ATOT's Second Annual Tax Time Thread!

[EagleKeeper]

Originally posted by: Rumpltzer
Question #1:
I married a little lady in December, 2004. She's not a US citizen, she has no SSN, and she doesn't live/work in the US.

Does the IRS care? I mean, does the mere fact that I'm married gain me anything as far as tax breaks if my wife isn't a citizen, has no SSN, and doesn't work in the US?

Question #2:
I got out of school and my employer paid my relocation expenses in July, 2004.

In January, 2005, I quit that job and was required to reimburse the company $5500 in relocation expenses. Can I claim the $5500?

Question #1:
You will have to go to the local SS office and attempt to get a SS# for her.
If they will not provide one, then you may have to talk to the IRS about how to handle the situation permanently. They may allow you to use a universal number but it will then flag your return every year for a manual review.

Being married does generate a tax break. It may be easier to just ignore the fact you are married with respect to the IRS.

Has the married been reported to the SS? They should know about it so as to allow survivor benifits at a minimum.


Question #2:

An intent to live in the area also is considered to be valid.
If you haven't met the time test by the date your 2004 tax return is due, you may still deduct your moving expenses on your 2004 return as long as you expect to meet the time test.

Seeing as your employer wanted to be re-embursed, then if you intend to live in the area for the required time that the relocation expense applies to, you can claim it using the Form 3903 for the 2004 tax year.

 

[Rumpltzer]

Thanks for the info CPA and EagleKeeper.

Although I only lived at the apartment from July to January, I was employed at the first job for 37 weeks and 3 days... which doesn't seem to help with the time test even if it was a valid argument.

I think I'll pretend to be single for this year. My little lady owns a school in Taiwan, and I'm not sure claiming her on my (our) taxes will be all that beneficial for me (us).

It also looks like I should hire myself a real tax preparer this year (for the first time).

Question #3:
How does one go about finding a tax preparer? About how much would one expect to pay? Should I avoid big tax houses like H&R Block and such for some reason?

 

[slycat]

Originally posted by: EagleKeeper

Thanks for the replies...learning stuff.

 

[EagleKeeper]

Originally posted by: Rumpltzer
Thanks for the info CPA and EagleKeeper.

Although I only lived at the apartment from July to January, I was employed at the first job for 37 weeks and 3 days... which doesn't seem to help with the time test even if it was a valid argument.

I think I'll pretend to be single for this year. My little lady owns a school in Taiwan, and I'm not sure claiming her on my (our) taxes will be all that beneficial for me (us).

It also looks like I should hire myself a real tax preparer this year (for the first time).

Question #3:
How does one go about finding a tax preparer? About how much would one expect to pay? Should I avoid big tax houses like H&R Block and such for some reason?

Question #4 (no offsense to CPA) but why.
Unless you have a complex business arangement, for an indivigual, there should be no need for a tax specialist (if one has the smarts required to finish High School). Most will have only the same education that you have along with training on how to use a S/W package. I would ventura to guess that 80-90% of the people using the services at Wal-Mart , H&R Block, etc are either unable to comprehend instructions or are too lazy to do the effort. And they are willing to pay $50-$80 for some-one to essentially handhold them. Then to boot, they will pay an extra $20 for E-filing to get $100-$200 back.

Pay for the Tax S/W ($20-$30), and the program will walk you through what you need to enter. You will just have to determine what additional information may be needed. Clues for that will come from the questions being asked by the S/W.

The S/W does not require you to do everything at once. You can stop at any time or jump around to different areas as needed.

Question #2:
With respect to the job situation, it is not how long you were employed, but how long you lived in the area that you claimed/are claiming relocation costs for.

 

[CPA]

Originally posted by: Rumpltzer
Thanks for the info CPA and EagleKeeper.

Although I only lived at the apartment from July to January, I was employed at the first job for 37 weeks and 3 days... which doesn't seem to help with the time test even if it was a valid argument.

I think I'll pretend to be single for this year. My little lady owns a school in Taiwan, and I'm not sure claiming her on my (our) taxes will be all that beneficial for me (us).

It also looks like I should hire myself a real tax preparer this year (for the first time).

Question #3:
How does one go about finding a tax preparer? About how much would one expect to pay? Should I avoid big tax houses like H&R Block and such for some reason?

referrals from others. depends on the complexity of your filing - could be as low as $50 to several hundreds of dollars. No, the big boys can do just as well, as long as you are confident that they person working with you is compentent. Plus, the big boys can offer perks the others don't - like loans and error-free guarantees.

