ATOT's Second Annual Tax Time Thread!

[CPA]

Originally posted by: z0mb13
I have a question about the sales tax deduction.

I live in CA, and since I pay state income taxes, I can choose the sales tax deduction or the income tax deduction, right?

I bought a car in 2003, can I deduct the sales tax for this purchase now?

you can take either the sales tax or your income tax. you can not claim the sales tax from the 2003 car purchase.

 

[CPA]

Originally posted by: 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.

That's really a difficult question to answer, because who knows what your income will be for 2005. You can guesstimate, but life happens and any of a number of reasons can change your income dramatically from who you estimated to be.

I always take this approach: It's always better to have a dollar today then to wait for it tomorrow (long term investing excluded).

 

[alm99]

What do I do when I paid to much in Social Security and Medicare and how can I prevent it from happening again? What do I say to my employer about the issue?

 

[EagleKeeper]

Originally posted by: alm99
What do I do when I paid to much in Social Security and Medicare and how can I prevent it from happening again? What do I say to my employer about the issue?

The SS payments are capped at a certain income level.

Either your employer made a mistake in the calculations, did not attempt to check if you hit the limits, or you worked multiple jobs and the total pushed you over the limit.

The best thing is to let your employer know that you paid more than needed. They should then return the difference to you and adjust their bookkeeping.

If the problem is within one employer it becomes easy to ensure that it does not happen again.

Working with multiple employers, then puts the burden on you to keep track of the limits. An employer is not responsible for withholding limits done by other employers. They can correct an overage after the fact; they do not have to prevent the overage on their own. In fact, some may not want to stop it unless you can show that the overage has already happened during that particular tax year.

 

[alm99]

Originally posted by: EagleKeeper

Originally posted by: alm99
What do I do when I paid to much in Social Security and Medicare and how can I prevent it from happening again? What do I say to my employer about the issue?

The SS payments are capped at a certain income level.

Either your employer made a mistake in the calculations, did not attempt to check if you hit the limits, or you worked multiple jobs and the total pushed you over the limit.

The best thing is to let your employer know that you paid more than needed. They should then return the difference to you and adjust their bookkeeping.

If the problem is within one employer it becomes easy to ensure that it does not happen again.

Working with multiple employers, then puts the burden on you to keep track of the limits. An employer is not responsible for withholding limits done by other employers. They can correct an overage after the fact; they do not have to prevent the overage on their own. In fact, some may not want to stop it unless you can show that the overage has already happened during that particular tax year.

Thanks, its just one employer

 

[Engineer]

IRS exemption calculator (dependent withholding).

It's been some time since I've done one of these, but, because of credits and lower tax rates, my deductions increased from 4 (currently) to 9 (I'll change tomorrow). Handy tool.



Bring home more of your money and save/invest or pay off bills. Don't blow it!

 

[Yossarian]

I use my car for business (and personal use). I frequently have business lunches, can I count the mileage used for those lunches as business miles?

 

[cronos]

this is my first year filing as a resident alien for tax purposes (my sixth year as an international student, and have always previously filed as non-resident), and i have a question:

my wife is not working and not eligible to get a SSN because of her status (F2 Visa). am i eligible then to file as 'married filing jointly'? i know i'm not a 'single' because i'm definitely married (previously, since i filed as a non-resident, i had to file as 'single' even when in reality i'm married) and i'm also not a 'married filing separately' since my wife really doesn't have any income at all and doesn't have any reason to file tax on her own.

i also just heard about the Hope and Lifetime Learning credit and after reading it briefly just now i am under the impression that i can claim the Lifetime Learning credit (not the Hope, since 2004 is not on my first two years of study) based on the form 1098-T that i received from the university on segregation fees that i had to pay out of pocket in 2004.

 

[DurocShark]

Well, crap. I actually have a question:

My spouse (wife) didn't work at all in 04. Does she still have to file? Or can I file as head of household claiming the kids?

 

[EagleKeeper]

Originally posted by: Yossarian
I use my car for business (and personal use). I frequently have business lunches, can I count the mileage used for those lunches as business miles?

Yes.

The mileage can be entered on the Form 2106. You must itemize to use this Form.
Meals (business lunches) will also be valid (at a 50% rate).

 

[EagleKeeper]

Originally posted by: saxguy
this is my first year filing as a resident alien for tax purposes (my sixth year as an international student, and have always previously filed as non-resident), and i have a question:

my wife is not working and not eligible to get a SSN because of her status (F2 Visa). am i eligible then to file as 'married filing jointly'? i know i'm not a 'single' because i'm definitely married (previously, since i filed as a non-resident, i had to file as 'single' even when in reality i'm married) and i'm also not a 'married filing separately' since my wife really doesn't have any income at all and doesn't have any reason to file tax on her own.

i also just heard about the Hope and Lifetime Learning credit and after reading it briefly just now i am under the impression that i can claim the Lifetime Learning credit (not the Hope, since 2004 is not on my first two years of study) based on the form 1098-T that i received from the university on segregation fees that i had to pay out of pocket in 2004.

