This is topic The official tax advice thread for 2006 federal tax returns. (was 2005) in forum Books, Films, Food and Culture at Hatrack River Forum.


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Posted by Boon (Member # 4646) on :
 
It's that time of year, again!

Get your questions answered here!

I'll check this thread once or twice a day. If you need faster help send me an email and I'll give you my phone number.

Disclaimer: as always, this advice is free, but backed up by links to the relevant IRS information. I am not a CPA, I don't work for the IRS, and I'm not even employed at a tax preparation company (though I have been in the past). I do really enjoy doing tax returns and helping people do theirs, though. And I like reading the IRS website, and am very good at finding information on their albatross of a site.

[ January 04, 2007, 05:30 PM: Message edited by: Boon ]
 

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Posted by Megan (Member # 5290) on :
 
Thanks for doing this, Boon!

I did my own taxes for the first time last year, and I'm actually kind of looking forward to getting that same sense of accomplishment again. (How crazy is that?!)
 

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Posted by Boon (Member # 4646) on :
 
Hey, I think it's great!

(I just finished mine today...needed one number that hubby had at work, then sent it off. WOOT!)
 

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Posted by Boon (Member # 4646) on :
 
From the top center of the IRS website:

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Seventy percent of the nation's taxpayers are eligible for free tax preparation software and free electronic filing.

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Selling price
- Selling expenses=
Amount realized

Amount realized
- Adjusted basis=
Gain or loss

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The selling price is the total amount you receive for your home. It includes money, all notes, mortgages, or other debts assumed by the buyer as part of the sale, and the fair market value of any other property or any services you receive.

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Selling expenses include:
Commissions,

Advertising fees,

Legal fees, and

Loan charges paid by the seller, such as loan placement fees or “points.”

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Your basis is its cost if you bought it or built it . . . While you owned your home, you may have made adjustments (increases or decreases) to your home's basis. The result of these adjustments is your home's adjusted basis, which is used to figure gain or loss on the sale of your home.

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When you bought your home, you may have paid settlement fees or closing costs in addition to the contract price of the property. You can include in your basis some of the settlement fees and closing costs you paid for buying the home. You cannot include in your basis the fees and costs for getting a mortgage loan. A fee paid for buying the home is any fee you would have had to pay even if you paid cash for the home.

Settlement fees do not include amounts placed in escrow for the future payment of items such as taxes and insurance.

Some of the settlement fees or closing costs that you can include in your basis are:
Abstract fees (abstract of title fees),

Charges for installing utility services,

Legal fees (including fees for the title search and preparing the sales contract and deed),

Recording fees,

Survey fees,

Transfer taxes,

Owner's title insurance, and

Any amounts the seller owes that you agree to pay, such as:

Certain real estate taxes (discussed later),

Back interest,

Recording or mortgage fees,

Charges for improvements or repairs, and

Sales commissions.


Some settlement fees and closing costs you cannot include in your basis are:
Fire insurance premiums,

Rent for occupancy of the house before closing,

Charges for utilities or other services related to occupancy of the house before closing,

Any fee or cost that you deducted as a moving expense (allowed for certain fees and costs before 1994),

Charges connected with getting a mortgage loan, such as:

Mortgage insurance premiums (including VA funding fees),

Loan assumption fees,

Cost of a credit report,

Fee for an appraisal required by a lender, and

Fees for refinancing a mortgage.

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Adjusted basis is your basis increased or decreased by certain amounts.

To figure your adjusted basis, you can use Worksheet 1, shown later. Filled-in examples of that worksheet are included in Comprehensive Examples, later.

Increases to basis. These include any:
Additions and other improvements that have a useful life of more than 1 year,

Special assessments for local improvements, and

Amounts you spent after a casualty to restore damaged property.


Decreases to basis. These include any:
Gain you postponed from the sale of a previous home before May 7, 1997,

Deductible casualty losses,

Insurance payments you received or expect to receive for casualty losses,

Payments you received for granting an easement or right-of-way,

Depreciation allowed or allowable if you used your home for business or rental purposes,

Residential energy credit (generally allowed from 1977 through 1987) claimed for the cost of energy improvements that you added to the basis of your home,

Adoption credit you claimed for improvements added to the basis of your home,

Nontaxable payments from an adoption assistance program of your employer that you used for improvements you added to the basis of your home,

First-time homebuyer credit (allowed to certain first-time buyers of a home in the District of Columbia), and

Energy conservation subsidy excluded from your gross income because you received it (directly or indirectly) from a public utility after 1992 to buy or install any energy conservation measure. An energy conservation measure is an installation or modification that is primarily designed either to reduce consumption of electricity or natural gas or to improve the management of energy demand for a home.


Improvements. These add to the value of your home, prolong its useful life, or adapt it to new uses. You add the cost of additions and other improvements to the basis of your property.

Examples.

Putting a recreation room or another bathroom in your unfinished basement, putting up a new fence, putting in new plumbing or wiring, putting on a new roof, or paving your unpaved driveway are improvements. An addition to your house, such as a new deck, a sunroom, or a new garage, is also an improvement.

The following chart lists some other examples of improvements.
Additions
Bedroom
Bathroom
Deck
Garage
Porch
Patio Heating & Air Conditioning
Heating system
Central air conditioning
Furnace
Duct work
Central humidifier
Filtration system
Lawn & Grounds
Landscaping
Driveway
Walkway
Fence
Retaining wall
Sprinkler system
Swimming pool

Miscellaneous
Storm windows, doors
New roof
Central vacuum
Wiring upgrades
Satellite dish
Security system
Plumbing
Septic system
Water heater
Soft water system
Filtration system

Interior
Improvements
Built-in appliances
Kitchen modernization
Flooring
Wall-to-wall carpeting

Insulation
Attic
Walls, floor
Pipes, ductwork


Improvements no longer part of home. Your home's adjusted basis does not include the cost of any improvements that are no longer part of the home.

Example.

You put wall-to-wall carpeting in your home 15 years ago. Later, you replaced that carpeting with new wall-to-wall carpeting. The cost of the old carpeting you replaced is no longer part of your home's adjusted basis.

Repairs. These maintain your home in good condition but do not add to its value or prolong its life. You do not add their cost to the basis of your property.

Examples.

Repainting your house inside or outside, fixing your gutters or floors, repairing leaks or plastering, and replacing broken window panes are examples of repairs.

Exception. The entire job is considered an improvement if items that would otherwise be considered repairs are done as part of an extensive remodeling or restoration of your home.

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Hmm..I know that's a lot of information. Basically, your adjusted basis is what it actually cost you to buy the home, plus any improvements and minus any losses. Your amount realized is the actual selling price, minus the costs of selling. I wish there were a simpler answer.
 

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Posted by Dagonee (Member # 5818) on :
 
Boon, that's perfect. I've got all my receipts and settlement docs, and I'll just go through it line by line. Thanks!
 

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Posted by Boon (Member # 4646) on :
 
You're welcome.
 

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Posted by Dagonee (Member # 5818) on :
 
I didn't think we qualified for the exclusion, but I see "Your financial ability to maintain your home materially changed" is a reason.

The reason we couldn't afford it any more was because Eve left her job to go back to school - does that count? I know school does (edit: to add NOT) count as new employment, but it did mean we couldn't afford to pay the mortgage any more.
 

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Posted by Synesthesia (Member # 4774) on :
 
I can't wait to do my taxes.
I just need one more W-2. Working more than one job in a year sucks.
I wish I could figure out how to get more deductibles like all the money I spent trying to find jobs and transporting to jobs and the like.
Or perhaps I just want a bigger refund as I have drastic plans for it.
 

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Posted by Boon (Member # 4646) on :
 
BTW, sometimes things that are deductible are actually called something else on your paperwork.

If you're not sure what something in your paperwork actually is, or can't find something that should be deductible, call whoever filled out the papers to ask questions.
 

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Posted by Boon (Member # 4646) on :
 
Dag, YES!

Syn, Look at page 5. You can deduct those things if you itemize. Of course, you may not want to, but at least you have the information now.
 

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Posted by Dagonee (Member # 5818) on :
 
You SO just made my day.

Boon.


 

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Posted by Boon (Member # 4646) on :
 

 

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Posted by Lupus (Member # 6516) on :
 

quote:

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Originally posted by Boon:
From the top center of the IRS website:

quote:

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Seventy percent of the nation's taxpayers are eligible for free tax preparation software and free electronic filing.

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thanks for that bit of info.

I'll be using that this year.
 

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Posted by Boon (Member # 4646) on :
 
My pleasure. FWIW, almost everyone who qualifies for EIC, as well as lots of other people, qualify for the service.
 

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Posted by Boon (Member # 4646) on :
 
Tips for Choosing a Tax Preparer

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If you pay someone to prepare your tax return, choose that preparer wisely. Taxpayers are legally responsible for what’s on their own tax returns even if prepared by someone else. So, it is important to choose carefully when hiring an individual or firm to prepare personal returns. Most return preparers are professional, honest and provide excellent service to their clients. Here are a few points to keep in mind when someone else prepares your return:

A Paid Preparer is required by law to sign the return and fill in the preparer areas of the form. The preparer should also include their appropriate identifying number on the return. Although the Preparer signs the return, you are responsible for the accuracy of every item on your return. In addition, the preparer must give you a copy of the return.
Review the completed return to ensure all tax information, your name, address and Social Security number(s) are correct. Make sure that none of these spaces is left blank.
Review and ensure you understand the entries and are comfortable with the accuracy of the return before you sign.
Never sign a blank return, and never sign in pencil.
If you have provided specific authorization in a power of attorney filed with the IRS, you may have copies of notices or refund checks mailed to your preparer or representative; but only you can sign and cash your refund check. For further information on Powers of Attorney, refer to Topic 311.
A Third Party Authorization Check Box on Form 1040 allows you to designate your Paid Preparer to speak to the IRS concerning how your return was prepared, payment and refund issues and mathematical errors.

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I'm a college student with a very low income - but I also have a room & board scholarship. I know I'm taxed on it (right?), but does it count as actual income?

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I ask because my actual anual income (wages into my pocket) is pretty low, and a decent percentage of that goes towards medical bills/prescription drugs. I think I read somewhere that if you spend over a certain percentage of your income on medical bills, you can write some of it off....

Any ideas?

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However, I'm not sure just how to file this year. My youngest is 16 and is obviously a dependent. My oldest is 20 and living at home while attending college full-time. His part time jobs only brought in about $3,000 for him last year. Can I still count him as a dependent even if he also files his own return in order to get back any/all tax he paid in?

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My middle child is 18 and has lived with me half the year and with his dad half the year in 2005. He lived with his dad TO SUPPORT his dad during the last half of the year. He made about $5000 on the job he had from October to December -- so now I'm not sure if I can claim him on my taxes as a dependent. Or whether he should file his own and claim his dad as his dependent (which might be hard to prove with only $5000 in income, but it is what they lived on) I want to claim however works out best for everyone.

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Do I still get EIC now that my daughter has turned 16?

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Under age 19 at the end of 2005
or
Under age 24 at the end of 2005 and a student
or
Any age and permanently and totally disabled

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If I file my taxes before Feb 15, is it likely I'll get my rebate before the end of March?

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I just use H and R block's website to do my federal taxes and this Telefile system for my state taxes.
That way I get my state return in four days and the federal takes a bit longer, but it's easy to do. I've been doing my own taxes for several years now.

