6th Annual Anandtech Tax Time Thread

[EagleKeeper]

Originally posted by: ICRS

Originally posted by: alkemyst

Originally posted by: ICRS
Last year I participated in a fund raising raffle for our companies holiday party. I ended up winning the rafle and around $200. Do I need to report this or anything?

yes...however being a company function make sure they didn't already take the taxes out of one of your paychecks.

No they didn't. Also the raffle was in cash, and not reported to the IRS in any document by my company.

For that amount, consider it to be a gift and do not worry.

 

[cressida]

Didn't see anything when I did a search. Last year the house (parents place) was transferred under my sister and my name. We decided to split the property tax and each paid our part. My question is how to claim the taxes and if we need proof of how much we paid.

 

[Doggiedog]

Hi EagleKeeper,

I have a question for you on Income Tax withholding.

I got divorced last year and with my new paycheck, my marital status has changed to single.

I noticed that my tax withholding is up 50%. Is this normal? The only other change is a small pay increase of 5%. I took 0 deductions on withholding while I was married (bc I didn't want to get blindsided by owed taxes) and I continued to take 0 deductions now. I looked at my tax schedule and I was in the 25% bracket as a married person but should be in the 28% bracket now as a single person.

Can you direct me to where I can look this up? The payroll people insist that they are right but they can't provide me any proof. They tell me to look at circular e or something. I am taking home several hundred $ less after a 5% pay increase than I did before I got the increase and status change. I would think at worst, it would be a wash but I am actually down. If you need, I can supply you with the #s.

Thanks!

DD

 

[TraumaRN]

Does anyone know if any of the 'tax refund estimator' are even close to accurate? Or more specifically is the turbotax one broken? I can change all kinds of dollar amounts around and it seems to always give my $6717 as my refund. If I use the HR Block one it gives me what I think is a fairly accurate refund, which is just over $11,000. I wanted to use the turbotax one to confirm that but like I said its broken or something. Can anyone point me to another refund estimator?

I also had one other question, I claimed single no dependant all last year but I want to file as head of household since I am. Should I change my claim status with my job after I file this year?

Thanks@

 

[alkemyst]

Originally posted by: cressida
Didn't see anything when I did a search. Last year the house (parents place) was transferred under my sister and my name. We decided to split the property tax and each paid our part. My question is how to claim the taxes and if we need proof of how much we paid.

If the taxes were escrowed, having the property in your name is enough. You can split the taxes up any way you want with the other owners.

Don't try to both claim 100% though, you will get audited. You should also be able to claim any interest if you are financing.

If not, then whoever paid the taxes should have a paper trail. You should still be able to split up the taxes between owners.

 

[alkemyst]

Originally posted by: DeathBUA
Does anyone know if any of the 'tax refund estimator' are even close to accurate? Or more specifically is the turbotax one broken? I can change all kinds of dollar amounts around and it seems to always give my $6717 as my refund. If I use the HR Block one it gives me what I think is a fairly accurate refund, which is just over $11,000. I wanted to use the turbotax one to confirm that but like I said its broken or something. Can anyone point me to another refund estimator?

I also had one other question, I claimed single no dependant all last year but I want to file as head of household since I am. Should I change my claim status with my job after I file this year?

Thanks@

if you are single with no dependents how are you filing HOH?

The online estimators are fairly accurate, but they are only as good as you filing them out accurately since they don't error-check. How are you getting $7-11k back?

Changing status with your job is up to you...if you had too much or too little withheld is the only time I'd mess with it.

 

[alkemyst]

Originally posted by: Doggiedog
Hi EagleKeeper,

I have a question for you on Income Tax withholding.

I got divorced last year and with my new paycheck, my marital status has changed to single.

I noticed that my tax withholding is up 50%. Is this normal? The only other change is a small pay increase of 5%. I took 0 deductions on withholding while I was married (bc I didn't want to get blindsided by owed taxes) and I continued to take 0 deductions now. I looked at my tax schedule and I was in the 25% bracket as a married person but should be in the 28% bracket now as a single person.

Can you direct me to where I can look this up? The payroll people insist that they are right but they can't provide me any proof. They tell me to look at circular e or something. I am taking home several hundred $ less after a 5% pay increase than I did before I got the increase and status change. I would think at worst, it would be a wash but I am actually down. If you need, I can supply you with the #s.

Thanks!

DD

Figuring out actual withholding based on status and exemptions is tricky...I don't think there is a table anywhere.

First I would do a model based on this years tax codes and what you think your situation will be like at the end of next year. Figure out how much tax you will be responsible for.

Once you do that see what you can do with HR to only have close to that taken out. I'd go to them with your old pay stub and new ones and ask them to explain it.

