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I'm waiting for the Educational forms to be finished. I've done mine with TurboTax (so far) this year, rather easy.
Posts: 189 | Registered: Jun 2005
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For some reason my refund is lower than I think it should be.
Posts: 9942 | Registered: Mar 2003
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Boon
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quote: 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?
quote: 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?
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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quote: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?
Just so you know you're not crazy, that was the rule a while back. You're not imagining it, but it was changed some time ago.
Posts: 26071 | Registered: Oct 2003
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Boon
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quote: 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.
quote:For some reason my refund is lower than I think it should be.
What did you use to prepare it? Although I know I never got a very big refund until we had a kid. *shrugs*
Posts: 21182 | Registered: Sep 2004
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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...
Posts: 9942 | Registered: Mar 2003
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quote:Why is it that I made more money last year, but seem to be getting a smaller tax refund?
What else changed? Did you withhold at a higher amount? Were you self-employed? Any extra taxable gains? Get bumped into a higher bracket?
Posts: 21182 | Registered: Sep 2004
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Boon
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quote: 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.
The program will walk you through it. Basically, amounts spent count as expenses. Inventory counts as assets, and goes against expenses. Just make sure both amounts show up on the Sch C.
quote: 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?
The guideline we used at work (as of last year, anyway) was 2 years for a regular business, 5 for a farm. The IRS says, basically, that if you carry on as if it were a business, and expect to have a profit more than a loss, it's a business. Otherwise, it's a hobby and different rules apply.
ETA: All of 2005 is counted as one tax year, unless you've chosen to use a different tax year (like October 31-Nov 1) for your business.
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quote:Why is it that I made more money last year, but seem to be getting a smaller tax refund?
What else changed? Did you withhold at a higher amount? Were you self-employed? Any extra taxable gains? Get bumped into a higher bracket?
I have no idea. This doesn't make sense. I made more money this year, yet my tax refund is microscopic... But I made a lot less last year, and it was huge.
Posts: 9942 | Registered: Mar 2003
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Boon
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quote: 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.
The state refund is only taxable if you itemized last year. Tell it no.
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Boon
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quote: For some reason my refund is lower than I think it should be.
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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Boon
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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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Sent... What happened?
Posts: 9942 | Registered: Mar 2003
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Boon
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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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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...
Posts: 21182 | Registered: Sep 2004
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Boon
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Do you qualify for EIC? How much will you get? Find out here!
quote: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.
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.
posted
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.
Posts: 9871 | Registered: Aug 2001
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Boon
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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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Boon
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quote: 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?
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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Boon
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quote: 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.
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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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.
Posts: 9871 | Registered: Aug 2001
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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). Posts: 74 | Registered: Apr 2005
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quote: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!
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. )
Posts: 21182 | Registered: Sep 2004
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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?
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... Posts: 21182 | Registered: Sep 2004
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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.
Different site from 1999.
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.
I just answered your email. Life is nuts sometimes, you know?
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Boon
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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).
:nod,nod:
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!
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Boon
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quote:You are both sooo lucky. *grumps*
I not only have to be massage-less, but Boon-less.
What? It's not that far. Roadtrip! Posts: 32919 | Registered: Mar 2003
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Boon
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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.
You may not even have an actual "profit." I'd set aside part of the rental, yes.
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?
Sorry, no. I've never rented out any property. WAIT, yes, I can recommend a really great book for anyone doing more complicated returns: this series is freaking wonderful! We used them all the time at the tax places. Expensive, but way more user-friendly than the IRS publications.
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Boon
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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.
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Boon
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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.
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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. Posts: 74 | Registered: Apr 2005
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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.
Posts: 26077 | Registered: Mar 2000
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Boon
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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.
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