You should be able to file as married, however, you will need to file by paper and attach a statement/proof of marriage regarding the unavailability of an SS #.

 

[EagleKeeper]

Originally posted by: DurocShark
Well, crap. I actually have a question:

My spouse (wife) didn't work at all in 04. Does she still have to file? Or can I file as head of household claiming the kids?

File as married. You get the same benefits as HOH plus a couple of additional allowances that can show up.

Also, if you paid some-one to look after the kids while she was looking for work, that can be handled as a credit

 

[Yossarian]

thanks Eags.

 

[cronos]

Originally posted by: EagleKeeper
You should be able to file as married, however, you will need to file by paper and attach a statement/proof of marriage regarding the unavailability of an SS #.

thanks EagleKeeper.

 

[Megamorph]

I formed a LLC in 2003. I had intended to start up a website that could potentially generate some revenue. The website never happened, thus the LLC never had any revenue. I never did anything with it.

Do I need to file a tax return for this LLC?

 

[murban135]

I bought a mutual fund 10 years ago. Over the years I paid taxes on the capital gains dividends (from the Form 1099-DIV) that the the fund reported. Now I have sold the fund with a capital gain. Do I receive some relief from the capital gains taxes due to the taxes I paid over the years on the capital gains dividends?

 

[EagleKeeper]

Originally posted by: murban135
I bought a mutual fund 10 years ago. Over the years I paid taxes on the capital gains dividends (from the Form 1099-DIV) that the the fund reported. Now I have sold the fund with a capital gain. Do I receive some relief from the capital gains taxes due to the taxes I paid over the years on the capital gains dividends?

Yes but you have to figure out what the original gain is.

You have paid taxes on the dividends which translate into new shares each time.

Look at what the original cost/share was and what it is now.

That is your capital gain on the original number of shares.
All others have already been accounted for.

 

[CPA]

Originally posted by: Megamorph
I formed a LLC in 2003. I had intended to start up a website that could potentially generate some revenue. The website never happened, thus the LLC never had any revenue. I never did anything with it.

Do I need to file a tax return for this LLC?

Did you file a form 8832 to classify as a Corporation? Are you the sole member of the LLC?

 

[Megamorph]

CPA, I've never filed anything or done anything with the LLC.

Yes, I am the sole member.

 

[CPA]

Originally posted by: Megamorph
CPA, I've never filed anything or done anything with the LLC.

Yes, I am the sole member.

Then the IRS would consider you to file as a sole proprietorship, in which case you should not have to file a Schedule C.

 

[Megamorph]

Originally posted by: CPA

Originally posted by: Megamorph
CPA, I've never filed anything or done anything with the LLC.

Yes, I am the sole member.

Then the IRS would consider you to file as a sole proprietorship, in which case you should not have to file a Schedule C.

So the simple translation is that I don't have to do anything regarding this LLC? Sorry, but I really know nothing about taxes.

 

[EagleKeeper]

1) No income from the Web site

2) The IRS does not know about your

1+2 = No need to file anything regarding the LLC; just file your normal 1040

 

[NinjaGnome]

Where do I find last years AGI and what is it? Would it be on the W2's of last year or is it What In received on my return.

 

[EagleKeeper]

Originally posted by: NinjaGnome
Where do I find last years AGI and what is it? Would it be on the W2's of last year or is it What In received on my return.

It is on last years tax return that you filed.

The first line item on the forms is the gross income from W2s.

Then there are additional add ons (gaming/unemployment/interest, etc)
then there are subtractions (IRAs, etc).

===================================================

After both sections are completed, you end up with the Adjusted Gross Income.

===================================================

It is this income that the deductions are subtracted from. After deductions, then you have a taxable income.

From the taxable income, taxes owed are calculated.

Then credits and taxes paid are taken into account.

The remaining balance is either what you owe Uncle or overpaid to Uncle the past year.

 

[ub4me]

Thanks for your help last time.

I have one more question.
Yesterday, I sent my fed tax return electronically (just one W-2).
Today, however, I received another W-2 from the college that I graduated from.
Numbers are like this:
1. Wages: $28.57
2. Federal Income tax withheld: $0
4. Social security tax withheld: $1.77
6. Medicare tax withheld: $0.41
17. State income tax: $0
19. Local income tax: $0.63

After I received this W-2, I remembered that I gave a guest lecture for a class during the summer.
But at the time, I didn't think they would send me a W-2.

Is it OK to ignore? Or should I send this W-2 with explaination via mail?