The 2015 Annual ATOT Income Tax Thread

[Ackmed]

I am pretty clueless when it comes to taxes, but expect to get raped again this year. We take them to a tax guy that my wife's dad has used for years. We've both claimed single and 0 to with hold more so we don't have to pay so much in.

IRS just sent me a letter saying I still owe money from 2013 from penalties. Which is not true, I paid it but they put it on the year 2014 and not 2013. Their mistake. I brought it to their attention, and was told "the system will work itself out". So late fees continued. I have everything documented, and when I called this week "part of the system is down" until the 11th so she couldn't verify what I was saying was true. I've been getting threatened with them seizing my assets for a mistake they made, and twice. Fucking annoying, and I work for the damn government, twice over.

OMG, you're still a dickhead.

To be fair... you initiated the dickheadery in your original post. Being a smart ass trying start something. Just stop, thanks. Let the thread be informative.

 

[Imported]

Got married in 2015. From the brackets listed, it seems it would be better off filing separately (25% and 25%) rather than a joint 28%.. does this seem right or am I missing something?

I'll run it through the software both ways whenever our W2s come in but was just curious ahead of time.

Our filings in the past have been very simple. We have no property, no kids, can't deduct student loan interest, etc.

 

[JM Aggie08]

Need some help with a few things:

Got married in November, have not changed our W4s at work. What do we need to do when filing this year? To tack onto the question above, it seems it would be best to file separately -- is there any other benefit to filing jointly that I'm not aware of? Can we even file jointly if we never changed our W4 in 2015?

 

[s0me0nesmind1]

Need some help with a few things:

Got married in November, have not changed our W4s at work. What do we need to do when filing this year? To tack onto the question above, it seems it would be best to file separately -- is there any other benefit to filing jointly that I'm not aware of? Can we even file jointly if we never changed our W4 in 2015?

Few things:

1) Your W4 essentially doesn't matter when filing your taxes. Your W4 is simply how it calculates what to deduct off your paycheck during your pay-cycle. If you were married as of December 31, 2014 at 11:59 pm, you should file married.

2) It is EXTREMELY unlikely that filing separate is in your best interest. Filing Separate severely limits you on some tax credits, and if you are going to itemize, it's not beneficial either because if one person itemizes, the spouse must itemize as well.

See: https://turbotax.intuit.com/tax-too...le-Taxes-Jointly-or-Separately-/INF20137.html

 

[JEDI]

what happened to EagleKeeper?

 

[postmark]

Sorry for the long winded post, but I wanted to try to put all the info out front. Thanks ahead for your help!
We refinanced to a 20 year in Jan 2011 and the 1098 from that year reported $2214 points in box 2 of that year. We've been deducting that over the life of that loan as follows:
2011 - $92
2012 - $111
2013 - $111
2014 - $111
So at this point we have $1789 left from those to amortize over the new 15 year loan. However, looking back on the HUD-1 from 2011 though, I see that lines 801 - 803 are listed as follows which makes me confused as to why the 1098 only showed $2214 in box 2:

line 801 (our origination charge) - $65
line 802 (your credit/charge (Points) for the specific interest rate chosen) - $2766.88 (1.25% in our case)
line 803 (your adjusted origination charges) - $2831.88

So the first question is, was the $2214 correct, or should we have been deducting from 2831.88 the whole time?
Now, in 2015 we refinanced again with the same lender into a 15 year loan. This time we rolled all costs into the new loan (we paid no money at closing, in 2011 we paid around $10k). Our 1098 came and this year box 2 is blank (I assume because we didn't pay cash at closing?). On our HUD-1 statement, we have the following this time:

line 801 (our origination charge) - $1050
line 802 (your credit/charge (Points) for the specific interest rate chosen) - $3150 (1.5% in our case)
line 803 (your adjusted origination charges) - $4200

So the question is, can I deduct these (or whatever portion is deductible) over the life of the new loan with the remainder of the points from the first refinance? Or do we just miss out on these points?
Thanks!

 

[96Firebird]

A little background on my 2015 year...

Got laid off in January, was unemployed for 6 months. During my unemployment, I received unemployment money. I also worked a contract job that lasted 2 weeks, and paid over $5000. The company that I worked for was out of PA. I live in NY. I then found a full-time job in June and have been working there since.