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You'll most likely also qualify for the free filing through the IRS this year. And I think H&R is one of their many, many partners. I'd look into it if I were you.
 

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Posted by Mrs.M (Member # 2943) on :
 
We've had a LOT of medical expenses for both myself and Aerin. Also, Aerin requires medication and special formula, which are very expensive. We had a nurse's assistant for the first 2 weeks she was home and we have a lot of extra doctor visits, still. Can we deduct any of those things?
 

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Posted by Boon (Member # 4646) on :
 
YES! Schedule A, Itemized deductions. ALL OF IT that exceeds 7.5% of your AGI.
 

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Posted by Boon (Member # 4646) on :
 
Oh, also the breast pump you rented, any special equipment (like crib inclines and stuff), etc.
 

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Posted by Boon (Member # 4646) on :
 
I love this thread.
 

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Posted by Mrs.M (Member # 2943) on :
 
THANK YOU!!! I forgot about the breast pump and it was not cheap. Plus, I need to rent one again b/c I'm relactating.

AGI is annual gross income, right?
 

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Posted by Boon (Member # 4646) on :
 
Adjusted, or what's on the very bottom of page one of the 1040.
 

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Posted by ClaudiaTherese (Member # 923) on :
 
Boon, this is such a kindness you do.
 

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Posted by Boon (Member # 4646) on :
 
Thank you for saying so, but it's a really selfish thing for me. I like it.
 

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Posted by Silkie (Member # 8853) on :
 
This is a good service, thanks for offering it Boon.

We've already filed, using free software downloaded from www.TaxAct.com. I found it simple and easy to use, but then we file using standard deductions. Using that same software my adult daughter was able to file free.

Note: The price of 'free' is that they try to sell you upgraded software, but unless you are doing a more complicated tax form than 1040EZ you probably don't need the upgraded version.
 

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Posted by Boon (Member # 4646) on :
 
Most, if not all, of the "partners" the IRS has talked into offering free services do this. It's simple enough to click on the "no thanks" button, though. And I'd say you probably don't need the upgraded version even if you have a truly complicated return (which is very, very rare).

I've offered my services to the library, but they won't even let me help people fill out *paper* returns without taking about 100 hours of classroom instruction. Bleh. In theory that's a good idea, but I can't even donate 100 hours away from my kids actually helping people, much less taking a class.
 

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Posted by Farmgirl (Member # 5567) on :
 
Thanks Boon!

I have one follow-up question:

quote:

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If he's under 19 and he lived with you at least 6 months of last year, and did not provide at least half of his own support, you can claim him as a dependent. Furthermore, he can file with his $5000, and claim his father as a dependent, but if he does this he must be careful not to claim his own exemption as well. I did several of these last year.

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So, now I need to figure out where to get the forms I need without it taking 6 weeks ordering them from the government.

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If he claims his father as a dependent on his tax return, but not himself, can he file as "Head of Household"? Since I claim HIM as a dependent and file as Head of Household, then he can't, right?

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My wife became a Creative Memories consultant late last year, which is basically her business now that she runs out of the house.

How difficult is the paperwork for something like that if I'm using something like TaxCut? I've read some things that say if you have your own business, you should always have a professional do them, but her business is still very small.

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These are my most favorite kinds of tax returns to do! Well, actually, home daycare returns are slightly more fun, but these are almost the same.

It's not that hard. Use TaxCut or whatever, answer the questions it asks you. If you want to claim home office, make sure you really do only use the space for business, and be aware that the IRS does look at those a little more carefully.

Like I said, though, these are my most favorite. If you want to, you can email me and I'll just do the Sch C portion of the return for you (no SSNs or anything needed) with some phone consultation. (selfish on my part, again)

ETA: P.S. The software the "professionals" use is very similar to TaxCut/TaxAct/H&R/JH/whatever. It's all question based software that fills in the numbers automatically...

[ January 30, 2006, 02:59 PM: Message edited by: Boon ]
 

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Posted by Boon (Member # 4646) on :
 

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Why is the amount for the EIC different in the 1040 booklet than it is when you use the tax programs online? And it's been that way for a couple of years now. It's like I'm stupid and looking up the wrong amount. But I know I'm not. I think the IRS just prints those books out before they have the actual numbers. And it's different by several hundred dollars.

Crazy?

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I get to itemize for the first time this year. Yay. $6,600 in medical bills/health insurance and another 6 grand in interest on the new house. Cool beans.

Unfortunately, they never send the forms I need. I do it online, but would never send them in that way. I use fake names and social security numbers and addresses and such to do the math, but then always check it with at least two other places and then copy it all down onto the actual real forms and mail them in. I hate thinking about how poorly information is handled on the internet. So, now I need to figure out where to get the forms I need without it taking 6 weeks ordering them from the government. Ugh.

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Yep. How's this for cool beans? The IRS has PDF forms online that you can fill in and print, but the information isn't retained anywhere.
 

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Posted by Boon (Member # 4646) on :
 

quote:

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Is a pell grant taxable?

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If everything works out, we will be moving to Iowa this summer so that my husband can attend seminary for four years. We currently own a house, but there's not a lot of equity built up yet. So we would have to sell it at a profit in order to have a down payment to buy a house in Dubuque. I seem to recall that the rule was that you had to use the profit as a down payment on a more expensive house in order to not be taxed on it. Is that correct?

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Also, the third year of seminary is an internship somewhere else. My initial thought was to rent the house (if we had one) for that third year, but would that then mean that it would be considered a rental property? I had also thought of buying a larger house than we need, if possible, and renting out a room or two. How would that affect our taxes?

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I seem to recall that the rule was that you had to use the profit as a down payment on a more expensive house in order to not be taxed on it. Is that correct?

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Boon, I've gotten tax forms from the two colleges I attended in 2005 with the amounts I paid for tuition. Can I still claim the amount I paid to the university even though I'm seeking a medical withdrawal? They won't refund me any of the money, but I wondered if I'm required to get an actual grade for the amount of tuition to be deductible.

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For some reason my refund is lower than I think it should be.

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What did you use to prepare it? Although I know I never got a very big refund until we had a kid. *shrugs*
 

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Posted by Belle (Member # 2314) on :
 
thanks Boon, you're a peach.
 

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Posted by Synesthesia (Member # 4774) on :
 
This doesn't make sense
Why is it that I made more money last year, but seem to be getting a smaller tax refund?
This doesn't make sense...
I NEED that whole amount of money...
 

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Posted by ketchupqueen (Member # 6877) on :
 

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Why is it that I made more money last year, but seem to be getting a smaller tax refund?

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None of my wife's work is really done in any spot to the exclusion of anything else, so we weren't going to claim home office. The things I was hoping TaxCut will walk me through is things like inventory, profits, etc. Does inventory count as a business expense for 2005 if it was not sold? I'm thinking not since it's still an assest.

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I understand that you can claim a loss on a business for (?) years. How is that determined? If she started the business in November, does 2005 still count as 1 year?

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quote:

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Originally posted by ketchupqueen:

quote:

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Why is it that I made more money last year, but seem to be getting a smaller tax refund?

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What else changed? Did you withhold at a higher amount? Were you self-employed? Any extra taxable gains? Get bumped into a higher bracket?

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I'm so irratated.
They didn't have this 1099-G did you recieve a state refund question last year!
I am so confused and annoyed.

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The state refund is only taxable if you itemized last year. Tell it no.
 

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Posted by Boon (Member # 4646) on :
 

quote:

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For some reason my refund is lower than I think it should be.

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If you'd like a personal consultation, send me an email. I can't tell you what could be wrong without specifics.
 

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Posted by Boon (Member # 4646) on :
 
Send me an email Syn. I think I know what happened, but I'd have to talk to you about it.
 

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Posted by Synesthesia (Member # 4774) on :
 
Sent...
What happened?
 

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Posted by Boon (Member # 4646) on :
 
I replied to your email. I think what may have happened is that when you started each new job, they waited to hold out taxes until you made a certain amount. They do this assuming that you have only worked for them, and that you'll only work for them this year. I can tell you, using the standard deduction and nothing fancy, about how much you should be getting back. Just give me a call or send me your number and I'll call you.
 

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Posted by Synesthesia (Member # 4774) on :
 
It bounced, please resend...
 

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Posted by Boon (Member # 4646) on :
 
Done.
 

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Posted by Boon (Member # 4646) on :
 
One BIG problem fixed.
 

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Posted by ketchupqueen (Member # 6877) on :
 
That's always good.

Our taxable income is going to be negative this year, what with moving and all.
 

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Posted by Boon (Member # 4646) on :
 
W00T!
 

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Posted by ketchupqueen (Member # 6877) on :
 
I know!

We really enjoyed seeing our refund go up last year when we did the EIC and the child credit and all. We're going to enjoy it even more this year, as we didn't recieve any advanced EIC...
 

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Posted by Boon (Member # 4646) on :
 
Do you qualify for EIC? How much will you get? Find out here!

::yawn::

Off to bed for the night.
 

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Posted by theCrowsWife (Member # 8302) on :
 

quote:

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A lot. Yes, renting it out (or renting out part of it) will make it a rental property. You may want to think about whether you'll be moving again after he gets out of Seminary. Rental property is business property for tax purposes, and the above rules about not having to pay taxes on the gains from the sale of a home do not apply to investment property, which is what it would become.

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Thank you, Boon!

Okay, after reading both those links I have another question. If we only rented it for the internship year, then we would be taxed on the rental income for that year's taxes. However, we would have lived there for three years when it was time to sell, so wouldn't that make the gains exempt?

And, thanks Dag. I knew that I had read that in a finance book at one point, but clearly it was out of date.

--Mel
 

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Posted by Lurker-Girl (Member # 7802) on :
 
Boon, if I drive up and give you a massage, will you do my taxes for me?

(Taxes were so much easier before I became self-employed. >_<)
 

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Posted by Kayla (Member # 2403) on :
 
Why does hrblock.com have me take a retirement savings credit (form 8880) and turbotax doesn't? With turbotax, I get back the exact savings deduction credit less than if I use hrblock. And neither one of them figured the EIC for the state returns. Between the two of them, it's about $500 difference, so I'm thinking about just biting the bullet and taking them into some place. I just can't bring myself to e-file. Freaks me out.
 

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Posted by Boon (Member # 4646) on :
 
I'm sorry I've had a really long day after 1 1/2 hours of sleep and I'm too tired to even read this thread. Please forgive me. I'll respond tomorrow.
 

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Posted by Boon (Member # 4646) on :
 

quote:

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If we only rented it for the internship year, then we would be taxed on the rental income for that year's taxes. However, we would have lived there for three years when it was time to sell, so wouldn't that make the gains exempt?

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quote:

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Boon, if I drive up and give you a massage, will you do my taxes for me?

(Taxes were so much easier before I became self-employed. >_<)

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quote:

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Why does hrblock.com have me take a retirement savings credit (form 8880) and turbotax doesn't? With turbotax, I get back the exact savings deduction credit less than if I use hrblock. And neither one of them figured the EIC for the state returns. Between the two of them, it's about $500 difference, so I'm thinking about just biting the bullet and taking them into some place. I just can't bring myself to e-file. Freaks me out.

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I don't know why that's happening.

