6th Annual Anandtech Tax Time Thread

[EagleKeeper]

Originally posted by: MoSuaveA
Great thread.

Even though I received (and still have) my 1098-T forms for my grad school the past 2 filings (2006, 2007) I neglected to include them because I did not know I was eligible for Lifetime Learning because I was paying with borrowed funds (Stafford loans). Now that I actually did my homework, something I should have done in the past, I realize I missed out on this credit.

I filed my taxes online using TaxAct and have access to those returns. I know I have to file a 1040x in order to amend those returns. Some questions:

Is there anything else I need to file along with this form? (i.e. Form 8863 or a copy of my 2006 and 2007 filings, copy of my 1098-T's)
Is this something I can/should do myself or am I better off asking a professional?

Thanks for the help and great thread.

It is something that you can do yourself.

I do not know if the online tax S/W will help you fill ouit the 1040X or not.

The steps are to put in the old data required and the changed data into the 1040X

Then you attached supporting documentation and a statement on why the change.

15 minutes to complete the form if you have the data handy.

You need a seperate form for each year.

 

[EagleKeeper]

Originally posted by: alchemize
This is more for planning 2009 taxes on a home I bought in 2008.

Bought a house in May 2008. Now I'm going to be moving (job). Don't want to take a huge loss on this house...can I rent out the house for a while, then sell the house and deduct any losses/sales expenses? Is there a time required to rent the house to make it a "rental property"?

I'm delving through 527/544 but this is tough reading

If you classify the house as For Rent, you can deduct items listed on the Schedule E.
As long as you do not take depreciation, then that depreciation does not need to be "paid back". Put an ad up for Rent or contact a real estate manangement company. That starts the ball rolling and classifies it.

If you are not living in it, all expenses related to it can be deducted. Transportation costs to check on / maintain the house are also deductible. That can include airfare or proportional vehicle costs

 

[MoSuaveA]

Originally posted by: EagleKeeper


It is something that you can do yourself.

I do not know if the online tax S/W will help you fill ouit the 1040X or not.

The steps are to put in the old data required and the changed data into the 1040X

Then you attached supporting documentation and a statement on why the change.

15 minutes to complete the form if you have the data handy.

You need a seperate form for each year.

Eagle,

Thanks fore the response.

I gather the only information needed to be filled out on 1040x be line 7 Credits, replacing 0 with 2,000 as I paid over 10k in tuition, along with the explanation for the error in Part II.

Is there a need to fill out form 8863 for the two years or will attaching the 1098-T forms to each 1040x suffice?

Thanks in advance for your time and help, it is much appreciated.

 

[EagleKeeper]

Originally posted by: MoSuaveA

Originally posted by: EagleKeeper


It is something that you can do yourself.

I do not know if the online tax S/W will help you fill ouit the 1040X or not.

The steps are to put in the old data required and the changed data into the 1040X

Then you attached supporting documentation and a statement on why the change.

15 minutes to complete the form if you have the data handy.

You need a seperate form for each year.

Eagle,

Thanks fore the response.

I gather the only information needed to be filled out on 1040x be line 7 Credits, replacing 0 with 2,000 as I paid over 10k in tuition, along with the explanation for the error in Part II.

Is there a need to fill out form 8863 for the two years or will attaching the 1098-T forms to each 1040x suffice?

Thanks in advance for your time and help, it is much appreciated.

I would be better to attach the 8863 for each year.
That way, if someone looks for it, it is there.
Remember, the government thrives on paperwork - you must not starve them.

 

[MoSuaveA]

Originally posted by: EagleKeeper

I would be better to attach the 8863 for each year.
That way, if someone looks for it, it is there.
Remember, the government thrives on paperwork - you must not starve them.

What I figured. I was actually able to change my returns online and generate a new copy which gave me the correct 1040 form and it also generated a correct 8863 for 2006 and 2007.

Going to send the correct 1040, 8863 and the 1098-T form along with the 1040x. Think that should cover everything.

Still a little confused on what to fill out on 1040x though, do I need to change each line or just the portion wrt the credit that was not indicated?

Thanks for all of the help!

 

[EagleKeeper]

I would fill on only where there are changes

 

[pontifex]

I've used taxact.com to do taxes the last 2 times. would turbotax be any better or is it about the same or worse?
Also, it says turbotax 2008, do you have to buy a new copy every year? if so it's cheaper to use taxact.com.

