ATOT's Second Annual Tax Time Thread!

[EagleKeeper]

Originally posted by: SarcasticDwarf
My small business (unregistered) is a website with book information that on the side has affiliate links to book sellers. Would it fall under 541990? I saw a listing for booksellers, but was confused as that seems more a B&M type thing.

The codes are not very accurate for professional work.
541990 is a nice catch all.

The IRS uses the codes to help classify the validity of expenses.

Certain codes will be expected to have expenses of certain types that are a higher percentage than other items.

 

[Turin39789]

I found some information on 1099's in here already but was unable to make much sense from it.


I was unemployed for a few months this year, but managed to get a few basic contract jobs, doing pc installation.

One of them sent me a w2 and took out taxes, GREAT.

The other one sent me a 1099-misc and this is my first time dealing with one.


I made 876.00 on this job over the course of several weekends, how much more complicated will this make my taxes. What do I need to do.

Thanks! You guys are lifesavers

 

[EagleKeeper]

Originally posted by: Turin39789
I found some information on 1099's in here already but was unable to make much sense from it.


I was unemployed for a few months this year, but managed to get a few basic contract jobs, doing pc installation.

One of them sent me a w2 and took out taxes, GREAT.

The other one sent me a 1099-misc and this is my first time dealing with one.


I made 876.00 on this job over the course of several weekends, how much more complicated will this make my taxes. What do I need to do.

Thanks! You guys are lifesavers

You have lucked out.

File your 1040 with a Schedule C
The 1099-Misc will be entered on the Schedule C as income.
Then you get the luxury of reducing that income with all sorts of expenses related to that job. Dig into this thread for ideas.
Remember that you can have expense totals that exceed the 1099. That will help reduce your overall taxable income.

All the related expenses will be entered in different catagories on the Schedule C.

 

[Led Zeppelin]

Question: I usually tele-file, but this year I closed my PO Box, where my forms always went to, and they never got forwarded to my home address. If I go to the post office to get the forms, do they have the security code that I need in order to telefile? Basically my question is, if I don't have the booklets they were supposed to send me, am I not able to telefile?

 

[EagleKeeper]

Originally posted by: BostonRedSox
Question: I usually tele-file, but this year I closed my PO Box, where my forms always went to, and they never got forwarded to my home address. If I go to the post office to get the forms, do they have the security code that I need in order to telefile? Basically my question is, if I don't have the booklets they were supposed to send me, am I not able to telefile?

No access code - no luck.

Find one of the free options listed on the IRS web site and enjoy the extra typing that you will have to do to e-file.

 

[Led Zeppelin]

Originally posted by: EagleKeeper

Originally posted by: BostonRedSox
Question: I usually tele-file, but this year I closed my PO Box, where my forms always went to, and they never got forwarded to my home address. If I go to the post office to get the forms, do they have the security code that I need in order to telefile? Basically my question is, if I don't have the booklets they were supposed to send me, am I not able to telefile?

No access code - no luck.

Find one of the free options listed on the IRS web site and enjoy the extra typing that you will have to do to e-file.

That's what I figured. Thanks for the reply.
How do I go about assuring that they send me the correct forms for next year? I have a forwarding address on file with the USPS, but based on my not getting any booklets this year, that's not good enough.

 

[EagleKeeper]

Originally posted by: BostonRedSox

Originally posted by: EagleKeeper

Originally posted by: BostonRedSox
Question: I usually tele-file, but this year I closed my PO Box, where my forms always went to, and they never got forwarded to my home address. If I go to the post office to get the forms, do they have the security code that I need in order to telefile? Basically my question is, if I don't have the booklets they were supposed to send me, am I not able to telefile?

No access code - no luck.

Find one of the free options listed on the IRS web site and enjoy the extra typing that you will have to do to e-file.

That's what I figured. Thanks for the reply.
How do I go about assuring that they send me the correct forms for next year? I have a forwarding address on file with the USPS, but based on my not getting any booklets this year, that's not good enough.

The IRS has stated that they will stop the tele-file program after this year. Not enough participation.

