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Originally posted by: alkemyst
I just got off the phone with someone that was a consultant, but no longer really doing it and not filing with the Dept of Revenue anymore nor on his taxes. He is currently just a W2 employee.
He volunteered to follow up on a lead last year to see if he could help for a friend of a friend's business. The deal was supposed to be under the table and his quote reflected that, the deal seems to have turned into a nightmare.
They ended up cutting him a personal check from the business when it was supposed to be cash...he figured as long as they didn't report it as work he'd be ok (it was in his name not his business name). He installed antivirus and updated office to a newer version if it matters as far as type of work. He also set them up for an online back up service. I don't think there is anything he could offset the income from costs outside of his mileage to and from the site which was excessive...he had looked to do one trip, possibly two and ended up going back and forth at least a dozen times (the trip was about 20 miles and the only saving grace may be it happened when mileage reimbursement was at it's peak). Supposedly he came in 1/2 of what their next quote was from their 'regular' guy.
They are now wanting his W9 or Social to claim the work off their own taxes. I am not sure what his options are...can he just put he made $1200 as additional income on his 1040 or does he have to do more now (dept of revenue, etc)?
He's really aggravated with this whole deal as it was supposed to be a 12 hour job and they kept calling him back out with things that were really unrelated and even were threatening at times...they sound like nightmare customers. He said he probably had 40 hours into it.
He is sort of pressed for time to respond as they have called him '100 times' since Monday and are now leaving hysterical messages like he has fled the country or something. He just got their messages when he got back from a 3 day vacationHe hasn't even unpacked yet.
sucks.
Drop the income into a Schedule C
Expense it to the hilt. Direct & indirect (proportional)
He has the obligation to provide them with the required info.
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Changing the withholding status from married to single is the equivalent of a $3500 taxable income increase.
25% of that amount is $900 extra taxes
Originally posted by: EagleKeeper
I have always used the split option when I do in-law taxes. There has never been a problem with funds going into the specified accounts. (Makes it great for recovering IOUs
Okay, that's interesting... so they give you some money that direct deposits into 'your' bank account and the rest goes into their bank account? But on the split direct deposit form it says you can't do this?
Also, how do you claim the income for your own personal taxes? Where would that go? I'm not running any kind of business so not sure where I would account for it.
alkemyst
No Lifer
- Feb 13, 2001
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Anytime you are paid you are in business, you'd use schedule C and list it as self-reported income. You pay self-employment tax, but can write off expenses. Your relatives can then claim the preparation fees.
Edit: actually if you only make $400 or less you can get by with Schedule SE alone.
I've read that if you make less than $400/year from your 'business' then you don't have to report it... is this true? From doing my family's tax returns I'll probably end up getting $200-$300.
Also, this is just something I do for one week out of the year can I deduct anything like my computer or internet use?
http://www.finance.cch.com/text/c60s15d015.asp
Thanks for the help.
So let's say to make it round numbers I get $100K, that should be approximately a $3000 increase because of the 3% change in tax bracket. That should come out to a $250 increase a month. I am paying a lot more %age wise than that. It doesn't make sense to me.
Simple question...
You are allowed to deduct state income tax from your federal return right?
If so, do you deduct the amount you paid in state taxes or the actual amount you owe?
For example, I paid $10,000 in state income taxes but only ended up owing $7,000.
Is my federal deduction $10,000 or $7,000?
You are allowed to deduct state income tax from your federal return right?
If so, do you deduct the amount you paid in state taxes or the actual amount you owe?
For example, I paid $10,000 in state income taxes but only ended up owing $7,000.
Is my federal deduction $10,000 or $7,000?
mcurphy
Diamond Member
- Feb 5, 2003
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I am confused about which filing status I should use between Married Joint and Married Separate.
1) Do I need to include my wifes wages and income with my return if I am married filing separate?
2) If I do not need to include my wifes income on my return.....then I imagine I need to go through the TaxAct software again with a different username and enter her information for her return?
3) We have 2 children and own a home. Can I itemize my return and claim all of these deductions and file hers without any deductions?
If I enter all of my information, wages, deduction and mortgage info....it shows a nice return for me for filing seperate. But if I include my wifes wages / income, the return is reduced by quite a bit for filing jointly.