If you do decide to go to one of the companies, I don't want you to get sticker shock. They'll quote you something like $50 for a simple return, but they're talking about a 1040EZ and NOTHING else. With EIC, state return, retirement savings, etc., expect to pay $169-249 to have your return done by one of the national companies.

Instead of doing that, why don't you send me an email, and I'll send you my phone number. I'll do them on paper for you, sans identifying information, and then scan the paperwork and email it back to you. Copy it onto fresh forms, add SSNs and stuff, and mail them off.

Or I can at least tell you if you really should get the credit or not, and then the state forms should cost about $30-50 if you just have the national firm do ONLY those.
 

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Posted by Kayla (Member # 2403) on :
 
Thanks, boon. I've gone through them again today and I think I've got most of it figured out, but like I said in the e-mail, the retirement savings credit math is lost on me, and I don't get the additional child tax credit that H&R Block says I should get.
 

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Posted by Lurker-Girl (Member # 7802) on :
 
Sweet! If you're serious, I'll let you know when I get all my forms together (you may have to tell me what you'll need) . I'm not much help in the kitchen, but I'd be happy to bring cookies and help out with kid(s).
 

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Posted by ketchupqueen (Member # 6877) on :
 

quote:

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quote:
--------------------------------------------------------------------------------
Boon, if I drive up and give you a massage, will you do my taxes for me?

(Taxes were so much easier before I became self-employed. >_<)
--------------------------------------------------------------------------------

ABSOLUTELY! Come up for the weekend, and I'll include dinner, breakfast, lunch and a trip to the zoo!

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You are both sooo lucky. *grumps*

I not only have to be massage-less, but Boon-less.

(I don't really mind doing my own taxes. )
 

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Posted by theCrowsWife (Member # 8302) on :
 
Thanks, Boon! Somehow I missed those examples when I read that page the first time. As long as we set aside money from the renters to pay the taxes, we should be fine, right? Plus, I would be really surprised if we made much if any of a profit after only four years. Dubuque, Iowa doesn't exactly have a booming real estate market.

Oh! I just thought of one more thing. I don't think I 100% understand the purpose of the depreciation allowance. Is that for making repairs, paying for a management company, etc? What if the actual cost of renting was higher than the allowance--would we then have to itemize? Or would we be out of luck?

I think I just need to go find a comprehensive (and up to date!) book on renting residential property. Any recommendations?

--Mel
 

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Posted by Lurker-Girl (Member # 7802) on :
 
KQ, I never minded doing my own taxes until I had to start messing with schedule C and got penalized.

And I'd massage you if you were here and I were qualified.
 

---

Posted by ketchupqueen (Member # 6877) on :
 
I know.

And we have to deal with self-employment stuff, multiple W-2s, and all kinds of other stuff, but it's actually not that bad when one of your husband's skills is tax preparation (he's planning to finish his CA certification this month) and your aunt is a CPA...
 

---

Posted by Lurker-Girl (Member # 7802) on :
 
Lucky you.
 

---

Posted by starLisa (Member # 8384) on :
 
Can you deduct private school kindergarten as child care?
 

---

Posted by Kayla (Member # 2403) on :
 
Is it also a day-care? Our son went to a full-time kindergarten (that also had other grades, but one big school room basically) but since they had the daycare registration thingy with the state, they were considered daycare.

However, I found a website that mentioned something about Illinois and private school tuition.

quote:

---

The Illinois tuition tax credit program, enacted in 1999, gives families a maximum tax break of $500 to cover education expenses from any private or public school. Families get a 25 percent credit for education expenses that exceed $250, but a family must spend $2,250 to get the $500 maximum credit.

The Illinois tuition tax credit program is governed by Chapter 35 Section 201(m) of the Illinois Compiled Statutes.

---

quote:

---

Starting next year, Illinois families will be eligible to take a credit of up to $500 against their state income tax bill for 25 percent of the expenses they incur in educating their children at public, private, and religious schools. Eligible expenses include tuition, book fees, and lab fees, but the first $250 of these expenses is excluded.

---

quote:

---

Thanks, boon. I've gone through them again today and I think I've got most of it figured out, but like I said in the e-mail, the retirement savings credit math is lost on me, and I don't get the additional child tax credit that H&R Block says I should get.

---

quote:

---

Sweet! If you're serious, I'll let you know when I get all my forms together (you may have to tell me what you'll need) . I'm not much help in the kitchen, but I'd be happy to bring cookies and help out with kid(s).

---

quote:

---

You are both sooo lucky. *grumps*

I not only have to be massage-less, but Boon-less.

(I don't really mind doing my own taxes. )

---

KQ, I miss you guys, too.
 

---

Posted by rivka (Member # 4859) on :
 
Come visit!

What? It's not that far. Roadtrip!
 

---

Posted by Boon (Member # 4646) on :
 

quote:

---

As long as we set aside money from the renters to pay the taxes, we should be fine, right? Plus, I would be really surprised if we made much if any of a profit after only four years. Dubuque, Iowa doesn't exactly have a booming real estate market.

---

quote:

---

Oh! I just thought of one more thing. I don't think I 100% understand the purpose of the depreciation allowance. Is that for making repairs, paying for a management company, etc? What if the actual cost of renting was higher than the allowance--would we then have to itemize? Or would we be out of luck?

---

quote:

---

I think I just need to go find a comprehensive (and up to date!) book on renting residential property. Any recommendations?

---

quote:

---

Can you deduct private school kindergarten as child care?

---

Only if they say you can.

The IRS says no, if the care is primarily educational in nature.
 

---

Posted by Boon (Member # 4646) on :
 

quote:

---

Originally posted by rivka:
Come visit!

What? It's not that far. Roadtrip!

---

I could come as far as Vegas, but can't come to CA.
 

---

Posted by rivka (Member # 4859) on :
 
Hmm.

That's not sooo far.

*considers*
 

---

Posted by Lurker-Girl (Member # 7802) on :
 

quote:

---

Originally posted by Boon:

Yep, I'm serious. You can't sleep here 'cause my husband gets uptight (unless you bring a tent and sleep in the yard), but I'll feed you, cart you around, take you to the zoo and do your taxes, all for the low, low price of one good massage!

---

Oh, wait--you wanted a good massage?. . .

What will you offer for an "I'm slightly out of practice" massage?


Can I email you through Hatrack? I'll let you know when I receive my 1099.
 

---

Posted by katharina (Member # 827) on :
 
Wow - let's hear it for tax-deductible hobbies. Just about everything is the same as last year, except I paid tuition, so I get a refund for the first time in years.
 

---

Posted by Boon (Member # 4646) on :
 

quote:

---

What will you offer for an "I'm slightly out of practice" massage?

---

I'll take what I can get. My neck and shoulder are killing me.

quote:

---

Can I email you through Hatrack? I'll let you know when I receive my 1099.

---

Yep.
 

---

Posted by Boon (Member # 4646) on :
 

quote:

---

Wow - let's hear it for tax-deductible hobbies. Just about everything is the same as last year, except I paid tuition, so I get a refund for the first time in years.

---

I've heard it said that the perfect tax return is the one where you owe Uncle Sam exactly $1.00.

LLC? (Curious.)
 

---

Posted by Boon (Member # 4646) on :
 

quote:

---

*considers*

---

You know, Rivka, you could come to Tulsa. You could even bring the kids. We'll have a TulsaTaxCon and I'll do all the attendees' taxes for free and take y'all to the zoo.
 

---

Posted by Kayla (Member # 2403) on :
 
Boon, I figured you'd be frazzled from all you had to do today, so I thought I'd call tomorrow. (Friday, if you don't read this till then.) I'll be home all day except from 9:30 - 11:30. And all weekend. Any time in particular good for you?

(I kind of assumed she meant schooling, too.)
 

---

Posted by Boon (Member # 4646) on :
 
Tomorrow afternoon would be good, as I have to be out again in the evening.

Otherwise, weekend afternoons and evenings are best.
 

---

Posted by Kayla (Member # 2403) on :
 
Okey dokey. What do you mean by "afternoon?" (I'm not too obsessive or anything, but I'd hate to get you at lunchtime, or as you're putting kids down for a nap or something.) (Okay, I am too obsessive, but hey, what can you do?)
 

---

Posted by rivka (Member # 4859) on :
 

quote:

---

You know, Rivka, you could come to Tulsa.

---

quote:

---

Originally posted by Kayla:
Is it also a day-care?

---

quote:

---

Originally posted by Kayla:
Our son went to a full-time kindergarten (that also had other grades, but one big school room basically) but since they had the daycare registration thingy with the state, they were considered daycare.

---

quote:

---

Originally posted by Kayla:
However, I found a website that mentioned something about Illinois and private school tuition.

---

quote:

---

Originally posted by Boon:

quote:

---

Can you deduct private school kindergarten as child care?

---

Only if they say you can.

The IRS says no, if the care is primarily educational in nature.

---

quote:

---

7.1 Child Care Credit/Other Credits : Child and Dependent Care Credit & Flexible Benefit Plans
My spouse and I both work and are eligible for the Child and Dependent Care Credit. May I include my 5 year old son's parochial school kindergarten tuition cost as a qualified expense in Form 2441, Child Care Expenses?

The expenses for kindergarten do not qualify for the dependent care credit because kindergarten is primarily educational in nature. However, you can count the part of the expenses of sending your child to school that is for your child's care if it can be separated from the expenses of education. For example, you may count the cost of an after school care program even though the school tuition does not qualify.

---

 

---

Posted by starLisa (Member # 8384) on :
 
Thanks, Fugu. I'll look into this.
 

---

Posted by Farmgirl (Member # 5567) on :
 
Boon -- I ran my turbotax last night and ran into a question I couldn't answer.

I was trying to see whether or not it would be right to claim my mother as a deduction. According to the guidelines, she couldn't make over XXX (I don't remember the amount) of taxable income.

She received only social security. Now on the form that Social Security sends her for her taxes, it list how much she made for the year in SS (and it was like $5000 or so) and then says "this MAY OR MAY NOT be taxable".

SO I can't answer the question as to whether she makes that $5000 as taxable or as non-taxable income! So I don't know whether I should claim her as a dependent. (She is over 65, and getting just the general retirement SS benefit).

Help

Farmgirl
 

---

Posted by Boon (Member # 4646) on :
 
Thanks for helping, Fugu.

FG, her SS is NOT taxable. If you provided more than 50% of her room, board, and upkeep (sounds like a house or something, upkeep ), claim her.
 

---

Posted by human_2.0 (Member # 6006) on :
 
What is EIC?

How do you know if you qualify for free tax prep?

I'm on Mac, is there free software for it?
 

---

Posted by Boon (Member # 4646) on :
 

quote:

---

What is EIC?

---

quote:

---

The EITC is a refundable federal income tax credit for low-income working individuals or families. The credit was created in 1975 in part to offset the burden of Social Security taxes and as a work incentive. The amount of the credit varies but it is generally determined by income and family size.

The maximum amount of earned income allowed is higher for 2005 than it was for 2004. A taxpayer may be able to take the credit for 2005 if they:

earn less than $31,030 ($33,030 if married filing jointly) and have one qualifying child;
earn less than $35,263 ($37,263 if married filing jointly) and have more than one qualifying child;

earn less than $11,750 ($13,750 if married filing jointly) and have no children.

---

quote:

---

How do you know if you qualify for free tax prep?

