7th Annual Anandtech Tax Time Thread

[EagleKeeper]

Well boys and girls it's that time of year again. While at times the thousands of regs and tens of thousands of cumbersome forms, worksheets and pages of codes seem infuriating, deep down you all know you love it. Whether it's keeping things in order all year for a quick mid-February filing or a knuckle-clenching, bullet sweating the current April 15th midnight filing, when you've finally filed it's better than sex! So, without further delay, we give you:

The 7th Annual Anandtech Tax Time Thread!!!

First order of business, the legal mumbo jumbo:

All responses to questions (primarily from myself and CPA along with some other valued contributers) are based on our knowledge and understanding of the current tax code. That said, we do not expressly give permission to use our opinions and responses as sole binding measure for any user, the intended or not. Seek out a local expert and a second opinion with any tax inquiry. We will not be held liable for any audit, fine, penalty or other consequence due to any user basing a filing primarily on our responses. In other words, you're on your own.

Please understand that the service provided here is not to be considered as the final say in any tax related question or issue. We advise everyone to take caution with accepting the answers posted here and seek a good tax accountant or tax lawyer when necessary, especially those pesky complicated questions. Additionally Anandtech nor Anand have endorsed myself or the other benevolent responders in this thread. So please don't complain to them if you feel like you got a bogus answer. Finally, this thread is NOT meant to offer advice nor do your taxes for you. It is solely to help clear up questions, concerns or misunderstandings that you may have concerning the 2007 Tax Code. None of the responders take responsibility for your final tax preparation. You do!

Secondly, this is important people:

Please post all tax questions in this thread! We will NOT, I repeat, WILL NOT, respond to other threads. Additionally, we strongly encourage all members to post your questions here for the benefit of others. We will NOT respond to PMs unless we request one from you. And finally, please, for the love of all that's good in the world, read through the thread, there is a good chance your question has already been asked and answered.

Questions that have been answered, will be indicated as such ? you will have to dig through the thread anyhow to find it. attempt to scan through previous threads before - should your question have been answered previously, anticipate that sarcasm will be the response. the other threads have been archived and the search function works (now we at on vB).

If the below saves one ATOT member from being a sucker, it will be worth the typing:

**** Warning - Snapshot of IRS Phishing E-Mail ****
IRS Privacy Page

PLEASE NOTE: Do not respond to unsolicited e-mails that claim to come from the IRS, or any e-mail from an unknown party asking you to submit personal, tax, or financial data. The Internal Revenue Service does not use e-mail to request this type of information. Forward suspicious emails to: phishing@irs.gov

If you E-File, the provider will inform you of the estimated time to have a refund issued.
If you mail, allow a minimum of an extra 2 weeks for a refund to be processed.
A good rule is to allow an extra additional week in addition to above, for each month that you delay filing.
Allow an extra week if the funds are being mailed to you instead of being direct deposit.


Now, if you're an ambitious one, you can always trudge through the IRS website for help

Oh, and again please, try not to PM us or any of the other responders unless you are asked to. Instead, post your question here for all to see, because chances are there is another member with a similar issue. The Mods have been requested to lock any/all other threads that show up dealing with tax issues.

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Okay, moving on. This thread is NOT intended to:

-Answer state tax questions. Sorry folks, states are their own beasts. They all have different rules and regs, heck 7 states don't even have income taxes. We are not about to keep up with 43 different state codes. Therefore, we won't be answering state questions. The best way to get an answer for a state question is to call up the State Treasury or Revenue Dept.

- Endorse any tax software. We can safely say that most of the software does it's job well. Without recommending any particular one, you can choose TaxAct, TaxCut, or TurboTax. Additionally, these and many more sites assist you in actually doing your taxes online. Even the IRS website has the ability for you to file online with simple filings.

-Help propagate any illegal tax schemes. Some of us do not appreciate the hospitality of the Federal Government. So keep your schemes out of this thread. Thanks for understanding.

- Start any arguments between the current system, flat tax, national sales tax or any other tax opinion. The thread is to help people, not debate, flame or troll. The Moderators will be asked to intervene for the latter items as needed.

