ATOT's Second Annual Tax Time Thread!

[orion7144]

Originally posted by: CPA

Originally posted by: orion7144
2 quick questions...

1. On the sales tax deduction, Since we were not aware that we would have to keep reciepts and they cam out with the tables, I see you can add the tax on an automobile purchase but, can you add other high ticket purchases on as well. I have all of my reciepts for the new fridge, tv, computer parts, car, etc.

2. I eat luch out 2-3 times per week with our equipment vendors. Since we are talking "shop" can I write that off as a un-reimbures buisness expense?

1. Basically, vehicles, boats, home (manufactured, prefabbed) and home building materials can be included.

2. See my response to Slycat above.

Thanks, I don't have any problems meeting the standard deduction with my house so any little bit extra (meals) will help increase the refund.

 

[EagleKeeper]

Yes - As long as you end up paying at least 80% of the tax due for the year (by withholding or pre-payment) you can adjust your withholding limits to what ever you choose.

If you have to little withheld according to the IRS guidelines, you can get hit with a penalty.
Details on the withholding guidelines can be found at the IRS web site

 

[EagleKeeper]

Originally posted by: orion7144

Originally posted by: CPA

Originally posted by: orion7144
2 quick questions...

1. On the sales tax deduction, Since we were not aware that we would have to keep reciepts and they cam out with the tables, I see you can add the tax on an automobile purchase but, can you add other high ticket purchases on as well. I have all of my reciepts for the new fridge, tv, computer parts, car, etc.

2. I eat luch out 2-3 times per week with our equipment vendors. Since we are talking "shop" can I write that off as a un-reimbures buisness expense?

1. Basically, vehicles, boats, home (manufactured, prefabbed) and home building materials can be included.

2. See my response to Slycat above.

Thanks, I don't have any problems meeting the standard deduction with my house so any little bit extra (meals) will help increase the refund.

Remember meals only are allowed at 50%. The IRS frowns on liquid meals :beer::wine:

 

[Carrot44]

I just got in the mail a 1099G from the state of Idaho for when I worked there in 2003. (I live in Washington State) Do I have to report the $70 dollar refund as income on my 2004 Federal return? Idaho charges income tax if you live in another state and work in Idaho cause they don't have a labor and industries thingie.

Ken

 

[EagleKeeper]

Originally posted by: Carrot44
I just got in the mail a 1099G from the state of Idaho for when I worked there in 2003. (I live in Washington State) Do I have to report the $70 dollar refund as income on my 2004 Federal return? Idaho charges income tax if you live in another state and work in Idaho cause they don't have a labor and industries thingie.

Ken

If on your 2003 taxes, you deducted income tax paid that year on the Schedule A, the 1099G (Refund) is taxable.

If no itemization, then no declaration of 1099G (Refund) is needed as a line item for income.

 

[Insane3D]

I just received my TeleFile packet in the mail today, and noticed it was available starting today (1/13), which is seems to be a day earlier than when normal filing opens. So, I just got finished filing, and should be getting a direct deposit of $820 soon. I think this is the earliest I've ever filed...

Thanks again to EagleKeeper and CPA for the thread and the help.

:thumbsup:

 

[ggavinmoss]

Question: I messed up my automatic paycheck deductions for my Roth IRA this year and didn't contribute my maximum. I was under the impression that you could contribute the difference before April 15 and have that count towards the previous calendar year, but I can't find anything that confirms/denies this. A little help?

-geoff

 

[EagleKeeper]

Originally posted by: ggavinmoss
Question: I messed up my automatic paycheck deductions for my Roth IRA this year and didn't contribute my maximum. I was under the impression that you could contribute the difference before April 15 and have that count towards the previous calendar year, but I can't find anything that confirms/denies this. A little help?

-geoff

IRAs - IRS FAQ

Contributions must be made by due date. Contributions can be made to your traditional IRA for a year at any time during the year or by the due date for filing your return for that year, not including extensions. For most people this means that contributions for 2004 must be made byApril 15, 2005, and contributions for 2005 must be made by April 17, 2006.

 

[Pacfanweb]

Okay, I bought a business in 2004. It is a sole proprietorship.
Can I deduct the price I paid for the business?

 

[Carrot44]

Originally posted by: EagleKeeper

Originally posted by: Carrot44
I just got in the mail a 1099G from the state of Idaho for when I worked there in 2003. (I live in Washington State) Do I have to report the $70 dollar refund as income on my 2004 Federal return? Idaho charges income tax if you live in another state and work in Idaho cause they don't have a labor and industries thingie.

Ken

If on your 2003 taxes, you deducted income tax paid that year on the Schedule A, the 1099G (Refund) is taxable.

If no itemization, then no declaration of 1099G (Refund) is needed as a line item for income.

I don't remember if I did or not So would it be best to just claim it? 70 bucks won't make a difference one way or the other.