So, on my taxes (using H&R Block software), do I enter my contract work on form 1099-MISC? Do I need to file anything to PA for the work, or is it all NY since I lived in NY during the work? I didn't have any expenses, so I am listing the full amount I received as income and 0 deductible expenses. It seems the softwares (I have both H&R Block and TurboTax and am comparing the two) don't explain contract work very well, and I am getting a little confused on how to handle my situation. Then I'm also reading about paying estimated taxes quarterly, but I don't think I needed to do that because I am expected to get a refund at the end of the year because of paying taxes for my full-time job?

Any advice would be appreciated...

 

[pete6032]

A little background on my 2015 year...

Got laid off in January, was unemployed for 6 months. During my unemployment, I received unemployment money. I also worked a contract job that lasted 2 weeks, and paid over $5000. The company that I worked for was out of PA. I live in NY. I then found a full-time job in June and have been working there since.

So, on my taxes (using H&R Block software), do I enter my contract work on form 1099-MISC? Do I need to file anything to PA for the work, or is it all NY since I lived in NY during the work? I didn't have any expenses, so I am listing the full amount I received as income and 0 deductible expenses. It seems the softwares (I have both H&R Block and TurboTax and am comparing the two) don't explain contract work very well, and I am getting a little confused on how to handle my situation. Then I'm also reading about paying estimated taxes quarterly, but I don't think I needed to do that because I am expected to get a refund at the end of the year because of paying taxes for my full-time job?

Any advice would be appreciated...

Not a tax pro but I had a similar situation a few years ago, lived in one state and worked remotely as a contractor for a consulting firm whose primary location was in another state. I reported the income on the return for my home state, not on the state where the consulting office was. I did this because I was doing the actual work in my home state, not in the consulting office state. Also I never made estimated payments because I knew my other deductions would equal more than the estimated payments for the contract work.

 

[glenn1]

For the "child or dependent care" tax credit, I presume that care provided by an Au Pair who has a social security number qualifies?

 

[ElFenix]

stuck

ATOT Moderator ElFenix

 

[drebo]

I had no health insurance during the month of December due to starting a new job in November and not being eligible under that new job for coverage until January. Old job never sent me COBRA paperwork.

Am I going to have to pay massive stupid penalties?

 

[JM Aggie08]

I had no health insurance during the month of December due to starting a new job in November and not being eligible under that new job for coverage until January. Old job never sent me COBRA paperwork.

Am I going to have to pay massive stupid penalties?

Thanks Obama.

 

[Xcobra]

A little background on my 2015 year...

Got laid off in January, was unemployed for 6 months. During my unemployment, I received unemployment money. I also worked a contract job that lasted 2 weeks, and paid over $5000. The company that I worked for was out of PA. I live in NY. I then found a full-time job in June and have been working there since.

So, on my taxes (using H&R Block software), do I enter my contract work on form 1099-MISC? Do I need to file anything to PA for the work, or is it all NY since I lived in NY during the work? I didn't have any expenses, so I am listing the full amount I received as income and 0 deductible expenses. It seems the softwares (I have both H&R Block and TurboTax and am comparing the two) don't explain contract work very well, and I am getting a little confused on how to handle my situation. Then I'm also reading about paying estimated taxes quarterly, but I don't think I needed to do that because I am expected to get a refund at the end of the year because of paying taxes for my full-time job?

Any advice would be appreciated...

You will only need to file for the state you are a resident of, ie NY. And yes, 1099-MISC will need to be entered into the software. You can use Sch C with no expenses and the system should calculate the self-employment taxes (and deduction) you will owe on the income.

On the estimated taxes, you are required to pay each quarter (you can google when they are due) if you have self-employment income (or other income with no withholding). This is to try to minimize any penalties for not having any withholding on the same income throughout the year. For 2015, it's done and dusted so you'll need to see what the results are after you're done with them. 2016, only if you expect more contract work should you pay estimated taxes. Sorry, long answer :biggrin:

 

[Xcobra]

I had no health insurance during the month of December due to starting a new job in November and not being eligible under that new job for coverage until January. Old job never sent me COBRA paperwork.

Am I going to have to pay massive stupid penalties?

That's so odd you were not eligible for insurance at your new job. I think there is an exemption if you did not exceed two months of coverage. See below. You should be able to indicate in the software for this exemption. Either way, penalty may not be too big if it's just one month depending how much you make. But I think you'll be fine :thumbsup:

https://www.healthcare.gov/exemptions-tool/#/results/2015/details/short-gap

 

[Xcobra]

For the "child or dependent care" tax credit, I presume that care provided by an Au Pair who has a social security number qualifies?

