ATOT's Second Annual Tax Time Thread!

[alkemyst]

Originally posted by: Zebo
Feeling lucky? Odds against finding big tax cheats

This is really about the BIG cheats. Those that have a lot of income coming from complex sources. The average working man with stocks/investments has about his whole financial history reported to various places basically in real time.

Now a lot of times the IRS sees 'minor' problems to them and ignores...however; they keep track then and once it becomes significant they will come after an individual...the kicker to this is your 3 year statute of limitations doesn't apply if you fraud....they will go back as far as they can and work up a sizable penalty.

 

[abc]

Originally posted by: EagleKeeper

Originally posted by: CPA

Originally posted by: abc

Originally posted by: EagleKeeper

Originally posted by: abc




How about everyone contribute $1 to an anandtech tax thread fund, funds divided amongst the annual experts?

While I like your last idea, keep in mind that it is NOT tax deductible.

Like he11 it is.:laugh:

You forgot that we set up that non-profit last Dec.:light:
Of course it has not made a profit or had a single donation yet.

really, i didnt know... and i'm sorry to read that... where was it set up?

 

[abc]

Originally posted by: EagleKeeper

Originally posted by: abc

Originally posted by: EagleKeeper
The only other option would be if you rented the house (or a portion) out.
Then the repair/maintenance costs become directly deductible against the rental income. Also, the property becomes depreciated, usually generating a paper loss that goes against the standard income tax from W2s.

lastly with regard to this suggestion, you do, or do NOT mean to suggest I would have been able to deduct:

60k in renovation costs (contractor labor, supplies) for the floor we live in, Also, 4k in flooring, 2.5k for fridge and oven... if only I had a renter in 2004?

If you started the renovations in 2004 with the intent of renting, and the renovations were not completed in time to rent out the unit in 2004, it is not your fault. The intent is still there. You could also have an transparent renter.

All of those costs plus depreciation and maintainence (+ utilities) would go against the rental income. If there is a "loss", then the loss (up to $25K) can go against your standard income. The "extra losss" will rollover year by year until it is used up.

ugh... i've been busy and now caught up with your insight... i've also since got my return back... cost me 130bucks... and she had nothing done with all the money spent in 2004 on renovating the place - to - be - rented for 2004 onward.

all she did was total it up, divide by two (between me and sibling) then set up to be ready to amortize/depreciate it for the 2005 tax year, when i visit her this time next year... since as I explained, I got a renter the beginning of this year... and thusly, am making rental income.

I got turbo tax now... I'm going to fiddle with it... I want to create a filing that pans out this transparent renter scenario... you mean put down ZERO for rental income, but put down the $30k was it, that I mentioned, the I spent for the contractor for that floor, plus about 11k I spent on supplies/tools?

plus newspaper ads in 2004 that didn't get me a renter in 2004, but did for 2005.

 

[abc]

oh no, i mean... i had a renter startind dec 2004, made 1k. had 30K+ in expenses.

the difference from that, I plug into which form?

 

[EagleKeeper]

Originally posted by: abc
oh no, i mean... i had a renter startind dec 2004, made 1k. had 30K+ in expenses.

the difference from that, I plug into which form?

All the information regarding the rental will go into the Schedule E.
Income and expenses.

IF the accountant did not seem to handle the situation properly, you should request some refund. Also, remember that her expenses are deductible for 2005.

 

[alkemyst]

If you can avoid this thread here: WOW JUST WOW!

and wisdom filled advice that an extra $20 to taxes each week is 'nothing'...

money compounding over a lifetime is lost on some people hence why people turn to experts and those that have filed in complex situations.

 

[sigpop]

Great job you experts. Any paypal link for your efforts?

Question about Job Expenses on Sched A lines 23-25. It looks like you have to spend more than 2 percent of your AGI to get any deduction. Is that correct? Sucks if that is the case...

 

[abc]

say, does selling my car to someone becomes my 'income'? I'm selling it for less than I bought it for. do I report that on federal income taxes?

 

[EagleKeeper]

Originally posted by: sigpop
Great job you experts.

Question about Job Expenses on Sched A lines 23-25. It looks like you have to spend more than 2 percent of your AGI to get any deduction. Is that correct? Sucks if that is the case...

Make sure you turn off the vacuum when you finish your taxes. Yes it sucks!!

However, it is the price that you are expected to pay to keep yourself qualified in the marketplace.

If you can give 10% of your income to a church or charity, then you should be able to spend 2% of it on yourself.

 

[EagleKeeper]

Originally posted by: sigpop
Great job you experts. Any paypal link for your efforts?

Thoughts regarding paypal are appreciated but not expected.

 

[EagleKeeper]

Originally posted by: abc
say, does selling my car to someone becomes my 'income'? I'm selling it for less than I bought it for. do I report that on federal income taxes?

Only if the vehicle was written off on taxes via a Schedule C, E of Form 2106.

