4th Annual Tax Thread - 2006

[EagleKeeper]

Originally posted by: WhiteKnight
Thanks for all the work on a great thread! I have a question regarding a late 1099-MISC. I e-filed my taxes through Taxcut last night, and I am due to get a refund. Today, my wife received a 1099-MISC for some work she did as a grad student for approximately $500. Payment was in the form of a personal check, so there was no withholding. What is my best course of action? The additional tax we owe on the $500 is well below the amount I am expecting to be refunded. I assume that I should file a 1040X, which I believe requires a new 1040 as well. Can I use Taxcut to make a new 1040, or does it have to be done by hand? Is there any better way to proceed other than filing a 1040X? I'd imagine that once the payer claims the $500 on their return, it will trigger a flag on our return indicating that we did not report the additional income. Would the IRS then recalculate my tax and send me some sort of "payment due" notice? Assuming there are no other penalties, that seems much easier than doing all the paperwork myself.

I'm not trying to cut any corners or cheat the system in any way, I just don't know the best way to proceed. Thanks!

See answer to question by Raduque .

Because you e-filed, you have the information available to file the 1040X. The 1040X must be filed via paper.

 

[SoulAssassin]

Originally posted by: EagleKeeper

Originally posted by: Shimmishim
Silly question I'm sure but can you get a deduction for tithes? The reason I ask is because last year was the first year I had a "real" job where I paid a significant amount of money to the church.

Thanks.

You need to itemize using the Schedule A to take advantage of charity to others.

Tax deductible religious donations make me sick. IMHO, if it's religious based organization (no matter what the religion) it should not be deductible. It comes back to that whole separation of church and state thing.

------------------------------------------------
Take this to P&N.

First Ammendment:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof

Anandtech Moderator

 

[WhiteKnight]

Originally posted by: EagleKeeper

Originally posted by: WhiteKnight
Thanks for all the work on a great thread! I have a question regarding a late 1099-MISC. I e-filed my taxes through Taxcut last night, and I am due to get a refund. Today, my wife received a 1099-MISC for some work she did as a grad student for approximately $500. Payment was in the form of a personal check, so there was no withholding. What is my best course of action? The additional tax we owe on the $500 is well below the amount I am expecting to be refunded. I assume that I should file a 1040X, which I believe requires a new 1040 as well. Can I use Taxcut to make a new 1040, or does it have to be done by hand? Is there any better way to proceed other than filing a 1040X? I'd imagine that once the payer claims the $500 on their return, it will trigger a flag on our return indicating that we did not report the additional income. Would the IRS then recalculate my tax and send me some sort of "payment due" notice? Assuming there are no other penalties, that seems much easier than doing all the paperwork myself.

I'm not trying to cut any corners or cheat the system in any way, I just don't know the best way to proceed. Thanks!

See answer to question by Raduque .

Because you e-filed, you have the information available to file the 1040X. The 1040X must be filed via paper.

Thanks, do I need to fill out a new 1040 or is the 1040X submitted by itself?

 

[jiggahertz]

Originally posted by: EagleKeeper

Originally posted by: jiggahertz
I was in grad school Fall 2005 and Winter (Jan-May) 2006 which my company paid tuition for. The amount they paid was added to my W-2's and income tax was withheld from this amount. I am wondering if I can claim the tuition credit. I also didn't receive the tax form from my university for the current tax year. I believe they included both semesters in the previous years tax document, even though tuition was paid in 2006 and taxes were withheld from me in 2006.

If the tuition was added to your W2 as taxable by your employer, then you can claim the tuition paid in 2006 under the LLC.

If you are able to use the Schedule A, then you have the option of filing it using the Form 2106.

You CAN NOT use the LLC and the Form 2106 for the same educational expense.

I completed my taxes using taxact.com and they have a $2000 credit on line 35 of my 1040 with a "T" next to it and no other forms attached and the LLC isn't claimed on line 50. I assume this is because I am filing single with an AGI of > $55,000. I just wanted to make sure the $2000 credit on line 35 was correct. I downloaded the instructions for the 8903 but didn't see anything regarding tuition.

 

[EagleKeeper]

Originally posted by: WhiteKnight

Originally posted by: EagleKeeper

Originally posted by: WhiteKnight
Thanks for all the work on a great thread! I have a question regarding a late 1099-MISC. I e-filed my taxes through Taxcut last night, and I am due to get a refund. Today, my wife received a 1099-MISC for some work she did as a grad student for approximately $500. Payment was in the form of a personal check, so there was no withholding. What is my best course of action? The additional tax we owe on the $500 is well below the amount I am expecting to be refunded. I assume that I should file a 1040X, which I believe requires a new 1040 as well. Can I use Taxcut to make a new 1040, or does it have to be done by hand? Is there any better way to proceed other than filing a 1040X? I'd imagine that once the payer claims the $500 on their return, it will trigger a flag on our return indicating that we did not report the additional income. Would the IRS then recalculate my tax and send me some sort of "payment due" notice? Assuming there are no other penalties, that seems much easier than doing all the paperwork myself.