 

[olds]

Question:
We live in CA.
My wife took a job in another town. It's probably too far to commute.
If we buy a motor home (in this case a fifth wheel) for her to stay in during the week, is any portion of that (other than the interest deduction as a second home) deductible? We have a small motor home but would sell that to buy the larger mh.
Thanks.

 

[EagleKeeper]

Originally posted by: oldsmoboat
Question:
We live in CA.
My wife took a job in another town. It's probably too far to commute.
If we buy a motor home (in this case a fifth wheel) for her to stay in during the week, is any portion of that (other than the interest deduction as a second home) deductible? We have a small motor home but would sell that to buy the larger mh.
Thanks.

You are probably SOL in terms of extra deductions.

Commuting costs for the primary job are not deductible, nor is the cost for a vehicle to get to work.
At most, she can recoup the costs of 1-2 trips in terms of residence relocation expenses via a Form 3903

If she was to be paid as 1099 then it would be different.

 

[Leejai]

is the interest from a 401k loan deductible?

 

[EagleKeeper]

No

 

[luvya]

Ok, got a minor problem here. Last year I opened an account at Union bank and received $75 welcome bonus. They sent me a "combined tax statement for year 2004" letter today, I dunno if I need to file for tax or not. I remember if it's any amount under $400 I am safe, isn't it?

 

[EagleKeeper]

The $75 is classified as interest.

Prepare your taxes with that value added in.

If that is your only income, then you do not need to file.

 

[sygyzy]

Any chance I can get some help with my stock/AMT situation guys?

 

[Nuriko]

Originally posted by: sygyzy
Any chance I can get some help with my stock/AMT situation guys?

Possibly, you never know until we have some details to work with

 

[sygyzy]

You're right, I'll repost.

I was granted some stock last year (2004). The stock vested and half was converted to a different company's stock (we were bought) and half was put into cash. Part of cash was given to me and part was kept to be distributed over the next three years (40%, 40%, 20%). I wrote a check to cover the stock purchases (paying less than their value of course). I sold half the stock and made some gains (very little). I still own half.

What are my tax consequences? I assume it is 100% ordinary income? What exactly will be taxed? Will I be taxed on the cash portion that I never received (they are keeping it then slowly releasing it, remember). Do I simply take the value of the stocks, minus the cost, then add that to my yearly income as if I was given all cash?

Do I fall under AMT?

 

[CPA]

Originally posted by: sygyzy
You're right, I'll repost.

I was granted some stock last year (2004). The stock vested and half was converted to a different company's stock (we were bought) and half was put into cash. Part of cash was given to me and part was kept to be distributed over the next three years (40%, 40%, 20%). I wrote a check to cover the stock purchases (paying less than their value of course). I sold half the stock and made some gains (very little). I still own half.

What are my tax consequences? I assume it is 100% ordinary income? What exactly will be taxed? Will I be taxed on the cash portion that I never received (they are keeping it then slowly releasing it, remember). Do I simply take the value of the stocks, minus the cost, then add that to my yearly income as if I was given all cash?

Do I fall under AMT?

sygyzy, sorry about missing your question earlier, I thought I had responded, but it looks like I just read it and thought to myself "crap, that's complicated" and forgot to get back to it. In any case, I can answer one question and have several questions to help me understand your issue.

1) AMT is not something that can be answered easily. You will need to account for everything and determine if you will have to pay AMT. A software program will help with this. Or you can rough draft it by hand with schedule 1040, schedule A (if you itemize) and schedule 6251 (AMT schedule).

2) Now for my questions. Do you know if these were Incentive Stock Options or Non-qualified stock options (This is key)? Did you receive the cash from the broker or through payroll? If I understand you right, you received a portion of the cash that came from the conversion AND you made some money selling the converted stock, correct? How long did you hold the stock?

 

[sygyzy]

Originally posted by: CPA

Originally posted by: sygyzy
You're right, I'll repost.

I was granted some stock last year (2004). The stock vested and half was converted to a different company's stock (we were bought) and half was put into cash. Part of cash was given to me and part was kept to be distributed over the next three years (40%, 40%, 20%). I wrote a check to cover the stock purchases (paying less than their value of course). I sold half the stock and made some gains (very little). I still own half.

What are my tax consequences? I assume it is 100% ordinary income? What exactly will be taxed? Will I be taxed on the cash portion that I never received (they are keeping it then slowly releasing it, remember). Do I simply take the value of the stocks, minus the cost, then add that to my yearly income as if I was given all cash?

Do I fall under AMT?

sygyzy, sorry about missing your question earlier, I thought I had responded, but it looks like I just read it and thought to myself "crap, that's complicated" and forgot to get back to it. In any case, I can answer one question and have several questions to help me understand your issue.

