2013 Annual Anandtech Tax Time Thread!

[CPA]

It's been a while since I've posted this thread - about 7 years, I think, but in the absence of Eaglekeeper - Where are you Bro? - I've gone ahead and posted ATOT's favorite annual thread. We all love taxes, right?!

So, without further adieu, I present to you:

The 11th Annual Anandtech Tax Time Thread!!!

First order of business:
Gratutities can be sent to the me and Eaglekeeper in lieu of all the birthday presents you bastards have missed giving us over the years.:whiste:

Now the legal mumbo jumbo:

All responses to questions (primarily from myself and Eaglekeeper, along with some other valued contributors) are based on our knowledge and understanding of the current tax code. That said, we do not expressly give permission to use our opinions and responses as sole binding measure for any user, the intended or not. Seek out a local expert and a second opinion with any tax inquiry. We will not be held liable for any audit, fine, penalty or other consequence due to any user basing a filing primarily on our responses. In other words, you're on your own.

Please understand that the service provided here is not to be considered as the final say in any tax related question or issue. We advise everyone to take caution with accepting the answers posted here and seek a good tax accountant or tax lawyer when necessary, especially those pesky complicated questions. Additionally Anandtech nor Anand have endorsed myself or the other benevolent responders in this thread. So please don't complain to them if you feel like you got a bogus answer. Finally, this thread is NOT meant to offer advice nor do your taxes for you. It is solely to help clear up questions, concerns or misunderstandings that you may have concerning the 2013 Tax Code. None of the responders take responsibility for your final tax preparation. You do!

Secondly, this is important people:

Please post all tax questions in this thread! We will not, REPEAT, WILL NOT, intend to respond to other threads and generally the mods will lock one-off threads. Thanks mods. We strongly encourage all members to post your questions here for the benefit of others. We will NOT respond to PMs unless we request one from you or if there is personal information that cannot be scrubbed to support a question. And finally, please, for the love of all that's good in the world, read through the thread, there is a good chance your question has already been asked and answered. We know that such is inconvenient, but you may also pick up unknown tidbits of useful information at the same time.

Questions that have been answered, will be indicated as such, you will have to dig through the thread anyhow to find it. Should your question have been answered previously, anticipate that sarcasm will be the response. The other threads have been archived and the search function works (now we are on vB).

If the below saves one ATOT member from being a sucker, it will be worth the typing:

**** Warning - Snapshot of IRS Phishing E-Mail ****
IRS Privacy Page Quote:
PLEASE NOTE: Do not respond to unsolicited e-mails that claim to come from the IRS, or any e-mail from an unknown party asking you to submit personal, tax, or financial data. The Internal Revenue Service does not use e-mail to request this type of information. Forward suspicious emails to: phishing@irs.gov

If you E-File, the provider will inform you of the estimated time to have a refund issued.
If you mail, please allow a MINIMUM of extra 2 weeks for a refund to be processed.
A good rule is to allow an extra additional week in addition to above, for each month that you delay filing.
Allow an extra week if the funds are being mailed to you instead of being direct deposit.


Now, if you're an ambitious one, you can always trudge through the IRS website for help. Most of our technical answers will come from it.

Oh, and again please, try not to PM us or any of the other responders unless you are asked to. Instead, post your question here for all to see, because chances are there is another member with a similar issue. The Mods have been requested to lock any/all other threads that show up dealing with tax issues.

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Okay, moving on. This thread is NOT intended to:

-Answer state tax questions. Sorry folks, states are their own beasts. They all have different rules and regs, heck 7 states don't even have income taxes. We are not about to keep up with 43 different state codifications. Therefore, we won't be answering specific state questions. The best way to get an answer for a state question is to call up the State Treasury or Revenue Dept.

- Endorse any tax software. We can safely say that most of the software does it's job well. Without recommending any particular one, you can choose TaxAct, TaxCut, or TurboTax. Additionally, these and many more sites assist you in actually doing your taxes online. Even the IRS website has the ability for you to file online with simple filings.

-Help propagate any illegal tax schemes. Some of us do not appreciate the hospitality of the Federal Government. So keep your schemes out of this thread. Thanks for understanding.

- Start any arguments between the current system, flat tax, national sales tax or any other tax opinion. The thread is to help people, not debate, flame or troll. The Moderators will be asked to intervene for the latter items as needed.

- Some states have their own online filing - check before you pay for state filing.