I'm not trying to cut any corners or cheat the system in any way, I just don't know the best way to proceed. Thanks!

See answer to question by Raduque .

Because you e-filed, you have the information available to file the 1040X. The 1040X must be filed via paper.

Thanks, do I need to fill out a new 1040 or is the 1040X submitted by itself?

Follow the instructions for the 1040X

 

[jinduy]

1) anyone here have experience with turbotax premier? i'm considering to get this version over the deluxe because I have rental property income. Is it worth buying (necessary?) or will the deluxe fit all my needs? I am a first time home owner btw.

2) also, i'm planning to purchase the latest version of turbotax(2006). is this software reusuable for 2007,2008....etc? or is there some sort of upgrade policy to this?

3) also i dont have the forms in front of me, but me and my friend own 50/50 of this property, and let's say the rent is $2000. Do I put down that I got $1000 in income or how does it work that I show the IRS visibility that I got $2k and split 50/50?

 

[amddude]

Originally posted by: SoulAssassin

Originally posted by: EagleKeeper

Originally posted by: Shimmishim
Silly question I'm sure but can you get a deduction for tithes? The reason I ask is because last year was the first year I had a "real" job where I paid a significant amount of money to the church.

Thanks.

You need to itemize using the Schedule A to take advantage of charity to others.

Tax deductible religious donations make me sick. IMHO, if it's religious based organization (no matter what the religion) it should not be deductible. It comes back to that whole separation of church and state thing.

Seperation of church and state is not anywhere in the constitution or the decleration of independence. It is not codified in federal law.

 

[EagleKeeper]

Originally posted by: jinduy
1) anyone here have experience with turbotax premier? i'm considering to get this version over the deluxe because I have rental property income. Is it worth buying (necessary?) or will the deluxe fit all my needs? I am a first time home owner btw.

2) also, i'm planning to purchase the latest version of turbotax(2006). is this software reusuable for 2007,2008....etc? or is there some sort of upgrade policy to this?

3) also i dont have the forms in front of me, but me and my friend own 50/50 of this property, and let's say the rent is $2000. Do I put down that I got $1000 in income or how does it work that I show the IRS visibility that I got $2k and split 50/50?

1) You will have to look at what forms each version supports. I do know that TurboTax chooses to cripple versions (or provide documention support) in order to force one to purchase an upgraded version.supports the Schedule E (Rentals)

2) Every year you must purchase a new copy.

3) It would be best to put down your half of everything regarding the rental on the Schedule E. In both of your records, keep a statement showing the 50/50 agreement for expenses and income on the property. The property should be in both names in order to do so.

 

[jlmadyson]

Well the refund hit this morning another seamless tax year ftw. I?m Already worrying about next year however.

 

[phatj]

Do any sites feature the free efile that also includes the 1099-B form?

I usually use Turbotax, but since I sold stocks, I need to file a 1099-B, but turbotax wants $30 to do that for me


EDIT: I answered my own question: for those who may be curious, Freetaxusa.com does this (and they are listed on the IRS's free efile site as well).

 

[bumngoat]

My employer claims that I must be on W2 for a full calendar year before they move me to K1. I told them I want to be on K1 now (asap), but they said it can't happen because of regulatory reasons, and the soonest I can move from W2 to K1 would be 2008. Is this true? Does it usually work like this? Most people in the firm are K1. The firm is a broker-dealer.

 

[QueHuong]

My dad recently died this year; I am doing the taxes for my parents and am wondering if there are any special procedures that I have to take, and if there are any tax breaks, such as for incurring major medical expenses. Thanks.

 

[EagleKeeper]

Originally posted by: QueHuong
My dad recently died this year; I am doing the taxes for my parents and am wondering if there are any special procedures that I have to take, and if there are any tax breaks, such as for incurring major medical expenses. Thanks.

Much depends if you are filling out for your parents or as his estate executer.
Medical expenses can be deductible on the Schedule A after the required threshhold.

 

[QueHuong]

Originally posted by: EagleKeeper

Originally posted by: QueHuong
My dad recently died this year; I am doing the taxes for my parents and am wondering if there are any special procedures that I have to take, and if there are any tax breaks, such as for incurring major medical expenses. Thanks.

Much depends if you are filling out for your parents or as his estate executer.
Medical expenses can be deductible on the Schedule A after the required threshhold.

I'm just filing for my parents.

 

[EagleKeeper]

Originally posted by: QueHuong

Originally posted by: EagleKeeper

Originally posted by: QueHuong
My dad recently died this year; I am doing the taxes for my parents and am wondering if there are any special procedures that I have to take, and if there are any tax breaks, such as for incurring major medical expenses. Thanks.

