regular return there. Reporting all income earned no matter where earned. This will result in paying taxes to ML on the TX income. There will be no credit since you paid nothing TX. Yeah, it sucks. The income from PA will also be reported there, but you'll get a credit for the PA taxes paid. Then you'll have to file a Non-Resident tax return in PA.

If you claim residence in PA, you'll have to report the TX income there. Same prob with no tax credit. I.e, PA will get your tax money from TX income. If ML sees you filed as a resident of PA, they won't bother you. IIRC, ML says you only cease being a resident there when you file as a resident of another State.

Hope that helps (even though its not good news)

Fern

 

[grooveman]

Hi, kindly tax people!

I just wanted to check in on something. I've just started a small, small, small business. (Sole proprietorship; started in late January)

Normally, a person in this situation would file quarterly to pay their taxes. (Self-employment tax, etc.) I was peering at some forms on the IRS site, and they made it sound like it was not necessary to file quarterly under certain circumstances. If I read the form right, if a person had an estimated tax liability of less than $1,000 for the year or didn't have any tax liability the previous year, quartely filing was not necessary. Alas, both of those circumstances apply to me.

I just wanted to make sure that I read everything properly. I might have a long night ahead otherwise.

No matter what, I think I've got to make an appointment to see a CPA soon. *Sighs*

Thanks very kindly - you all are wonderful!

Groove