Note: CPA and I have not had a chance to do much research on the changes. Most will be just a echo of what has been discovered that was not specific for a given year.

We also very busy this year, so may not be responding to questions as fast as in the previous years. However, we have good knowledgeable people that will help to fill in the gaps.



Special Items/Credits

First Time Homebuyer Credit

Those that filed for the 2008 "loan" when purchasing in 2009 can file an amended return to turn the loan into a credit.
Those that have filed for 2008 and purchased in 2009 can file an amended return for 2008 or apply for the credit on the 2009 filing.
All taxpayers listed on the return MUST qualify as "first timers"
If purchasing with a SO, each can claim a proportion of the available credit. This does not mean that each can claim up to 8K for a 160K house.

Students - American Opportunity Credit

There is a new credit similar to the Hope - American Opportunity Tax credit
This covers up to 4 years to a max of $2500. Up to $1000 can be credited even if you have no income

For those of you who enjoy torturing yourself, We present the IRS Web Site. However, this site has most of the answers also.


Previous ATOT Tax Threads

2003
2004
2005
2006
2007
2008

The two sites below have restrictions on their usage and any returns must be started through above links for them to be considered for no charge.
they are not available until mid-January

Federal/Intuit Tax Freedom
State/Intuit Tax Freedom

TaxAct states free filing using their online version for Federal.


H&R Block Product Comparison Chart: (not an endorsement)

Chart

All the three main biggies (TurboTax, TaxCut and TaxAct) do the job. Each has slightly different user interfaces and their quirks/irritations. They continually look at the competition and attempt to match them in features the following year. All three area able to import datafiles from each other.

Some will allow multiple Federal efiles for the same license.

All three have state filing.
However, if you have multiple states to work with, you MUST purchase a copy for each state that you need to work with. And some will not handle multiple states easily; which you will not know until after you shell out the extra $$:disgust:



Some IRS and other Tax Links may not be fully operational until mid January '10 or later



Okay, now that that stuff is out of the way, let's get to some helpful insight.

Deadlines (midnight of the date listed for filing deadlines)

W2 - Companies are required to have your W2 POSTMARKED by January 31st. It is NOT required that you have it in your hands by that date. Let's dispel that myth please.
If you do not receive it by mid February; for ex-employers, call the employer and ask for a copy to be Faxed to you. For current employers, contact your HR department.

1099 - Companies are required to have your W2 POSTMARKED by January 31st. It is NOT required that you have it in your hands by that date. If you do not receive it by mid February, call the employer and ask for a copy to be Faxed to you. Note: 1099s do not have to be sent to you. Individuals that could receive a 1099 are responsible for tracking their own income.

Most returns - 15 April 2010

IRS FAQ Index - contains links for below areas

• IRS Procedures
• Filing Requirements/Status/Dependents/Exemptions
• Itemized Deductions/Standard Deductions
• Interest/Dividends/Other Types of Income
• Pensions and Annuities
• Social Security Income
• Child Care Credit/Other Credits
• Earned Income Tax Credit
• Estimated Tax
• Capital Gains, Losses/Sale of Home
• Sale or Trade of Business, Depreciation, Rentals
• Small Business/Self-Employed/Other Business
• Aliens and U.S. Citizens Living Abroad
• Electronic Filing (e-file)
• Magnetic Media Filers
• Other (Alternative Minimum Tax, Estates, Trusts, Tax Shelters, State Tax Inquiries)
• Individual Retirement Arrangements (IRAs)

Free Filing

Online Free Filing via IRS

Check back with us on January 15, 2010

PMI is deductible if issued after 2006


Some tidbits from previous years.

Dependants:

Significant others are able to be declared as a dependent if you provide the support according to the IRS guidelines. (I personally feel that this is a loophole, however, take advantage of it as you desire - I would not push it with multiple SO at the same time ...)SO's children are now allowed based on a IRS notice of 3/08. This can also be used retroactively for the past 3 years.

You are a dependent of your parents if you are under 18 (24 if in school) unless:
You have stood on your own for more than 6 months. Just because you paid for your tuition costs does not mean that you are not a dependent.
Your parents have the option of not declaring you and letting you stand on your own.