 

[CPA]

Originally posted by: pontifex
I've used taxact.com to do taxes the last 2 times. would turbotax be any better or is it about the same or worse?
Also, it says turbotax 2008, do you have to buy a new copy every year? if so it's cheaper to use taxact.com.

I have used taxact since the very beginning - when it was free! In any case, is there something you don't like about it?

 

[dullard]

Thanks again for the thread, it helps many people. I think I know my situation correctly, but I'm coming here to check.

I have a small hobby that I make a bit of income from. So, of course, I pay income tax and self-employment taxes as I should. In 2008, I did one job for a set fee and for an item of value. I will count the item's value as income. However, I got the fee in 2008 and I didn't receive the item until 2009. Am I correct in my understanding that I pay taxes in 2008 for the fee and I pay taxes in 2009 for the item?

Here is a simplified example with the actual job changed for clarity. Suppose you have a contract to take photos for friends where they will pay you $50 and give you a camera lens. The contract was in 2008 and the job was done completely in 2008. Suppose they pay you $50 in Dec 2008 and give you a camera lens in Jan 2009. Is it correct to claim $50 in income in 2008 and X in income in 2009 (where X is the value of the lens)? Or should I just claim both as income in 2008?

 

[pontifex]

Originally posted by: CPA

Originally posted by: pontifex
I've used taxact.com to do taxes the last 2 times. would turbotax be any better or is it about the same or worse?
Also, it says turbotax 2008, do you have to buy a new copy every year? if so it's cheaper to use taxact.com.

I have used taxact since the very beginning - when it was free! In any case, is there something you don't like about it?

no, i was just wondering if one was better than the other, like one found more deductions than the other or stuff like that.

 

[Ryan]

Any idea when the tax cuts, which were just passed through the house, will be available to be taken advantage of?

 

[Drakkon]

In 08 I started using a virtual private server as a web host - this has included both project hosting for consultant work and personal (resume/portfolio only - kinda advertising?) - can I use the cost to run this server as a business expense? if so what type of expense is it (equipment rent,advertising,etc)?

 

[JS80]

Can I pay CA tax owed on current wage income with the IOU i will be getting from CA?

 

[EagleKeeper]

Originally posted by: JS80
Can I pay CA tax owed on current wage income with the IOU i will be getting from CA?

That is a state question that we do not touch with a pole.

10ft in most states, 20 ft in CA

 

[EagleKeeper]

Originally posted by: Ryan
Any idea when the tax cuts, which were just passed through the house, will be available to be taken advantage of?

The House of Representives is not Congress.

Tax law changes must be approved by both Chambers of Congress before they go into effect.

 

[EagleKeeper]

Originally posted by: Drakkon
In 08 I started using a virtual private server as a web host - this has included both project hosting for consultant work and personal (resume/portfolio only - kinda advertising?) - can I use the cost to run this server as a business expense? if so what type of expense is it (equipment rent,advertising,etc)?

If you declare the server income, then you can expense the server use proportional to use.

Keeping personal files should not affect the precentage.
Using the server for personal entertainment would affect the perrcentage of business use.

Anything that is directly related to the server would be expensed.
Anything that indirectly supports the server would be proportional.

 

[EagleKeeper]

Originally posted by: pontifex

Originally posted by: CPA

Originally posted by: pontifex
I've used taxact.com to do taxes the last 2 times. would turbotax be any better or is it about the same or worse?
Also, it says turbotax 2008, do you have to buy a new copy every year? if so it's cheaper to use taxact.com.

I have used taxact since the very beginning - when it was free! In any case, is there something you don't like about it?

no, i was just wondering if one was better than the other, like one found more deductions than the other or stuff like that.

Your guess is as good as hours.

You would be best to look at some of the consumer evaluation sites to determine if one is better than the other in the regard to helping you dig out infomration by asking questions.

 

[EagleKeeper]

Originally posted by: dullard
Thanks again for the thread, it helps many people. I think I know my situation correctly, but I'm coming here to check.

I have a small hobby that I make a bit of income from. So, of course, I pay income tax and self-employment taxes as I should. In 2008, I did one job for a set fee and for an item of value. I will count the item's value as income. However, I got the fee in 2008 and I didn't receive the item until 2009. Am I correct in my understanding that I pay taxes in 2008 for the fee and I pay taxes in 2009 for the item?

