ATOT's Second Annual Tax Time Thread!

[EagleKeeper]

Originally posted by: sigpop
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) Does the job
2) If she gets paid as a W2, those expenses will have to go on the 2106 which will require Schedule A itemization.

2) the contining Ed should classify as a LLC and is a line item on the 1040.

3) If you are declaring income, then you can use the Schedule C and 179. Using the 179 without declared income will raise a flag.

 

[The Sauce]

Can I claim my stepdaughter as a dependent? She is 20 and a full time student and we pay most of her non-tuition expenses. She pays her tuition with loans. According to Turbo-Tax the answer is no. Yet every previous year we used a tax consultant like H&R and every time we did claim her. Anyone know?

 

[TuxDave]

I'm attempting to claim lifetime learning credit and I got the 1098-T (?) form from my university. There's two boxes with numbers, Qualified Tuition Expenses and Scholarships and Grants. Am I supposed to subtract the scholarships and grants from my qualified tuition expenses?

 

[EagleKeeper]

Originally posted by: Snatchface
Can I claim my stepdaughter as a dependent? She is 20 and a full time student and we pay most of her non-tuition expenses. She pays her tuition with loans. According to Turbo-Tax the answer is no. Yet every previous year we used a tax consultant like H&R and every time we did claim her. Anyone know?

Check if she meets the requirements for dependants as previously outlined.

Question becomes, who is responsible for her loans.
The answer that you are providing the Tax S/W with, may be what is causing the glitch.

 

[The Sauce]

She is responsible for her loans.

 

[The Sauce]

One more, this one is a bit trickier. I bought a home this year which has a rental unit on the property. However it is not part of the main home, it is a cottage. Does this count as a multi-unit dwelling? Can I us the cost of the entire property as a depreciable asset?

 

[EagleKeeper]

Originally posted by: TuxDave
I'm attempting to claim lifetime learning credit and I got the 1098-T (?) form from my university. There's two boxes with numbers, Qualified Tuition Expenses and Scholarships and Grants. Am I supposed to subtract the scholarships and grants from my qualified tuition expenses?

Yes

 

[EagleKeeper]

Originally posted by: Snatchface
She is responsible for her loans.

Look at the IRS guidelines for dependants.

I would think that if you are providing more than 50% (according to your calculations), then you should have no problem claiming her.

Just double check what questions you are being prompted for when determining the dependency.

You should be able to "ignore" the loans when declaring her.
Because she will be classified as a dependant, you will get the Hope/LLC benefits (credits).
When she starts to repay the loans, then she will claim that on her tax returns.

 

[EagleKeeper]

Originally posted by: Snatchface
One more, this one is a bit trickier. I bought a home this year which has a rental unit on the property. However it is not part of the main home, it is a cottage. Does this count as a multi-unit dwelling? Can I us the cost of the entire property as a depreciable asset?

Best thing is to look at the percentage of living space or bedrooms for the rental property vs the main house.
If the rental unit is completely segregated, then you would use the property square footage percentage.

You will need to use the Schedule E. Tax S/W will prompt you for the percentages as if you are renting part of the house. That percentage will be used for every type of "implicit" deduction. Direct expenses are handle seperately.

 

[FrustratedUser]

OK, question about TurboTax.

I moved from AZ to VA in June 2004 so I need to file state tax in both AZ and VA, and of course the federal tax also.

Which TurboTax package support this? Do I have to buy 2 licenses, one for AZ and VA.


I used to file the 1040EZ back in AZ since I do not have any stocks, homes or rental properties.
I tried to e-mail TurboTax support but never got an answer.

Anyone...anyone... Bueller... anyone?

 

[The Sauce]

Originally posted by: EagleKeeper

Originally posted by: Snatchface
She is responsible for her loans.

You should be able to "ignore" the loans when declaring her.
Because she will be classified as a dependant, you will get the Hope/LLC benefits (credits).
When she starts to repay the loans, then she will claim that on her tax returns.