If you cover more than 50% TOTAL of living expenses for a "legal" (per IRS definition +/- two generations) relative they can be declared as a dependent.

You can not claim a spouse as a Dependant if filing as Head Of Household

1099

If you get paid with a 1099, you have the option of filing it with your 1040/1040A under misc income or using the Schedule C. Use of the Schedule C (requires a 1040) and allows you to write off expenses directly and some portion indirectly related to that income before taxes. Previous tax threads have provided guidance on items that could be used as expenses in on capacity or another.
Income earned via a 1099 is also subject to the self employment tax as well as the normal expected W2 type taxes.

Mileage

55 cents per mile for business miles
24 cents per mile driven for moving purposes
24 cents per mile driven for medical purposes
14 cents per mile driven in service to a charitable organization

Commuting is not deductible expenses.
Commuting between two jobs is.
Mileage to/from school while working (if the education if not primary - ie it supports work) is a deductible expense on the Form 2106 (which requires 1040 and Schedule A).
If school can be considered as supportive of business income, the tuition, fees, books and mileage become a business expense on the Schedule C. Otherwise use the 2106
You can not claim mileage and expenses on the same vehicle.

Moving

Expenses incurred when changing work locations (for any reason) if the location meets the distance test of 50 miles is filed on the Form 3903 and does NOT require a schedule A.

Sales Tax

Sales tax is still allowed as an itemized deduction this year. While it can be a little complicated, the main points of this deduction are:
a. Publication 600 is the main reference for this deduction and contains the tables for those of us who didn't keep your receipts all year long.
b. Anyone who itemized can take it, regardless of what state you are in, BUT, if you live in a state with local/state income tax you have to choose to use the sales tax or income tax deduction. You CAN'T have both.
Sales Tax Calculator

Interest Reporting

You are responsible to report interest /dividends over $1.
The payee is responsible for providing you a 1099 form when the payment is over $10.

Business Expense write offs.

Unless your have Self Employment income (use the Schedule C) expenses must fall under the Form 2106 using the Schedule A (Itemizations)

Expenses for clothing is not deductible, unless those items can not be worn out in public for normal use and/or private functions.
Example:
If you have to wear a suit for work, you can not deduct the cost of the suit and dry cleaning.
If you have a military or other Government service type uniform, it is deductible.

Students:

Hope Credit is for tuition for the first 2 years of college. = 50%
Lifetime Learning Credit is for any other type of educational advancement. = 20%
Note: If your parents claim you as a dependent, they get the Credits, no matter who pays the tuition.

Books, laptops, etc do not qualify. Those would have to be entered as expenses on the Form 2106 for those that use Schedule A.

Comparison of the Educational Credits
Lifetime Learning Credit..................................................... Hope Credit
Up to $2,000 credit per return............................................ Up to $1,800 credit per eligible student
Available for all years of postsecondary education................ Available ONLY until the first 2 years of post-
and for courses to acquire or improve job ......................... secondary education are completed
Available for an unlimited number of years......................... Available ONLY for 2 years per eligible student
Student does not need to be pursuing a degree................... Student must be pursuing an undergraduate degree
or other recognized education credential ............................ or other recognized education credential
Available for one or more courses ..................................... Student must be enrolled at least half time
....................................................................................... for at least one academic period beginning during the year
Felony drug conviction rule does not apply.......................... No felony drug conviction on student's record

There is a new credit similar to the Hope - American Opportunity Tax credit
This covers up to 4 years to a max of $2500. Up to $1000 can be credited even if you have no income

No Double Benefit Allowed
You cannot do any of the following:

Deduct higher education expenses on your income tax return (as, for example, a business expense) and also claim a lifetime learning credit based on those same expenses.

Claim a lifetime learning credit in the same year that you are claiming a tuition and fees deduction for the same student.

Claim a lifetime learning credit and a Hope credit based on the same qualified education expenses.

Claim a lifetime learning credit based on the same expenses used to figure the tax-free portion of a distribution from a covered education savings account (ESA) or qualified tuition program (QTP). See Coordination With Hope and Lifetime Learning Credits in Chapter 7 and Chapter 8 (QTP).