Ken

 

[EagleKeeper]

Originally posted by: Carrot44

Originally posted by: EagleKeeper

Originally posted by: Carrot44
I just got in the mail a 1099G from the state of Idaho for when I worked there in 2003. (I live in Washington State) Do I have to report the $70 dollar refund as income on my 2004 Federal return? Idaho charges income tax if you live in another state and work in Idaho cause they don't have a labor and industries thingie.

Ken

If on your 2003 taxes, you deducted income tax paid that year on the Schedule A, the 1099G (Refund) is taxable.

If no itemization, then no declaration of 1099G (Refund) is needed as a line item for income.

I don't remember if I did or not So would it be best to just claim it? 70 bucks won't make a difference one way or the other.

Ken

Get a hold of your copy of last years tax return or dig up the W2 if you can not find it.
The tax retrun copy will indicate if you itemized,

The W2 may give you a clue based on income

 

[CPA]

Originally posted by: Pacfanweb
Okay, I bought a business in 2004. It is a sole proprietorship.
Can I deduct the price I paid for the business?

It depends on how you will handle asset depreciation. When you purchased the business, you bought assets (equipment, vehicles, goodwill, covenants not to compete, etc.). Those assets need to be depreciated or amortized. OR you can take them as Section 179 expenses.

It's kind of difficult to give a yes/no, black/white answer on this because you actually have choices on to take as expense or depreciate. And if you depreciate, what method to use. You will really need to read the instructions for Schedule C and then play with the numbers to see what best fits your tax situation.

 

[CPA]

Originally posted by: Insane3D
I just received my TeleFile packet in the mail today, and noticed it was available starting today (1/13), which is seems to be a day earlier than when normal filing opens. So, I just got finished filing, and should be getting a direct deposit of $820 soon. I think this is the earliest I've ever filed...

Thanks again to EagleKeeper and CPA for the thread and the help.

:thumbsup:

I've been working on my taxes since mid-December. Now, I'm just waiting for some W2s, 1099s and finalize my business income to confirm the numbers I have put in. I'm a personal tax dweeb.

 

[Insane3D]

Originally posted by: CPA

Originally posted by: Insane3D
I just received my TeleFile packet in the mail today, and noticed it was available starting today (1/13), which is seems to be a day earlier than when normal filing opens. So, I just got finished filing, and should be getting a direct deposit of $820 soon. I think this is the earliest I've ever filed...

Thanks again to EagleKeeper and CPA for the thread and the help.

:thumbsup:

I've been working on my taxes since mid-December. Now, I'm just waiting for some W2s, 1099s and finalize my business income to confirm the numbers I have put in. I'm a personal tax dweeb.

Nothing wrong with that. I'm glad I have a simple return, and my employer (Marriott) gives us our W2's in the first week of January. I imagine having a business and investment income, as well as children makes it much more complicated. I'm also glad I have no state income or sales tax.

 

[Dedpuhl]

Filed this morning. I'm so happy mine is so simple. If it wasn't for tuition, I could use the ez form.

I overpaid $1400 last year.

 

[badmouse]

I had a bunch of random jobs which I lump together as business income as a "computer consultant".

I also find that I made more money than I thought as a musician, about $5000 - with my main music expenses being a digital keyboard, computer, cables, software etc.

In the past I've always called that a separate business, but is there any reason not to put that together with the "computer consultant" and just have one business?

 

[CPA]

Originally posted by: badmouse
I had a bunch of random jobs which I lump together as business income as a "computer consultant".

I also find that I made more money than I thought as a musician, about $5000 - with my main music expenses being a digital keyboard, computer, cables, software etc.

In the past I've always called that a separate business, but is there any reason not to put that together with the "computer consultant" and just have one business?

Technically you should file a schedule C seperately. The IRS asks you to use codes to classify your business. This helps keep track of what type of business you are filing for and gives a guage to governmental departments the type of businesses that exist out there. Also, and more importantly, it helps the IRS determine if expenses are in line with other businesses in that category.

 

[Zebo]

2) This is the final year of the SUV Business Use Tax loophole. For vehicles purchased this year and over 6000 pounds gross weight, this is the last year you can expense, as business Section 179 expense, the total cost (up to $100K) of the vehicle. the weight and percentage business use is key, but it is a great way of reducing your Schedule C business income if you did it.

Loophole? You make it sound so sisnister lol.

Anyway is'nt the new limit 8800GVW?

 

[Noirish]

What can be claimed as hobby?

Computer and related hardware purchases?

 

[Zebo]

You can't claim hobbies. But since the current rules are sufficiently vague I'm sure you can fiqure out how to. It's all about "intent".

 

[markgm]

Originally posted by: Noirish
What can be claimed as hobby?

Computer and related hardware purchases?

I build computers for friends and family. It's a hobby that I do on the side. I sell them to them, but they don't pay anywhere near what it costs me to not only put it together, but the knowledge involved in putting one together ;-)

Excellent thread by the way. I'm up to 3300 back so far!

 

[Nuriko]

Originally posted by: Noirish
What can be claimed as hobby?

Computer and related hardware purchases?