 

[Mxylplyx]

I opened a fidelity Roth IRA, and started a monthly deposit. After my first deposit of $300, I realized that Fidelity wouldnt let me invest in a mutual fund until I reached several thousand, so I pulled my original principal out since it would collect more interest in a money market account. Fidelity sent me an ira distrubution form, and turbotax is telling me I am subject to a penalty for an early ira distribution. What do I do about this? My understanding is that principal can be pulled from a roth at any time, especially since it is taxed going in. I am inclined to just not enter this in my taxes.

Thanks

 

[alkemyst]

Originally posted by: Mxylplyx
I opened a fidelity Roth IRA, and started a monthly deposit. After my first deposit of $300, I realized that Fidelity wouldnt let me invest in a mutual fund until I reached several thousand, so I pulled my original principal out since it would collect more interest in a money market account. Fidelity sent me an ira distrubution form, and turbotax is telling me I am subject to a penalty for an early ira distribution. What do I do about this? My understanding is that principal can be pulled from a roth at any time, especially since it is taxed going in. I am inclined to just not enter this in my taxes.

Thanks

You didn't meet the 5 year holding period. Until that is reached the penalty for early withdrawl (taxed at your bracket + 10%) is applied to the full amount.

 

[cpals]

n/m

 

[TraumaRN]

Originally posted by: alkemyst

Originally posted by: DeathBUA
Does anyone know if any of the 'tax refund estimator' are even close to accurate? Or more specifically is the turbotax one broken? I can change all kinds of dollar amounts around and it seems to always give my $6717 as my refund. If I use the HR Block one it gives me what I think is a fairly accurate refund, which is just over $11,000. I wanted to use the turbotax one to confirm that but like I said its broken or something. Can anyone point me to another refund estimator?

I also had one other question, I claimed single no dependant all last year but I want to file as head of household since I am. Should I change my claim status with my job after I file this year?

Thanks@

if you are single with no dependents how are you filing HOH?

The online estimators are fairly accurate, but they are only as good as you filing them out accurately since they don't error-check. How are you getting $7-11k back?

Changing status with your job is up to you...if you had too much or too little withheld is the only time I'd mess with it.

I'm filing HOH because I bought a house in October of 08. And getting so much back because of buying the house and because of the new homebuyer tax credit. It's a $7,500 tax credit(at least thats how much I qualified for). Tack on the deductions I can get for PMI, property taxes, mortgage interest, mortgage points plus charitable deductions, etc and thats how I am possibly getting so much back.

 

[alkemyst]

Originally posted by: DeathBUA

I'm filing HOH because I bought a house in October of 08. And getting so much back because of buying the house and because of the new homebuyer tax credit. It's a $7,500 tax credit(at least thats how much I qualified for). Tack on the deductions I can get for PMI, property taxes, mortgage interest, mortgage points plus charitable deductions, etc and thats how I am possibly getting so much back.

How are you QUALIFYING for HOH was my question, not why you are trying to claim that status...

 

[Shenaniganzz]

Last year I received $1393 for my stimulus payment; I claimed single with 3 dependents. I also got married last year so my husband and I filed married/joint this year. When TurboTax calculated our recovery rebate it showed that we were owed a total of $1500 so it gave us a credit of the difference of $107. However, when I filed my return the IRS accepted it but said that I have to file an amendment to pay back the $107 because we were not owed this money. Are we not owed this money because we were not married the previous year and I filed single? I didn't think that made a difference... Help?!

 

[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 vacation He hasn't even unpacked yet.

sucks.

 

[alkemyst]

Originally posted by: Shenaniganzz
Last year I received $1393 for my stimulus payment; I claimed single with 3 dependents. I also got married last year so my husband and I filed married/joint this year. When TurboTax calculated our recovery rebate it showed that we were owed a total of $1500 so it gave us a credit of the difference of $107. However, when I filed my return the IRS accepted it but said that I have to file an amendment to pay back the $107 because we were not owed this money. Are we not owed this money because we were not married the previous year and I filed single? I didn't think that made a difference... Help?!

This is one of the cases for waiting to be married vs not in regards to a tax situation.

The stimulus is now applied as if you were a couple with 3 dependents since you were married prior to the end of last year.

 

[TUKIN18S]

I have recieved a 1099C form from a forgiven debt in 2008. The debt was forgiven in a Chapter 7 bankruptcy. I have been reading and reading on what I need to do. Some places say if it was discharged in a bankruptcy I do not have to pay taxes on the amount forgiven. Elsewhere I read that I have to fill out a Form 982. I'm not sure where to go with this. Can you lend any insight? thanks for your time

Chad

 

[cpals]

Okay, different kind of question, but I did a friend's taxes online via TaxACT and we decided to do direct deposit for them. When I saw you could put the money into more than one bank account we thought that's great so the friend had me put my bank account number as a second one and put $25 for helping them do their taxes.