Claim a credit based on qualified education expenses paid with a tax-free scholarship, grant, or employer-provided educational assistance. See Adjustments to Qualified Education Expenses, later.

IRS SUMMARY FOR 2009 changes - From Pub 17

What's New for 2009
This section summarizes important tax changes that took effect in 2009. Most of these changes are discussed in more detail throughout this publication.

Changes are also discussed at www.irs.gov, click on Forms and Publications, and then on What's Hot in forms and publications.

Economic recovery payment. Any economic recovery payment you received is not taxable for federal income tax purposes, but it reduces any making work pay credit or government retiree credit.

Making work pay credit. If you have earned income from work, you may be able to take this credit. It is 6.2% of your earned income but cannot be more than $400 ($800 if married filing jointly). See Chapter 37.

Government retiree credit. You may be able to take this credit if you get a government pension or annuity, but it reduces any making work pay credit. See Chapter 37.

U.S. Savings Bonds. You can now use your refund to buy up to $5,000 in U.S. Series I savings bonds in multiples of $50. For more information, see Form 8888, Direct Deposit of Refund to More Than One Account.

Cash for clunkers. A $3,500 or $4,500 voucher or payment made for such a voucher under the CARS “cash for clunkers” program to buy or lease a new fuel-efficient automobile is not taxable for federal income tax purposes.

Unemployment compensation. You do not have to pay tax on unemployment compensation up to $2,400 per person for the year. Amounts over $2,400 are still taxable. See Chapter 12.

American opportunity education credit. The maximum Hope education credit is increased to $2,500. The increased credit has been renamed the American opportunity credit and part of it is refundable. See Chapter 35.

Deduction for motor vehicle taxes. If you bought a new motor vehicle in 2009 after February 16, you may be able to deduct any state or local sales or excise taxes on the purchase. In states without a sales tax, you may be able to deduct certain other taxes or fees instead. Take the deduction on Schedule A (Form 1040) if you are itemizing deductions and are not electing to deduct state and local general sales taxes. If you are not itemizing deductions, these taxes increase your standard deduction as figured on Schedule L (Form 1040A or 1040). See Chapter 20.

Qualifying child definition revised. The following changes to the definition of a qualifying child apply.

• Your qualifying child must be younger than you unless the child is permanently and totally disabled.
  
• A child cannot be your qualifying child if he or she files a joint return, unless the return was filed only as a claim for refund.
  
• If the parents of a child can claim the child as a qualifying child but no parent so claims the child, no one else can claim the child as a qualifying child unless that person's adjusted gross income (AGI) is higher than the highest AGI of any parent of the child who can claim the child.
  
• Your child is a qualifying child for purposes of the child tax credit only if you can and do claim an exemption for him or her.

See Chapters 3, 21, 34 and 36.

Earned income credit (EIC). The EIC has increased for people with three or more children and for some married couples filing jointly. You may be able to take the EIC if:

• Three or more children lived with you and you earned less than $43,279 ($48,279 if married filing jointly),
  
• Two children lived with you and you earned less than $40,295 ($45,295 if married filing jointly),
  
• One child lived with you and you earned less than $35,463 ($40,463 if married filing jointly), or
  
• A child did not live with you and you earned less than $13,440 ($18,440 if married filing jointly).

The maximum AGI you can have and still get the credit also has increased. You may be able to take the credit if your AGI is less than the amount in the above list that applies to you. The maximum investment income you can have and still get the credit has increased to $3,100. See Chapter 36 .

Divorced or separated parents. A noncustodial parent claiming an exemption for a child can no longer attach certain pages from a divorce decree or separation agreement instead of Form 8332 if the decree or agreement went into effect after 2008. The noncustodial parent must attach Form 8332 or a similar statement signed by the custodial parent and whose only purpose is to release a claim to exemption. See Chapter 3.

Tax on child's investment income. The amount of taxable investment income a child can have without it being subject to tax at the parent's rate has increased to $1,900. See Chapter 31.

Personal casualty and theft loss limit. Generally, a personal casualty or theft loss must be more than $500 to be allowed. This is in addition to the 10% of AGI limit that generally applies to the net loss.

