ATOT's Second Annual Tax Time Thread!

[rudeguy]

just a quick question. I got my W2, and it says that I did not pay any state tax. I have my final paycheck stub that shows that I did. My employer claims it was a mistake and that a corrected W2 is on its way. I know that I will never see that W2 (my employer likes to put things off until its mission critical).

My question is, can I just file my state taxes using the number from my final pay stub? The numbers dont match up for my federal taxes, so I am pretty sure they won't be the same for state. I don't want to risk an audit over this.

 

[EagleKeeper]

Originally posted by: Tomato

Originally posted by: EagleKeeper
Unless your itemized deductions exceed your standard deductions, the charity will only give you the warm fuzzy as explained earlier.

Have you totaled out your state income tax paid and added that total to the charitable contribution.

Single/Married?

From what information has been provided, you may not have the need to itemize.

:thumbsup: for warm fuzzies, :thumbsup::beer: if I can get more taxes back.

I haven't added my state income tax paid to the charitable contribution... sorry to sound like a complete tax n00b, but how would I do that?

Single (engaged) at the moment, hopefully married in December.

Use one of the on-line sites to attempt to prepare the taxes.

Just do not go to the point of completion where they want you to pay.

The site will be able to indicate what form will be used. If the 1040/Schedule A, it will be due to the deductions is greater than the standard.
Otherwise they will recommend the 1040EZ or 1040A.

YOu couild also try the referenced spreadsheet (courtesy of Buster). That will allow you to see what will work.

Originally posted by: busterTI
Someone may find THIS usefull.

 

[EagleKeeper]

Originally posted by: KK

Originally posted by: EagleKeeper

Originally posted by: KK

Originally posted by: EagleKeeper
That information would fall in line with the Lifetime Learning Credit.

If the tutition was paid for 2004 classes, it will be asked for by TaxCut when determining adjustments to income.

You will be asked if anyone when to school.

I went thru the taxcut adjustment process, I didn't get asked about it. Only something about education dealing with student loans. I searched for Form 8863 and it pulled up an Education Credits(Hope and Lifetime Learning Credits) Can you fill me in what this Lifetime Learning credit is all about.

Here's the situation surronded why we received this form. My wife(a teacher) took some classes to pick up an advanced degree. We paid for the class out of pocket.

Thanks

Lifetime Learning Credit is used to compensate for out of the pocket expenses for education after the first two years of college or continuing educations.

You are able to receive a credit against taxes owed of 20% of what was paid. There is a limit on how much can be claimed each year and there is also an upper income limit. One can not file your return as married-seperately.


IRS- FAQ - Lifetime Learning Credit

The Lifetime Learning Credit is not based on the student's workload. It is allowed for one or more courses that the student takes at an eligible educational institution. The credit is not limited to students in the first two years of post?secondary education. Expenses for graduate?level degree work are eligible. However, to be eligible for the credit, the student must be taking course work in order to acquire or improve job skills. There is no limit on the number of tax years for which the Lifetime Learning credit can be claimed for each student. The amount you can claim as a credit does not vary (i.e., increase) based on the number of students for whom you pay qualified expenses. However, that amount may be reduced based on your modified AGI. The credit is gradually reduced if your modified AGI is between $42,000 and $52,000 ($85,000 and $105,000 in the case of a joint return). You cannot claim the credit if you are married filing a separate return.

Here's how I interpreted the IRS FAQs. Let me know how far I am from reality.
If we paid 1000 we would get a 200 credit?

Thanks

Edit, went under the credits section and it mentioned the 1098-T, put in the figure and it put it under tuition credit. The lifetime learning credit was about 1/5 of what the tuition credit was.

Correct

 

[EagleKeeper]

Originally posted by: GoodDad
just a quick question. I got my W2, and it says that I did not pay any state tax. I have my final paycheck stub that shows that I did. My employer claims it was a mistake and that a corrected W2 is on its way. I know that I will never see that W2 (my employer likes to put things off until its mission critical).

My question is, can I just file my state taxes using the number from my final pay stub? The numbers dont match up for my federal taxes, so I am pretty sure they won't be the same for state. I don't want to risk an audit over this.