 

[Doggiedog]

I just got audited by the state tax authorities and found out I owe back taxes from 5 years ago. Does this mean my federal taxes will be audited as well? Its a pretty significant amount that my employer back then screwed me on.

 

[CPA]

Originally posted by: Doggiedog
I just got audited by the state tax authorities and found out I owe back taxes from 5 years ago. Does this mean my federal taxes will be audited as well? Its a pretty significant amount that my employer back then screwed me on.

Not necessarily. State laws differ from Federal. Generally, you can only be audited for the past 3 years, unless the IRS believes fraud was involved. This doesn't look to be the case. Either way, I suggest not doing anything unless the IRS approaches you.

 

[CPA]

Originally posted by: RIGorous1
Hi all,

In my USC financial adi package I recieved a cal grant, a pell grant, and a USC grant for $5000, 2000, and 5000 respectively. Do these count as income for my adjusted gross income? How about scholarships? Do scholarships count as taxable income? Also can I claim my book expenses for the lifetime Learning credit? Thanks

If you are a candidate for a degree, you generally can exclude from income that part of the grant used for:

1)Tuition and fees required for enrollment or attendance, or
Fees, books, supplies, and equipment required for your courses.

You cannot exclude from income any part of the grant used for other purposes, such as room and board.

A scholarship generally is an amount paid for the benefit of a student at an educational institution to aid in the pursuit of studies. The student may be in either a graduate or an undergraduate program.

If you used any of this money for personal purposes, you MUST include it as income.

2) The books can not be expensed under Lifetime Learning if you paid for them using your scholarships.

Publication 970 should have your answers. Look on page 5, it has a nice table describing what's taxable and what is not for scholarships.

 

[Doggiedog]

Originally posted by: CPA

Originally posted by: Doggiedog
I just got audited by the state tax authorities and found out I owe back taxes from 5 years ago. Does this mean my federal taxes will be audited as well? Its a pretty significant amount that my employer back then screwed me on.

Not necessarily. State laws differ from Federal. Generally, you can only be audited for the past 3 years, unless the IRS believes fraud was involved. This doesn't look to be the case. Either way, I suggest not doing anything unless the IRS approaches you.

Thanks C

 

[bunker]

My wife worked in a city that charged city income tax for a week, they took out 0.30. Should I bother filing this with that city?

 

[jbloggs]

I have a rental property and my understanding is I need to fill in Schedule S of the Tax forms. I also my understanding is that any repairs, cost of upkeeping, etc is considered an expense that I can deduct. Can you confirm this?

Also, if the rent paid is considered income, do I then consider the mortgage I pay on the house as an expense. And can I also deduct the interest I pay on the mortgage as I would do normally if it wasn't a rental and I lived there?

Is there anything else I should be aware of for file tax return that includes rental property?

Thanks in advance for any help you can provide.

 

[EagleKeeper]

Originally posted by: bunker
My wife worked in a city that charged city income tax for a week, they took out 0.30. Should I bother filing this with that city?

Gut feeling is that the city got their expected share.

Stamp alone will cost you $0.37

Also, most times the local municipalities are receive the tax revenue when it is collected /distributed by the state.

The state tax return may ask you about local taxes and handle it from there.

 

[EagleKeeper]

Originally posted by: jbloggs
I have a rental property and my understanding is I need to fill in Schedule S of the Tax forms. I also my understanding is that any repairs, cost of upkeeping, etc is considered an expense that I can deduct. Can you confirm this?

Also, if the rent paid is considered income, do I then consider the mortgage I pay on the house as an expense. And can I also deduct the interest I pay on the mortgage as I would do normally if it wasn't a rental and I lived there?

Is there anything else I should be aware of for file tax return that includes rental property?

Thanks in advance for any help you can provide.

Unsure about the Schedule S.

I do know that everything you are asking about is covered under the Schedule E.
You declare the income that the property generates and then also any mortgage interest and property taxes.
The mortgage itself is not deductible, however, Uncle allows you to depreciate the dwelling which acts as the same.
Expenses that you pay to maintain/upgrade are deductible along with any utilities that you may provide for the tennants.
Expenses for vehicle use w/ respect to the property are also deductible.
Tax S/W walks you through this area nicely.