First-time homebuyer credit. The credit increases to as much as $8,000 ($4,000 if married filing separately) for homes bought after 2008 and before May 1, 2010 (before July 1, 2010, if you entered into a written binding contract before May 1, 2010). You can choose to claim the credit on your 2009 return for a home you bought in 2010 that qualifies for the credit. You generally must repay any credit you claimed on your 2008 return if you sold your home in 2009 or the home stopped being your main home during 2009.For more information on these changes and other changes to the homebuyer credit, see Chapter 37.

Alternative minimum tax (AMT) exemption amount increased. The AMT exemption amount is increased to $46,700 ($70,950 if married filing jointly or a qualifying widow(er); $35,475 if married filing separately). See Chapter 30.

Standard mileage rates. For 2009, the standard mileage rate for the cost of operating your car for business use is 55 cents per mile. See Chapter 26. For 2009, the standard mileage rate for the cost of operating your car for medical reasons is 24 cents per mile. See Chapter 21. For 2009, the standard mileage rate for the cost of operating your car for determining moving expenses is 24 cents per mile. See Publication 521, Moving Expenses.

Electric vehicle credits. You may be able to take a credit for:

• A plug-in electric drive motor vehicle placed in service in 2009 (see Chapter 37),
  
• A plug-in electric vehicle bought after February 17, 2009 (see Chapter 37), or
  
• Conversion of a vehicle to a plug-in electric drive motor vehicle placed in service after February 17, 2009 (see Chapter 37).

Credit for nonbusiness energy property. You may be able to take this credit for qualifying energy saving items for your home placed in service in 2009. See Chapter 37.

Retirement savings plans. The following paragraphs highlight changes that affect individual retirement arrangements (IRAs) and pension plans. Traditional IRA income limits. You may be able to take an IRA deduction if you were covered by a retirement plan and your modified AGI is less than $65,000 ($109,000, if you are married filing jointly or a qualifying widow(er). If your spouse was covered by a retirement plan, but you were not, you may be able to take an IRA deduction if your modified AGI is less than $176,000. See Chapter 17. Roth IRA income limit. You may be able to make a Roth IRA contribution if your modified AGI is less than $120,000 ($176,000, if you are married filing jointly or a qualifying widow(er). See Chapter 17. Retirement savings contributions credit. The AGI limit for claiming this credit is increased to $27,750 ($41,625 if head of household; $55,500 if married filing jointly). See Chapter 37. Military differential pay. For IRA purposes, your compensation includes any military differential pay you receive from your employer while you are serving on active duty for a period of more than 30 days. Elective salary deferrals. The maximum amount you can defer under all plans is generally limited to $16,500 ($11,500 if you have only SIMPLE plans; $19,500 for section 403(b) plans if you qualify for the 15-year rule). The catch-up contribution limit for individuals age 50 or older at the end of the year is increased to $5,500 (except for section 401(k)(11) plans and SIMPLE plans, for which this limit remains unchanged). Temporary waiver of required minimum distribution rules. No minimum distribution is required from your IRA or most defined contribution retirement plans for 2009. See Chapter 10 or, for IRAs, Chapter 17.

Certain amounts increased. Some tax items that are indexed for inflation increased for 2009. Standard deduction. The standard deduction for taxpayers who do not itemize deductions on Schedule A (Form 1040) has increased. The amount depends on your filing status. See Chapter 20. Exemption amount. You are allowed a $3,650 deduction for each exemption to which you are entitled. However, you will lose part of your exemption amount if you have high income. See Chapter 3. Limit on itemized deductions. Some of your itemized deductions may be limited if your adjusted gross income is more than $166,800 ($83,400 if you are married filing separately). See Chapter 29. Tax benefits for adoption. The maximum adoption credit and the maximum exclusion from income of benefits under an employer's adoption assistance program are increased to $12,150. See Adoption Credit in Chapter 37. Education credits income limits increased. The amount of income you can have and still claim an education credit has increased. See Chapter 35. Social security and Medicare taxes. The maximum wages subject to social security tax (6.2%) increased to $106,800. All wages are subject to Medicare tax (1.45%). Credits increased. The following credits have increased for some people.

