8th Annual Anandtech Tax Time Thread (OP Updated 14th Jan)

[Homerboy]

One should have to request a payment schedule via some form.

Each state will have their own form, similar to the Feds.

http://www.revenue.wi.gov/faqs/ise/payment.html#pay1

My google-fu came through too:

What should I do if I can not pay the full amount of tax due with my tax return?
If you can not pay the full amount due with your tax return, file the completed Wisconsin tax form on time and pay as much as possible. By filing on time, you will avoid late filing fees and possible negligence penalties. In certain cases, you may have the option to pay the balance due shown on your individual income tax return by credit card. See Credit Card Payments for more information. You will receive a bill for the unpaid balance.

 

[Aharami]

anyone here use Tax Act? Its listed prices are a lot cheaper than TurboTax. I'm wondering if TA is an inferior software compared the TT. Will it have all the federal and state codes as TT?

 

[EagleKeeper]

anyone here use Tax Act? Its listed prices are a lot cheaper than TurboTax. I'm wondering if TA is an inferior software compared the TT. Will it have all the federal and state codes as TT?

All S/w that does taxes has to be approved by the Feds for use.

TT has a slicker UI - they have been around much longer and can charge for brand name recognition.

Tax Act must have the Federal - I would suspect that they will also have all 43 state tax tables also.

How well they do with crossing states lines, I have not heard. the others used to have a problem crossing state lines; then they figured it out and realized taht they can charge you double as a result.:thumbsdown:

 

[Aharami]

yea I've come to terms with the fact that I will have to pay double for two states. TaxAct will be ~ $32 for two states and federal and TT will be ~$85 for two states and federal. If it's all the same, I'd rather use the cheaper one.

Also I got married nearly 2 yrs ago. I dont know why my wife decided to do this now, but she officially changed her name with the SS office a week ago (changed her name with whats shown on our marriage license), only to find out that now her employer will have to reissue her a new W2 with her new last name (W2 has to match SS records). Aside from that, are there any other tax implications with changing your name?

 

[EagleKeeper]

None that I am aware of.

Have you tried to file electronically with the existing W2.

as long as the SS matches the name on the 1040, you may be able to get through.

 

[Aharami]

she's going thru the trouble because the some lady at the SS office told her that the name on her W2 has to match her SS card

 

[EagleKeeper]

she's going thru the trouble because the some lady at the SS office told her that the name on her W2 has to match her SS card

I do know that the SS name must match to the SS # and DOB w/ respect to the 1040 form.

The worse that can happen is the return gets rejected and you have to wait to refile when the new W2 arrives. Refiling does not cost extra.

However, the IRS is not going to be looking for/processing the new W2 until a few months from now after all the LEGIT paperwork.

 

[JohnnyMCE]

i am working on my parents taxes and am stuck on one spot. He was employed for half the year and unemployed for the other half. The half he was employed he paid his company for medical insurance. When he became unemployed he started paying for cobra. as part of cobra he was reimbursed 80% of what he paid in.

Since I am itemizing their medical i need to list out the money they paid to insurance. Should i just punch in what he paid for the insurance after reimbursement and call it a day or do i enter what he paid up front and then is there another section to enter the reimbursement they received.

BTW the reimbursement they received was from "monthly premium assistance reimbursement"

 

[EagleKeeper]

i am working on my parents taxes and am stuck on one spot. He was employed for half the year and unemployed for the other half. The half he was employed he paid his company for medical insurance. When he became unemployed he started paying for cobra. as part of cobra he was reimbursed 80% of what he paid in.

Since I am itemizing their medical i need to list out the money they paid to insurance. Should i just punch in what he paid for the insurance after reimbursement and call it a day or do i enter what he paid up front and then is there another section to enter the reimbursement they received.

BTW the reimbursement they received was from "monthly premium assistance reimbursement"

We are discussing the Federal Government, specifically, the IRS.:wub:

Do not try to confuse them any more than is needed.

Net cost should be entered.

 

[manlymatt83]

OK, here's the deal. I started an LLC where I'm doing Independent Internet Consulting. I have about 8 clients, and 2 of them want me on-site every so often (2-3 days a week total, I work about 4 days from home, as I work 7 days/week).

1) I have a home office. My apartment is small, but I have a section of my living room with a desk, chair, computer, and I only use it for my business. I live alone, so it's very easy to justify that.

2) I don't own a car. When my clients require me to travel to their location (work on-site), I rent a zipcar. I always re-imburse myself from the company's account for this zipcar, as it's traveling from my home office to my client. Is this correct?