If the W2 does not match up with the Fed, then you have two choices.

Either way, wait until the end of next week, to allow your employer enough rope to hang himself. You may wish to ask on Tues if the corrections were sent out. If the answer is negative, advise him of the Federal penalty of $250/W2 that is not sent out.

Then if a corrected W2 is not arrived, you can

1) Either wait until it arrive, reminding the employer that he is breaking federal law and will be fined $250 per W2 that was not sent out on time. (Inotherwords, hint, hint to him)

2) File a Federal with the information that you have on the W2(on the assumption that it must be accurate) because the promised correction never showed up. When the corrections show, then file a 1040X with the ammended numbers. The same could be done for the State, however, you should estimate the stae numbers based on your last paystub for 2004 and decide if it is worth it. If you are itemizing, the state tax numbers will be critical.

 

[EagleKeeper]

Originally posted by: Rage187
Figured I'd ask this here.


I live in NV and my wife lives in SC, how do we file?

Your choice. You can file jointly or married filing seperately. Kids could allow head of househiold status for one and single for the other (unless kids are split between parents)

Jointly will allow more deductions/credits to be available.

Seperately if the number pan out better for you.

That is where the advantage of Tax S/W comes into play.

Build a master file as joint. Make two copies and in each copy strip out the other spouse's income and decutions. Compare which will be more benificial. A lot easier than figuring it out by hand.

Note: the online systems do not alow you to duplicate the information, it must be re-entered for each dummy return.

Many states will require you to file using the same status as was done for the Feds.

 

[EagleKeeper]

Originally posted by: upsciLLion
Nnnnnnnnnnnnnnevermind.

Some times the answer is under your nose

 

[FatJackSprat]

I started my own part-time law firm this year. I spent about four times its earnings to get it set up.

I have already expensed enough items to cover all of its income.

Should I use the Bonus Depreciation for the remaining items that qualify for it. I am thinking that by taking less depreciation on those items this year I will have more depreciation left on them in later years. I am reporting all of this on my personal 1040.

Thank you.

 

[Freejack2]

My wife an I both attended college this year, however I had to withdraw (hopefully temporarily) after may due to work. At the end of the year my loans came due and I made a payment on them in 2004. Can I claim both the lifetime learning credit and the interest accrued on my student loans, just one, or neither?

Thanks.

 

[FatJackSprat]

This kind of goes with my first question two posts above.

Will a business loss reduce the tax on the income I receive from my employer?

 

[EagleKeeper]

Originally posted by: FatJackSprat
This kind of goes with my first question two posts above.

Will a business loss reduce the tax on the income I receive from my employer?

If the business is identified using Schedule C, yes.
Losses can offset W2 wages.

 

[EagleKeeper]

Originally posted by: Freejack2
My wife an I both attended college this year, however I had to withdraw (hopefully temporarily) after may due to work. At the end of the year my loans came due and I made a payment on them in 2004. Can I claim both the lifetime learning credit and the interest accrued on my student loans, just one, or neither?

Thanks.

Both are valid line items.

Lifetime can apply to both your wife and yourself (unless she is in first 2 years)

 

[KoolAidKid]

Quick question: I am considering minimizing/eliminating the money withheld from each paycheck for state and federal taxes. I plan to set up an automatic withdrawal to my ING savings account to earn interest on the money I would have had taken out for taxes. Then, close to the end of the year, I will estimate my tax liability and send the IRS a tax payment to cover my tax liability. Other than underestimating my tax liability and getting penalized, what is the problem with this practice? Why don't more tax professionals recommend it?

 

[Freejack2]

Thanks, wife isn't in first 2 years so it's a lifetime credit for her too.

Originally posted by: EagleKeeper

Originally posted by: Freejack2
My wife an I both attended college this year, however I had to withdraw (hopefully temporarily) after may due to work. At the end of the year my loans came due and I made a payment on them in 2004. Can I claim both the lifetime learning credit and the interest accrued on my student loans, just one, or neither?

Thanks.

Both are valid line items.

