3rd Annual AT Tax Time Thread

[stan394]

I used TurboTax.com to file my federal tax return electronically. I filled in everything they ask me, paid the preparation fee and submitted the return electronically. When I read the .pdf file of the 1040 (and related forms), I realized TurboTax included some vouchers (1040-ES) for me to pay 'estimated tax' for year 2006. I don't think I have ever indicated that I want to pay estimated tax for the next year in this year's return. However, I already submitted the return. Do I have to use those vouchers to pay the estimated tax in 2006 (there are 4 installments)?

 

[EagleKeeper]

You can use those vouchers to mail in the estimated payments if you choose.

TT is just attempting to help you along.

 

[stan394]

Originally posted by: EagleKeeper
You can use those vouchers to mail in the estimated payments if you choose.

TT is just attempting to help you along.

Can I choose not to make those payments?

 

[EagleKeeper]

Depending on your situation; you can choose not to.

However, Uncle may not like it when he feels that you are short changing him on paying quarterly taxes as required.

 

[Zee]

question please:

1) state in question: NYS state - Father lives in Foreign country for the past couple of years but legally the "perm residence" is in NY (has driver license here, family(me)). Is that a Non-residence form or residence form?

Thank you in advance!

 

[EagleKeeper]

Originally posted by: Zee
question please:

1) state in question: NYS state - Father lives in Foreign country for the past couple of years but legally the "perm residence" is in NY (has driver license here, family(me)). Is that a Non-residence form or residence form?

Thank you in advance!

We are not qualified to give state advice.

For Federal purposes, if he is out of the USA, then he does not have to file a return IF he has no income from within the USA.

 

[SarcasticDwarf]

This coming winter I am going to spend about 3-4 weeks (max) in Europe. Part of that time will be spent gathering material that will be used to get college credit (probably 1 or 2 indenpendant studies). Do you think I will be able to deduct any of it (such as the plane ticket) on my taxes next year as part of it is for educational purposes (though in theory, since I am going out and "seeing the world" I guess the entire thing is educational?

 

[EagleKeeper]

No - Educational deductions via the Credits are limited to tuition costs and other things buried in the tuition costs by the institution.

One would have to itemize using the Schedule A to even attempt such a thing.

 

[SarcasticDwarf]

Originally posted by: EagleKeeper
No - Educational deductions via the Credits are limited to tuition costs and other things buried in the tuition costs by the institution.

One would have to itemize using the Schedule A to even attempt such a thing.

By the wording of the last line there I take it that it would not be worth the effort?

 

[EagleKeeper]

Originally posted by: SarcasticDwarf

Originally posted by: EagleKeeper
No - Educational deductions via the Credits are limited to tuition costs and other things buried in the tuition costs by the institution.

One would have to itemize using the Schedule A to even attempt such a thing.

By the wording of the last line there I take it that it would not be worth the effort?

If Single - You will have to come up with $5K of valid expenses plus 2% of your gross income.
And then, should you get audited; you will have to JUSTIFY it to an auditor, that potentialy has never traveled to Europe) and will wonder why the US taxpayer should have to support your "educational" effort.

 

[Muse]

Originally posted by: EagleKeeper

Originally posted by: Muse
My Turbotax Deluxe 2005, in the deductions questionaire portion has a screen for Major Purchases. It says I can deduct the cost of "building materials for major home improvements." I hired a contractor to remove and replace the entire roof of my house. Can I deduct the portion of the cost that's attributable to materials cost? I paid for the entire job out of a loan which put a lien on my house. Thanks!

This may apply to the "sales tax deduction" that was intended for states that do not have a state income tax. There is a percentage (based on the state) that can be used for a Schedule A along with itemization for major purchases.
Other states can use the "sales tax deduction" instead of the state income tax deduction for the Schedule A/1040.

Remember that the interest on the loan is a deductible interest.

I'm in California. Turbotax says it can (if I elect to do so, and I did) use the higher of the two deductions types:

1. Sales tax deduction
2. State income tax deduction

It said that in most cases, the state income tax deduction is the greater, however in my case it was the sales tax and by a wide margin. Probably because I made so little money in 2005. It so happens I got a no-interest loan (!), so I won't get that deduction. I qualified for a city program benefitting certain low income persons.

I don't know what to do with that possible building materials deduction. I guess I might call the IRS on that one.

 

[Leejai]

When are HOA dues deductable? Are they at all (even a portion)?

 

[Muse]

Professionally, I am a computer programmer. To keep up with my profession, I belong to a professional organization of programmers. I assume I can take a deduction for the organization's annual dues.

We have monthly meetings and I drive to them, a 90 mile round trip. Can I take my mileage here as a deduction?

 

[EagleKeeper]

Originally posted by: Leejai
When are HOA dues deductable? Are they at all (even a portion)?

Not unless the property is used as a rental.

 

[EagleKeeper]

Originally posted by: Muse
Professionally, I am a computer programmer. To keep up with my profession, I belong to a professional organization of programmers. I assume I can take a deduction for the organization's annual dues.

We have monthly meetings and I drive to them, a 90 mile round trip. Can I take my mileage here as a deduction?

That will be considered deductible using the Form 2106/Schedule A.

 

[Muse]

Originally posted by: EagleKeeper

Originally posted by: Muse
Professionally, I am a computer programmer. To keep up with my profession, I belong to a professional organization of programmers. I assume I can take a deduction for the organization's annual dues.

We have monthly meetings and I drive to them, a 90 mile round trip. Can I take my mileage here as a deduction?

That will be considered deductible using the Form 2106/Schedule A.

Yup, that's the form that TT shows it's working on. Thanks.