Many things could be counted as hobbies, anything from building and selling computers at a loss (per markgm) to breeding horses. However, hobby expenses are only deductable to the limit of hobby income (so if you had $1000 of expenses and $500 of income from the hobby, you would end up claiming no income from the hobby, not a $500 loss to deduct against other income). If you wanted to have the $500 loss count against the other income you have be conducting the business for profit per the IRS, you can read more at http://www.irs.gov/publications/p535/ch01.html#d0e619 (it's pub 535, if you're wondering)

If you do not carry on your business or investment activity to make a profit, you cannot use a loss from the activity to offset other income. Activities you do as a hobby, or mainly for sport or recreation, are often not entered into for profit.

The limit on not-for-profit losses applies to individuals, partnerships, estates, trusts, and S corporations. It does not apply to corporations other than S corporations.

In determining whether you are carrying on an activity for profit, several factors are taken into account. No one factor alone is decisive. Among the factors to consider are whether:

1. You carry on the activity in a businesslike manner,
2. The time and effort you put into the activity indicate you intend to make it profitable,
3. You depend on the income for your livelihood,
4. Your losses are due to circumstances beyond your control (or are normal in the start-up phase of your type of business),
5. You change your methods of operation in an attempt to improve profitability,
6. You, or your advisors, have the knowledge needed to carry on the activity as a successful business,
7. You were successful in making a profit in similar activities in the past,
8. The activity makes a profit in some years, and
9. You can expect to make a future profit from the appreciation of the assets used in the activity.

Presumption of profit. An activity is presumed carried on for profit if it produced a profit in at least 3 of the last 5 tax years, including the current year.

 

[Nuriko]

Originally posted by: Zebo

2) This is the final year of the SUV Business Use Tax loophole. For vehicles purchased this year and over 6000 pounds gross weight, this is the last year you can expense, as business Section 179 expense, the total cost (up to $100K) of the vehicle. the weight and percentage business use is key, but it is a great way of reducing your Schedule C business income if you did it.

Loophole? You make it sound so sisnister lol.

Anyway is'nt the new limit 8800GVW?

Actually, from my understanding, this isn't the last year; I think 2009 will be the last year. However, as of Octobter 22, 2004, the max. 179 deduction for SUVs weighing 6k-14k lbs gvw is 25k (you can still claim up to the full 102k for trucks and other equipment). If you bought and put into service (it has to be at least 50% used for business and that percentage is prorated against the total cost of the suv the SUV) before that day, you can claim up to the full 102k, as well as bonus depreciation.

Example: if you bought a hummer for 60k and only use it 60% for business, then you could immediately take 36k 179 depreciation, if it was bought before 10/22/04. However, the 179 depreciation starts to phase out if you bought over 410k of qualifying property (one example is tangible personal property such as machines, equipment, furniture).

 

[Pacfanweb]

Originally posted by: CPA

Originally posted by: Pacfanweb
Okay, I bought a business in 2004. It is a sole proprietorship.
Can I deduct the price I paid for the business?

It depends on how you will handle asset depreciation. When you purchased the business, you bought assets (equipment, vehicles, goodwill, covenants not to compete, etc.). Those assets need to be depreciated or amortized. OR you can take them as Section 179 expenses.

It's kind of difficult to give a yes/no, black/white answer on this because you actually have choices on to take as expense or depreciate. And if you depreciate, what method to use. You will really need to read the instructions for Schedule C and then play with the numbers to see what best fits your tax situation.

Actually, there were no assets bought in this purchase. (okay, a stamp and a stapler)
Basically, it's a service business, mobile and I work out of my car. I paid the guy I bought it from, but there weren't really any assets. I paid for the name, basically, and I guess essentially for him to sign a non-compete agreement and walk away. And a specified period of training.

Then I bought my own materials and went to work.
I have papers we signed and receipts for the money I paid him for the business. That help any?

 

[CPA]

Originally posted by: Pacfanweb

Originally posted by: CPA

Originally posted by: Pacfanweb
Okay, I bought a business in 2004. It is a sole proprietorship.
Can I deduct the price I paid for the business?

It depends on how you will handle asset depreciation. When you purchased the business, you bought assets (equipment, vehicles, goodwill, covenants not to compete, etc.). Those assets need to be depreciated or amortized. OR you can take them as Section 179 expenses.

It's kind of difficult to give a yes/no, black/white answer on this because you actually have choices on to take as expense or depreciate. And if you depreciate, what method to use. You will really need to read the instructions for Schedule C and then play with the numbers to see what best fits your tax situation.

Actually, there were no assets bought in this purchase. (okay, a stamp and a stapler)
Basically, it's a service business, mobile and I work out of my car. I paid the guy I bought it from, but there weren't really any assets. I paid for the name, basically, and I guess essentially for him to sign a non-compete agreement and walk away. And a specified period of training.

Then I bought my own materials and went to work.
I have papers we signed and receipts for the money I paid him for the business. That help any?

The you purchased goodwill and a covenant not to compete, but of which will have to be amortized.