Yes, that should qualify if both of you work. Just keep in mind (if you're in the US and Au Pair is as well), the IRS expects household employment taxes (depending on amount you paid) :whiste:

https://www.irs.gov/taxtopics/tc756.html

 

[Xcobra]

Got married in 2015. From the brackets listed, it seems it would be better off filing separately (25% and 25%) rather than a joint 28%.. does this seem right or am I missing something?

I'll run it through the software both ways whenever our W2s come in but was just curious ahead of time.

Our filings in the past have been very simple. We have no property, no kids, can't deduct student loan interest, etc.

See post #29. You will most likely be better off filing jointly. The rates seem lower but look at the bands, you hit 25% much quicker than if filing jointly. But the more important thing is credits, etc. are lost if you file separately. Not sure what your situation is.

 

[Xcobra]

Sorry for the long winded post, but I wanted to try to put all the info out front. Thanks ahead for your help!
We refinanced to a 20 year in Jan 2011 and the 1098 from that year reported $2214 points in box 2 of that year. We've been deducting that over the life of that loan as follows:
2011 - $92
2012 - $111
2013 - $111
2014 - $111
So at this point we have $1789 left from those to amortize over the new 15 year loan. However, looking back on the HUD-1 from 2011 though, I see that lines 801 - 803 are listed as follows which makes me confused as to why the 1098 only showed $2214 in box 2:

line 801 (our origination charge) - $65
line 802 (your credit/charge (Points) for the specific interest rate chosen) - $2766.88 (1.25% in our case)
line 803 (your adjusted origination charges) - $2831.88

So the first question is, was the $2214 correct, or should we have been deducting from 2831.88 the whole time?
Now, in 2015 we refinanced again with the same lender into a 15 year loan. This time we rolled all costs into the new loan (we paid no money at closing, in 2011 we paid around $10k). Our 1098 came and this year box 2 is blank (I assume because we didn't pay cash at closing?). On our HUD-1 statement, we have the following this time:

line 801 (our origination charge) - $1050
line 802 (your credit/charge (Points) for the specific interest rate chosen) - $3150 (1.5% in our case)
line 803 (your adjusted origination charges) - $4200

So the question is, can I deduct these (or whatever portion is deductible) over the life of the new loan with the remainder of the points from the first refinance? Or do we just miss out on these points?
Thanks!

s0me0nesmind1 can correct me on this but, you have to deduct all the points separately on the new loan. The old loan, you get to bring the remainder of the points to the year you paid that loan off and write them off that year, ie 2015. About the amount claimed being incorrect, you have 3 years from the time you file your returns to amend them. But to be honest, the difference between the amount actually claimed, say in 2012 and what you should have claimed is probably really small and the tax savings (refund) even smaller. Is it really worth amending? Run some numbers.

 

[drebo]

That's so odd you were not eligible for insurance at your new job. I think there is an exemption if you did not exceed two months of coverage. See below. You should be able to indicate in the software for this exemption. Either way, penalty may not be too big if it's just one month depending how much you make. But I think you'll be fine :thumbsup:

https://www.healthcare.gov/exemptions-tool/#/results/2015/details/short-gap

Ahh, that's good to know. Unfortunately they don't list what the income threshold is.

 

[Imported]

See post #29. You will most likely be better off filing jointly. The rates seem lower but look at the bands, you hit 25% much quicker than if filing jointly. But the more important thing is credits, etc. are lost if you file separately. Not sure what your situation is.

Just went through them last night since I got my W2s yesterday. Better off filing jointly. Thanks!

 

[postmark]

s0me0nesmind1 can correct me on this but, you have to deduct all the points separately on the new loan. The old loan, you get to bring the remainder of the points to the year you paid that loan off and write them off that year, ie 2015. About the amount claimed being incorrect, you have 3 years from the time you file your returns to amend them. But to be honest, the difference between the amount actually claimed, say in 2012 and what you should have claimed is probably really small and the tax savings (refund) even smaller. Is it really worth amending? Run some numbers.

