The 2015 Annual ATOT Income Tax Thread

[RockinZ28]

Well that was a complete waste of fucking time. Went through the whole home sale portion of Turbo Tax.

At the end it tells me, "You have a loss on the sale of your home of $13,820. Personal losses are not deductible."

Gee thanks.

 

[gururu2]

Take it back. At least from Costco I was able to return it for full refund.

 

[HybridSquirrel]

I quit a job last year and had to exercise my remaining ISO shares. The income was reported on my W2 from that company, but I also got a form 3921. I am doing my taxes on turbo tax and don't see an option to enter Form 3921. I did not receive a 1099-B for this sale.

I entered it on "Stocks, Mutual funds, Bonds" but now it is counting the income twice, since I already reported the income on my W2. How should I enter the information on turbo tax? I don't want it to count on my income twice since the income is already reported.

I also have a "statement of taxable income" from that company but no official form number, it just has information from the Form 3921

Also, ISO's really screw you don't they?

edit: I received this information from google "A form 3921 is an informational form only. It is not entered on your tax return.". Is this true?

 

[PandaBear]

Hi guys, it is great to be back on ATOT after 2 years away (kids).

Previously I was using Taxact for federal and then FTB's online site for state, but this year Taxact no longer let me put in a lot of the forms (capital gain, amt, etc) unless I use the plus version for $20.

So for a married couple that has a home, sold some stocks (long and short term gain), paid family leave, home ownership, childcare expense savings account, etc and most importantly amt, which one is the cheapest for federal only or federal and state?

I can do it on paper or in the past use irs' system, but just wondering if there is something easier and not too expensive.

 

[rcpratt]

So, I got a 1099-R in the mail after I filed. For $36.

So I plugged it into TurboTax, and it says I owe $0 federal and $1 state taxes.

Do I really need to amend this thing and mail $1? Or can I just ignore it?

 

[destrekor]

So, I got a 1099-R in the mail after I filed. For $36.

So I plugged it into TurboTax, and it says I owe $0 federal and $1 state taxes.

Do I really need to amend this thing and mail $1? Or can I just ignore it?

I believe if you owe $1 or less you don't have to send in a check, and if they owe you $1 or less, they won't send one either.

But I don't know if you have to send in an amended return to show the math.

Every state may be different, I think the $1 thing is what I read recently for Ohio, can't guarantee it is the same elsewhere.

 

[Avalon]

A friend of mine was living with her roommate, whom purchased the house they lived in. At some point, the roommate refinanced and added my friend on as co-owner. The refinanced amount was $245k. Around October 2015, the roommate moved out, and they refinanced again to remove the roommate as co-owner, making my friend the sole owner of the home, at $215k. This is the first home she has owned.

Are there any deductions my friend is eligible for? I wasn't sure, since this is technically the second refinance of the home, and she didn't purchase it originally, plus the price it was refinanced for went down.

 

[PandaBear]

A friend of mine was living with her roommate, whom purchased the house they lived in. At some point, the roommate refinanced and added my friend on as co-owner. The refinanced amount was $245k. Around October 2015, the roommate moved out, and they refinanced again to remove the roommate as co-owner, making my friend the sole owner of the home, at $215k. This is the first home she has owned.

Are there any deductions my friend is eligible for? I wasn't sure, since this is technically the second refinance of the home, and she didn't purchase it originally, plus the price it was refinanced for went down.

Deduction is for the amount of interest paid. Did the lender send you a 1098 (or something like that) telling you how much they report to IRS of interest collected from you?

 

[Avalon]

I'll check, thank you.

 

[TwiceOver]

I quit a job last year and had to exercise my remaining ISO shares. The income was reported on my W2 from that company, but I also got a form 3921. I am doing my taxes on turbo tax and don't see an option to enter Form 3921. I did not receive a 1099-B for this sale.

I entered it on "Stocks, Mutual funds, Bonds" but now it is counting the income twice, since I already reported the income on my W2. How should I enter the information on turbo tax? I don't want it to count on my income twice since the income is already reported.