So you are saying that even if she is paying her entire tuition with loans, we can ignore that and as long as we paid >50% of "everything else" she can be claimed? Turbo Tax included Tuition in the calculation of the 50%, which is what bumped us out of qualifying.

 

[The Sauce]

Originally posted by: EagleKeeper

Originally posted by: Snatchface
One more, this one is a bit trickier. I bought a home this year which has a rental unit on the property. However it is not part of the main home, it is a cottage. Does this count as a multi-unit dwelling? Can I us the cost of the entire property as a depreciable asset?

Best thing is to look at the percentage of living space or bedrooms for the rental property vs the main house.
If the rental unit is completely segregated, then you would use the property square footage percentage.

You will need to use the Schedule E. Tax S/W will prompt you for the percentages as if you are renting part of the house. That percentage will be used for every type of "implicit" deduction. Direct expenses are handle seperately.

Ok so here is what I did. I entered it as a depreciable asset. The entire cost of the property was 280K. Then I used a 25% "business use percentage." The rental property is about 25% of the square footage of the main house. Was that right? Also they are asking me what is the cost of the property attributable to "land only." I have no idea what to put in here - it's on 15 acres of property along with the main house.

PS - Oh and what about property taxes and mortgage interest? Should I claim 25% of those as well?

 

[EagleKeeper]

Originally posted by: FrustratedUser
OK, question about TurboTax.

I moved from AZ to VA in June 2004 so I need to file state tax in both AZ and VA, and of course the federal tax also.

Which TurboTax package support this? Do I have to buy 2 licenses, one for AZ and VA.


I used to file the 1040EZ back in AZ since I do not have any stocks, homes or rental properties.
I tried to e-mail TurboTax support but never got an answer.

Anyone...anyone... Bueller... anyone?

Based on experience with TurboTax and multiple states.

The good, the bad and the ugly.


Now in reverse order.

UGLY
Most tax S/W will not cross state boundaries. However, you are not informed of this until after the purchase has been made.

BAD
Most tax S/W will require you to purchase a second state. Then see above.

GOOD
One should build a tax file with the federal.

Then:

Options if you have two systems.
Install the Federal S/W on both systems. Make sure the Fed is copied before you install the state.
On each system, install the different state S/W.
On one system for the part-time resident for AZ.
On the second system do the same for VA.

Either way you will not be able to file electronicaly for both of the states.

Option if you have only one system.
Build the Federal return.
Make a pure image of the system. Tax S/W squirls away special files/registry values that seem to prevent a clean un-install.

Install the first state.
Complete it.
Print it.

Re-image the system.
Repeat sequence for the the second state.


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

Online S/W may be able to handle the situation differently.

 

[The Sauce]

Oops, ignore

 

[EagleKeeper]

Originally posted by: Snatchface

Originally posted by: EagleKeeper

Originally posted by: Snatchface
One more, this one is a bit trickier. I bought a home this year which has a rental unit on the property. However it is not part of the main home, it is a cottage. Does this count as a multi-unit dwelling? Can I us the cost of the entire property as a depreciable asset?

Best thing is to look at the percentage of living space or bedrooms for the rental property vs the main house.
If the rental unit is completely segregated, then you would use the property square footage percentage.

You will need to use the Schedule E. Tax S/W will prompt you for the percentages as if you are renting part of the house. That percentage will be used for every type of "implicit" deduction. Direct expenses are handle seperately.

Ok so here is what I did. I entered it as a depreciable asset. The entire cost of the property was 280K. Then I used a 25% "business use percentage." The rental property is about 25% of the square footage of the main house. Was that right? Also they are asking me what is the cost of the property attributable to "land only." I have no idea what to put in here - it's on 15 acres of property along with the main house.

Land does not depreciate, therefore the cost of the land has to be removed. Your insurance agent should be able to tell you what the dwelling value are (that is what is actually insured). Subtract the dwelling value from the purchase price and you have the land value.

One can use the square footage of the rental unit, # bedrooms or property square footage allocated to the rental unit as the percentage basis. Use what ever is most benificial.