Thanks for the feedback. First off, unfortunately it seems that because I refinanced with the same lender, I can't claim the remaining points this year. I have to roll those into the length of the new loan from here https://www.irs.gov/publications/p936/ar02.html:

Mortgage ending early. If you spread your deduction for points over the life of the mortgage, you can deduct any remaining balance in the year the mortgage ends. However, if you refinance the mortgage with the same lender, you cannot deduct any remaining balance of spread points. Instead, deduct the remaining balance over the term of the new loan.

so according to what I had been deducting, I have 1789 left from that I can add to the 4200 in points from my HUD-1 this year, and claim that over my new 15 year loan.

What I'm interested in, is can I now say that before instead of starting at 2214 in 2011, I should have been at 2832, and deducted 118 in 2011, and 142 in each of 2012-2014 leaving me with 2288 left to roll into the new loan. Obviously I give up 119 in deductions over the last 4 years, but is that going to be a red flag on my taxes this year? It's probably not worth the $23 in deduction each year to worry about.

 

[Xcobra]

Thanks for the feedback. First off, unfortunately it seems that because I refinanced with the same lender, I can't claim the remaining points this year. I have to roll those into the length of the new loan from here https://www.irs.gov/publications/p936/ar02.html:



so according to what I had been deducting, I have 1789 left from that I can add to the 4200 in points from my HUD-1 this year, and claim that over my new 15 year loan.

What I'm interested in, is can I now say that before instead of starting at 2214 in 2011, I should have been at 2832, and deducted 118 in 2011, and 142 in each of 2012-2014 leaving me with 2288 left to roll into the new loan. Obviously I give up 119 in deductions over the last 4 years, but is that going to be a red flag on my taxes this year? It's probably not worth the $23 in deduction each year to worry about.

Ah, I missed that. I don't usually come across multiple loan refinancing. On your question, that should be no problem at all actually. You can easily prove that's what you paid and any prior year adjustments would be on the IRS' favor. You're good to go :thumbsup:

 

[postmark]

Ah, I missed that. I don't usually come across multiple loan refinancing. On your question, that should be no problem at all actually. You can easily prove that's what you paid and any prior year adjustments would be on the IRS' favor. You're good to go :thumbsup:

I just wish there were two lines broken out on the worksheet for this. As it is, on line 6c of the mortgage worksheet, I currently have $5989 in there ($4200 from this year and $1789 left from last mortgage). I was hoping it would be clearer for me to remember this all come next year when I file again

 

[cbrsurfr]

How is a flip property treated on taxes? Is it similar to a rental property? Unfortunately it closed in 2016 so I will have to account for this in 2015 and 2016 taxes.

Current train of thought:
2015 - calculate basis and claim mileage expenses
2016 - pay taxes on the difference between selling price and depreciated value

No one answered me so I've been digging further. Seems I have to treat this as a second property so I can deduct property taxes, but that's it since I had no loan for this year. Then on next years taxes I have to calculate the gain and list under investments.

What I'm still not sure on is mileage. Since I live ~80 miles round trip from the property I have a lot of mileage. Would that just get figured into the cost basis along with materials and other work I had done on my 2016 taxes?

 

[Herr Kutz]

Is anyone else having issues with TurboTax free file? I thought their numbers were coming out a little weird so I checked my numbers on H&R and on TurboTax's online intuit calculator (https://turbotax.intuit.com/tax-tools/calculators/taxcaster/) and both of those last two options give me identical numbers which are way off from TurboTax free file. Working through it, it looks like TurboTax is not subtracting personal exemption from taxable income. What's the deal with this?

 

[Xcobra]

No one answered me so I've been digging further. Seems I have to treat this as a second property so I can deduct property taxes, but that's it since I had no loan for this year. Then on next years taxes I have to calculate the gain and list under investments.

What I'm still not sure on is mileage. Since I live ~80 miles round trip from the property I have a lot of mileage. Would that just get figured into the cost basis along with materials and other work I had done on my 2016 taxes?

Sorry! I missed this one. Yes, if it's your second property, it would just be your 2nd property by default. Can deduct mortgage interest and real estate taxes (real estate taxes can be claimed on any property - interest, only first two).

Unfortunately, your mileage is just that, mileage. It's not taken into account anywhere. If your business was on flipping properties (and you would need to prove this if IRS questioned), then mileage would just be a business expenses. Otherwise, you're out of luck.

Your gain when you sell would be calculated as, amount sold for (less selling expenses) LESS amount you paid, plus capital costs (ie renovation of rooms, etc.) and buying costs. Taxable if gain, non-deductible if a loss as it's considered personal.