Here is a simplified example with the actual job changed for clarity. Suppose you have a contract to take photos for friends where they will pay you $50 and give you a camera lens. The contract was in 2008 and the job was done completely in 2008. Suppose they pay you $50 in Dec 2008 and give you a camera lens in Jan 2009. Is it correct to claim $50 in income in 2008 and X in income in 2009 (where X is the value of the lens)? Or should I just claim both as income in 2008?

Your choice - If you have a committment for the item, declare it for which is better for you.

 

[IamDavid]

Got a question I hope someone can help with. It's about state returns but not a specific state so I hope this will still qualify for help... Anyway, here it is:


I was living in Arkansas for the first 4 months of 07.
Moved to Texas in April.
Continued to receive pay through July 15th from Arkansas.
Texas has no state income tax. Arkansas does.

So, since Texas has been my primary residency for most of the year do I still need to file an AR return? When using one website it forced me to pick AR as my primary residence because I couldn't choose TX(they don't have state inc. taxes).

Thanks in advance...

David

 

[Syrch]

I bought a home in the qualifing time frame but am wondering if i used FHA for the down payment does that disqualify me for the housing rebate of $7500?

 

[HopJokey]

Two questions. I'm preparing a IRS form 1120S for a house painting company.

1) Can the painters paid by the company to paint the houses be under "cost of goods - labor (schedule A line 3)" or does it have to be under "salary and wages" deduction (line 8)?

2) Where would deductions be made for the amounts we paid to outside contractors? Under "Other deductions" (line 19)?

Thanks a lot!

 

[EagleKeeper]

Originally posted by: IamDavid
Got a question I hope someone can help with. It's about state returns but not a specific state so I hope this will still qualify for help... Anyway, here it is:


I was living in Arkansas for the first 4 months of 07.
Moved to Texas in April.
Continued to receive pay through July 15th from Arkansas.
Texas has no state income tax. Arkansas does.

So, since Texas has been my primary residency for most of the year do I still need to file an AR return? When using one website it forced me to pick AR as my primary residence because I couldn't choose TX(they don't have state inc. taxes).

Thanks in advance...

David

You will need to file a state non-resident return for AK.
It is best to file by paper; most S/W packages (on/offline) do not like to cross state boundaries.

 

[EagleKeeper]

Originally posted by: HopJokey
Two questions. I'm preparing a IRS form 1120S for a house painting company.

1) Can the painters paid by the company to paint the houses be under "cost of goods - labor (schedule A line 3)" or does it have to be under "salary and wages" deduction (line 8)?

2) Where would deductions be made for the amounts we paid to outside contractors? Under "Other deductions" (line 19)?

Thanks a lot!

1) If they are paid a salary or by the hour, then use lin 8. If they get paid by the job, then I would recommend line 3.

2) That seems proper.

 

[bobdole369]

Got a toughie, you guys probably can't help much.

New law abolishing 8453-OL (the electronic signature thing) - went into effect and I need to provide 2007's PIN and AGI.

I've used the "free-file" version via h&r block for several years. I was able to get to the site and log in, but unfortunately - where 2007 existed up to amonth ago (the last time I looked at it) it is now completely gone. So I can no longer review my 2007 tax return. My wife is in the same boat - no clue about her AGI and the tax place apparently purposely removed the link to where we can find the info.

As it costs $20 to email h&r block - its really messy. Any ideas?

I of course no longer have my W-2 - shame on me - from 2007.

 

[CPA]

Originally posted by: Syrch
I bought a home in the qualifing time frame but am wondering if i used FHA for the down payment does that disqualify me for the housing rebate of $7500?

First off, have you owned a home in the last three years? If so, you are not eligible for the credit. Also, keep in mind that there are income limitations and that the credit is 10% of the home purchase value up to $7500 (married; 3750 for single).

As for using FHA for the down payment, if you used Freddie Mac Home Possible program or something similar through your local bank, they use MRB's (Mortgage Revenue Bonds) which would disqualify you from receiving the credit. FHA doesn't actually provide the loan, they partner with a private lender. Your ability to qualify is dependent on how the private lender packaged your loan.

Now if you received a Grant through American Dream Down Payment or something similar, they also use mortgage revenue bonds and that would disqualify you.

We really need more info on your down payment to assist.