 

[The Sauce]

So if the cottage has 1 bedroom and the main house has 2 bedrooms I can use 50% - even if the square footage is like 25%?

Also do I apply that same percentage to property taxes and mortgage interest on the property?

PS - BTW, I love you.

 

[FrustratedUser]

Originally posted by: EagleKeeper

Originally posted by: FrustratedUser
OK, question about TurboTax.

I moved from AZ to VA in June 2004 so I need to file state tax in both AZ and VA, and of course the federal tax also.

Which TurboTax package support this? Do I have to buy 2 licenses, one for AZ and VA.


I used to file the 1040EZ back in AZ since I do not have any stocks, homes or rental properties.
I tried to e-mail TurboTax support but never got an answer.

Anyone...anyone... Bueller... anyone?

Based on experience with TurboTax and multiple states.

The good, the bad and the ugly.


Now in reverse order.

UGLY
Most tax S/W will not cross state boundaries. However, you are not informed of this until after the purchase has been made.

BAD
Most tax S/W will require you to purchase a second state. Then see above.

GOOD
One should build a tax file with the federal.

Then:

Options if you have two systems.
Install the Federal S/W on both systems. Make sure the Fed is copied before you install the state.
On each system, install the different state S/W.
On one system for the part-time resident for AZ.
On the second system do the same for VA.

Either way you will not be able to file electronicaly for both of the states.

Option if you have only one system.
Build the Federal return.
Make a pure image of the system. Tax S/W squirls away special files/registry values that seem to prevent a clean un-install.

Install the first state.
Complete it.
Print it.

Re-image the system.
Repeat sequence for the the second state.


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

Online S/W may be able to handle the situation differently.

WTF!?
Sounds like TurboTax is complete crap. Make an image of my system to do taxes for two states. WTF!


Thank you for the help. Looks like I have to get ripped off by H&R this year.

 

[EagleKeeper]

Originally posted by: Snatchface
So if the cottage has 1 bedroom and the main house has 2 bedrooms I can use 50% - even if the square footage is like 25%?

Also do I apply that same percentage to property taxes and mortgage interest on the property?

PS - BTW, I love you.

1 + 2 = 3.

Thererfore the cottage is 33% (1/3)

That is the percentage of indirects that get applied to taxes, interest, etc

 

[EagleKeeper]

Originally posted by: FrustratedUser

Originally posted by: EagleKeeper

Originally posted by: FrustratedUser
OK, question about TurboTax.

I moved from AZ to VA in June 2004 so I need to file state tax in both AZ and VA, and of course the federal tax also.

Which TurboTax package support this? Do I have to buy 2 licenses, one for AZ and VA.


I used to file the 1040EZ back in AZ since I do not have any stocks, homes or rental properties.
I tried to e-mail TurboTax support but never got an answer.

Anyone...anyone... Bueller... anyone?

Based on experience with TurboTax and multiple states.

The good, the bad and the ugly.


Now in reverse order.

UGLY
Most tax S/W will not cross state boundaries. However, you are not informed of this until after the purchase has been made.

BAD
Most tax S/W will require you to purchase a second state. Then see above.

GOOD
One should build a tax file with the federal.

Then:

Options if you have two systems.
Install the Federal S/W on both systems. Make sure the Fed is copied before you install the state.
On each system, install the different state S/W.
On one system for the part-time resident for AZ.
On the second system do the same for VA.

Either way you will not be able to file electronicaly for both of the states.

Option if you have only one system.
Build the Federal return.
Make a pure image of the system. Tax S/W squirls away special files/registry values that seem to prevent a clean un-install.

Install the first state.
Complete it.
Print it.

Re-image the system.
Repeat sequence for the the second state.


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

Online S/W may be able to handle the situation differently.

WTF!?
Sounds like TurboTax is complete crap. Make an image of my system to do taxes for two states. WTF!


Thank you for the help. Looks like I have to get ripped off by H&R this year.

Do not go pay $55 to H&R for each plus another chunk of change for the Federal.