I'm not sure why this is...or if I am doing something wrong. Of course, I have not entered her return yet as a Married Filing separately without any deductions. Am I going to run into any problems?
I'm sorry if this seems vague. I can give any info that is needed to clear this up. This is my first time filing taxes on my own, as I am sick of paying H&R Block hundreds of dollars to do it for me.
1) Do I need to include my wifes wages and income with my return if I am married filing separate?
2) If I do not need to include my wifes income on my return.....then I imagine I need to go through the TaxAct software again with a different username and enter her information for her return?
3) We have 2 children and own a home. Can I itemize my return and claim all of these deductions and file hers without any deductions?
If I enter all of my information, wages, deduction and mortgage info....it shows a nice return for me for filing seperate. But if I include my wifes wages / income, the return is reduced by quite a bit for filing jointly.
I'm not sure why this is...or if I am doing something wrong. Of course, I have not entered her return yet as a Married Filing separately without any deductions. Am I going to run into any problems?
I'm sorry if this seems vague. I can give any info that is needed to clear this up. This is my first time filing taxes on my own, as I am sick of paying H&R Block hundreds of dollars to do it for me.
Hey all, I thought I would once again tap into AT's vast crowd wisdom, heh
If I am filling out my tax returns - the Schedule D in particular - how do I do it if I have a Schedule D-1 that is compiled by a trading program that lists all my trades/calculates wash sales, etc. It does not/not generate a Schedule D, just the D-1 continuation form. Do I need to manually fill out the boxes on the regular Schedule D and in the area where you list your trades, just write "see D-1 continuation" or something?
Thanks!
If I am filling out my tax returns - the Schedule D in particular - how do I do it if I have a Schedule D-1 that is compiled by a trading program that lists all my trades/calculates wash sales, etc. It does not/not generate a Schedule D, just the D-1 continuation form. Do I need to manually fill out the boxes on the regular Schedule D and in the area where you list your trades, just write "see D-1 continuation" or something?
Thanks!
alkemyst
No Lifer
- Feb 13, 2001
- 83,769
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This is a common fallacy. The $400+ rule applies to doing the more in-depth Schedule C.
From that same site you linked:
You can deduct business expenses even if it nets you a greater loss than any cashflow even.
Some run small businesses that are losers just to offset higher W2/1099 income and generate cash flow.
Im working on filling out my federal and state taxes using H&R block online filing system. On my W2 forms, there a section along side the state, federal, employee, city w2, that list what information to put in what boxes. The information under 2008 W2 earnings summary. my medical insurance premium falls under that, not listed on my actual w2 forms: it says "section 125 Benefit Plan" then the amount I paid last year. It doesnt state what box to enter that information into on H & R block W2 entry form. Would I put it under the other information box 14? even though it doesnt list my insurance plan info in box 14 on my w2? or would I enter that information in the medical and dental expenses in the deductions section?
alkemyst
No Lifer
- Feb 13, 2001
- 83,769
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no this is the purpose of filing separate. However, you both can't claim 100% of all the deductions and you are limited in other ways.
It should handle this for you if you start with that status...I haven't used that particular piece of software, but TurboTax will handle this just fine.
To clarify...you both cannot take the standard deduction if one itemizes.
That's because you are sharing income technically now. Marriage is really a tax penalty although many think of it as a benefit due to using marriage to offset a one-time tax disaster.
You should get software if TaxAct doesn't do it that will handle married filing separately together.
Hmm... It appears TurboTax thinks otherwise. For some reason it is calculating my 2007 state refund as income in 2008 since it was paid to me in 2008.
In fact, when I look at my previous TT 1040 forms they do indeed use the "paid" amount in my Schedule A and not the "amount owed" amount.
That doesn't raise any red flags if I continually operate a 'business' that has a negative income flow on my tax returns every year?
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The IRS does not look kindly on a business that runs in the red for 5 consectutive years. At that point, it is considered to be a hobby of which you can not write off expenses.
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If you file electronically, only a final Schedule D total gets sent to the IRS.
You can just manually enter in the total, keeping the other generated document for backup.
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Finish your wife's return and your return and then come back with questinos.
You have only done half the work; therefore we can not provide any answers to your questions.
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