---

quote:

---

I'm on Mac, is there free software for it?

---

I said tax questions, not computer questions. I have no idea.
 

---

Posted by Farmgirl (Member # 5567) on :
 
Human,
go to HEREand do all the paperwork/filing online, and you don't need to download any specific software onto your machine. So it won't matter which OS you are using.

FG
 

---

Posted by ketchupqueen (Member # 6877) on :
 

quote:

---

*nod* Understood. But this is for a work thing, neh?

---

quote:

---

Example.
You took out a qualified student loan in 1994. Beginning October 1, 1996, you made a payment on the loan every month, as required. In September 2002, you received a small inheritance that allowed you to make an extra payment on your loan during October, November, December, and January. You made your final loan payment in August 2003. No student loan interest deduction was allowed before 1998. The following interest payments would qualify for deduction.

1996: None
1997: None
1998: 12 payments (1st year deduction allowed)
1999: 12 payments
2000: 12 payments
2001: 9 payments (60-month period ended in September)
2002: 15 payments (law changed—12 required + 3 voluntary payments)
2003: 9 payments (8 required + 1 voluntary)

---

See, I was wondering where that 60 month thing we talked about came in, because there was no mention of it on the tax forms. So, according to that example, it doesn't matter when the loan originated, or how many years he's been paying on it, right?

[Also, you should e-mail me your snail mail addy so I can send you a thank you.]
 

---

Posted by Farmgirl (Member # 5567) on :
 
I don't know if this helps any Kayla -- but I had student loan interest.

I simply logged onto my student loan information on the Sallie Mae loan site, and they had the 1098-E information right there on my account (they don't mail it anymore) and told me exactly how much interest I could show as being deductible on my tax return.

FG
 

---

Posted by Kayla (Member # 2403) on :
 
Thanks, Farmgirl. I'll have him log on. I got a letter telling me that they sent the information from the 1098 E to the IRS. And it has the information from "Box 1" (?) which may be less than actual interest paid if the loan originated before 2004 because loans before then didn't include origination fees and whatnot. Or something.


So, they basically sent me a letter telling what information was on the 1098 they sent to the IRS, but didn't send me the 1098.

My brother's bank did the same thing with mortgage interest. Sent me a letter telling me that they sent the 1098 to the IRS, but not to me. I don't get it. Are people forging 1098s? I would think if they did this to avoid that, the problem with W-2s would be even worse.
 

---

Posted by Boon (Member # 4646) on :
 
Hm. An area I need to brush up on. Okay, I'll learn it and post tonight (or first thing tomorrow). Right now I have to run out (again!) to do more cookie stuff. Grrr.
 

---

Posted by Irregardless (Member # 8529) on :
 
Holy crap. Got our last W-2 today, did the math, and we owe $1,064. Holy crap. When my wife took the job for which she had the most income ($7,151), she specified withholding at the "higher, single rate" on her W-4, yet they withheld only $218. Holy crap.


 

---

Posted by Boon (Member # 4646) on :
 
Wow, things have changed. Here's all the information in 970 that has to do with student loan interest.

There's no time limit anymore. If the loan was written before ...umm, sometime in 2004, all kinds of things are deductible that weren't before. Origination fees, capitalized interest...even interest on credit cards if they were used for qualified expenses. Wow, wow, wow!

1098s are frequently sent to the taxpayers (us) in letter format now. The reason? Uhhh..dunno. Costs less to print?
 

---

Posted by Boon (Member # 4646) on :
 
Irregardless, need some help or are you sure that's right?

They probably didn't hold out as much as you thought they would because of the job change. See, when you switch jobs, your new employer treats your paperwork as though he's the only one you've worked for that year, so they base the withholding on how much you'll need to have taken out to pay taxes on only the amount you'll make for them. And they only start taking out taxes once you reach a certain amount (I think it's like, $3000 or something).

FWIW, in the future, there is a box on the W-4 you fill out as a new hire to tell the boss to hold out extra every paycheck.
 

---

Posted by Irregardless (Member # 8529) on :
 
Thanks, Boon. Yes, that sounds like the problem, and that practice sounds insane, IMO.
 

---

Posted by Boon (Member # 4646) on :
 
But still, $7000 shouldn't change your taxes by that much. If you decide you'd like a private consult, send me an email and I'll send you my phone number.

I hope you don't really owe that much. I hate the IRS too much to see anyone give them that much money.
 

---

Posted by Belle (Member # 2314) on :
 
This is our last year to pay self-employment, praise God. We did have some plumbing business in 2005. After this year it's all going to be on W-2's and I can't wait for tax time to be simpler and less stressful!
 

---

Posted by Boon (Member # 4646) on :
 
Yay for easier tax paperwork. You know, this whole headache could be avoided if we switched to a national sales tax instead.

::ducks and runs::
 

---

Posted by Irregardless (Member # 8529) on :
 

quote:

---

Originally posted by Boon:
But still, $7000 shouldn't change your taxes by that much. If you decide you'd like a private consult, send me an email and I'll send you my phone number.

I hope you don't really owe that much. I hate the IRS too much to see anyone give them that much money.

---

I couldn't believe it when I first ran the numbers, but I'm fairly certain it's right. This was the most straightforward & simple our taxes have been since we've been married.

Married jointly, no dependents
Total income: $44444
- Student loan interest $358
Standard $10K deduction (no mortgage, etc.) + 2 exemptions
Taxes: $3421
Withheld: $2357
Owe: $1064
 

---

Posted by Boon (Member # 4646) on :
 
Dude, that sucks.
 

---

Posted by Belle (Member # 2314) on :
 
There any way you can get more deductions by itemizing?
 

---

Posted by Boon (Member # 4646) on :
 
Without a mortgage, the chances are slim...unless one of them has a cost intensive job, like a mechanic that has to buy tools or something.
 

---

Posted by Belle (Member # 2314) on :
 
Man, I'm sorry.

I mean, I feel your pain, having owed the IRS even more than that before (self-employment taxes are a bugger bear) but I know how disheartening it is to receive bad news, especially unexpected bad news from a tax return.

At least you know about it now, and can start putting money away between now and April 15th. One thing I know from experience - it doesn't feel good ever sending the IRS a check, but it certainly will feel worse if you send it in early. Even when I had the money set aside, I always pay them on the 15th. No reason they should get my money one day sooner than I legally have to provide it.
 

---

Posted by Irregardless (Member # 8529) on :
 
Nope. About the only significant item would be church contributions, and that's nowhere near the standard deduction.
 

---

Posted by Irregardless (Member # 8529) on :
 

quote:

---

Originally posted by Belle:
At least you know about it now, and can start putting money away between now and April 15th.

---

That's about the only good thing about this. At least I did them as soon as I got the documents, instead of getting caught by surprise two months from now.
 

---

Posted by Tstorm (Member # 1871) on :
 
Hmmm...

I'm gainfully employed full-time in the pits of hell. Some people call it a retail sales job.

I'm also working with a small business part-time, off their official payroll, doing miscellaneous work. Payment has been through personal check, and no single payment to me has exceeded $200. I should report this under gross income, my conscience says. Is there a certain threshold below which these payments don't have to be reported? A certain level of income from a source that isn't taxable?
 

---

Posted by Boon (Member # 4646) on :
 
You can also make payment arrangements if you need to, or pay your taxes with a major credit card if you absolutely must.

I wouldn't unless I absolutely had no choice, though.
 

---

Posted by Boon (Member # 4646) on :
 

quote:

---

I'm also working with a small business part-time, off their official payroll, doing miscellaneous work. Payment has been through personal check, and no single payment to me has exceeded $200. I should report this under gross income, my conscience says. Is there a certain threshold below which these payments don't have to be reported? A certain level of income from a source that isn't taxable?

---

The lower limit was $400 as of last year...but that was only if that was your only income.

Basically, yes, you have to report it. Here's where it gets tricky:

If you were an independent contractor, setting your own hours, deciding for yourself *how* the work would be done, you're file a Schedule C. That means self-employment taxes, etc.

If, however, you were a regular employee and just off the books, you're required to report the income on line 7, with a written explaination attached.

If you want the IRS to determine your status as an employee or not, you must request it.

If you do report the income, though, on anything but a Sch C, you're employer will probably get a visit (or at least a letter) from the IRS.
 

---

Posted by Tstorm (Member # 1871) on :
 
Ok, which means I should tell the business I'm reporting it on my tax forms.

I don't think I'm an independent contractor, though it might be convenient tax-wise, particularly for my employer. Time to go reading on Schedule C.

Thanks!
 

---

Posted by signal (Member # 6828) on :
 
Heya Boon, I emailed you. I think it's probably easy, but anything involving forms hurts my head.

You are a godsend.
 

---

Posted by Boon (Member # 4646) on :
 
Tstorm, you're more than welcome.

signal, answered.
 

---

Posted by Boon (Member # 4646) on :
 
Twice. Thought of something else.
 

---

Posted by Boon (Member # 4646) on :
 
How to choose the simplest tax return form for your needs.
 

---

Posted by Farmgirl (Member # 5567) on :
 
Shoot!

I have my taxes almost all done (although not yet sent through) and my bank (where I also work) sends me this little letter (I don't have the form number with me) that is the kind of thing you usually get to report interest on your accounts. (except I already had the interest on my accounts known). This letter doesn't say "interest" but shows a little $25 "bonus" that has to be reported to the IRS, it says.

That "bonus" was a $25 Visa gift card I received for referring someone else to open an account with our bank.

Now where the heck and I supposed to report THAT number on this return?

FG
 

---

Posted by imogen (Member # 5485) on :
 
Holy Carp.

Your tax system makes ours seem simple.

And I still hate doing my tax return!
 

---

Posted by Boon (Member # 4646) on :
 

quote:

---

This letter doesn't say "interest" but shows a little $25 "bonus" that has to be reported to the IRS, it says.

That "bonus" was a $25 Visa gift card I received for referring someone else to open an account with our bank.

Now where the heck and I supposed to report THAT number on this return?

---

Normally they would have sent you a 1099-MISC and put that in box 7. I hate that they've switched to letters. More confusing.

How. Fun. Now you get to do a Schedule CEZ.
 

---

Posted by Boon (Member # 4646) on :
 

quote:

---

Holy Carp.

Your tax system makes ours seem simple.

And I still hate doing my tax return!

---

Yeah. And, not only do all of us get to do the federal return, but most of us also get to do state returns, and some of us even get to do city returns.
 

---

Posted by Synesthesia (Member # 4774) on :
 
This isn't a federal issue, but they SAID I got my state tax refund, but clearly I haven't gotten it.
I am very cross...
I know I got that number right too and I can't do anything about it until Monday.
Makes me so mad.
 

---

Posted by Dagonee (Member # 5818) on :
 
Was it being direct deposited?
 

---

Posted by Synesthesia (Member # 4774) on :
 
Yes...
I checked it yesterday. No $$$$$. Then I checked on the website, they said I got it yesterday! So I went out in the rain to look into my account.
No cash.
I NEED THAT MONEY!
*Growls*
 

---

Posted by Dagonee (Member # 5818) on :
 
It's possible it's there but not credited - which doesn't make it less sucky for you right now, but should ease your mind about it being lost.

Sorry you're bank isn't measuring up.
 