3) When I'm home, I pay for my meals... whether I cook at home, order in, etc. When I'm on-site with a client, if it's dinner, I'll always pay for it with the company card, as it's a late night so for the convenience of the client that I'm there late. When I'm at one client, I always eat with the CTO, as I'm only on-site with them one day a week, so I expense those. Where my confusion lies here is the lunches I get when I'm on-site at my other client about 2 days/week... the lunches aren't expensive (I always eat at the same place, and it's $10/day if that...) but I always pay for them with the company card, mostly because it's always a group of us going to lunch so I mingle with the employees during lunch, and yes, they are a start-up so we are always talking business.... and I can't bill for this time obviously even though we are discussing business.

So does this sound okay? Either way, all of my deductions (zipcars, home office, meals, etc.) don't even total 10% of the gross income. But I still want to make sure I'm following the rules.

 

[EagleKeeper]

OK, here's the deal. I started an LLC where I'm doing Independent Internet Consulting. I have about 8 clients, and 2 of them want me on-site every so often (2-3 days a week total, I work about 4 days from home, as I work 7 days/week).

1) I have a home office. My apartment is small, but I have a section of my living room with a desk, chair, computer, and I only use it for my business. I live alone, so it's very easy to justify that.
Correct - expense the proportion of the floor space vs the overall living room. Use that percentage for all utilities also. Cell phone can be 100% business expense

2) I don't own a car. When my clients require me to travel to their location (work on-site), I rent a zipcar. I always re-imburse myself from the company's account for this zipcar, as it's traveling from my home office to my client. Is this correct?
Correct

3) When I'm home, I pay for my meals... whether I cook at home, order in, etc. When I'm on-site with a client, if it's dinner, I'll always pay for it with the company card, as it's a late night so for the convenience of the client that I'm there late. When I'm at one client, I always eat with the CTO, as I'm only on-site with them one day a week, so I expense those. Where my confusion lies here is the lunches I get when I'm on-site at my other client about 2 days/week... the lunches aren't expensive (I always eat at the same place, and it's $10/day if that...) but I always pay for them with the company card, mostly because it's always a group of us going to lunch so I mingle with the employees during lunch, and yes, they are a start-up so we are always talking business.... and I can't bill for this time obviously even though we are discussing business.
What you pay for yourself needs to be kept seperate than for the clients.
You can take 50% of meals away from the home office.
You can take 100% of the client meals as expenses

So does this sound okay? Either way, all of my deductions (zipcars, home office, meals, etc.) don't even total 10% of the gross income. But I still want to make sure I'm following the rules.

Recommendations are in bold

 

[mwtgg]

We are discussing the Federal Government, specifically, the IRS.:wub:

Do not try to confuse them any more than is needed.

Net cost should be entered.

It depends on AGI. Some of the premium assistance could be recaptured, but for married couples, AGI must be above $250k, so...

 

[manlymatt83]

Recommendations are in bold

Two questions.

1) Cell phone can be 100% business expense? I have a cell phone tied to me personally, so I just send myself $150/mo from the company, which ends up working out to 100% of the data plan, 100% of my mobile stick, and 50% of the actual cell plan. Is that okay?

2) For meals, what about when I'm on-site at a clients, and I go across the street to the food court, get food, and bring it back and eat it on-site with the clients in their cafeteria? As long as I'm eating with others, can I deduct my meal 50%? Just log who I ate with that day? Again, we always talk business, but I don't know if that's enough justification considering I'm eating in the office cafeteria with everyone else who paid for their own food...

EDIT: better way to ask #2... do I take 50% of ALL meals away from the home office, where I'm on-site at a client, or ONLY if I'm eating with others while on-site?

EDIT #2: Does it matter that my home office is NOT my mailing address for my company? I use earthclassmail.com, so they give me an address somewhere in Oregon.... however, my insurance policies for the company (errors and omissions, general liability) ARE tied to my apartment address.

 

[EagleKeeper]

Two questions.

1) Cell phone can be 100% business expense? I have a cell phone tied to me personally, so I just send myself $150/mo from the company, which ends up working out to 100% of the data plan, 100% of my mobile stick, and 50% of the actual cell plan. Is that okay?
The IRS has determined that a cell phone can be calssified as 100% business expense even though there may be some personal use

2) For meals, what about when I'm on-site at a clients, and I go across the street to the food court, get food, and bring it back and eat it on-site with the clients in their cafeteria? As long as I'm eating with others, can I deduct my meal 50%? Just log who I ate with that day? Again, we always talk business, but I don't know if that's enough justification considering I'm eating in the office cafeteria with everyone else who paid for their own food...