We also very busy this year, so may not be responding to questions as fast as in the previous years. However, we have good knowledgeable people that will help to fill in the gaps.

For those of you who enjoy torturing yourself, We present the IRS Web Site. However, this site also has most of the answers also. Hard to find, but they will be there.


Previous ATOT Tax Threads for reference

• 2003
• 2004
• 2005
• 2006
• 2007
• 2008
• 2009
• 2010
• 2011
• 2012

The two sites below have restrictions on their usage and any returns must be started through above links for them to be considered for no charge.
they are not available until mid-January.

Federal/Intuit Tax Freedom
State/Intuit Tax Freedom - Not available yet. Will update once new URL is provided.

TaxAct states free filing using their online version for Federal.


H&R Block Product Comparison Chart: (not an endorsement)

Chart

All the three main biggies (TurboTax, TaxCut and TaxAct) do the job. Each has slightly different user interfaces and their quirks/irritations. They continually look at the competition and attempt to match them in features the following year. All three area able to import datafiles from each other.

Each attempts to sell you the Basic Federal package in fancier terms. What you get is added support/documentation.
The internal S/W is still the same - supports all forms that a person will need for themselves, investments (Stocks/bonds/Interest and rental property) and Small Business use.

Some will allow multiple Federal efiles for the same license.

All three have state filing.
However, if you have multiple states to work with, you MUST USUALLY purchase a copy for each state that you need to work with.


Some IRS and other Tax Links may not be fully operational until mid January or later
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Okay, now that that stuff is out of the way, let's get to some helpful insight.

Deadlines (midnight of the date listed for filing deadlines)

W2 - Companies are required to have your W2 POSTMARKED by January 31st. It is NOT required that you have it in your hands by that date. Let's dispel that myth right now, please.

If you do not receive it by mid-February: for ex-employers, call the employer and ask for a copy to be Faxed to you; For current employers, contact your HR department.

1099 - 1099s do not have to be sent to you. Individuals that could receive a 1099 are responsible for tracking their own income.

Federal returns - Tuesday, April 15, 2014. This is also the date to file for request of extension. An extension is generally granted when filed, BUT it is an extension to file NOT to pay. You still need to pay your taxes by April 15th (or what you reasonably believe your tax liability is at that time). The extension grants you 6 extra months to file your paperwork and avoid late-filing penalties (but not interest).

IRS FAQ Index - contains links for below areas

• Filing Requirements/Status/Dependents/Exemptions
• IRS Procedures
• Itemized Deductions/Standard Deductions
• Interest/Dividends/Other Types of Income
• Pensions and Annuities
• Social Security Income
• Child Care Credit/Other Credits
• Earned Income Tax Credit
• Estimated Tax
• Capital Gains, Losses/Sale of Home
• Sale or Trade of Business, Depreciation, Rentals
• Small Business/Self-Employed/Other Business
• Aliens and U.S. Citizens Living Abroad
• Electronic Filing (e-file)
• Magnetic Media Filers
• Other (Alternative Minimum Tax, Estates, Trusts, Tax Shelters, State Tax Inquiries)
• Individual Retirement Arrangements (IRAs)
• Recent changes in the tax law

Free Filing - via IRS

Check back in January to file your 2013 Free File return.

EVERYONE is Eligible to Free File!

Let Free File do the hard work for you with brand-name software or online Fillable Forms. You can prepare and e-file your federal return for free. Participating software companies make their products available through the IRS. Some also support state tax returns (not always free).

Some useful tidbits accumulated from previous years.

Dependants:
Quote:

Significant others are able to be declared as a dependent if you provide the support according to the IRS guidelines. (I would not push it with multiple SO at the same time ...) SO's children are now allowed based on a IRS notice of 3/08. This can also be used retroactively for the past 3 years.

You are a dependent of your parents if you are under 18 (24 if in school) unless:
You have stood on your own for more than 6 months. Just because you paid for your tuition costs does not mean that you are not a dependent.
Your parents have the option of not declaring you and letting you stand on your own.

If you cover more than 50% TOTAL of living expenses for a "legal" (per IRS definition +/- two generations) relative they can be declared as a dependent.

You cannot claim a spouse as a Dependent if filing as Head Of Household.

1099:

If you get paid with a 1099, you have the option of filing it with your 1040/1040A under misc income or using the Schedule C. Use of the Schedule C (requires a 1040) and allows you to write off expenses directly and some portion indirectly related to that income before taxes. Previous tax threads have provided guidance on items that could be used as expenses in on capacity or another.
Income earned via a 1099 is also subject to the self employment tax as well as the normal expected W2 type taxes.