Best to get a second system, (beg borrow, bribe).
You are in VA, there must be some-one that is willing to save a couple of $$ and split the cost of the state S/W. On your own system, put on the AZ state.

Or just get the AZ forms from on-line and do those manually, and use your system for the Va/Fed.

Having an electronic copy of the return will make it a lot easier next year.

 

[FrustratedUser]

Originally posted by: EagleKeeper

Originally posted by: FrustratedUser

Originally posted by: EagleKeeper

Originally posted by: FrustratedUser
OK, question about TurboTax.

I moved from AZ to VA in June 2004 so I need to file state tax in both AZ and VA, and of course the federal tax also.

Which TurboTax package support this? Do I have to buy 2 licenses, one for AZ and VA.


I used to file the 1040EZ back in AZ since I do not have any stocks, homes or rental properties.
I tried to e-mail TurboTax support but never got an answer.

Anyone...anyone... Bueller... anyone?

Based on experience with TurboTax and multiple states.

The good, the bad and the ugly.


Now in reverse order.

UGLY
Most tax S/W will not cross state boundaries. However, you are not informed of this until after the purchase has been made.

BAD
Most tax S/W will require you to purchase a second state. Then see above.

GOOD
One should build a tax file with the federal.

Then:

Options if you have two systems.
Install the Federal S/W on both systems. Make sure the Fed is copied before you install the state.
On each system, install the different state S/W.
On one system for the part-time resident for AZ.
On the second system do the same for VA.

Either way you will not be able to file electronicaly for both of the states.

Option if you have only one system.
Build the Federal return.
Make a pure image of the system. Tax S/W squirls away special files/registry values that seem to prevent a clean un-install.

Install the first state.
Complete it.
Print it.

Re-image the system.
Repeat sequence for the the second state.


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

Online S/W may be able to handle the situation differently.

WTF!?
Sounds like TurboTax is complete crap. Make an image of my system to do taxes for two states. WTF!


Thank you for the help. Looks like I have to get ripped off by H&R this year.

Do not go pay $55 to H&R for each plus another chunk of change for the Federal.

Best to get a second system, (beg borrow, bribe).
You are in VA, there must be some-one that is willing to save a couple of $$ and split the cost of the state S/W. On your own system, put on the AZ state.

Or just get the AZ forms from on-line and do those manually, and use your system for the Va/Fed.

Having an electronic copy of the return will make it a lot easier next year.

I am sure next year will be easy, just as easy as it was in AZ.
What is difficult about having to file in two states? Isn't it just 2 1040EZ?

Why wouldn't I be able to e-file in both states?

 

[UTmtnbiker]

Tax advice please!!!!!

I'm using TaxCut Deluxe and have gotten to a point where I'm stuck. Any advice would be helpful...

The situation:

I got married in Aug. 2004 so we will be filing jointly
My wife had a condo for the last 7 years. She rented it out for 3 months in 2004 (Jan. Feb. Mar.) and then we sold it in September 2004.

In Taxcut I can treat this is a rental property and then a disposal of a rental property OR I can treat this as rentail property and then a Main Home sale as we qualify that way also (she lived there in 2 out of the last 5 years). Is one way right and the other way wrong? Am I missing anything?

TIA.

 

[EagleKeeper]

Originally posted by: FrustratedUser
I am sure next year will be easy, just as easy as it was in AZ.
What is difficult about having to file in two states? Isn't it just 2 1040EZ?

Why wouldn't I be able to e-file in both states?

The IRS will get very upset if you file a return more than once.

Some states require that the Fed be e-filed with the state return.
If both AZ and VA require this, then you will have to e-file one and paperfile the other.

VA should be the return to e-file.

You should not file an 1040EZ for the Fed due to moving. The cost of moving (assuming that it was job related and you were not re-embursed with taxable reporting on the W2) becomes a deduction via the Form 3903. The Tax S/W should ask you about this.
Also, VA may allow some deduction due to the move. The Tax S/W for the state should transfer this info from the Feds.