• Additional child tax credit. See Chapter 34.
  
• Residential energy efficient property credit. See Chapter 37.
  
• COBRA subsidy. The 65% subsidy for payment of COBRA health care coverage continuation premiums is not taxable. See Chapter 21.
  
• Home mortgage principal reductions. Any Pay-for-
• Performance Success Payments that reduce the principal balance of your home mortgage under the Home Affordable Modification Program are not taxable

.

Well, sorry for the long post, but just like the IRS code, it takes a lot to do something simple. We have tried to organize it for easier reading by using the quoting method to section areas off.

AGAIN
Questions already answered in the thread may be responded to as "all ready answered". If so, you will gasp> actually have to read this thread
Now, let the questions begin.

 

[Mill]

There are quite a few important changes for this year: introduction of Schedule L, AOC (way better than HOPE), Change in energy credit caps and guidelines (very beneficial for most people), change of Homeowner's Tax Credit (existing owners can now get a credit, EIC changes (threshold as well as the introduction of 3 qualifying children and specific rules regarding those with higher AGIs that are in the same household), etc.

EagleKeeper, I have a decent summary from a recent tax conference. I will see if I can scan it or transcribe it for use here.

 

[Exterous]

I just wanted to go ahead and thank those that have/will contribute to the thread. Your time and effort is appropriated!

 

[manlymatt83]

I'll have a lot of questions this year, so I'm glad we're starting early. Thanks to everyone who contributes to this thread!

 

[2Xtreme21]

Was wondering if one of you could answer this...

I'm currently in offer negotiations on a house (first-time homebuyer) and, if all goes well, will be closing late January 2010. I know I am eligible for the first-time homebuyer tax credit, but am I able to receive it in April 2010? Or must I file it on my 2010 taxes since I'm closing next year?

 

[EagleKeeper]

Was wondering if one of you could answer this...

I'm currently in offer negotiations on a house (first-time homebuyer) and, if all goes well, will be closing late January 2010. I know I am eligible for the first-time homebuyer tax credit, but am I able to receive it in April 2010? Or must I file it on my 2010 taxes since I'm closing next year?

It will belong on your 2010 taxes - filed in 2011

 

[Uppsala9496]

Question: Regular salary through most of 2009, and turned independent contractor in November. I had to buy a new desk and various other items to get a spare room in my place up and operational for my home office. No issues with using these as a deduction when I itemize? (paint, new flooring tile, new light fixtures, new desk, new office chair, some computer hardware, etc.)

 

[Exterous]

Here are a couple of mine:

1) I had a job in January that required me to use my personal cell phone for business use. I lost that job in March when the company went under. How much of my cell phone bill am I able to deduct?

2) My new work place has a policy that if you work from home you must have an office that is clear of distractions with a desk and internet access. While I do not work from home regularly I am required to have an on call cell phone (company provided) that I have for one week every third week on a rotating schedule that must be answered after hours (5pm-10pm M-F and 10am-4pm Sat/Sun). I have a desk and area of my office only for work use - completely separate from my personal desk/computer. Does this qualify me to use the home office deductions?

3) This is more for future use. My wife is a Spanish teacher and was wondering if she could deduct part of a trip to Spain where she would take classes and bring items/pictures back to use in her classroom. Would any of this be tax deductible?

Thanks again for your time and efforts!

 

[overst33r]

Where can I find 2008 Schedule D form?

I got an AUR from the IRS regarding some of my stock information. It says to enclose supporting information such as a 1099-B form and a filled out Schedule D. Since it was for the 2008 tax year I assume it's a 2008 Schedule D form...

 

[SarcasticDwarf]

I'm looking at the new job I am likely to start in late January. As part of the offer I will be getting about a $9k check for relocation (straight check, not providing receipts). I know I can deduct the moving expenses using 3903. What I am curious about is what I need to worry about with regards to the $9k. Is it treated as normal income, in which case I should expect to owe about 1/4 of it in taxes?

 

[EagleKeeper]

Question: Regular salary through most of 2009, and turned independent contractor in November. I had to buy a new desk and various other items to get a spare room in my place up and operational for my home office. No issues with using these as a deduction when I itemize? (paint, new flooring tile, new light fixtures, new desk, new office chair, some computer hardware, etc.)