---

Posted by Synesthesia (Member # 4774) on :
 
This has never happened before
As long as my money has not gone into some other account which would make folks go WOO HOO! I GOT ALL THIS MONEY. when it is MY money... grrrrr

I'll have to call them up on Monday, but I need to buy that ticket and pay rent.
 

---

Posted by Boon (Member # 4646) on :
 
Lots of states (and the IRS) will put on their website that your refund has been sent to you when it really hasn't. The truth is, they have one "drain" day a week, when all electronic transactions take place. As of last year, it was Thursday for the IRS and Wednesday for Oklahoma.

Also, some banks (a lot of them, actually) will sit on electronic transactions for a day or three before posting them to an account. I dunno why.
 

---

Posted by Synesthesia (Member # 4774) on :
 
It was also on a Friday too.
That could have something to do with it.
I hope it gets resolved soon.
 

---

Posted by rivka (Member # 4859) on :
 

quote:

---

Also, some banks (a lot of them, actually) will sit on electronic transactions for a day or three before posting them to an account. I dunno why.

---

quote:

---

I have a question for you regarding moving expenses. My family and I had an employment-related move in 2005. When we saw how much the move would cost if we were to rent a moving van, we decided instead to purchase a truck and drive across the country ourselves. We purchased a shell for the truck in order to keep our things locked up while we traveled (we were on the road for five days). We ended up staying at a relative's house on the way in order to save money.

So what can we deduct from our taxes? Only the price of gas for the truck? The shell? The truck payment for that month?

---

Unfortunately, because you bought the truck, it falls under "using your own car to move" and you can either use standard mileage (15-22 cents depending on when you moved) or actual expenses (gas, oil, etc.). Only out-of-pocket expenses for overnights are deductible, and meals are not.
 

---

Posted by Boon (Member # 4646) on :
 

quote:

---

Boon, I'm relaying a question for a friend. She had a house fire during 2005, and she sees that she can deduct for certain casualties on her return. First, does she have to itemize each and every item of damage/loss, or can she say "household supplies" with a total? Second, it seems that the recovery service hasn't put together a final inventory. Can she file without any casualty deductions now and then file an amended return once they get final information?

---

I'd call the entire thing "House fire" with a grand total. And yes, I'd go ahead and file with what I had and amend it later.
 

---

Posted by Boon (Member # 4646) on :
 
Syn, I'm not ignoring you, I just don't know what I could do to help.
 

---

Posted by cheiros do ender (Member # 8849) on :
 
Boon, I'm extremely impressed by your effort in carrying on this thread so long. You're awesome! I don't pay tax yet but I have a little question and thought this might be the place to ask: Do banks pay tax like a business, or are they not considered businesses in the same sense as the rest of them?
 

---

Posted by Boon (Member # 4646) on :
 
I don't know, as I really don't get into corporate returns. I can find out tonight, though. After Girl Scouts.
 

---

Posted by Farmgirl (Member # 5567) on :
 
cherios -- I work for a bank.

We (banks) pay taxes. Credit Unions do not. (that's a very simplied version, but in a nutshell)

FG
 

---

Posted by cheiros do ender (Member # 8849) on :
 
That's all I needed to know. I'm a member of a Credit Union, and I guess no banks if they don't count as such.
 

---

Posted by zgator (Member # 3833) on :
 
What are the rules regarding having a 401k and an IRA? My wife had an IRA before we got married. I have a 401k through work. She has been wanting to put more money in hers, but it was my understanding that, because I have a 401k that I contribute to, we won't get the tax benefit for putting more money in the IRA.
 

---

Posted by Goody Scrivener (Member # 6742) on :
 

quote:

---

quote:
--------------------------------------------------------------------------------
Boon, I'm relaying a question for a friend.
--------------------------------------------------------------------------------

I'd call the entire thing "House fire" with a grand total. And yes, I'd go ahead and file with what I had and amend it later.

---

OKay, same friend: they received cash payments from the insurance company to be put toward temporary housing while their home is being repaired. Does this count as income? Would they offset the loss deduction by this amount? They haven't yet received any sort of W2 or 1099 or anything like that to make the answer easily obvious.
 

---

Posted by Bokonon (Member # 480) on :
 
zgator, depends on the type of IRA (Roth, regular, etc), firstly, and secondly it depends on the combined household income (you lose some retirement plan benefits once you start making a certain amount, IIRC).

-Bok
 

---

Posted by Jacare Sorridente (Member # 1906) on :
 
Boon- thanks for your help!
 

---

Posted by Boon (Member # 4646) on :
 
Goody, it'll offset the loss.

zgator, if you, your spouse, or both of you are covered by a qualified retirement plan (the retirement box is checked on your W-2), your IRA deduction may be reduced or eliminated, depending on the amount of your Modified Adjusted Gross Income and your filing status.

To decide for sure if the tax break will help you, figure your taxes as though you won't, and then as if you will. Payments must be made by 4/15 to be deductible for last year. Here's your link.
 

---

Posted by Boon (Member # 4646) on :
 
I just have to say it again, I love this thread. It makes me happy.
 

---

Posted by rivka (Member # 4859) on :
 
Weirdo.
 

---

Posted by Boon (Member # 4646) on :
 


bump
 

---

Posted by ketchupqueen (Member # 6877) on :
 
You and KPC are both strange in the head when it comes to taxes. My aunt, too, for that matter.
 

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Posted by Audeo (Member # 5130) on :
 
So I earned approximately $3,000, recieved an additional $2200 as into-pocket financial aid, another $6,000 was given as room and board, and I was charged about $19,000 for tuition, which was covered by a mishmash of scholarships, grants, Stafford, and PLUS loans. My mother is claiming me as a dependent, and filing some sort of educational tax credits. I don't know if the money I recieved from the school or that was applied to my room and board has been taxed; I'm fairly certain it should have been. Do I need to do anything as far as the federal government is concerned? This is the first year I've worked, so the first year I had anything to report and I'm beyond confused.

edit to note that a portion of my earned income was federal workstudy, if that makes a difference.
 

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Posted by signal (Member # 6828) on :
 
Yay! My taxes are unofficially done. My federal taxes are done and am waiting for my refund, and my state taxes were mailed out today. I'm so relieved. Thank you SO much, Boon!

(((Boon)))

On a somewhat random hypothetical note, I was watching the Olympics today and they were talking about this guy who won gold and was donating all his winnings to charity. Would he be taxed for that? Or would it just cancel out if he wrote that off?
 

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Posted by Boon (Member # 4646) on :
 
Audeo, I'm really sorry I haven't answered your questions yet, and now I'm getting ready for bed. I'll come back to this tomorrow, though.

signal, happy to help!

The winnings would be income. Take out of that his standard or itemized deductions, any personal exemptions, and what's left is taxable income.

Charitable donations would fall under itemized deductions.

quote:

---

Those itemizing deductions reduce their taxable income by the total contributed to qualified tax-exempt organizations, with some limits. The tax saving usually equals the deduction times the marginal tax rate – the top rate for the person’s income level.

For example, an individual with a taxable income of $50,000 donates $2,000 to his or her church. The tax savings from this generosity will be $500 — $2,000 times the taxpayer’s marginal tax rate of 25 percent.

---

 

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Posted by HandEyeProtege (Member # 7565) on :
 
Looks like this thread is still open for business, so here goes:

My wife was an AmeriCorps volunteer in 2005, for which she gets an "Education Award" towards her student loans. The actual award came in January, so I don't have to worry about it until next year's taxes, but they made a separate payment in December to cover the interest on her student loans while they were deferred (Americorps lets you defer the loans). It was something like ~$500.

According to the Americorps webiste we should have received a 1099 which would show that amount as miscellaneous income. We didn't get one, and when we emailed Americorps they said that you don't have to report it if the amount is under $600.

However, we did get a 1098 from the loan holder, showing how much interest was paid, which DOES include the amount paid by Americorps (plus some paid by us.)

So, my questions: Is it true that we don't have to report the interest reimbursement as income? And can we still take a deduction for the amount on the 1098 if we don't?
 

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Posted by HandEyeProtege (Member # 7565) on :
 
*selfishly bumping this thread*
 

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Posted by Audeo (Member # 5130) on :
 
Luckily my school offered some help in figuring things out, so I have my taxes done now. I appreciate the offer to help nonetheless.

~Audeo
 

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Posted by ketchupqueen (Member # 6877) on :
 
Our return has posted to our account.
 

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Posted by Synesthesia (Member # 4774) on :
 
I got my savings number wrong. So I'll have to wait for ages.
Which is depressing.
 

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Posted by Synesthesia (Member # 4774) on :
 
So it turns out my return really is 326...
So unfair... I cannot understand why it is that I'm making more money and get so less back!
It's almost tempting to go back to working at Stop and Shop just so my rent can be lower and I don't have to pay 4324234 dollars for my student loans.
At least I'd get more time at home with the rabbit...
But would probably have no cash to pay for his food.
I can't win.
 

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Posted by Bokonon (Member # 480) on :
 
Syn, it depends on the withholding, and whether you are bumped up to a new tax bracket.

-Bok
 

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Posted by Synesthesia (Member # 4774) on :
 
Great...
So I finally earn more money and the government is there ready to rob me, complete with a mask and bag with dollar signs on it.
*moves to Ireland and becomes a writer*
 

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Posted by Bokonon (Member # 480) on :
 
Not exactly... You get all the money you would have before... And then everything in the next tax bracket, minus your tax owed. You never take home less when you get a raise.

And anyway, if you can help it, you should aim to NEVER get a return... All that means was you gave the government an interest-free loan, for the the appearance of a cash "present". Imagine if you had an extra buck a day (if you had not had any return, and spread it through the year).

-Bok
 

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Posted by Synesthesia (Member # 4774) on :
 
How could I do that?
Arrange not to give the government a loan?
I NEED all of my money and they do not.
 

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Posted by breyerchic04 (Member # 6423) on :
 
Tax return in(not mine, my parents), fafsa in, happy breyer.
 

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Posted by Bokonon (Member # 480) on :
 
One way is to adjust your deductions for your withholding with your employer. The thing is, if you end up owing in, especially a lot, the IRS will not be happy.

You should adjust deductions for withholdings only after consulting a tax preparer.

-Bok
 

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Posted by Synesthesia (Member # 4774) on :
 
There a way I can adjust deductions for withholdings WITHOUT owing a whole lot of money? Which I hate.
 

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Posted by Lupus (Member # 6516) on :
 
Syn, as to why you got less back, there are a few possibilities. In 2004 were you in school? If so, you would have gotten a deduction on your tuition on your '04 return that you would not have gotten this year. Also, I could be wrong, but I am fairly sure that student loan interest is deductable. If you have been paying off your loans, then your interest would be less...giving you less of a deduction. In both of these cases, your lower deduction would lead to more of your income being taxed. Of course on the upside, the reason you would have gotten the deduction before is that you had made payments to your school or to pay down loan interest...this year would would not have had to make those payments, so you actually had more money during the year to use.

It is also possible that in 04 you had your employer take more money out of your paycheck. You might not have even known it was happening...maybe you didn't take any deductions in 04, but when they had you check off W4 this year, you took the correct amount of deductions. So while you are getting less back this year, it is because you gave the government less money to start with...which is a good thing.

Your tax refund is not exactly based on how much money you made in a year. Your tax refund is based on how much you paid vs. how much tax you owed the government. Both of these things are highly correlated with how much you made...but they don't mirror it exactly, since other factors such as deductions and how much you asked to be witheld on your W4 can change them.