Otherwise No

 

[abc]

Originally posted by: EagleKeeper

Originally posted by: abc
say, does selling my car to someone becomes my 'income'? I'm selling it for less than I bought it for. do I report that on federal income taxes?

Only if the vehicle was written off on taxes via a Schedule C, E of Form 2106.

Otherwise No

that's cool I guess thank you. see, since if you sell a pack of q-tips on ebay and get $2, you're supposed to report that as income right...

that's why I was wondering, if I were to sell a car, irrespective if I sold it for more or less than what I originally paid, did I have to put it somewhere come tax time.

 

[EagleKeeper]

Originally posted by: abc

Originally posted by: EagleKeeper

Originally posted by: abc
say, does selling my car to someone becomes my 'income'? I'm selling it for less than I bought it for. do I report that on federal income taxes?

Only if the vehicle was written off on taxes via a Schedule C, E of Form 2106.

Otherwise No

that's cool I guess thank you. see, since if you sell a pack of q-tips on ebay and get $2, you're supposed to report that as income right...

that's why I was wondering, if I were to sell a car, irrespective if I sold it for more or less than what I originally paid, did I have to put it somewhere come tax time.

Intention is the key:
Is the sale for a business gain or disposal of personal property.
Selling the box of Q-tips once is not a business. Selling cases of Q-tips is.

 

[abc]

accounting laws is WITCHCRAFT

 

[geno]

Guys, I kinda have a problem here

I was wondering if someone could help-

I'm 21 and I've been a college student since I was 18. Before this I was a high school student, both periods of which I had been working at least part time. My employers, and parents, told me (or at least I understood it as) that as long as I'm a student, I won't have to pay taxes since I can say I'm exempt. My mother also claims me as a dependent still, I don't know if this has any bearing on my situation. Now a couple of weeks ago, I get a letter from the IRS saying they don't have any of my tax forms starting from 1999 to 2003. They're now asking me to file past taxes all the way back to 99. I responded to them that I had been a student that whole time (they included a response form to explain if I didn't need to pay taxes). I'm guessing I'm way wrong here in believing I didn't have to pay taxes. They also sent me a 1040 form, but it appears that it's only for 2003.

Can someone please point my stupid self in the right direction? I think I've been miseducated for a long time on the issue and I need to get this straightened out soon or else I'll be in deep doo-doo If anyone can tell me at least how I go about filing taxes from back in 99, that would be a huge help since I need to get this rolling. Thanks SO much to anyone who can help!

 

[EagleKeeper]

Originally posted by: abc
accounting laws is WITCHCRAFT

Maybe we should burn all accountants at the stake (like Old Salem in the early 1800s):evil:

 

[CPA]

Originally posted by: geno
Guys, I kinda have a problem here

I was wondering if someone could help-

I'm 21 and I've been a college student since I was 18. Before this I was a high school student, both periods of which I had been working at least part time. My employers, and parents, told me (or at least I understood it as) that as long as I'm a student, I won't have to pay taxes since I can say I'm exempt. My mother also claims me as a dependent still, I don't know if this has any bearing on my situation. Now a couple of weeks ago, I get a letter from the IRS saying they don't have any of my tax forms starting from 1999 to 2003. They're now asking me to file past taxes all the way back to 99. I responded to them that I had been a student that whole time (they included a response form to explain if I didn't need to pay taxes). I'm guessing I'm way wrong here in believing I didn't have to pay taxes. They also sent me a 1040 form, but it appears that it's only for 2003.

Can someone please point my stupid self in the right direction? I think I've been miseducated for a long time on the issue and I need to get this straightened out soon or else I'll be in deep doo-doo If anyone can tell me at least how I go about filing taxes from back in 99, that would be a huge help since I need to get this rolling. Thanks SO much to anyone who can help!

You may have been exempt from tax withholding but that doesn't mean you still don't have to file. You might want to contact a tax attorney and see if he'll give you a free consulation. There are definitely certain steps that you should take when addressing the IRS.

 

[alkemyst]

Originally posted by: geno
I'm 21 and I've been a college student since I was 18. Before this I was a high school student, both periods of which I had been working at least part time. My employers, and parents, told me (or at least I understood it as) that as long as I'm a student, I won't have to pay taxes since I can say I'm exempt. My mother also claims me as a dependent still, I don't know if this has any bearing on my situation. Now a couple of weeks ago, I get a letter from the IRS saying they don't have any of my tax forms starting from 1999 to 2003. They're now asking me to file past taxes all the way back to 99. I responded to them that I had been a student that whole time (they included a response form to explain if I didn't need to pay taxes). I'm guessing I'm way wrong here in believing I didn't have to pay taxes. They also sent me a 1040 form, but it appears that it's only for 2003.

Can someone please point my stupid self in the right direction? I think I've been miseducated for a long time on the issue and I need to get this straightened out soon or else I'll be in deep doo-doo If anyone can tell me at least how I go about filing taxes from back in 99, that would be a huge help since I need to get this rolling. Thanks SO much to anyone who can help!