EDIT: better way to ask #2... do I take 50% of ALL meals away from the home office, where I'm on-site at a client, or ONLY if I'm eating with others while on-site?
50% of your food is deductible as a business expense when eating out as a result of business

EDIT #2: Does it matter that my home office is NOT my mailing address for my company? I use earthclassmail.com, so they give me an address somewhere in Oregon.... however, my insurance policies for the company (errors and omissions, general liability) ARE tied to my apartment address.It should not make any difference.

See Answers

 

[manlymatt83]

See Answers

Good to know, thanks!!

 

[manlymatt83]

One final question: Should I be cutting myself a monthly check from my LLC for the re-imbursement of my phone, data plan, home office, etc. or should I just deduct those on my schedule C at the end of the year and not take money out of the company monthly for it? What's better? I like the idea of a monthly automated check, that way the expenses are tracked in my expense system (which cuts the checks), but at the same time it makes it hard to change expenses at the end of the year...

 

[EagleKeeper]

One final question: Should I be cutting myself a monthly check from my LLC for the re-imbursement of my phone, data plan, home office, etc. or should I just deduct those on my schedule C at the end of the year and not take money out of the company monthly for it? What's better? I like the idea of a monthly automated check, that way the expenses are tracked in my expense system (which cuts the checks), but at the same time it makes it hard to change expenses at the end of the year...

With the exception of the home office expenses, why can not the company cut a check to the cell phone and internet providers directly?

This way, it shows on the company sheets like it should and you avoid the extra paperwork.

The proportional stuff, I would just use the Schedule C for.

 

[manlymatt83]

With the exception of the home office expenses, why can not the company cut a check to the cell phone and internet providers directly?

This way, it shows on the company sheets like it should and you avoid the extra paperwork.

The proportional stuff, I would just use the Schedule C for.

Well, my cell phone and data expenses are in my personal name. I didn't want to transfer my personal cell phone to the business when I started the company, even though I use it exclusively for business. So instead, I just cut myself $150/mo with the subject as "phone / data / data plan". My data plan is $29.99/mo and my external data stick is $42.99/mo and my portion of the $99/mo phone plan is $79/mo so that leaves $7 for personal calls (so it's a prorated amount of $150 my accountant said he was okay with).

So would it be better to not cut a check monthly to myself and instead just use schedule C at the end of the year?

 

[EagleKeeper]

Anything that is proportional, use the Schedule C

 

[manlymatt83]

Anything that is proportional, use the Schedule C

Alright. So if I pay $42.96 to t-mobile and want to cut myself a check for $42.96 from my company with "T-Mobile reimbursement", then do it that way. But if I'm going to proportionalize things ($150 total for a bunch of things), just use Schedule C at the end of the year?

 

[EagleKeeper]

Correct. I would think that your floor space and utilities should be more than the $150.

 

[manlymatt83]

Correct. I would think that your floor space and utilities should be more than the $150.

Yeah, me too.

Alright, so I'll re-imburse my t-mobile bill monthly from the company (which is what I do when I use a zipcar), since that data plan is ONLY used for my company. In fact maybe I'll try to get it put in the companies name so I can just have the company pay the bill directly.

At the end of the year, I'll partially deduct my monthly cell phone/data plan usage, home office, home internet, etc.

Sounds like a plan to me! Yeah, the arbitrary $150/mo (which I did for January and February) just didn't make too much sense to me. I'll put the $300 back in the company to cancel those out.

 

[manlymatt83]

One final question... you suggest I deduct any meals where I'm on-site away from my home office at a business location. But if I get audited, won't the IRS ask me to show the business purpose and/or who I ate with?

 

[EagleKeeper]

One final question... you suggest I deduct any meals where I'm on-site away from my home office at a business location. But if I get audited, won't the IRS ask me to show the business purpose and/or who I ate with?

On the receipt (you are keeping those - please say YES), log with whom you ate and enough info so that you can identify the client.

Purpose of the business does not have to be recorded. The fact that they are a client and/or polential client is enough

 

[manlymatt83]

On the receipt (you are keeping those - please say YES), log with whom you ate and enough info so that you can identify the client.

Purpose of the business does not have to be recorded. The fact that they are a client and/or polential client is enough

I scan every receipt then throw it out. I use freshbooks to track expenses and upload the receipt associated with the expense 🙂