As for adjusting your deductions, with you only getting back a bit over 300, you likely have your witholding set at a good rate. If you don't know what you are doing, adjusting your allowances can cause you to owe big chunk at the end of the year. If you were getting say, 600 back...then I'd say that if I were you I would adjust things for the next year so that you don't put so quite as much in...but even then you have to be careful, and it is best to see a tax preparer first. When you make as little as we do, getting fined for not paying enough through the year is not as much of a risk as it is for people who make a lot more (unless you had nothing withheld) BUT, you do run the risk of having to pay more than you can afford in April.

In 2004, I actually had things worked out just about perfectly (I got 42.00 back), though in '03 I messed up a bit and owed around 150.00. This year I went the other way and am getting back around 500.00, but that is not due to a problem with my calculations at the start of the year, it was due to a change in my financial situation mid year that I could not have forseen at the start of the year. I guess I could have made adjustments then, but I didn't bother.
 

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Posted by ctm (Member # 6525) on :
 
Am I the only one who hasn't done her taxes?

I have a question about declaring my state tax refund. Our divorce was final on 1/11/2005, so the ex and I filed joint returns for 2004, and split the rufunds 50/50. So how do we declare the state refund this year, each do our half or does one of us have to do the whole thing?

Thanks!
 

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Posted by Tstorm (Member # 1871) on :
 
Boon, thanks for helping me out earlier. I just got everything finished up. All told, I spent less than 4 hours on the 2005 Tax Project. Getting all the tax info I needed took the longest. I entered everything in on my own forms, and did my own calculations. Then I submitted everything via E-File.

I'm confident all the numbers and calculations are correct. Both E-File and my numbers matched up beautifully.


 

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Posted by human_2.0 (Member # 6006) on :
 
Boon, are you still around and willing to help the extreme procrastinators?

I received a gift worth 499 from Apple computer and they gave me a W9 Gift Letter form and it says if an individual or organization receives $600 or more in non-employee compensation, prizes or awards, Apple is required to file a 1099-Misc. The guy who gave me the give said Aple was going to deduct the gift obviously and that I had to file this with my taxes. I have no idea where I would list this though. And do I even have to list it?
 

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Posted by Boon (Member # 4646) on :
 
Yes, you are legally required to claim things like this (although a lot of people don't). Put it on line 21 of your 1040.
 

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Posted by human_2.0 (Member # 6006) on :
 
Thanks!

I thought the other issue I have was going to be easy, but now I am a bit stumped.

I wrote an article for an online computer publisher and they sent me a 1099-MISC and listed the money given to me as nonemployee compensation (box 7). I'm now pretty sure that means I have to fill out a Schedule C-EZ and SE.

So I'm trying to fill out the Schedule C-EZ and SE like I know what I'm doing... I have NO idea what to use for the six-digit code that identifies the principal business or professional activity for Schedule C-EZ. Do I use:

516110 Internet publishing & broadcasting

?

[ April 07, 2006, 01:42 AM: Message edited by: human_2.0 ]
 

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Posted by Boon (Member # 4646) on :
 
Sure, that one is fine...just get as close as you can and don't worry about that one too much...it's not that important.
 

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Posted by human_2.0 (Member # 6006) on :
 
Finally! I finished my taxes! Wheeee!
 

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Posted by Belle (Member # 2314) on :
 
We got all our stuff to our CPA, but she is so busy she may have to file an extension and then file for us after the 15th. No biggie.

She does expect a refund, but a smaller one than last year. I don't care, so long as I don't owe.
 

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Posted by Tatiana (Member # 6776) on :
 
I was trying to file for an extension online tonight and I couldn't find a way. Last year I just called in for federal and did something online for state but this year I can't seem to find a way to do either.

Any ideas? I suppose I will have to mail the actual forms?
 

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Posted by Farmgirl (Member # 5567) on :
 
Seems to me that the online program I used, at the very end after filling it out had an option of attaching the "extension" form 4868. But I don't think there is a way to file form 4868 just on the IRS.gov site online
 

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Posted by Tatiana (Member # 6776) on :
 
Apparently the option I used last year, of filing a 4868 by phone, is discontinued this year. It seems that it's included in the other efiling options. So I tried TurboTax and it bombed out a couple of times. I tried going at it from other directions and got a bit further before it bombed out. I tried one of the others and it didn't seem to have an option for filing a 4868. It was taking me step by step through the entire 1040. TurboTax online a third time got me through the process finally, and then they said "okay print this out and mail it in". So I give up! I guess I could have saved a lot of time by just printing the pdf form out and mailing it to begin with, but I kept thinking they wouldn't take a step backwards like that, and make it slower and more difficult than it was last year. I forgot it is the IRS we are talking about.
 

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Posted by Tatiana (Member # 6776) on :
 
I'm hoping they aren't due until Monday night. Does anyone know for sure?
 

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Posted by rivka (Member # 4859) on :
 
That is absolutely true.

Midnight of Monday, April 17, 2006.

BUT be sure you mail them at a post office with the special late pickup time!
 

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Posted by Tatiana (Member # 6776) on :
 
I put them in the mailbox at the post office before the last pickup time that they posted on the mailbox. I hope that did the trick. If not then I guess they were late.
 

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Posted by rivka (Member # 4859) on :
 
That should certainly do it.
 

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Posted by CoriSCapnSkip (Member # 9153) on :
 
Okay, I have one. Not applicable this year, but I'd like to know NOW so I won't have to worry till next year.

If a person is self-employed, are they supposed to get an employer ID number? I noticed (at least on the form I used) there are two places to fill out "other income" besides your regular job, a form with an employer ID number, or another area where it says NOT to put income from self-employment there. So where DO you put information on money you made, for instance, selling things online or elsewhere?
 

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Posted by Tatiana (Member # 6776) on :
 
You only have to have an employer ID number if you are a corporation or employ other people. An individual running a business in "sole-proprietor" mode can still file their business earnings under their own social security number, using a Schedule C, Schedule SE, etc. You are supposed to pay 4 times a year the estimated amount you owe, but if you have another regular job it's easier just to get them to withhold a bit more than they otherwise would.
 

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Posted by CoriSCapnSkip (Member # 9153) on :
 
Well, that's scary. You can't just pay once a year? Especially when the income is uneven (such as from online sales) and you have no idea how much you'll make, if anything?
 

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Posted by fugu13 (Member # 2859) on :
 
You can just pay once a year (provided your income isn't too large), but you effectively pay a penalty for doing so.
 

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Posted by Farmgirl (Member # 5567) on :
 
Depends on how much they make, doesn't it fugu?

I mean - I used to pay self-employement tax once a year (about $500) at tax time when I did a little free-lance writing on the side. Because I didn't make enough to do the quarterly reporting..

but that's been a few years ago.
 

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Posted by Belle (Member # 2314) on :
 
You are supposed to pay estimated taxes quarterly if you're self-employed. However, if you are having enough witheld from your regular job, don't worry about it.

If, though, you find you owe they can exert a penalty for you not filing quarterly. I don't know the limit, I'm sure Boon can tell you or you can brave the IRS website trying to figure it out.

As Tatiana said, you can simply file a Schedule C if you're a sole proprietor. The Employer ID number is only needed if you have employees. For a sole proprietor, the SSN substitutes for the EIN.
 

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Posted by Boon (Member # 4646) on :
 

quote:

---

If you had a tax liability for 2005, you may have to pay estimated tax for 2006.

General Rule
You must pay estimated tax for 2006 if both of the following apply.

You expect to owe at least $1,000 in tax for 2006, after subtracting your withholding and credits.

You expect your withholding and credits to be less than the smaller of:

90% of the tax to be shown on your 2006 tax return, or

100% of the tax shown on your 2005 tax return. Your 2005 tax return must cover all 12 months.

---

quote:

---

Originally posted by Synesthesia:
Is there a way to get more of my federal money back?
I NEED it.
I have big plans!

---

quote:

---

Originally posted by Stephan:
May of 2005 my wife (fiance at the time) and I purchased a house. The loan at the time was just in my name. We were not married that year so I was able to take the entire itemized deduction of the interest, and she took her standard deduction. We married in 2006, and from my understanding we now lose her standard deduction. Is this accurate?

---

quote:

---

If you and your spouse file separate returns and one of you itemizes deductions, the other spouse will have a standard deduction of zero. Therefore, the other spouse should also itemize deductions.

You may be able to claim itemized deductions on a separate return for certain expenses that you paid separately or jointly with your spouse. Deductible expenses that are paid out of separate funds, such as medical expenses, are deductible by the spouse who pays them. If these expenses are paid from community funds, the deduction may depend on whether or not you live in a community property state. In a community property state, the deduction is, generally, divided equally between you and your spouse. For more information refer to Publication 504, Divorced or Separated Individuals; and Publication 555, Community Property.

---

quote:

---

Originally posted by Synesthesia:
Is there a way to get more of my federal money back?
I NEED it.
I have big plans!

---

quote:

---

Originally posted by Stephan:

quote:

---

Originally posted by Synesthesia:
Is there a way to get more of my federal money back?
I NEED it.
I have big plans!

---

This year claim 7 exemptions at your job. That will allow you to keep the most you can. Then leave the country at the end of the year and don't come back.

---

quote:

---

Originally posted by Synesthesia:

. . . I am a bit too shy to call, but I'm still concerned about how to get more money in my pocket.
I also wish I was married and had a house NOW.

---

quote:

---

Originally posted by Jhai:
I just got married this December, and my husband and I will be filling jointly for immigration purposes (we need to convince INS it's not a green-card marriage, and this is one step). He's an Indian citizen, I'm a US citizen. I imagine my part of the taxes will be pretty simple, since I'm still a student and have only earned about five thousand dollars this year. However, he's an independent contractor to an IT company, and there's the whole not-a-citizen thing, so I have a feeling his will be rather complicated.

Should we try to do it ourselves, or go to a company to do it? We can't have any mistakes, since INS will be looking it over.

---

quote:

---

Originally posted by quidscribis:
I had a friend, a fine arts student (nice guy, but could barely add), who got a job working for H & R Block during tax time. He received a couple of hours training before he was set to work preparing tax returns. Lovely.

Personally, I would never bother with a company like H & R Block. You could do as good a job or better yourself most likely.

Are requirements for tax prep companies any higher in the US than Canada?


At any rate, this is basically just to confirm that when Boon says it's a crapshoot as far as getting anyone who actually knows anything, she's telling The Truth.

---

That happens a lot. When I was an office manager for one of the national companies, we had some employees who took the class (6 weeks, twice a week, for 2 hours) offered by the company. They passed the class, but still couldn't answer basic questions about anything.

We also had a couple of employees that I hired in late January. I hired them because I put them in front of the computer and they finished the same course in 2 days and then could answer any question I asked them about the material. They got a lot more hours than the ones who'd taken the class, even though I was being pushed by management to work the others more. Guess I'm just stubborn, but I wanted people I could trust not to screw up simple returns in the office while I was gone. Sue me.

No, there are no laws regarding training tax prep employees, as long as they don't try to say they are accountants. They're not.
 

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Posted by mackillian (Member # 586) on :
 
Boon! You're never on to chat anymore. So very sad.