Being exempt as a full-time student is a falacy. Many believe it though: http://www.irs.gov/faqs/faq-kw186.html

If you mother is claiming you, you cannot claim yourself...if you are gainfully employed and supporting yourself this usually is not a good thing for you. It works out good for parents though .

You are sort of in a catch-22. You reporting yourself is going to get you fined usually...it's really a no-win situation. I am not sure if they'd be lenient on a student more than a private sector individual, but my brother reported on his own small-business (gross 7 figure income) that the first two years he filed incorrectly and sent in a check for the difference (which was something like $10k or so)....they fined him, retroactively penalized him and in the end that tax burden was more than his total profit/income for the first three years of his business.

I'd first figure out what you really owe (if you didn't actually owe, there is never a penalty for not filing as far as I know on the federal level)....if you were only owed money back (which is possible depending on circumstances) then you don't have to worry. You will probably have to discuss this with your parent(s) and a lot of times they become a barrier in solved these kinds of problems.

Next, if there does appear to be a problem, I would get to a good tax attorney, they usually know someone on the 'inside' that can help things along.

Good luck with that

 

[EagleKeeper]

Originally posted by: geno
Guys, I kinda have a problem here

I was wondering if someone could help-

I'm 21 and I've been a college student since I was 18. Before this I was a high school student, both periods of which I had been working at least part time. My employers, and parents, told me (or at least I understood it as) that as long as I'm a student, I won't have to pay taxes since I can say I'm exempt. My mother also claims me as a dependent still, I don't know if this has any bearing on my situation. Now a couple of weeks ago, I get a letter from the IRS saying they don't have any of my tax forms starting from 1999 to 2003. They're now asking me to file past taxes all the way back to 99. I responded to them that I had been a student that whole time (they included a response form to explain if I didn't need to pay taxes). I'm guessing I'm way wrong here in believing I didn't have to pay taxes. They also sent me a 1040 form, but it appears that it's only for 2003.

Can someone please point my stupid self in the right direction? I think I've been miseducated for a long time on the issue and I need to get this straightened out soon or else I'll be in deep doo-doo If anyone can tell me at least how I go about filing taxes from back in 99, that would be a huge help since I need to get this rolling. Thanks SO much to anyone who can help!

One of the steps that you will need to take is locate all of your back tax paperwork (W2s, 1099-I, etc) for each of the missing years.
Then either try to locate copies of the 1040 tax booklets for each year that you did not file.

Go through the exercise of preparing the 1040 for every year. Because you were claimed as a dependant, make that dependant is the status that you use on the form and when calculating the tax.

Even if you get a tax professional (as CPA indicated) they will need all that information to help you.

You may have to visit your local IRS office to request copies of the 1040 booklets for each back year and also request copies of any financial paperwork that they have on you. Those back forms will not be available anywhere else but via the IRS. You may be able to locate them on their web site, but do not count on it.

You may not have to bend over, but you will need to be humble.

Some people may have old copies of Tax S/W going back a few years, however, you will need to locate your paperwork no matter what even if you try to look at that route.

Also, Uncle may notify Aunty Mass, so be prepared for her to step up and tap you on the shoulder.

 

[geno]

Awesome, thanks a ton guys I'll get this straightened out ASAP... I hope I don't owe too much

If anyone's in the same situation as me and needs past 1040's, I found the section on irs.gov where you can print them out:

Link

 

[abc]

say, i think i paid like 17k in house purchase closing costs. aren't the deductible entirely or partially... and if not entirely, would more of it be deductible if I had a renter?

i'm trying to look at my itemized 1040 and I don't see anything relating to my closing costs. I only see mortage insurance stuff and property tax stuff.

 

[EagleKeeper]

Originally posted by: abc
say, i think i paid like 17k in house purchase closing costs. aren't the deductible entirely or partially... and if not entirely, would more of it be deductible if I had a renter?

i'm trying to look at my itemized 1040 and I don't see anything relating to my closing costs. I only see mortage insurance stuff and property tax stuff.

For the rental property, you will have the Schedule E.
On the 1040, closing costs are not deductible with the exception of government imposed fees/taxes.

Posts above have dealt with what is deductible for a private person.
for rental property, the closing costs that are not deductible need to be proportioned between the retnal and personal use.

Then the rental proportion will be depreciated according the the IRS schedule. It has become part of the cost basis for the rental property.

 

[abc]

what is defined as rental property.

if the mutifloor property which I live in, but rent 1fl... considered 'rental property' yes?

 

[abc]

so based on what you're saying... and based on my 2 flr house....

17k divided by 2 (1 fl rent, 1 fl not rent) = 8.5k



8.5k cannot do anything with

8.5k amortized over 27.5yrs.

 

[abc]

what's the difference between:

real estate tax

vs.

personal property tax


on my return, looks like what i paid in property taxes was placed on the 'real estate tax' column, while presonal property tax column had nothing.