I also have a "statement of taxable income" from that company but no official form number, it just has information from the Form 3921

Also, ISO's really screw you don't they?

edit: I received this information from google "A form 3921 is an informational form only. It is not entered on your tax return.". Is this true?

I have a similar question regarding 1099-B. My wife sold some of her stock grants this year. At the time of sale they took just over $2100 for taxes. On her pay stubs it shows an income of the amount we received and also her taxes year to date went up by the amount that was held back for taxes.

Then we received a 1099-B showing that we received a $6200 gain and that NO taxes were held back. How is this not double dipping if it is claimed in her W2 as income and taxes withheld, but ALSO a 1099-B income on top of that?

 

[HybridSquirrel]

I have a similar question regarding 1099-B. My wife sold some of her stock grants this year. At the time of sale they took just over $2100 for taxes. On her pay stubs it shows an income of the amount we received and also her taxes year to date went up by the amount that was held back for taxes.

Then we received a 1099-B showing that we received a $6200 gain and that NO taxes were held back. How is this not double dipping if it is claimed in her W2 as income and taxes withheld, but ALSO a 1099-B income on top of that?

I think, and someone feel free to correct me, that the tax was taken out because it's considered as compensation from your employer, and thus added to the W2 and tax withheld. But your brokerage also reports the sale to the IRS, hence the 1099-B. But the broker didn't tax you, your employer did.

Who handles the grants? You might be able to talk to them. Mine were through Fidelity and they were extremely helpful explaining the situation, you might want to check this page out to see if it helps: https://scs.fidelity.com/webxpress/help/topics/learn_exercising_stock_options.shtml

edit: Also you might want to talk to the employee stock plan coordinator at her company. Because different companies have different rules about the withholding and what not.

edit 2: Or talk to a CPA, I am seeing one this week because it keeps getting more confusing.

 

[TwiceOver]

I think, and someone feel free to correct me, that the tax was taken out because it's considered as compensation from your employer, and thus added to the W2 and tax withheld. But your brokerage also reports the sale to the IRS, hence the 1099-B. But the broker didn't tax you, your employer did.

Who handles the grants? You might be able to talk to them. Mine were through Fidelity and they were extremely helpful explaining the situation, you might want to check this page out to see if it helps: https://scs.fidelity.com/webxpress/help/topics/learn_exercising_stock_options.shtml

edit: Also you might want to talk to the employee stock plan coordinator at her company. Because different companies have different rules about the withholding and what not.

edit 2: Or talk to a CPA, I am seeing one this week because it keeps getting more confusing.

Here's an answer that I found from the Turbo Tax help forums. It sounds like I'm supposed to adjust my basis to include the income so that basically wipes out the 1099. I'm going to have a CPA run through it though and make sure everything is kosher.

The problem is that you are using the WRONG BASIS to report the sale. That's why you are getting a "double income" effect.

When you sell stock acquired via an employer stock incentive program your basis for the sale is the sum of:

Any amount you paid to receive the stock, which might be $0, plus
Compensation income created either by the acquisition or sale of the stock

If the sale is "covered" - broker reports basis to IRS - then in 2014 brokers are only required to report the "purchase price" element of the sale. The basis reported omits the "compensation" element of the sale and therefore the "compensation" gets reported twice: once via the W-2 and then again on the sale of the stock.

Clearly the "fix" here is to add back the compensation element to the basis of the stock being sold. Of course if the sale is not for ALL of the stock received under an employer stock incentive plan award, you then you need to convert the compensation element to a "per-share" figure which you use in reporting the sale.

If the 1099-B is reporting the basis to the IRS and is not using the correct basis, (maybe only the amount you paid for the stock), then enter the 1099-B as it reads but then click on the "Add More Details" box (or maybe "Edit Details"), and the "Start" button, (or maybe "Edit.)

On the next page select the first option which is "I need to add or fix info about this sale that's on my Form 1099-B." Tell TurboTax that the 1099-B is reporting the wrong basis. That's the interview you want and that's where you can fix things. Tell TurboTax that the 1099-B is reporting the wrong basis and then enter the "missing" compensation to get to the correct basis.