I'm not sure if our (mine and nathan's) 05 return actually made it through all the way. (it kept getting rejected)

*frown*
 

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Posted by Boon (Member # 4646) on :
 
Mack! I know. I'll sign on just for you in a little while. Right now I'm on the crappy computer so I can lay on the heating pad. Lower back ouch.

Call the IRS. They'll tell you the status of last year's return at no cost. You'll need both SSN's and possibly dates of birth, address, or other identifying information before they'll tell you anything, but they *will* answer that question over the phone, and it won't cost you a dime.
 

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Posted by Boon (Member # 4646) on :
 
:bump:
 

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Posted by Kwea (Member # 2199) on :
 
Boon...I e-filed today, and it went fairly smooth. No real weird issues, but I don't remember if we filed last year or not.


I don't want to ask in case we didn't.


I remember it being a wash because Jenni's job didn't take enough out.


So...how much does sending in a snail mail signature slow down the return process? I should be getting a fair return deposited...
 

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Posted by Boon (Member # 4646) on :
 
1. Expect your refund in...oh, 2-4 weeks for direct deposit, 4-6 weeks for them to mail you a check. Actually...keep reading...

2. Don't worry about whether or not you filed last year. As long as you don't owe them a boatload of money, the penalties and interest should be very low. And if THEY owe YOU, there are no penalties at all. (But if you don't file and claim your refund within 3 years, you don't get it!) So, if I were you, I'd wait until I got this year's refund, and then call them up.

DON'T, whatever you do, just ignore or forget about last year's taxes. You DO have to file them.

Oh yeah, and sometimes, if they figure you owe them a lot, they'll make up a return for your file if you don't do it. Then, they'll just keep your refund to pay your "back tax debt." So if you don't get your refund, or their website says your refund is "delayed," it may be worth calling them up anyway.
 

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Posted by Kwea (Member # 2199) on :
 
It is deposited, which is a lot faster....I got my state taxes back two years ago within 10 days.


Just wondering....I didn't have a pin #, or last years AGI, so I have to mail the signature form in. I wasn't sure how much that would slow the return down.
 

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Posted by Lyrhawn (Member # 7039) on :
 
Should I just do my own taxes?

For the last two or three years I've gone through the family accountant, who does all the taxes in my family. My return isn't that big, I usually have to pay like $50 to the state and then I get like $300 back from the Fed. I make about $12K a year (part time job for a college student) and I claim one (exemption?) so I get back more on my monthly checks.

I don't have any deductions that I know of. I'm a college student, and I think I might have paid something like $100 in education related interest on various loans during 2006.

Is it simple enough to save myself the $50 our accountant charges to just do it myself? Online maybe?

I'm also wondering how it works with how I claim myself as a dependent. I live with my mother and commute to school, and until this year she has claimed me as a dependent, but we agreed that this year I would claim myself. How does that affect my taxes?
 

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Posted by Boon (Member # 4646) on :
 

quote:

---

Originally posted by Kwea:
I wasn't sure how much that would slow the return down.

---

quote:

---

Originally posted by Lyrhawn:
Should I just do my own taxes?

For the last two or three years I've gone through the family accountant, who does all the taxes in my family. My return isn't that big, I usually have to pay like $50 to the state and then I get like $300 back from the Fed. I make about $12K a year (part time job for a college student) and I claim one (exemption?) so I get back on my monthly checks.

I don't have any deductions that I know of. I'm a college student, and I think I might have paid something like $100 in education related interest on various loans during 2006.

Is it simple enough to save myself the $50 our accountant charges to just do it myself? Online maybe?

---

You can e-file for free, fill out a 1040EZ, or call me up and I'll tell you what numbers to put where...all free options.

Yours is an extremely simple return, and doesn't take the accountant more than 10-15 minutes to do. It's really easy.

If you'd like my phone number, send me an email. (That goes for anyone needing help.)
 

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Posted by Synesthesia (Member # 4774) on :
 
This year I will have H and R look at my taxes.
I have a coupon. I better not forget it.
Usually I do my taxes myself, and the first time I let someone else do it, but I really just want MORE MONEY SOMEHOW! Because I am an idiot and I know I'll buy another pocket watch.
 

---

Posted by Lyrhawn (Member # 7039) on :
 

quote:

---

Originally posted by Boon:

quote:

---

Originally posted by Lyrhawn:
Should I just do my own taxes?

For the last two or three years I've gone through the family accountant, who does all the taxes in my family. My return isn't that big, I usually have to pay like $50 to the state and then I get like $300 back from the Fed. I make about $12K a year (part time job for a college student) and I claim one (exemption?) so I get back on my monthly checks.

I don't have any deductions that I know of. I'm a college student, and I think I might have paid something like $100 in education related interest on various loans during 2006.

Is it simple enough to save myself the $50 our accountant charges to just do it myself? Online maybe?

---

You can e-file for free, fill out a 1040EZ, or call me up and I'll tell you what numbers to put where...all free options.

Yours is an extremely simple return, and doesn't take the accountant more than 10-15 minutes to do. It's really easy.

If you'd like my phone number, send me an email. (That goes for anyone needing help.)

---

Thanks, I guess I just needed the reassurance, I AM going to do my own this year. And when it comes time (should be soon, I've already gotten all my tax stuff from the school, just waiting for my W-2 from work), you'll probably be getting an email from me asking for help.

One other question, ahead of time, do I get any sort of deduction or something for tuition I've paid out of pocket?

I appreciate the help Boon
 

---

Posted by Boon (Member # 4646) on :
 

quote:

---

Originally posted by Lyrhawn:

I'm also wondering how it works with how I claim myself as a dependent. I live with my mother and commute to school, and until this year she has claimed me as a dependent, but we agreed that this year I would claim myself. How does that affect my taxes?

---

Snuck one in there on me.

You'll have about $3500 in taxable income, instead of $6800 or so(lowering your tax liability from about $680 to about $350). Also, if you're old enough and meet the other requirements, you may be eligible for EIC, in which case you'll need to file a 1040A (still simple, though).
 

---

Posted by Lyrhawn (Member # 7039) on :
 
I'm 22. I have no idea what the rest of that means.

Claiming myself instead of being dependent on someone else lowers the amount of my income that CAN be taxed down to $3500? Is that how it works? Does the $350 figure you mention mean that that's how much I should have to pay in yearly taxes (seems kinda low for that)? And the EIC is the Earned Income Credit right? How does that work?
 

---

Posted by Tstorm (Member # 1871) on :
 
I'm definitely going to owe taxes this year, unless something miraculous occurs in the calculations. I worked for about 5 months as a consultant, and since my future was uncertain, I didn't bother trying to estimate income and pay those quarterly reports. So I'll happily pay whatever the booklet and formulas tell me to.

But until I get the report from my "customer", I can't actually do anything. (It's in the mail, I'm told.)

The good news is, I got my W-2s from my other employers and this is the last one I'm waiting on.

(Oh, and thanks for being here, Boon; I appreciate reading all the advice you post for everyone.)
 

---

Posted by Boon (Member # 4646) on :
 

quote:

---

Originally posted by Lyrhawn:

One other question, ahead of time, do I get any sort of deduction or something for tuition I've paid out of pocket?

---

quote:

---

Originally posted by Lyrhawn:
I'm 22. I have no idea what the rest of that means.

Claiming myself instead of being dependent on someone else lowers the amount of my income that CAN be taxed down to $3500? Is that how it works? Does the $350 figure you mention mean that that's how much I should have to pay in yearly taxes (seems kinda low for that)? And the EIC is the Earned Income Credit right? How does that work?

---

quote:

---

Originally posted by Tstorm:
I'm definitely going to owe taxes this year, unless something miraculous occurs in the calculations. I worked for about 5 months as a consultant, and since my future was uncertain, I didn't bother trying to estimate income and pay those quarterly reports. So I'll happily pay whatever the booklet and formulas tell me to.

But until I get the report from my "customer", I can't actually do anything. (It's in the mail, I'm told.)

The good news is, I got my W-2s from my other employers and this is the last one I'm waiting on.

(Oh, and thanks for being here, Boon; I appreciate reading all the advice you post for everyone.)

---

When you get it, feel free to ask for help if you'd like. (Please? Sounds like a fun return.)
 

---

Posted by Boon (Member # 4646) on :
 
Syn, I don't want you to think I'm ignoring you, I just didn't see a question in your post.
 

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Posted by fugu13 (Member # 2859) on :
 
Syn: talk to Boon. She's likely a lot better than whoever you'd talk to at H&R block.
 

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Posted by Synesthesia (Member # 4774) on :
 
cool.
I Just want to know how to get as much money as possible, because I am on the cover of stupid magazine.
 

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Posted by TomDavidson (Member # 124) on :
 
For one thing, you should refuse to let Stupid Magazine use your likeness without doling out some Benjamins for the privilege.
 

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Posted by Boon (Member # 4646) on :
 
HA!
 

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Posted by katharina (Member # 827) on :
 
Hi, Boon.

I have a question. I moved to Virginia from Texas last April. Virginia has income tax, and Texas doesn't. Do I just pay income tax on the money I earned while I was living in Virginia, or do I have to pay state income tax for the whole year? How do I separate that?
 

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Posted by Boon (Member # 4646) on :
 
(My expertise is in federal, but I'll answer your question as well as I can.)

Generally, how it works is this: your total income goes somewhere on your state return, but you only pay taxes on the portion you actually earned there. You'll need to do a part-year return for Virginia.

If you find yourself confused, or just want some help, I'll be happy to read up on it and give you specific advice when you're ready.

For now, though, it's just too hard to know about all the states that have income tax. The instructions for the part-year return should have all the information you need.
 

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Posted by Boon (Member # 4646) on :
 
I just finished filing my taxes online.
 

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Posted by Lyrhawn (Member # 7039) on :
 
Check your email please Boon.
 

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Posted by Boon (Member # 4646) on :
 
Sorry, the email address listed was defunct. I just changed the address in my profile. Would you mind resending?
 

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Posted by Lyrhawn (Member # 7039) on :
 
Resent through Hatrack.

Basically it was just me asking you to sign onto AIM if you get the chance, for like fifteen minutes, to answer some questions and guide me through filing online.
 

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Posted by ketchupqueen (Member # 6877) on :
 
We also filed online already-- we're getting upwards of $5200 back from Federal and a little more than $60 back from the state. Considering that we had almost nothing withheld this year, that's not bad...

And tickets from here to Tulsa are less than $200/person... Hey, Boon! Know what that means? Even after most of it is set aside to pay debts looks like we're coming to visit you.
 

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Posted by Boon (Member # 4646) on :
 
you have no idea how happy that makes me! WOOHOOOOO!!!
 

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Posted by Lyrhawn (Member # 7039) on :
 
I just finished e-filing under the expert guiding hand of Boon and it was AMAZING.

Not only am I getting more back than I ever have before (pretty much everything I paid in taxes this year), but it was easy, free, and FUN!

Everyone should e-file! Everyone should also give Boon a HUGE friggin' round of applause for providing help. Utterly amazing.

(((Boon)))
 

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Posted by rivka (Member # 4859) on :
 
*claps in a circle*
 

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Posted by Will B (Member # 7931) on :
 
I can't figure how (or whether) to deduct my expenses for a writing class I took last year. I'm not in college, not traditional age.