Mileage - (New numbers are posted)

56.5 cents per mile for business miles
24.0 cents per mile driven for moving purposes
24.0 cents per mile driven for medical purposes
14.0 cents per mile driven in service to a charitable organization
Commuting is not deductible expenses.
Commuting between two jobs is.
Mileage to/from school while working (if the education if not primary - ie. it supports work) is a deductible expense on the Form 2106 (which requires 1040 and Schedule A).
If school can be considered as supportive of business income, the tuition, fees, books and mileage become a business expense on the Schedule C. Otherwise use the 2106
You can not claim mileage and expenses on the same vehicle.

Moving:

Expenses incurred when changing work locations (for any reason) if the location meets the distance test of 50 miles is filed on the Form 3903 and does NOT require a schedule A.

Sales Tax: (Still Valid for 2013)

Sales tax is still allowed as an itemized deduction this year. While it can be a little complicated, the main points of this deduction are:
a. Publication 600 is the main reference for this deduction and contains the tables for those of us who didn't keep your receipts all year long.
b. Anyone who itemized can take it, regardless of what state you are in, BUT, if you live in a state with local/state income tax you have to choose to use the sales tax or income tax deduction. You CAN'T have both.

Sales Tax Calculator

Interest Reporting

You are responsible to report interest /dividends over $1.
The payee is responsible for providing you a 1099 form when the payment is over $10.

Business Expense write-offs.

Unless you have Self-Employment income (use the Schedule C), expenses must fall under the Form 2106 using Schedule A (Itemizations)

Expenses for clothing are not deductible, unless those items cannot be worn out in public for normal use and/or private functions.

Example:
If you have to wear a suit for work, you cannot deduct the cost of the suit and dry cleaning.
If your required to wear a uniform, you can deduct as part of Schedule A Itemized Deductions.
If you have a military or other Government service type uniform, it is deductible.

Students:

American Opportunity is for expenses. (Complex formula)
Hope Credit is for tuition for the first 2 years of college. = 50%
Lifetime Learning Credit is for any other type of educational advancement. = 20%
Note: If your parents claim you as a dependent, they get the Credits, no matter who pays the tuition.
Note: If filing separately, NO educational credits can be claimed for self.

The above credits are for tuition only. Books (unless required to be purchased directly from the school as a term of enrollment), room, board, fees of any kind, laptops, etc. do not qualify. Those would have to be entered as expenses on the Form 2106 for those that use Schedule A.


No Double Benefit Allowed
You cannot do any of the following:

Deduct higher education expenses on your income tax return (as, for example, a business expense) and also claim a lifetime learning credit based on those same expenses.

Claim a lifetime learning credit in the same year that you are claiming a tuition and fees deduction for the same student.

Claim a lifetime learning credit and a Hope credit based on the same qualified education expenses.

Claim a lifetime learning credit based on the same expenses used to figure the tax-free portion of a distribution from a covered education savings account (ESA) or qualified tuition program (QTP). See Coordination With Hope and Lifetime Learning Credits in Chapter 7 and Chapter 8 (QTP).

Claim a credit based on qualified education expenses paid with a tax-free scholarship, grant, or employer-provided educational assistance. See Adjustments to Qualified Education Expenses, later.

AMT

2011 AMT Exemption levels
Single $48,450
Married Jointly $74,450
Married Separately $37,225

2012 AMT Exemption levels
S $33,750
MJ $45,000
MS $22,500

2013 AMT Exemption levels
S $51,900
MJ $80,800
MS $40,400

Well, sorry for the long post, but just like the IRS code, it takes a lot to do something simple. We have tried to organize it for easier reading by using the quoting method to section areas off.

AGAIN
Questions already answered in the thread may be responded to as "all ready answered". If so, you will <gasp> actually have to read this thread. Hint: Try the in-thread search function.

We will attempt to update this OP for any changes made by Congress in the coming months. Hopefully, we won't have a repeat of 2012. Now, let the questions begin.

 

[Bartman39]

Is this for real...?

 

[CPA]

Is this for real...?

Every year for 11 years.

Crap, just noticed most of the formatting fell off. Need to update thread.

 

[FallenHero]

So, for childcare costs...we pay my mother in law to babysit. Can our payment towards her be counted for tax purposes and would we have to provide a receipt if they do?