Afterwards I started thinking about this and went back to the form that TaxACT filled out for us and noticed that it says the bank account numbers must be in the filing person's name. My friend's return has already been filed online... is there anyway to change it to put all of the return into their account or will the IRS try and put the $25 in my account and fail and then put it all in my friend's account?

Thanks.

 

[Al Neri]

I did a quick search and did not find anything here.

my AGI is 81900....1900 over the limit to deduct tuition expenses. I had > 7000 in tuition payments this year.

Is there any way I could get my MAGI under that 80k limit?
Would it be worth it?
If not, would I even get much back?
Can I carry this forward? I plan on eventually taking a pay cut (career change).

Thanks!

Don R.

 

[alkemyst]

Originally posted by: cpals
Okay, different kind of question, but I did a friend's taxes online via TaxACT and we decided to do direct deposit for them. When I saw you could put the money into more than one bank account we thought that's great so the friend had me put my bank account number as a second one and put $25 for helping them do their taxes.

Afterwards I started thinking about this and went back to the form that TaxACT filled out for us and noticed that it says the bank account numbers must be in the filing person's name. My friend's return has already been filed online... is there anyway to change it to put all of the return into their account or will the IRS try and put the $25 in my account and fail and then put it all in my friend's account?

Thanks.

I'd call the IRS and see what to do...they are probably going to question your unreported income though. You had in the post you deleted that you do this for several people.

Doing tax preparation is income and needs to be reported.

 

[alkemyst]

Originally posted by: Don Rodriguez
I did a quick search and did not find anything here.

my AGI is 81900....1900 over the limit to deduct tuition expenses. I had > 7000 in tuition payments this year.

Is there any way I could get my MAGI under that 80k limit?
Would it be worth it?
If not, would I even get much back?
Can I carry this forward? I plan on eventually taking a pay cut (career change).

Thanks!

Don R.

Yes...we would need to know more, there are 100's-1000's of things to reduce your AGI
depends on you
don't know, that's up to you
yes

model it on putting in 1900 less income and see what you get back, if it then seems worth it then explore your options.

 

[Shenaniganzz]

So, then I SHOULD be entitled to the $107? I have no problem paying it back if I am not entitled to it, but I don't want to file an amendment and mess up my taxes if I'm not supposed to pay it back...
Okay, the IRS says I have to pay it back so I should just pay it back right? Just want to be sure on what to do here. I don't want to receive an audit in the future. Thanks!

 

[alkemyst]

Originally posted by: Shenaniganzz
So, then I SHOULD be entitled to the $107? I have no problem paying it back if I am not entitled to it, but I don't want to file an amendment and mess up my taxes if I'm not supposed to pay it back...
Okay, the IRS says I have to pay it back so I should just pay it back right? Just want to be sure on what to do here. I don't want to receive an audit in the future. Thanks!

Did you actually already submit your return?

If so you will have to amend it. If not TurboTax can handle it properly.

 

[Shenaniganzz]

Yes it was submitted. TurboTax calculated that I was due a credit of $107 for the recovery rebate. Then the IRS accepted my return but said that I have to file an amendment to pay back the $107.

What I don't understand is why the IRS is saying I have to pay back this credit. If TurboTax calculated this for me due to the recovery rebate requirements, shouldn't it be correct?

 

[EagleKeeper]

Originally posted by: cpals
Okay, different kind of question, but I did a friend's taxes online via TaxACT and we decided to do direct deposit for them. When I saw you could put the money into more than one bank account we thought that's great so the friend had me put my bank account number as a second one and put $25 for helping them do their taxes.

Afterwards I started thinking about this and went back to the form that TaxACT filled out for us and noticed that it says the bank account numbers must be in the filing person's name. My friend's return has already been filed online... is there anyway to change it to put all of the return into their account or will the IRS try and put the $25 in my account and fail and then put it all in my friend's account?

Thanks.

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)

 

[EagleKeeper]

Originally posted by: Shenaniganzz
Yes it was submitted. TurboTax calculated that I was due a credit of $107 for the recovery rebate. Then the IRS accepted my return but said that I have to file an amendment to pay back the $107.

What I don't understand is why the IRS is saying I have to pay back this credit. If TurboTax calculated this for me due to the recovery rebate requirements, shouldn't it be correct?

TT did not take into account you being married during the year.
They just take into account your are married.