- Oct 30, 2000
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Some states will provide you with a credit toward the state tax based on rent paid.
There is no such thing for Federal.
There is no such thing for Federal.
so it doesn't sound like i can claim them as dependent. But what is this gift giving form (709) that I saw from the IRS? Can I get returns for giving 10,000 to my parents as gift?
- Nov 19, 2001
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I'm not sure I understand your question. But if you're asking if you can see a tax benefit from giving the gifts you are thinking the wrong way. You are allowed to "gift" $11000 annually to a participant. After that, you are subject to paying a "Gift Tax".
- Oct 30, 2000
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IRS - FAQ - Gift Tax
IRS - FAQ - Gift Tax - Form 709
It looks like there is a 20% penalty for handing out money to fast.
IRS - FAQ - Gift Tax - Form 709
It looks like there is a 20% penalty for handing out money to fast.
So there's no tax benefit for me to give them 10000 and on top of that I have to pay tax if it's more than 11000? I gave them more than 11000 but not all at the same time. Would that still apply?
Thanks a lot!!
- Oct 30, 2000
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It is on a per year basis.
Also, the limit is for one person.
It you gave it to both then the amount given would be equivalent to close to $5k / person.
That may avoid the gift tax.
The only tax benefit you can have is if you can declare them as dependants. They must meet the test guidelines that have been previously asked and posted for others.
okay, my sibling and I met an accountant today and in the course of the meeting, we ironed out some 'findings' that I want to run by you experts here...
1. Suggestion that I claim 'Head of household' and take my mom.
My sibling also claims 'Head of Household' BUT claims my dad.
Therefore we both can be heads for each parent.
1a. Will be done next year, since for the 2004 filing, the folks had SOLD stocks (a loss). Selling stocks, showing posession of stocks by parent, eliminates you from being able to claim Head of Household.
I'm not to kosher on 'splitting' the parents, would that work... afterwards I was thinking, I'm not sure if the stock account where stocks were sold were a joint mom/dad account, or was it only my dad. If it was only my dad, can't either me or my sibling file as Head for my mom.
1. Suggestion that I claim 'Head of household' and take my mom.
My sibling also claims 'Head of Household' BUT claims my dad.
Therefore we both can be heads for each parent.
1a. Will be done next year, since for the 2004 filing, the folks had SOLD stocks (a loss). Selling stocks, showing posession of stocks by parent, eliminates you from being able to claim Head of Household.
I'm not to kosher on 'splitting' the parents, would that work... afterwards I was thinking, I'm not sure if the stock account where stocks were sold were a joint mom/dad account, or was it only my dad. If it was only my dad, can't either me or my sibling file as Head for my mom.
- Oct 30, 2000
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If your parents file tax returns, you could have a serious problem with splitting and taking as dependants. The problem is that you will have to show that what benifits that you provide for one parent is not usable by the other.
If audited, you (plural) would have to show that the cost of providing all expenses for one parent was not used by the other. If the parents are living together, that would be difficult.
Your best bet is to go for alternating years and claiming both with a head of household.
the difference is only 1 expemption and it is not worth the possibilty of triggering trouble.
Remember the IRS will have a history of both parents previously and may get suspicious if they are broken up. And the parents will not be able to file a joint return in the year that they will be claimed by the children.
Okay, part II from today's meeting...
My sibling and I EQUALLY share a mortgage. Got a house, and split everything down the middle.
1. Notably, 60k in renovation costs (contractor labor, supplies) for the floor we occupy. Deductible in any way? Also, 4k in flooring, 2.5k for fridge and oven.
2. 36k in renovation costs (contractor, labor, supplies) for floor we renovated for purpose of renting. Deductible?
Further, another 11k in supplies, fixtures, tools we bought ourselves because we picked what we wanted installed, and because we did some work as well.. aka painting.
1.What the accountant said is anything spent on the floor we occupy, we can't utilize any of the costs incurred.... Sure there's no way? Is this renovation just going to add value to the house and do nothing for taxes?
2.With the floor that incurred the 36k plus 11k, she said she will add the two together, split it in half so me and my sibling can utilize this deduction equally, and AMORITIZE it through 27.5 years.
Is this the best way?... over the span of 27.5 years, which when I asked how she nominated that number, she said it's a typical by the book number kind of thing, 36+11 pans out to very little in terms of tax deduction power.
My sibling and I EQUALLY share a mortgage. Got a house, and split everything down the middle.
1. Notably, 60k in renovation costs (contractor labor, supplies) for the floor we occupy. Deductible in any way? Also, 4k in flooring, 2.5k for fridge and oven.
2. 36k in renovation costs (contractor, labor, supplies) for floor we renovated for purpose of renting. Deductible?
Further, another 11k in supplies, fixtures, tools we bought ourselves because we picked what we wanted installed, and because we did some work as well.. aka painting.
1.What the accountant said is anything spent on the floor we occupy, we can't utilize any of the costs incurred.... Sure there's no way? Is this renovation just going to add value to the house and do nothing for taxes?
2.With the floor that incurred the 36k plus 11k, she said she will add the two together, split it in half so me and my sibling can utilize this deduction equally, and AMORITIZE it through 27.5 years.
Is this the best way?... over the span of 27.5 years, which when I asked how she nominated that number, she said it's a typical by the book number kind of thing, 36+11 pans out to very little in terms of tax deduction power.
- Oct 30, 2000
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The sales tax break that was passed this year may help you.
CPA has a link to info in the original post.