 

[FrustratedUser]

Originally posted by: EagleKeeper

Originally posted by: FrustratedUser
I am sure next year will be easy, just as easy as it was in AZ.
What is difficult about having to file in two states? Isn't it just 2 1040EZ?

Why wouldn't I be able to e-file in both states?

The IRS will get very upset if you file a return more than once.

Some states require that the Fed be e-filed with the state return.
If both AZ and VA require this, then you will have to e-file one and paperfile the other.

VA should be the return to e-file.

You should not file an 1040EZ for the Fed due to moving. The cost of moving (assuming that it was job related and you were not re-embursed with taxable reporting on the W2) becomes a deduction via the Form 3903. The Tax S/W should ask you about this.
Also, VA may allow some deduction due to the move. The Tax S/W for the state should transfer this info from the Feds.

I was fully reimbursed. I am actually using the free online TurboTax as we speak. I only have to pay when I'm done with the preparation and you are right, the 1040EZ could not be used but strangely enough a friend of mine in the same situation went to H&R and they did file a 1040EZ because he was fully reimbursed. So I guess it's the same for me.

 

[EagleKeeper]

Originally posted by: FrustratedUser

Originally posted by: EagleKeeper

Originally posted by: FrustratedUser
I am sure next year will be easy, just as easy as it was in AZ.
What is difficult about having to file in two states? Isn't it just 2 1040EZ?

Why wouldn't I be able to e-file in both states?

The IRS will get very upset if you file a return more than once.

Some states require that the Fed be e-filed with the state return.
If both AZ and VA require this, then you will have to e-file one and paperfile the other.

VA should be the return to e-file.

You should not file an 1040EZ for the Fed due to moving. The cost of moving (assuming that it was job related and you were not re-embursed with taxable reporting on the W2) becomes a deduction via the Form 3903. The Tax S/W should ask you about this.
Also, VA may allow some deduction due to the move. The Tax S/W for the state should transfer this info from the Feds.

I was fully reimbursed. I am actually using the free online TurboTax as we speak. I only have to pay when I'm done with the preparation and you are right, the 1040EZ could not be used but strangely enough a friend of mine in the same situation went to H&R and they did file a 1040EZ because he was fully reimbursed. So I guess it's the same for me.

If the re-embursement is shown on the W2, then you either have to pay tax on it (classified as income) or file a 3903 to account for the moving costs.

The 1040EZ will not support Forms for educational credit & moving expenses.


/edit - W2 referenced

 

[FrustratedUser]

Originally posted by: EagleKeeper

Originally posted by: FrustratedUser

Originally posted by: EagleKeeper

Originally posted by: FrustratedUser
I am sure next year will be easy, just as easy as it was in AZ.
What is difficult about having to file in two states? Isn't it just 2 1040EZ?

Why wouldn't I be able to e-file in both states?

The IRS will get very upset if you file a return more than once.

Some states require that the Fed be e-filed with the state return.
If both AZ and VA require this, then you will have to e-file one and paperfile the other.

VA should be the return to e-file.

You should not file an 1040EZ for the Fed due to moving. The cost of moving (assuming that it was job related and you were not re-embursed with taxable reporting on the W2) becomes a deduction via the Form 3903. The Tax S/W should ask you about this.
Also, VA may allow some deduction due to the move. The Tax S/W for the state should transfer this info from the Feds.

I was fully reimbursed. I am actually using the free online TurboTax as we speak. I only have to pay when I'm done with the preparation and you are right, the 1040EZ could not be used but strangely enough a friend of mine in the same situation went to H&R and they did file a 1040EZ because he was fully reimbursed. So I guess it's the same for me.

If the re-embursement is shown ion the W4, then you either have to pay tax on it (classified as income) or file a 3903 to account for the moving costs.

The 1040EZ will not support Forms for educational credit & moving expenses.

I don't have a W4, but it shows on the W2.
Does this mean H&R fubared my friends taxes?

edit:
I have a taxable part and a non-taxable part. I already paid taxes on it.