1) AMT is not something that can be answered easily. You will need to account for everything and determine if you will have to pay AMT. A software program will help with this. Or you can rough draft it by hand with schedule 1040, schedule A (if you itemize) and schedule 6251 (AMT schedule).

2) Now for my questions. Do you know if these were Incentive Stock Options or Non-qualified stock options (This is key)? Did you receive the cash from the broker or through payroll? If I understand you right, you received a portion of the cash that came from the conversion AND you made some money selling the converted stock, correct? How long did you hold the stock?

CPA,

Thanks for taking the time. Answers:

I held the stock a few months. Much less than a year. I still have roughly half that will reach a year in a few months. I received the cash from payroll I believe. I am not sure why this makes a difference? It might be the broker. I gave them my bank routing number and account and the money just appeared deposited. Then I wrote a check to cover my cost for the stocks. The stocks are Incentive Stock Options. You are correct, I made some money from selling the converted stock. Not much though, maybe a few $100. One confusing part is that the cash I received was because they just cashed out half my shares into cash. They weren't really "sold" per se. They just took number stocks, divided by two, and gave me cash for it. In that case, I didn't profit on the market per se. But I did "profit" since I bought them for less than their value. I want to know how this is going to be taxed?

 

[geekz0r]

when does the employer have to have the w2's mailed out for the employee, I thought it was end of January, can anyone confirm this?

 

[SarcasticDwarf]

I am 20 and have always files a 1040EZ as I am claimed as a dependant by my parents. This past year I have made (in addition to my summer job) ~$430 from Google and Comission Junction (ad sales on websites). Where should I report this? I have heard that there are two different spots it can be claimed at.

 

[EagleKeeper]

Originally posted by: geekz0r
when does the employer have to have the w2's mailed out for the employee, I thought it was end of January, can anyone confirm this?

Confirmed

 

[EagleKeeper]

Originally posted by: SarcasticDwarf
I am 20 and have always files a 1040EZ as I am claimed as a dependant by my parents. This past year I have made (in addition to my summer job) ~$430 from Google and Comission Junction (ad sales on websites). Where should I report this? I have heard that there are two different spots it can be claimed at.

If you total income will generate no tax liability, there is a line item on the 1040 forms for misc income.

IF there is a tax liability, then you can put the extra income on a Schedule C and then deduct expenses incurred in generation of that income and/or related to it.

 

[Doggiedog]

I've got a question about accountants.

I've been using the same accountant (my friend's business accountant) for several years. In the time I've used him, I have never gotten a tax refund. In fact, last year I got charged extra for unpaid NY state tax although it was only for $32.

I'm ambivalent as to whether or not I like him. I just hand him my info and he gives me back the forms. Would you recommend I change accountants and find someone new or just stick with slow and steady. The one issue I have is that I must have $500K in stock losses over the years that he knows about. Would this matter if I go to a new accountant?

Thanks.

 

[oog]

if i pay the remaining part of my 2004 property taxes for my primary residence (in CA) in january 2005, do i file that part of my property taxes as a deduction on my 2004 taxes or 2005 taxes? thanks in advance.

 

[EagleKeeper]

Originally posted by: oog
if i pay the remaining part of my 2004 property taxes for my primary residence (in CA) in january 2005, do i file that part of my property taxes as a deduction on my 2004 taxes or 2005 taxes? thanks in advance.

Deductible in the year that you sign the check, not the year that the tax is for.

 

[CPA]

Originally posted by: EagleKeeper

Originally posted by: oog
if i pay the remaining part of my 2004 property taxes for my primary residence (in CA) in january 2005, do i file that part of my property taxes as a deduction on my 2004 taxes or 2005 taxes? thanks in advance.

Deductible in the year that you sign the check, not the year that the tax is for.

As Eaglekeeper states. I had to correct my CPA boss on this issue last year. It just goes to show how complicated the tax system is.

 

[CPA]

Originally posted by: Doggiedog
I've got a question about accountants.

I've been using the same accountant (my friend's business accountant) for several years. In the time I've used him, I have never gotten a tax refund. In fact, last year I got charged extra for unpaid NY state tax although it was only for $32.

I'm ambivalent as to whether or not I like him. I just hand him my info and he gives me back the forms. Would you recommend I change accountants and find someone new or just stick with slow and steady. The one issue I have is that I must have $500K in stock losses over the years that he knows about. Would this matter if I go to a new accountant?

Thanks.

did you receive copies of your prior filings? You can also ask for copies of his workpapers on you. It doesn't hurt to try someone different.