 

[Xcobra]

So, for childcare costs...we pay my mother in law to babysit. Can our payment towards her be counted for tax purposes and would we have to provide a receipt if they do?

I believe nothing has changed on this for 2013. You both have to be working to get the credit. Credit can be 3,000 per child up to 6,000 for 2 or more. There are AGI limitations and if you both work and qualify, you get at least 20% of the above expense limits as a credit (i.e. 600 or 1,200). There are other limits but this should give you some basic understanding.

Check Pub 503 for more info: http://www.irs.gov/publications/p503/ar02.html

 

[CPA]

So, for childcare costs...we pay my mother in law to babysit. Can our payment towards her be counted for tax purposes and would we have to provide a receipt if they do?

See what XCobra stated. In addition, you don't need a receipt, but you will have to provide her SSN number on form 2441. This means there is a chance the IRS will verify that information with what is submitted by your mother-in-law. Your MIL should be on board in filing that income lest she risk getting in trouble with the IRS.

 

[IronWing]

One note to maybe add to the OP: The IRS stated that it will not begin processing tax returns until Jan 31, 2014 so there is no advantage to sending them in earlier than that.

 

[hclarkjr]

One note to maybe add to the OP: The IRS stated that it will not begin processing tax returns until Jan 31, 2014 so there is no advantage to sending them in earlier than that.

yes that blows, another year screwed up tax time again. i have mine filled out already and am waiting for H&R block to start accepting returns to be efiled

 

[CPA]

One note to maybe add to the OP: The IRS stated that it will not begin processing tax returns until Jan 31, 2014 so there is no advantage to sending them in earlier than that.

Will do. Slung the OP together last night and didn't get a chance to verify much.

 

[Pardus]

...

 

[CPA]

CPA.. can you please tell me what items for 2013 will be allowed as a deductible for a 1099 independent contractor who works out of his house/home office and on the road/car. Is there a detailed list somewhere (such as purchase of a laptop, printer, chair, desk, ink, paper, business cards, laminated brochures and other printed materials, faxes, cell phone/bills, car payments, gas, tolls, mileage, auto repairs, auto insurance, health insurance etc)

Also, do you recommend TurboTax as being the best way to do ones own taxes or to have someplace else do it for you.

Last year, I spent weeks with TurboTax going over my dedications and calculations and I received a letter from the IRS telling me there was a mistake and I owed them more. Had to pay a penalty also.

I tried H&R block in 2010 and they missed a lot of dedications. seemed to be very lazy and pissy. I guess I asked them too many questions. H&R block was insanely expensive also. They initially quoted me $125 but ballooned to $275 after it was all said and done. They said I had so many changes and corrections from what I would call there first draft, those bastards decided to charge me more.

Thanks.

There's no specific list, unfortunately. If you directly use it to generate revenue for your "business" (if you are contractor or self-employed you are a business) then you can deduct it. There are two things, though, that you have to be careful in how you use as a deduction/expense on Schedule C: Your house and your car.

House: you will have to calculate the square footage of the area that you use EXCLUSIVELY for your business. IRS does not allow you to deduct a portion of your house if you use it for business a couple hours and then family/fun the rest of the time. That said, any area you use to conduct your business, including storage of business materials, can be considered for home office use. Once the percentage of home is calculated you can apply that to your home costs including utilities, depreciation, mortgage interest, specific maintenance,etc. to determine the amount of expense to include on Schedule C. Schedule C instructions will have more information

Car: you can use actual costs, including car depreciaton, when conducting business in your car (very difficult to track, though) or use the standard mileage rate listed in the OP. The rate is only applicable to the business miles, however, but it's much similar to manage.

As for software, it's only as good as what the user puts into it. I would be very surprised if the TurboTax calculated something wrong. Most likely an amount was reported to the IRS that you didn't include or IRS determined that something you included was not allowable. We don't recommend any software over any other. I personally use TaxAct.

 

[FallenHero]

See what XCobra stated. In addition, you don't need a receipt, but you will have to provide her SSN number on form 2441. This means there is a chance the IRS will verify that information with what is submitted by your mother-in-law. Your MIL should be on board in filing that income lest she risk getting in trouble with the IRS.

So don't claim it then, got it

 

[Ksyder]

This might be a dumb question but if you don't purchase ACA-compliant health care do they fine you in 2014 or would the first penalty be in 2015?

 

[mwtgg]

There's no specific list, unfortunately. If you directly use it to generate revenue for your "business" (if you are contractor or self-employed you are a business) then you can deduct it. There are two things, though, that you have to be careful in how you use as a deduction/expense on Schedule C: Your house and your car.