You can look into the sales tax cost for building improvements as something on the Schedule A. However, it must be balanced aginst what an state income tax credit would be.
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.
CPA has a link to info in the original post.
You can look into the sales tax cost for building improvements as something on the Schedule A. However, it must be balanced aginst what an state income tax credit would be.
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.
eagle, i discussed the new sales tax law, not with respect specifically with all the home improvement supplies, but in a general sense, and brought it up also in light of having purchased a car.
she leaned on fear that claiming this sales tax deduction might make my return show up more likely on the radar... she rather just take the state and local income tax rather than bother with persuing any sales tax deduction.... so my sibling and i left it at that... would you have no fear in taking advantage of the sales tax deduction.
she leaned on fear that claiming this sales tax deduction might make my return show up more likely on the radar... she rather just take the state and local income tax rather than bother with persuing any sales tax deduction.... so my sibling and i left it at that... would you have no fear in taking advantage of the sales tax deduction.
thanks for your info thus far eagle... regarding 'if i had rented it out'... I do rent it out... now (01/01/05)... I guess you mean HAD I rented it out during 2004, I could use the 36k+11k to DIRECTLY negate rental income?
Instead of now having to amortize it as per the suggestion during my meeting today? So you agree with the amortizing, and term of 27.5 yrs?
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?
- Oct 30, 2000
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Check out what the benifit of the sales tax vs income tax.
For most everyone, the income tax is much more benificial. The sales tax was put into place to help those of us that live in a no-income tax state.
- Oct 30, 2000
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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.
- Oct 30, 2000
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The amortization time is a fixed IRS time frame. All you would be doing is increasing the value of the place and writing it off over the time frame. Amortization is another word for depreciation.
MrChad
Lifer
- Aug 22, 2001
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Ok, WTF is up with NY taxes?!? I am up to my eyeballs in tax PDF forms and it's making my head spin.
My tax situation is fairly simple:
Moved from MD to NY in early August and changed jobs at the same time
No capital gains/losses to worry about
No education expenses
I filled out my 1040 along with a 3903 for a moving fee credit. Simple enough.
I filled out my MD 502 (resident) which was also quite simple.
Now to NY. I start with a 203 form (Nonresident or part-time resident). Then I need a 203B and 360.1 form for my "Other NY City" taxes. Since NY city taxes aren't listed on my W2s, I owe nearly $800 to the state! (I wonder why city taxes weren't withheld; my fiancee works for the city (teacher) and she doesn't have city withholdings either). Not only that, I apparently owe a penalty (2105.9) because my actual withholdings were so off the mark of what I actually owe.
Also, there are specific instructions regarding sales/use tax. I've always heard that states require you to report this, but how strictly is it enforced? I never reported out-of-state purchases in MD.
As an aside, NY has possibly the most CRYPTIC forms and instructions I've ever had to deal with. WAY worse than MD or even the federal return. :|
/rant
Sorry, no real specific questions except for why city taxes aren't listed on my W2 and what to do about sales/use tax.
My tax situation is fairly simple:
Moved from MD to NY in early August and changed jobs at the same time
No capital gains/losses to worry about
No education expenses
I filled out my 1040 along with a 3903 for a moving fee credit. Simple enough.
I filled out my MD 502 (resident) which was also quite simple.
Now to NY. I start with a 203 form (Nonresident or part-time resident). Then I need a 203B and 360.1 form for my "Other NY City" taxes. Since NY city taxes aren't listed on my W2s, I owe nearly $800 to the state! (I wonder why city taxes weren't withheld; my fiancee works for the city (teacher) and she doesn't have city withholdings either). Not only that, I apparently owe a penalty (2105.9) because my actual withholdings were so off the mark of what I actually owe.
Also, there are specific instructions regarding sales/use tax. I've always heard that states require you to report this, but how strictly is it enforced? I never reported out-of-state purchases in MD.
As an aside, NY has possibly the most CRYPTIC forms and instructions I've ever had to deal with. WAY worse than MD or even the federal return. :|
/rant
Sorry, no real specific questions except for why city taxes aren't listed on my W2 and what to do about sales/use tax.
- Oct 30, 2000
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Obey your conscience on the sales/use tax.
I somehow never seem to buy anything from out-of-state
I somehow never seem to buy anything from out-of-state
mrchad, lol welcome to NY. I'm sorry to read of your frustration. I had never known our forms are the worst you'd ever come across.
- Oct 30, 2000
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- Oct 30, 2000
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Some payroll places will break out the state from a second taxing authority, others do not.
A lot depends on what tax tables the payroll group is using.
Others will just ignore it completely and put the burden on you to adjust accordingly.
You may wish to appeal the penalty for underwithholding or dig deeper into finding out additional expenses incurred (get a little more creative with your calculations)
- Oct 30, 2000
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Just some basic questions.
1. I use TurboTax for my fed taxes. Any comments on that package?
2. My wife has some expenses required for her job as a physical therapist. A personal work insurance policy at $99 renewed each year and some Continuing Ed classes. I asssume these are ok for Work deductions?
3. Also, I work out of the home programming computers and teaching online. I usually try to use the Sect 179 deductions for computer/office products. Is that valid?
1. I use TurboTax for my fed taxes. Any comments on that package?
2. My wife has some expenses required for her job as a physical therapist. A personal work insurance policy at $99 renewed each year and some Continuing Ed classes. I asssume these are ok for Work deductions?
3. Also, I work out of the home programming computers and teaching online. I usually try to use the Sect 179 deductions for computer/office products. Is that valid?
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