Much depends if you are filling out for your parents or as his estate executer.
Medical expenses can be deductible on the Schedule A after the required threshhold.

I'm just filing for my parents.

Your mother will file jointly and there is a checkbox to indicate that a person is deceased.
However, because the person lived for part of the year, it counts as a full year tax wise.

 

[dionx]

I sold some ESPP stocks on 1/24/06 for $1404 (27 x $52). These gross proceeds were reported to the IRS, which is shown on my Form 1099-B. I acquired the shares on 6/30/05 with a basis price of $36.40, but with a discount so that it only cost me $30.94. These numbers are not on my Form 1099-B.

Am I correct to report the "Sale Price" as $1404 and the "Cost or Basis" as $983 (27x$36.40), therefore I only pay tax on the difference between sale price and purchase price? Or is there something wrong with my assumption of the "Cost or Basis"?

Thanks in advance.

 

[Stoltenborg]

One question.

In terms of keeping tax records for 6/7 years... do electronic copies/scans cut it? Or do I need to keep the hard paperwork?

 

[EagleKeeper]

Originally posted by: dionx
I sold some ESPP stocks on 1/24/06 for $1404 (27 x $52). These gross proceeds were reported to the IRS, which is shown on my Form 1099-B. I acquired the shares on 6/30/05 with a basis price of $36.40, but with a discount so that it only cost me $30.94. These numbers are not on my Form 1099-B.

Am I correct to report the "Sale Price" as $1404 and the "Cost or Basis" as $983 (27x$36.40), therefore I only pay tax on the difference between sale price and purchase price? Or is there something wrong with my assumption of the "Cost or Basis"?

Thanks in advance.

Your cost basis must include the price that you paid with the discount.

30.95x27

 

[EagleKeeper]

Originally posted by: Stoltenborg


One question.

In terms of keeping tax records for 6/7 years... do electronic copies/scans cut it? Or do I need to keep the hard paperwork?

I fought the law(IRS) in 95 using scanned images and won.
Showed the directory dates and let them waste the paper.

 

[djheater]

I'm a little disturbed that I don't seem to be paying any taxes. :Q
Used the turbotax walkthrough and filled out everything I was asked.

Married filing jointly
My AGI is 67k
3 dependants
Spouse has no income
Both my wife and I are in school, I qualify for the Hope credit
We own a home and paid 12000 in mortgage interest...

I'm getting 4200 back according to them, compared with 1400 out of tax cut last year when we weren't in school, and we hadn't gotten rid of PMI (if that matters).. It's a big yikes.

Thoughts?

 

[redgtxdi]

Question..........


Found out I screwed up & contributed to traditional IRA & made too much last year. Figured out how to "RECHARACTERIZE" over to Roth IRA so I'm good now..........BUT........


I filled out all of Vanguard's paperwork & sent that off. I was told to fill out form 8606......ok, done. I'm using Turbo Tax. Turbo Tax talks about 8606, but unlike older versions of Turbo Tax I can't see how my return looks normally (i.e. old paper-view) so I can't see if TT is filling out an 8606 for me.

I'm filing electronically..........should I just manually send in an 8606 to the IRS just to be safe????

TIA

 

[Spamela]

i sent in a 1040x (& california 540x) and
received refunds, then recently received
interest income statements from the IRS &
california franchise tax board.

what form(s) should i use to declare the interest income?
TIA!

 

[EagleKeeper]

Originally posted by: redgtxdi
Question..........


Found out I screwed up & contributed to traditional IRA & made too much last year. Figured out how to "RECHARACTERIZE" over to Roth IRA so I'm good now..........BUT........


I filled out all of Vanguard's paperwork & sent that off. I was told to fill out form 8606......ok, done. I'm using Turbo Tax. Turbo Tax talks about 8606, but unlike older versions of Turbo Tax I can't see how my return looks normally (i.e. old paper-view) so I can't see if TT is filling out an 8606 for me.

I'm filing electronically..........should I just manually send in an 8606 to the IRS just to be safe????

TIA

If you are going to file electronically, you need to trust that TT will send all the info that is needed.

However, you should have a copy of everything for your records.

 

[EagleKeeper]

Originally posted by: Spamela
i sent in a 1040x (& california 540x) and
received refunds, then recently received
interest income statements from the IRS &
california franchise tax board.

what form(s) should i use to declare the interest income?
TIA!

Depending on the amount of interest, you may need to use the Schedule B.

 

[Iilac]

Hey EagleKeeper

This might had been answered aleady but I recently sold a stock. Am I taxed on the difference that I brought in and sold at or am I taxed of the whole amount that I sold the stock for? Also where on the tax form, where I will put down this infomation? How do I get schedule B?

Thanks