TurboTax will report the sale on Form 8949 "as reported by the broker" but will put an adjustment figure into column (g) of the Form, a code "B" into column (f) of the Form, and the correct amount of gain or loss which includes the adjustment.

Tom Young

 

[Imported]

Do I need to do anything with a Form 5498-SA (HSA, Archer MSA, or Medicare Advantage MSA Information)? No contributions made in 2015. I think everything in the account is from many years ago. Wife got it in the mail and I'm unsure what to do with it.

 

[misle]

Question regarding working in two different states:

I live and own a home in Missouri. From late July to late December, my company sent me to a job site in Indiana. I rented an apartment and lived there (with occasional trips back to my house in MO).

When I used H&R Block's website, they showed me paying IN tax only on income earned in IN. But in MO, they show me paying tax on my total income and crediting me with tax paid on income from IN.

Is that correct? Seems like I should only pay MO tax on the income I earned in MO.

I've never filed for two states before. My taxes are usually pretty simple.

 

[gururu2]

IN: A part-year resident owes tax on taxable income received from all
sources while being a resident of Indiana. A part-year or full-year nonresident
also owes tax on income from Indiana sources as listed below
while a legal resident of another state.

Based on this you are a part-year resident who needs to pay IN taxes from Jul-Dec.

MO: All income earned while living in Missouri is taxable to Missouri. A part-year resident may determine to be taxed as a resident for the entire year by using Form MO-CR to claim a credit for taxes paid to another state on the income earned while living in Missouri. Or a part-year resident may use Form MO-NRI to determine their income percentage based on the income earned while living in Missouri.

Based on this you are a part-year resident who should use Form MO-NRI. This is easy.

 

[misle]

Based on this you are a part-year resident who should use Form MO-NRI. This is easy.

Thanks!

 

[kaerflog]

I apologize if this has been answered already.
Regarding HSA accounts, I thought these are exempted from your income.
In my W2, the HSA amount $5739 is not included in my income. However when I'm doing my taxes(on TaxAct), if I put in W2 box 12b W $5739, TaxAct will increase my income by $5739 hence less money back. The $5739 is listed in other income
So I deleted the box 12b and when I got to the HSA part of TaxAct, I entered all the usual information and the amount of $5739, it once again include that amount in my income.
Any explanation as why TaxAct keep adding the HSA amount of $5739 to my income ???

 

[HeXen]

My wife has an ESOP stock ownership plan at work.
I don't know what to file it as for the type of plan. My options are basically 401k, 403b, Annuity, modified endowment contract or govt section 457 plans. I don't think any of those apply?

Also, according to my tax software, since she received a lousy $345 from it and even payed $69 taxes on that amount as well, it's still considered as early distribution and a 10% tax penalty on the taxable amount. why couldn't the taxes already paid fall within that 10% penalty?. Since it's under $500 do I even really need to report this?
There are exemptions for the penalty but not really sure if she qualifies yet or not but doesn't appear like it.

 

[HeXen]

There is a deduction for olympic medal winners? Really? Win a medal, win a tax deduction. We really need a total tax reform, that's just stupid.

 

[TheSiege]

I am divorced with 2 kids. My ex claims 1 kid and I claim 1 kid. I made about 80k and I am probably right around standard deduction (house, alimony, school loan) I think last year I was just barely above standard deductions. My ex made 15k maybe. Last year I got about 6k back. I am wondering is there a quick and easy way to see if she claims them both would we, as a whole, get more money back. i.e I would get 2k less back but she would end up getting an additional 3k back and we split the difference, 1k being the difference in this example which would give us each 500 more?

 

[Stopsignhank]

I quit a job last year and had to exercise my remaining ISO shares. The income was reported on my W2 from that company, but I also got a form 3921. I am doing my taxes on turbo tax and don't see an option to enter Form 3921. I did not receive a 1099-B for this sale.