House: you will have to calculate the square footage of the area that you use EXCLUSIVELY for your business. IRS does not allow you to deduct a portion of your house if you use it for business a couple hours and then family/fun the rest of the time. That said, any area you use to conduct your business, including storage of business materials, can be considered for home office use. Once the percentage of home is calculated you can apply that to your home costs including utilities, depreciation, mortgage interest, specific maintenance,etc. to determine the amount of expense to include on Schedule C. Schedule C instructions will have more information

Car: you can use actual costs, including car depreciaton, when conducting business in your car (very difficult to track, though) or use the standard mileage rate listed in the OP. The rate is only applicable to the business miles, however, but it's much similar to manage.

As for software, it's only as good as what the user puts into it. I would be very surprised if the TurboTax calculated something wrong. Most likely an amount was reported to the IRS that you didn't include or IRS determined that something you included was not allowable. We don't recommend any software over any other. I personally use TaxAct.

I'd like to add one thing to this post, which is new for tax year 2013. Claiming the home office deduction had always been a record-keeping mess and one which was likely to get disallowed upon examination due to the taxpayer not meeting the strict requirements. Frequently it wasn't even worth claiming the deduction because of this. The IRS issued Rev. Proc. 2013-13, which provides for a safe harbor home office deduction of $5 per square foot (capped at 300 sqft or $1500) of your house used exclusively for business (this part has not changed).

This is beneficial because now you don't have to track utility bills, insurance, R&M, depreciation (and potential subsequent recapture) AND you can still claim 100% of real estate taxes and mortgage interest on Schedule A.

 

[CPA]

This might be a dumb question but if you don't purchase ACA-compliant health care do they fine you in 2014 or would the first penalty be in 2015?

2014 reportable on your April 2015 tax filing.

 

[mwtgg]

This might be a dumb question but if you don't purchase ACA-compliant health care do they fine you in 2014 or would the first penalty be in 2015?

Zero effect on the 2013 return (filed in 2014). The penalties will be administered on the 2014 return (filed in 2015).

 

[bradly1101]

I am helping someone dear to me with their taxes. He became badly disabled in 2013, the same year that he ran up $65K+ in related medical bills. He had been laid off a few years prior and had no health insurance, and doesn't qualify for Medicaid since he has a 401K (now converted to an IRA with less stock exposure).

He used part of that to pay the medical bills, and had to take out an extra $18K which they kept for his federal tax deduction.

Last year he made very little money. Beside the $65K IRA withdrawal ($83K with deduction) for the medical bills he only made a few grand from a couple months of SSDI.

So I wanted to do a 'dry run' and ran the numbers using the 2013 1040, but last year's worksheet for medical bills (he certainly meets the 10% of income requirement to report medical bills - up from last year's 7.5%). It looks like he'll get about $17.5K back of the $18K deducted for taxes. I know the numbers are fuzzy since the forms aren't out, but does that sound about right?

 

[morkus64]

So this past year I've been running a design business as a sole proprietor (finally registered as an LLC / S Corp a couple days ago! No scolding! ). As part of executing the designs, clients sometimes prefer to pay me and then have me purchase the appliances / furnishings / whatever for them. Depending on the situation, I will sometimes add a small commission to the cost of the items.

How is this dealt with so far as taxes go?

Another piece of this is that I've had a couple of large (over $20k) checks deposited into my personal account, which includes payments to me, other contractors, and the cost of various things to purchase. I'm a bit concerned this will raise alarms (banks report checks over a certain amount, correct?), but most of that money is held for only a few days until I write everyone else their checks. Should I be worried? How/is any of this reported?

TIA!

 

[SociallyChallenged]

This may seem a little specific, but I figured I'd give it a shot.

In addition to full-time work under an employer, I currently work several hours on the weekends (1-4h) as an independent contractor. As such, I utilize my office area (solely my office, not used for anything else) to prepare materials for clients, complete web chats, and occasionally meet clients. I understand that there is an home office deduction that's able to be completed (now with a new method or previous, more complicated method). It states that the area must be exclusively and regularly used as a place of business. Considering I use this for maybe 5-10h per week with regards to my independent contractor position, is that sufficient to apply for the home office deduction? Thanks a bunch.

 

[Xcobra]

This may seem a little specific, but I figured I'd give it a shot.