All the items listed will fall under Schedule C.
You can also start depreciation of the room and proportional for utilities and other household expenses.

As independent, you also now can start to write off your auto and related travel expenses.

 

[EagleKeeper]

Where can I find 2008 Schedule D form?

I got an AUR from the IRS regarding some of my stock information. It says to enclose supporting information such as a 1099-B form and a filled out Schedule D. Since it was for the 2008 tax year I assume it's a 2008 Schedule D form...

PDFs are available from the IRS web site

 

[EagleKeeper]

I'm looking at the new job I am likely to start in late January. As part of the offer I will be getting about a $9k check for relocation (straight check, not providing receipts). I know I can deduct the moving expenses using 3903. What I am curious about is what I need to worry about with regards to the $9k. Is it treated as normal income, in which case I should expect to owe about 1/4 of it in taxes?

That 9K is taxable income.
As you noted,some can be compensatated using the 3903.

If you itemize, then more can come off using the 2106 (Business Expenses).

Pity the poor sports stars right out of college that get the multi-million signing bonus.:twisted:

 

[overst33r]

PDFs are available from the IRS web site

I searched. I could only find the 2009 forms...

 

[EagleKeeper]

Here are a couple of mine:

1) I had a job in January that required me to use my personal cell phone for business use. I lost that job in March when the company went under. How much of my cell phone bill am I able to deduct?
3 months using the Form 2106

2) My new work place has a policy that if you work from home you must have an office that is clear of distractions with a desk and internet access. While I do not work from home regularly I am required to have an on call cell phone (company provided) that I have for one week every third week on a rotating schedule that must be answered after hours (5pm-10pm M-F and 10am-4pm Sat/Sun). I have a desk and area of my office only for work use - completely separate from my personal desk/computer. Does this qualify me to use the home office deductions?
You are not required to work from home - therefore nothing can be claimed as a business expense as regards to working from home

3) This is more for future use. My wife is a Spanish teacher and was wondering if she could deduct part of a trip to Spain where she would take classes and bring items/pictures back to use in her classroom. Would any of this be tax deductible?
All expenses as related to Spain would be deductible using the Form 2106. Airfare, lodging, tuition, meals, transportation, trinkets, etc. If she travels outside of Spain, then those expenses would not be allowable

Thanks again for your time and efforts!

The answers are bolded inside the quote

 

[IronWing]

If we take in foster animals from a non-profit shelter can we count our expenses in keeping the animals (food, vet bills) as charitable contributions? The understanding is that the animals will eventually be adopted to permanent homes.

 

[EagleKeeper]

If we take in foster animals from a non-profit shelter can we count our expenses in keeping the animals (food, vet bills) as charitable contributions? The understanding is that the animals will eventually be adopted to permanent homes.

Those expenses should count. Make sure you have a statement from the shelter indicating that you are doing so under their "umbrella" as a non-profit. You also may be able to deduct a portion of your facility in you are actually caring for the animals in your house. This may be a grey area and not worth the red flag though.

 

[Adam8281]

That 9K is taxable income.
As you noted,some can be compensatated using the 3903.

If you itemize, then more can come off using the 2106 (Business Expenses).

Pity the poor sports stars right out of college that get the multi-million signing bonus.:twisted:

I believe that if your employer reimburses your moving expenses as tax-free reimbursement (it will show up that way on your W2), then you cannot deduct the moving expenses. But if the employer reimburses your moving expenses by increasing your ordinary income, then you claim the deduction for the moving expenses. Basically, you can't "double-dip" by excluding the reimbursement and deducting the expenses. But the transaction can be structured in two ways, each of which come to the same effect: excludable reimbursement and no deduction, or deduction and non-excludable reimbursement.

 

[EagleKeeper]

I believe that if your employer reimburses your moving expenses as tax-free reimbursement (it will show up that way on your W2), then you cannot deduct the moving expenses. But if the employer reimburses your moving expenses by increasing your ordinary income, then you claim the deduction for the moving expenses. Basically, you can't "double-dip" by excluding the reimbursement and deducting the expenses. But the transaction can be structured in two ways, each of which come to the same effect: excludable reimbursement and no deduction, or deduction and non-excludable reimbursement.