I entered it on "Stocks, Mutual funds, Bonds" but now it is counting the income twice, since I already reported the income on my W2. How should I enter the information on turbo tax? I don't want it to count on my income twice since the income is already reported.

I also have a "statement of taxable income" from that company but no official form number, it just has information from the Form 3921

Also, ISO's really screw you don't they?

edit: I received this information from google "A form 3921 is an informational form only. It is not entered on your tax return.". Is this true?

I have a similar question regarding 1099-B. My wife sold some of her stock grants this year. At the time of sale they took just over $2100 for taxes. On her pay stubs it shows an income of the amount we received and also her taxes year to date went up by the amount that was held back for taxes.

Then we received a 1099-B showing that we received a $6200 gain and that NO taxes were held back. How is this not double dipping if it is claimed in her W2 as income and taxes withheld, but ALSO a 1099-B income on top of that?

Here's an answer that I found from the Turbo Tax help forums. It sounds like I'm supposed to adjust my basis to include the income so that basically wipes out the 1099. I'm going to have a CPA run through it though and make sure everything is kosher.

If you are using Turbo Tax you have to buy the premium version to handle things like ESPP, ISO and RSUs. When you enter the sale of the stock it will ask you if there are unusual details for the sale. You have to check this box and it will talk you through all the info so that you do not double dip.

 

[coloumb]

Thanks for keeping this going year after year! Question regarding Tax Treaty and Resident/non-resident filing:

Wife - Canadian [Canadian Passport], US green card holder which expires 2020 [I assume she'll have to give it back since she lives/works in Canada now].

Me - US citizen, US Passport.

She obtained employment with a Canadian company [in Alberta] last March with the intent to be a Canadian resident [again] and as far as I know with no plans to move back to the U.S.

We owned/lived in the same house since 2000 so she passes the substantial presence test.

Question or verification that I understand options for Resident and Non-Resident filing:

Since she didn't give up her Green Card last year so I assume this equates to Resident Alien status that needs to include her Canadian Income.

However, with the US – Canada tax treaty she can use her Canadian residency and avoid double taxation which means we'd use the 1040NR and do not need to include her Canadian Income [world income]?

 

[ToBYourself]

How do I file federal and state taxes in the following situation (we have been married for several years to each other):

(me) full year resident in SC, worked in SC, own home in SC; paid all mortgage interest and house taxes

(spouse) first 1/2 year resident in TN, worked in TN, rented home in TN, moved to SC (had moving expenses), worked in SC, lived with me

Do we have to file as Married filing separately, or can we file Married filing jointly and split our incomes (file separate?) on the state forms? Other options?

Does total income play a role? I earn almost half again what she does.

I'm having difficulty answering my question via searching and perusing documentation. Turbotax doesn't appear to be any help.

Thanks!

(edit: No children are involved)

(edit2: Both my spouse and me filing - I would prefer to not have to file "Married, Filing Separately")

 

[gururu2]

How do I file federal and state taxes in the following situation (we have been married for several years to each other):

(me) full year resident in SC, worked in SC, own home in SC; paid all mortgage interest and house taxes

(spouse) first 1/2 year resident in TN, worked in TN, rented home in TN, moved to SC (had moving expenses), worked in SC, lived with me

Do we have to file as Married filing separately, or can we file Married filing jointly and split our incomes (file separate?) on the state forms? Other options?

Does total income play a role? I earn almost half again what she does.

I'm having difficulty answering my question via searching and perusing documentation. Turbotax doesn't appear to be any help.

Thanks!

(edit: No children are involved)

I believe if you file joint on federal you have to file joint on state (with some exceptions). State returns will ask for portions earned in and out of state so it isn't difficult to figure. Basically you are 100% in SC and 0% in TN. Be careful that you don't pay tax to both states, which may require a credit request later.

 

[morkus64]

Question(s) here: My wife made $750 on a 1099 from a business in CA they withheld $52.50. According to Turbotax we would get a refund of $34. It costs (with TT) $37 to file. Do I have to file a CA state return or can I just say eff it?

TIA!