 

[theeedude]

Do the long term and short term capital gains go into different places? I am using taxslayer.com, and it's adding both of them to my income. I thought long term gains were taxed lower...
Also, can I deduct part of my rent if I work from home a few times a week when I am too lazy to drive to work?

 

[EagleKeeper]

Originally posted by: senseamp
Do the long term and short term capital gains go into different places? I am using taxslayer.com, and it's adding both of them to my income. I thought long term gains were taxed lower...
Also, can I deduct part of my rent if I work from home a few times a week when I am too lazy to drive to work?

They all should show on the Schedule D.

However, the rate is taxed differently.

Unless your employer specifically requires you to work from home; expenses for working at home are NOT deductible.

 

[Fausto]

Question: my wife and I have a daughter in day care. We take advantage of the $5000 flexible spending account to help pay for this on a pre-tax basis. Am I also eligible for the Child Care credit on the backside of my 1040? The form 2441 instructions didn't seem to indicate that this was a no-no, but I don't want to inadvertently double dip and piss off Uncle Sam.

TIA.

 

[CPA]

Originally posted by: Fausto
Question: my wife and I have a daughter in day care. We take advantage of the $5000 flexible spending account to help pay for this on a pre-tax basis. Am I also eligible for the Child Care credit on the backside of my 1040? The form 2441 instructions didn't seem to indicate that this was a no-no, but I don't want to inadvertently double dip and piss off Uncle Sam.

TIA.

You can do both, you will have to fill out section III of the 2441. Line 12 is where you put the amount that was paid out to you ($5000); it should be on box 10 of your W2.

 

[Fausto]

Originally posted by: CPA

Originally posted by: Fausto
Question: my wife and I have a daughter in day care. We take advantage of the $5000 flexible spending account to help pay for this on a pre-tax basis. Am I also eligible for the Child Care credit on the backside of my 1040? The form 2441 instructions didn't seem to indicate that this was a no-no, but I don't want to inadvertently double dip and piss off Uncle Sam.

TIA.

You can do both, you will have to fill out section III of the 2441. Line 12 is where you put the amount that was paid out to you ($5000); it should be on box 10 of your W2.

Thanks, bud.

 

[Pho King]

Question: I recieved an 83(b) election from my company back in December 2005. A copy was sent to the IRS, but it also states to attach a copy to my 2005 Federal and State returns - I don't see where I put this information in my taxes - do I just attach the sheet?

 

[Muse]

My W2 job netted me $3500, but I had another job that only lasted 3 days. The people who hired me for this job that only turned out to last 3 days insisted that I be on a consulting basis (1099), and needing the work, I agreed. The total pay for the 3 days was $717. I added this 1099-MISC form last to my Turbotax, because I wanted to expense my home office and computer equipment on my "regular" W2 job (my W2 employer required me to have a home office and work out of it exclusively, telecommute).

I find that Turbotax is taking a big bite out of this $717 check - around 25%, increasing my tax by $173. Why's it doing that? I didn't do anything to establish a business other than agree to 1099 status. Can I shield myself from some of that tax exposure? I didn't indicate any expenses for this job, figuring they should only apply to my "regular" job, since this one only lasted 3 days and I've never worked on a 1099 basis before. I had and have no intention of "starting a business." I just wanted some work. Somehow, the income from it is being taxed at a much higher rate than my W2 job. I figure I shouldn't enter any of the deductions for this "business" of mine if I already entered them as an expense for my regular job. TIA.

 

[EagleKeeper]

Originally posted by: Muse
My W2 job netted me $3500, but I had another job that only lasted 3 days. The people who hired me for this job that only turned out to last 3 days insisted that I be on a consulting basis (1099), and needing the work, I agreed. The total pay for the 3 days was $717. I added this 1099-MISC form last to my Turbotax, because I wanted to expense my home office and computer equipment on my "regular" W2 job (my W2 employer required me to have a home office and work out of it exclusively, telecommute).

I find that Turbotax is taking a big bite out of this $717 check - around 25%, increasing my tax by $173. Why's it doing that? I didn't do anything to establish a business other than agree to 1099 status. Can I shield myself from some of that tax exposure? I didn't indicate any expenses for this job, figuring they should only apply to my "regular" job, since this one only lasted 3 days and I've never worked on a 1099 basis before. TIA.

The 1099 is income; You have to pay taxes on it, Federal and SS plus state. The SS bite on 1099 income is 15%

However, you can directly expense off items that were related to that income.

Review this thread for ideas on what to use on the Schedule C for expenses.

 

[Muse]

Originally posted by: EagleKeeper

Originally posted by: Muse
My W2 job netted me $3500, but I had another job that only lasted 3 days. The people who hired me for this job that only turned out to last 3 days insisted that I be on a consulting basis (1099), and needing the work, I agreed. The total pay for the 3 days was $717. I added this 1099-MISC form last to my Turbotax, because I wanted to expense my home office and computer equipment on my "regular" W2 job (my W2 employer required me to have a home office and work out of it exclusively, telecommute).

I find that Turbotax is taking a big bite out of this $717 check - around 25%, increasing my tax by $173. Why's it doing that? I didn't do anything to establish a business other than agree to 1099 status. Can I shield myself from some of that tax exposure? I didn't indicate any expenses for this job, figuring they should only apply to my "regular" job, since this one only lasted 3 days and I've never worked on a 1099 basis before. TIA.

The 1099 is income; You have to pay taxes on it, Federal and SS plus state. The SS bite on 1099 income is 15%

However, you can directly expense off items that were related to that income.

Review this thread for ideas on what to use on the Schedule C for expenses.

The thing is that probably everything I can expense off that 1099 income has already been used for deductions for my regular job. Is it possible for me to enter the same expenses in both places? Won't that screw things up? IOW, the cell phone, computer equipment, Internet access -- all that I already entered as expenses for my regular telecommute job.