In addition to full-time work under an employer, I currently work several hours on the weekends (1-4h) as an independent contractor. As such, I utilize my office area (solely my office, not used for anything else) to prepare materials for clients, complete web chats, and occasionally meet clients. I understand that there is an home office deduction that's able to be completed (now with a new method or previous, more complicated method). It states that the area must be exclusively and regularly used as a place of business. Considering I use this for maybe 5-10h per week with regards to my independent contractor position, is that sufficient to apply for the home office deduction? Thanks a bunch.

Yes, if you only use it for business purpose and for nothing else, you are able to deduct the expenses related to the office (via square footage apportionment). The fact that it is not used during the week is irrelevant. What matters is that you DON'T use it for personal purpose at all (only for business). All the expenses allocated to the office can be offset against the income you derived on the weekends. Use Schedule C :thumbsup:

 

[MartyMcFly3]

So don't claim it then, got it

Haha was thinking the same thing with my dad.

 

[CPA]

I am helping someone dear to me with their taxes. He became badly disabled in 2013, the same year that he ran up $65K+ in related medical bills. He had been laid off a few years prior and had no health insurance, and doesn't qualify for Medicaid since he has a 401K (now converted to an IRA with less stock exposure).

He used part of that to pay the medical bills, and had to take out an extra $18K which they kept for his federal tax deduction.

Last year he made very little money. Beside the $65K IRA withdrawal ($83K with deduction) for the medical bills he only made a few grand from a couple months of SSDI.

So I wanted to do a 'dry run' and ran the numbers using the 2013 1040, but last year's worksheet for medical bills (he certainly meets the 10% of income requirement to report medical bills - up from last year's 7.5%). It looks like he'll get about $17.5K back of the $18K deducted for taxes. I know the numbers are fuzzy since the forms aren't out, but does that sound about right?

I'm going to assume he's permanently disabled and he's less than 65 years old. Is that a correct? Also, was this a Roth IRA? Did he receive any unemployment income?

Also, keep in mind that the SSDI income is going to be taxable, at least a portion of it, based on the info your provided.

Based on what you've outlined, I'm getting a little less than $15K in refund. But, I'm using just what you provided, there may be other things to consider.

Don't forget he needs to include medical miles, out-of-pocket vehicle expenses, parking/tolls, etc. to help increase his medical deduction.

 

[CPA]

So this past year I've been running a design business as a sole proprietor (finally registered as an LLC / S Corp a couple days ago! No scolding! ). As part of executing the designs, clients sometimes prefer to pay me and then have me purchase the appliances / furnishings / whatever for them. Depending on the situation, I will sometimes add a small commission to the cost of the items.

How is this dealt with so far as taxes go?

Another piece of this is that I've had a couple of large (over $20k) checks deposited into my personal account, which includes payments to me, other contractors, and the cost of various things to purchase. I'm a bit concerned this will raise alarms (banks report checks over a certain amount, correct?), but most of that money is held for only a few days until I write everyone else their checks. Should I be worried? How/is any of this reported?

TIA!

I'm going to assume by "couple of days ago" means you did it in 2014. I also assume you will be filing cash basis versus accrual basis. So, the simple explanation on cash basis filing is that you report money you received and money you paid. period. You don't need to fret about getting money early, it's revenue to you and you have to report it. However, because you are using cash basis accounting, you won't have the luxury of deducting the future expense from that cash earned on your Schedule C filing.

 

[bradly1101]

I'm going to assume he's permanently disabled and he's less than 65 years old. Is that a correct? Also, was this a Roth IRA? Did he receive any unemployment income?

Also, keep in mind that the SSDI income is going to be taxable, at least a portion of it, based on the info your provided.

Based on what you've outlined, I'm getting a little less than $15K in refund. But, I'm using just what you provided, there may be other things to consider.

Don't forget he needs to include medical miles, out-of-pocket vehicle expenses, parking/tolls, etc. to help increase his medical deduction.

Thank you so much! That's the ballpark so I think I'm good. Thanks for all the great advice!

I'm going to assume he's permanently disabled and he's less than 65 years old. -Yes.

Also, was this a Roth IRA? - After a little research it looks like they rolled him over to a Traditional IRA because on his account page he has the option to convert to a Roth. Would this be a good idea since it appears there are less taxes with a Roth?


Did he receive any unemployment income? - No.

 

[Carson Dyle]

My niece is a student and has nothing more than passbook savings income of a few dollars for the year, but she gets a 1099 form from her bank. Is she required to file a return?