 

[kyparrish]

Okay, I have a question. I've tried reading all of the posts here, but couldn't make it through, sorry if this has been asked before.

My wife and I were married on June 19th, 2004. She was living in South Carolina at the time, and moved in with me after we were married (I've lived in North Carolina the whole year). Her W-2 shows that she only had SC tax taken out over the course of the year.

I've planned on filing our federal return as "married, filing jointly," but how should I file our state returns, the same way? Will we both have to file state taxes in SC and NC? The NC return looks like you can calculate how much tax you owe based on how long you were a resident. So, even though I never lived in SC, would I still have to fill out a non-resident schedule for SC if we file jointly in SC?

Sorry for the horrible syntax

 

[EagleKeeper]

Originally posted by: kyparrish
Okay, I have a question. I've tried reading all of the posts here, but couldn't make it through, sorry if this has been asked before.

My wife and I were married on June 19th, 2004. She was living in South Carolina at the time, and moved in with me after we were married (I've lived in North Carolina the whole year). Her W-2 shows that she only had SC tax taken out over the course of the year.

I've planned on filing our federal return as "married, filing jointly," but how should I file our state returns, the same way? Will we both have to file state taxes in SC and NC? The NC return looks like you can calculate how much tax you owe based on how long you were a resident. So, even though I never lived in SC, would I still have to fill out a non-resident schedule for SC if we file jointly in SC?

Sorry for the horrible syntax

NC should have some arrangement with SC on taxes paid to the other state.
Best thing to do is since both of you live in NC, file the NC paperwork and follow instructions for handling out-of-state income.

We do not try to address state issues here (that is why you did not see answers).

 

[Turin39789]

Originally posted by: EagleKeeper

Originally posted by: Turin39789
I found some information on 1099's in here already but was unable to make much sense from it.


I was unemployed for a few months this year, but managed to get a few basic contract jobs, doing pc installation.

One of them sent me a w2 and took out taxes, GREAT.

The other one sent me a 1099-misc and this is my first time dealing with one.


I made 876.00 on this job over the course of several weekends, how much more complicated will this make my taxes. What do I need to do.

Thanks! You guys are lifesavers

You have lucked out.

File your 1040 with a Schedule C
The 1099-Misc will be entered on the Schedule C as income.
Then you get the luxury of reducing that income with all sorts of expenses related to that job. Dig into this thread for ideas.
Remember that you can have expense totals that exceed the 1099. That will help reduce your overall taxable income.

All the related expenses will be entered in different catagories on the Schedule C.

I'm not sure how much I lucked out. I was just one of many technicians working the job, falling under management there. I didn't keep any receipts and while I may be able to think up a few expenses, gas, buying doughnuts for other employees, etc I doubt I will be able to make a dent, and wont be able to prove any of them. Any suggestions or do i just take the hit?

 

[EagleKeeper]

Originally posted by: Turin39789

Originally posted by: EagleKeeper

Originally posted by: Turin39789
I found some information on 1099's in here already but was unable to make much sense from it.


I was unemployed for a few months this year, but managed to get a few basic contract jobs, doing pc installation.

One of them sent me a w2 and took out taxes, GREAT.

The other one sent me a 1099-misc and this is my first time dealing with one.


I made 876.00 on this job over the course of several weekends, how much more complicated will this make my taxes. What do I need to do.

Thanks! You guys are lifesavers

You have lucked out.

File your 1040 with a Schedule C
The 1099-Misc will be entered on the Schedule C as income.
Then you get the luxury of reducing that income with all sorts of expenses related to that job. Dig into this thread for ideas.
Remember that you can have expense totals that exceed the 1099. That will help reduce your overall taxable income.

All the related expenses will be entered in different catagories on the Schedule C.

I'm not sure how much I lucked out. I was just one of many technicians working the job, falling under management there. I didn't keep any receipts and while I may be able to think up a few expenses, gas, buying doughnuts for other employees, etc I doubt I will be able to make a dent, and wont be able to prove any of them. Any suggestions or do i just take the hit?

Spend the time needed to dig through allof this thread. Many ideas have been posted on items that can save you on the Schedule C.