I recommend against TaxAct this year. It worked great for me the past 2 years, but this time, instead of asking me questions so it can tell me how to record an expense, it asks me how I want to record the expense, and I can't figure the right way. It also won't let me look at the forms it's going to print before I print them.
 

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Posted by Synesthesia (Member # 4774) on :
 
I still haven't done my taxes yet. I went to H and R B and found out I won't get enough to skin a flea.
That is sad.
 

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Posted by Stephan (Member # 7549) on :
 

quote:

---

Originally posted by Synesthesia:
I still haven't done my taxes yet. I went to H and R B and found out I won't get enough to skin a flea.
That is sad.

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quote:

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Originally posted by Boon:
you have no idea how happy that makes me! WOOHOOOOO!!!

---

Of course, now Jeff is hemming and hawing about when he'd be able to do it. So it might be just me and the girls. But I'm sure you won't mind, right?
 

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Posted by airmanfour (Member # 6111) on :
 
I just had HR Block look at mine, and they say that there was too much buying and selling of stocks to make my life easy. I think I'm going to have to file myself next year because it got REALLY expensive.

Makes me want to ruin some tea.
 

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Posted by Lyrhawn (Member # 7039) on :
 

quote:

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Makes me want to ruin some tea.

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Woah there, let's not go overboard with our reactions.
 

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Posted by Boon (Member # 4646) on :
 

quote:

---

Originally posted by airmanfour:
I just had HR Block look at mine, and they say that there was too much buying and selling of stocks to make my life easy. I think I'm going to have to file myself next year because it got REALLY expensive.

Makes me want to ruin some tea.

---

quote:

---

Originally posted by Lyrhawn:
I just finished e-filing under the expert guiding hand of Boon and it was AMAZING.

Not only am I getting more back than I ever have before (pretty much everything I paid in taxes this year), but it was easy, free, and FUN!

Everyone should e-file! Everyone should also give Boon a HUGE friggin' round of applause for providing help. Utterly amazing.

(((Boon)))

---

I was very happy to help you. It really *was* fun seeing those numbers in the corner go up and up, wasn't it?

I recall you also referring to the software as "miraculous."
 

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Posted by Boon (Member # 4646) on :
 

quote:

---

Originally posted by Will B:
I can't figure how (or whether) to deduct my expenses for a writing class I took last year. I'm not in college, not traditional age.

I recommend against TaxAct this year. It worked great for me the past 2 years, but this time, instead of asking me questions so it can tell me how to record an expense, it asks me how I want to record the expense, and I can't figure the right way. It also won't let me look at the forms it's going to print before I print them.

---

quote:

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Originally posted by ketchupqueen:
Of course, now Jeff is hemming and hawing about when he'd be able to do it. So it might be just me and the girls. But I'm sure you won't mind, right?

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:thwacks Jeff:

Umm...no, of course I wouldn't mind. Not that I don't like Jeff or anything, but it may be more convenient that way, provided you don't mind travelling alone. First, it would make it easier to convince my husband to let you stay here. It would also make transportation easier, since we'd all fit in the van.

That would mean only two adults to deal with three little ones, though...although my older two are a big help in that regard. I still do have one stroller, but the toddlers would have to walk everywhere. And I'm assuming you'd bring at least one carseat on the plane. Since I have one extra, those'd be covered.

This is so much fun...
 

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Posted by Lyrhawn (Member # 7039) on :
 
Hey Boon,

I'm trying to convince my mom to e-file this year too, but she doesn't qualify on TurboTax for free e-filing.

Is there another site you like, and trust, for people who make about 40K a year?
 

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Posted by Boon (Member # 4646) on :
 
I used TaxACT with my sister. It wasn't as user-friendly as TurboTax, but it was fine. I can get on AIM again if you'd like.
 

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Posted by Will B (Member # 7931) on :
 

quote:

---

Originally posted by Boon:
Did you go to college for at least 1/2 a full load, for at least one semester? If so, you can claim it as either Hope or Lifetime Learning Credit.

If not, you can still claim it as an employee business expense if it helped you keep or get a job (or will) and you itemize.

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quote:

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Originally posted by Boon:
I used TaxACT with my sister. It wasn't as user-friendly as TurboTax, but it was fine. I can get on AIM again if you'd like.

---

If you could get on AIM in like 15 minutes (I'm going to be eating dinner in just a moment) and can help me walk her through it, and so long as the e-filing is free, I'd be even more greatful than before (if that's even possible!)

She's just nervous about using anything other than our usual family tax guy for taxes.

Edit to add: or at any point in the next hour or so, I'll be around whenever you have a chance. Thanks

[ February 06, 2007, 09:58 PM: Message edited by: Lyrhawn ]
 

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Posted by Boon (Member # 4646) on :
 

quote:

---

Originally posted by Will B:
I took a 3-hour class. It doesn't relate to my job. (It *may* get me a new job, but I can't prove that yet!)

---

Sorry, you don't get to claim it.
 

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Posted by Boon (Member # 4646) on :
 

quote:

---

Originally posted by Lyrhawn:
. . .so long as the e-filing is free. . .

---

quote:

---

Originally posted by Boon:

quote:

---

Originally posted by ketchupqueen:
Of course, now Jeff is hemming and hawing about when he'd be able to do it. So it might be just me and the girls. But I'm sure you won't mind, right?

---

:thwacks Jeff:

Umm...no, of course I wouldn't mind. Not that I don't like Jeff or anything, but it may be more convenient that way, provided you don't mind travelling alone. First, it would make it easier to convince my husband to let you stay here. It would also make transportation easier, since we'd all fit in the van.

That would mean only two adults to deal with three little ones, though...although my older two are a big help in that regard. I still do have one stroller, but the toddlers would have to walk everywhere. And I'm assuming you'd bring at least one carseat on the plane. Since I have one extra, those'd be covered.

This is so much fun...

---

That would be awesome. I'd bring strollers, of course (can't get through an airport without them!) We just ordered stroller connectors that connect our two umbrella strollers. So you deal with Boo and I can handle mine in their strollers. I'll bring a carseat for Bridget and we even have a portable one if you don't have an extra with a five-point harness for Ems (she's still skinny enough to need a five-point harness.) I do not, in fact, mind travelling alone with kids, and am pretty good at it most of the time. The only issue would be getting Emma over not seeing Abba for a few days, but she's dealt with that before... So the only thing to work out would be sleeping arrangements. And if necessary we could stay somewhere else, though of course I would prefer staying with you. But you might not like it because Emma and I are on weird sleep schedules and she tends to cry a lot about going to sleep at night.
 

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Posted by rivka (Member # 4859) on :
 
*jealous*
 

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Posted by ketchupqueen (Member # 6877) on :
 

 

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Posted by Mama Squirrel (Member # 4155) on :
 
Boon, I guess I don't understand how the child tax credit works. We paid in $809 in FIT, but we are getting back $1,702. Does that sound reasonable?

Thanks for having this thread!
 

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Posted by Puffy Treat (Member # 7210) on :
 
Is one able to claim one's self as a dependent if one only rents, not owns one's home?
 

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Posted by Boon (Member # 4646) on :
 

quote:

---

Originally posted by Mama Squirrel:
Boon, I guess I don't understand how the child tax credit works. We paid in $809 in FIT, but we are getting back $1,702. Does that sound reasonable?

Thanks for having this thread!

---

Well, without the rest of your numbers, it's hard to say. I'm sending you my phone number. Feel free to give me a call and I'll work up the numbers for you. Should take about ten minutes.
 

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Posted by Boon (Member # 4646) on :
 

quote:

---

Originally posted by Puffy Treat:
Is one able to claim one's self as a dependent if one only rents, not owns one's home?

---

??

One does not ever claim one's self as a dependent. One does claim an exemption for one's self if no one else is claiming one as a dependent.

I think you're combining personal exemptions and standard/itemizing deductions. They're two different animals.

Personal exemptions are when you get to knock $3300 per person you support (including yourself) off your taxable income.

Deductions reduce your taxable income further by allowing you to either choose the standard rate for your marital status, or deducting your mortgage interest, taxes paid, part of your medical expenses, etc.

HTH.
 

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Posted by Tstorm (Member # 1871) on :
 
Boon,

I hope you're feeling better by now. From the sounds of it, my version of tonsilitis/strep throat was much milder than yours.

A few posts up, you mentioned that my return sounded "fun", and I'm going to take your word for it.

I've got all the paperwork and numbers, and I even went through the forms once already. If you want to take a look, I just need to know how to get in touch with you.

(I sent an e-mail a few weeks ago, but it is possible that a spam-catcher ate it. Or vice-versa on your reply. At any rate, the e-mail in my Hatrack profile works fine.)
 

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Posted by Synesthesia (Member # 4774) on :
 
I still must do my taxes, but this year I OWE!
HOW AWFUL!
 

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Posted by Tstorm (Member # 1871) on :
 
Hehe. I wonder if you owe as much as I do...

(Not a contest, just an idle thought. No, I consider this private information.
 

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Posted by Synesthesia (Member # 4774) on :
 
This sucks.
A few days before tax time, I forced myself to clean and found some sort of Americorps service thing which said I used $647 to pay interest on a student loan.
Does this mean I will own the government MORE money?
Worse, I finished my state taxes and have already gotten the refund.
Why are these people driving me crazy?
Do i have to include this in my fed taxes or will I get audited or something?
I don't want to do it if they will charge me more money, and I have no idea how to add it!
 

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Posted by Strider (Member # 1807) on :
 
interest paid on student loans is tax deductible. So you would actually get back more money by reporting it.

Not including something doesn't necessarily mean anything...unless you get caught. Which is unlikely, but a possibility. But again, in this case you're actually losing out on money by not reporting that. I have no idea how to ammend a return(or if it's even possible) that's already been sent in.
 

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Posted by Synesthesia (Member # 4774) on :
 
I haven't sent it in yet, it's on H and r block, but i don't know how to include it.
 

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Posted by Synesthesia (Member # 4774) on :
 
Ok, it seems I will get a refund, but I am confused because I don't understand so If I get audited, what can I do?


As long as they don't shoot me in front of a firing squad. It's really not enough money to skin a flea.
 

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Posted by Tstorm (Member # 1871) on :
 
It's not all that hard to file an amended return. I did so almost three years ago, when I forgot a measley amount of interest on a savings account. It only made a slight difference, but the freedom of conscience was worth it.

(I just submitted my return on Sunday. They took the money out of my account today. )
 

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Posted by Seatarsprayan (Member # 7634) on :
 
I have a question. My father owns his house free-and-clear. He spends most of the year traveling in his RV, I am living in his house, and it's understood that it's going to be my house from now on. When he comes back to stay it'll be because he's an invalid and I'll just take care of him, but the mastery of the house has de facto already passed to me.

Would it be possible for me to "buy" his house from him? I could pay him every month and get to deduct the payments on my tax return, and he would just put the money in an investment account with me as the beneficiary, and when he dies I would inherit it all back again!

Does that work at all?
 

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Posted by Dagonee (Member # 5818) on :
 

quote:

---

Would it be possible for me to "buy" his house from him? I could pay him every month and get to deduct the payments on my tax return, and he would just put the money in an investment account with me as the beneficiary, and when he dies I would inherit it all back again!

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quote:

---

Your father would have to pay taxes on the interest portion of your payments, so I'm not sure that would be a benefit.

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