Lifetime can apply to both your wife and yourself (unless she is in first 2 years)

 

[EagleKeeper]

Originally posted by: KoolAidKid
Quick question: I am considering minimizing/eliminate the money withheld from each paycheck for state and federal taxes. I plan to set up an automatic withdrawal to my ING savings account to earn interest on the money I would have had taken out for taxes. Then, close to the end of the year, I will estimate my tax liability and send the IRS a tax payment to cover my tax liability. Other than underestimating my tax liability and getting penalized, what is the problem with this practice? Why don't more tax professionals recommend it?

Below are at least three reasons:

1) It is considered slightly un-ethical (from the point of view of your favorite Uncle)

2) Many people will not have the disipline to save the money.

3) Some people will not remember to pay the money before the end of the year. Holidays can be a distraction.

Best way to get an estimate of the tax liability if you can not get the forms before the new year, would be to look at the difference between the normal withholding and the reduced withholding over a pay period.

That can the provide a decent estimate on what to send in at the end of the year. times number of pay periods

Aslo

IRS - FAQ - Topic 355 - Estimated Tax

The federal income tax is a pay?as?you?go tax. This means the tax must be paid on income as it is received. Tax is generally withheld from your wages or salary before you receive it,

Generally, you should make estimated tax payments for 2005 if you will owe tax of $1,000 or more, after withholding and credits, and the total amount of tax withheld and your credits will be less than the smaller of:

90% of the tax to be shown on your 2005 tax return, or
100% of the tax shown on your 2004 tax return, if your 2004 tax return covered all 12 months of the year. However, if your 2004 adjusted gross income exceeded $150,000, or $75,000 if you will file a separate return from your spouse for the year 2005, then your tax withheld and credits must total 110% instead of 100% of your 2004 tax.

 

[alent1234]

it's going to be a good tax year

the wife and I made about $120,000 gross and by my early estimates before I got all the w-2's is that we have a liability of around $11,000 for taxes for the whole year. Instead of 28% we will pay less than 10% in income taxes

down with the flat tax

 

[spidey07]

gambling

Have W2-G that was filed when I took about 2K from casino in 2004.

Have about 3K of winning pony tickets that I haven't cashed from 2004 (they all requie you to fill out a W2-G) to cash them, over 600 bucks each.

I didn't cash them because I figured I would cash them in 2005 and spread it out so to speak. Do I have to claim those winnings in 2004? I'm getting ready to cash them and don't want to claim them in 2004.

 

[ub4me]

Hi,

I began to work for a small local church as a secretary last year.
Since I have a little bit more computer skill and knowledge than others in my church, sometimes people ask me to fix their problematic computers, or install wireless router or home networking.
Then after I looked after their problems/setup, they usually gave me $50-$150 as gratitute even though I didn't ask any money.
It happned about 12 times last year, and its total is $1450.
My question is do I need to report it as income? If so, what kind of income category do I need to report ?
Thanks in advance for your time.

 

[petejk]

I need to restate stock losses for 2003 that i never did last year....

what form do i need to fill it out....i knew what it was before...but i forgot...

THANKS!

 

[alent1234]

Originally posted by: ub4me
Hi,

I began to work for a small local church as a secretary last year.
Since I have a little bit more computer skill and knowledge than others in my church, sometimes people ask me to fix their problematic computers, or install wireless router or home networking.
Then after I looked after their problems/setup, they usually gave me $50-$150 as gratitute even though I didn't ask any money.
It happned about 12 times last year, and its total is $1450.
My question is do I need to report it as income? If so, what kind of income category do I need to report ?
Thanks in advance for your time.

legally yes and I think it's in the other income or business income. then you can deduct anything you used to make that income.

in reality you would be a fool to do so since it's cash

 

[petejk]

Originally posted by: petejk
I need to restate stock losses for 2003 that i never did last year....

what form do i need to fill it out....i knew what it was before...but i forgot...

THANKS!

If anyone needs to know....its the 1040X form!

PEACE!