The IRS has guidelines for employeers that funds paid to a third party for moving expenses should not be declared as income to the employee. Funds paid directly to the employee are to be classified as taxable income. It is then up to the employee to expense using the Form 3903 expenses that come out of their pocket.

 

[Mill]

I have been very busy at work, so I have not had time to do a summary of tax law changes. I am actually presenting on the subject this week, but I have not done my presentation yet. At any rate, here are the best pages I've found so far that give a good idea of the changes:

http://www.irs.gov/publications/p17/ar01.html
http://www.1040.com/site/Profession...omingWithTY2009Returns/tabid/347/Default.aspx

To me the biggest changes are going to be the Making Work Pay Credit for self-employed individuals that did not adjust their quarterly payments as well as being able to deduct some property tax without itemizing. The new American Opportunity Credit is very good, and most people will take that over Hope. In addition, EIC thresholds increased a good bit and the new energy credit setup is AWESOME for anyone wanting to make their home more efficient.

I do not do a lot of business returns, so I have less of an idea of changes in that arena.

 

[rgwalt]

I have been very busy at work, so I have not had time to do a summary of tax law changes. I am actually presenting on the subject this week, but I have not done my presentation yet. At any rate, here are the best pages I've found so far that give a good idea of the changes:

http://www.irs.gov/publications/p17/ar01.html
http://www.1040.com/site/Profession...omingWithTY2009Returns/tabid/347/Default.aspx

To me the biggest changes are going to be the Making Work Pay Credit for self-employed individuals that did not adjust their quarterly payments as well as being able to deduct mortgage interest without itemizing. The new American Opportunity Credit is very good, and most people will take that over Hope. In addition, EIC thresholds increased a good bit and the new energy credit setup is AWESOME for anyone wanting to make their home more efficient.

I do not do a lot of business returns, so I have less of an idea of changes in that arena.

Mill- I think you mean that home owners can deduct a limited amount of property tax without having to itemize, which is new this year. I have not seen anything similar regarding mortage interest deduction.

 

[EagleKeeper]

Mill- I think you mean that home owners can deduct a limited amount of property tax without having to itemize, which is new this year. I have not seen anything similar regarding mortage interest deduction.

Pub 17 - Chapter 22

If you do not itemize deductions on Schedule A (Form 1040), and you paid state or local real estate taxes on real property that is not used in a trade or business and does not produce rental income, you can increase the amount of your standard deduction by the amount of state or local real estate taxes you paid. However, this additional standard deduction amount cannot be more than $500 ($1,000 if your filing status is married filing jointly), and you cannot deduct taxes paid on foreign real estate. To figure the amount of your standard deduction, if you paid state or local real estate taxes, complete Schedule L (Form 1040A or 1040).

 

[Mill]

That's right, not interest... property tax. I itemize anyway, but for people in low property tax places like Alabama it is very nice. Where I live a 200k house only has property tax of about 1000-1100, so most people will be able to realize a nice savings with that if they were not going to itemize.

 

[Praetor]

Just for a little clarification, on the whole credit/loan thing from 2008. We closed on our house in Sept '08. When we filed our '08 taxes, we took advantage of the credit/loan to pay off unexpected hospital bills.

I see it specifically noted that people that took advantage of this in 2009 can change it to a credit. Any chance of that happening for those of us that purchased in 2008 and took advantage of it then?

 

[rickon66]

I have been working part time for a marketing company and recently realized that they have a strange way of computing pay. The pay rate that they quote me varies by job between $10 and $17 per hour. When I look at the detailed breakdown of the pay paperwork they list my pay as minium wage and the rest as "mileage" pay. So if my pay rate for a particular job is $10, it is listed as hourly rate $7.25 and mileage pay $2.75. If my pay for another job is $15 it still lists my hourly rate as $7.25 and mileage as $7.75. This is without regard as to any actual miles that I drive. This seems to me like this is just a way to avoid paying social security and other tax. Does anyone know if this is legal?