It is up to you on how to proceed.
Every $10 that you dig up is probably worth $2-3 in your pocket.

 

[maziwanka]

i have a quick question. i'm trying to determine whether my 401k contributions are tax deductible. i'm guessing not, since they use pretax dollars anyways and it would seem like i get a double benefit of sorts.

im currently a 23 year old commuting to work in new york city (no stock investments other than through the employee stock purchase program and i haven't sold any stock that i've purchased) and im looking for possible deductions to use on my tax returns. i've already deducted my student loan interest but i can't think/find anything else. any other possible ideas? if this question is too broad to respond to, could you please point me in the direction of possible publications/websites to look at?

i didn't get a chance to scrounge through the 33 pages in this thread, so i'd appreciate any help. i will be a full time student in 2005-2006, if that helps at all.

thanks again, +ronnie

 

[EagleKeeper]

If your work does not have a pension/retirement plan you may be able to to start/fund an IRA for 2004.

Other than that, withthe exception of moving expenses to a new job, the only thing would be your school tuition payment.

If you are able to use the Schedule A then items on that can be used. You will have to have enough deductins to exceed your standard deduction

 

[CPA]

Originally posted by: maziwanka
i have a quick question. i'm trying to determine whether my 401k contributions are tax deductible. i'm guessing not, since they use pretax dollars anyways and it would seem like i get a double benefit of sorts.

im currently a 23 year old commuting to work in new york city (no stock investments other than through the employee stock purchase program and i haven't sold any stock that i've purchased) and im looking for possible deductions to use on my tax returns. i've already deducted my student loan interest but i can't think/find anything else. any other possible ideas? if this question is too broad to respond to, could you please point me in the direction of possible publications/websites to look at?

i didn't get a chance to scrounge through the 33 pages in this thread, so i'd appreciate any help. i will be a full time student in 2005-2006, if that helps at all.

thanks again, +ronnie

Eaglekeeper pretty much hit the nail on the head. If you can't itemize you are pretty limited. You could also have a buttload of kids, that would get you some tidy deductions

As for the 401K, since it is pretax your employer would not have included it in box 1 Gross Wages. In fact, It wouldn't be included in FICA and Medicare Gross wages either. So, you already have the benefit of the 401K taken out of your Gross wage that you are reporting.

 

[maziwanka]

Originally posted by: CPA

Originally posted by: maziwanka
i have a quick question. i'm trying to determine whether my 401k contributions are tax deductible. i'm guessing not, since they use pretax dollars anyways and it would seem like i get a double benefit of sorts.

im currently a 23 year old commuting to work in new york city (no stock investments other than through the employee stock purchase program and i haven't sold any stock that i've purchased) and im looking for possible deductions to use on my tax returns. i've already deducted my student loan interest but i can't think/find anything else. any other possible ideas? if this question is too broad to respond to, could you please point me in the direction of possible publications/websites to look at?

i didn't get a chance to scrounge through the 33 pages in this thread, so i'd appreciate any help. i will be a full time student in 2005-2006, if that helps at all.

thanks again, +ronnie

Eaglekeeper pretty much hit the nail on the head. If you can't itemize you are pretty limited. You could also have a buttload of kids, that would get you some tidy deductions

As for the 401K, since it is pretax your employer would not have included it in box 1 Gross Wages. In fact, It wouldn't be included in FICA and Medicare Gross wages either. So, you already have the benefit of the 401K taken out of your Gross wage that you are reporting.

working on your first suggestion now... hahahahha

eh. sucks i guess. i might have to pay 50 bucks in taxes to the gov.

 

[EagleKeeper]

Originally posted by: maziwanka
working on your first suggestion now... hahahahha

eh. sucks i guess. i might have to pay 50 bucks in taxes to the gov.

1-800-RENT_KID

 

[maziwanka]

Originally posted by: EagleKeeper

Originally posted by: maziwanka
working on your first suggestion now... hahahahha

eh. sucks i guess. i might have to pay 50 bucks in taxes to the gov.

1-800-RENT_KID

just wanted to say thanks to the both of you (EagleKeeper and CPA) for all the tax help.