 

[StageLeft]

Thanks for the thread! I have a question: Can I deduct my student loan interest? I took it out from a canadian lender (RBC, in the form of a credit line). I'm making payments on it and according to pub 970 my education qualifies except for the section on page 26 where it says you're eligigble if your school school was eligible to participate in a student aid program administered by the Deapartment of Education. My school was ITI (It's kind of a post-grad IT diploma thing). They had no US schools at the time. I don't know if they were eligible, and the link in pub 970 does not work (tells you how to find out).

I guess my question is did my school have to participate at the time in this dept of education thing? If not, and I presume mine didn't, then I can get no money back?

 

[ub4me]

Originally posted by: alent1234

Originally posted by: ub4me
Hi,

I began to work for a small local church as a secretary last year.
Since I have a little bit more computer skill and knowledge than others in my church, sometimes people ask me to fix their problematic computers, or install wireless router or home networking.
Then after I looked after their problems/setup, they usually gave me $50-$150 as gratitute even though I didn't ask any money.
It happned about 12 times last year, and its total is $1450.
My question is do I need to report it as income? If so, what kind of income category do I need to report ?
Thanks in advance for your time.

legally yes and I think it's in the other income or business income. then you can deduct anything you used to make that income.

in reality you would be a fool to do so since it's cash

I got it.
So, if I received it as check, I need to report those as "Other income" Right?

 

[MSCoder610]

Hi, hopefully this wasn't already answered, but none of the scholarship posts I saw quite applied to my situation.

I got a 1098-T from my university, showing $14,080 in scholarships for 2004, and $5817 for tuition and other qualified expenses.
I'm 18, and my mom still claims me as a dependent.
The online filing service I'm using right now, after I input my 1098T, puts all 14080 for taxable income, then puts the 5817 (which becomes 4000) as the education deduction. But, I'm not eligible for that, since someone claims me as a dependent.
If all $14080 is taxed and I can't deduct the tuition and such, I'd be paying a lot more taxes than I would expect.

Is what the service did correct (i.e. "tuition must be on the education deduction, which I can't claim"), or can I adjust the reported taxable income to (scholarships minus tuition/expenses) myself?

Thanks in advance, hopefully my question isn't too confusing.

 

[EagleKeeper]

Originally posted by: spidey07
gambling

Have W2-G that was filed when I took about 2K from casino in 2004.

Have about 3K of winning pony tickets that I haven't cashed from 2004 (they all requie you to fill out a W2-G) to cash them, over 600 bucks each.

I didn't cash them because I figured I would cash them in 2005 and spread it out so to speak. Do I have to claim those winnings in 2004? I'm getting ready to cash them and don't want to claim them in 2004.

Gaming losses can offset winnings (as long as they can be documented).

Therefore the 2K in casino moneyh can be offset as income by declaring $2K in losses. You are not allowed to have losses greater than winnings.

With respect to the uncashed Pony ticket, it will be up to the track on how it is handled.

If they handle it as when the race occurred, then they count against 2004 income and will provide 2004 W2-G.

If they go by when the ticket was cashed, then it becomes 2005 income. You do not have control over it.

However, if you have had losses at the track, they can offset the winnings also.

If you file 2004 and then find out that the tickets belong in 2004 income, you will have to file a 1040X.

And if you try changing the gaming losses in the 1040X to offset the missing tickets , it will increase the chance of generating a red flag to the IRS.

 

[EagleKeeper]

Originally posted by: ub4me
Hi,

I began to work for a small local church as a secretary last year.
Since I have a little bit more computer skill and knowledge than others in my church, sometimes people ask me to fix their problematic computers, or install wireless router or home networking.
Then after I looked after their problems/setup, they usually gave me $50-$150 as gratitute even though I didn't ask any money.
It happned about 12 times last year, and its total is $1450.
My question is do I need to report it as income? If so, what kind of income category do I need to report ?
Thanks in advance for your time.

You can choose to either ignore it, list it as other income or treat it as business income using a Schedule C

The benifits of Schedule C is that you can the write off expenses incurred in the pursuit/support of income. Those expenses can exceed the actual income and do not require itemization via the Form 2106/Schedula A limtiations.