ATOT's Second Annual Tax Time Thread!

[EagleKeeper]

Originally posted by: Muse
I apologize if this was answered in a different post.

I donated a few bucks to Americares a couple of days ago, online (using my credit card). I think it was actually about 2 hours after the 8.7 quake the other day, although I hadn't heard about it yet. Can I declare this as a charitable donation for tax year 2004? Shortly after the tsunami I heard that donations to tsunami relief in early 2005 would be declarable on 2004 returns. Also heard that Americares donations are deductible, whereas many other organizations' contributions are not (e.g. Intl' Red Cross). Can anyone please clear this up for me? Thanks.

Uncle did make an exceptions to allow donations for the tsunami to be deductible for 2004.

Most charities are non-profit and therefore deductible. If you have concerns about their status, ask them.

Red Cross, United Way, Scouts, Churches/Missions, Salvation Army are all valid.

 

[EagleKeeper]

Originally posted by: Muse
One more question, please:

I had a (very) part time job in 2004, which is telecommute and doesn't take much of my time, which I still have. I have a W2 for it. Fine.

In November 2004 I was hired full time on a temporary basis on a different job that was to last through approximately the end of 2004, possibly to be extended. The guy who hired me told me it was on a "contract" basis (however, I don't recall signing a contract!). After 4 days on the job he decided it wasn't working out and he showed me the door. They sent me a check a week or two later and I got a W2 from them for tax filing purposes. Do I just treat this like my other job and file my return with two W2's? I guess this didn't turn out to be a contract job, right? Thanks for the information.

W2 is W2 and filed the same way.


Contract work can mean different things to different people.
Some treat is as a per project basis and do not want to worry about benefits or long term committment.

Others will treat it as "not an employee" and pay via a 1099 tax form making you self-employed

 

[EagleKeeper]

Originally posted by: Philippine Mango
I'm glad I don't have taxes...

You have them, you just do not realize it or have to account for it yet.

 

[Tanner]

Originally posted by: EagleKeeper

Originally posted by: Tanner

Home Office Questions


Does the office space have to be finished space in the home?

Does the space have to be strictly used for office work? (i.e. can I use it for the occasional visitor to sleep in?

What has to be in the room to make it an office?
I use a laptop which is sometimes @ home and lots of books and folders a desk and a chair...good enough for the IRS?


TIA!

The space must be a physical space. Quality does not matter.

The percentage of use of the area with respect to the business is what counts.

If the same furnishing would be found in a seperate room in an office building and one could operate from such an area, then Uncle shold be happy.


To determine what the IRS considers a home office, it would be best to look on their web site for accurate examples.

Thank you very much!

IRS on the Business Use of Your Home



VERY helpful!

I love the "site:irs.gov" feature on google fun!

 

[Muse]

Originally posted by: EagleKeeper

Originally posted by: Muse
I apologize if this was answered in a different post.

I donated a few bucks to Americares a couple of days ago, online (using my credit card). I think it was actually about 2 hours after the 8.7 quake the other day, although I hadn't heard about it yet. Can I declare this as a charitable donation for tax year 2004? Shortly after the tsunami I heard that donations to tsunami relief in early 2005 would be declarable on 2004 returns. Also heard that Americares donations are deductible, whereas many other organizations' contributions are not (e.g. Intl' Red Cross). Can anyone please clear this up for me? Thanks.

Uncle did make an exceptions to allow donations for the tsunami to be deductible for 2004.

Most charities are non-profit and therefore deductible. If you have concerns about their status, ask them.

Red Cross, United Way, Scouts, Churches/Missions, Salvation Army are all valid.

Mmm, I saw a TV story not long after the tsunami and they stated in no uncertain terms that a lot of chartities that people were donating to for tsunami relief were NOT tax deductible because they weren't technically USA based. The primary example that stuck in my head was the Red Cross International Relief Fund. They specifically cited Americares as deductible. I didn't notice anything on their site about that, though. I guess I should contact them about it.

 

[Muse]

Originally posted by: EagleKeeper

Originally posted by: Philippine Mango
I'm glad I don't have taxes...

You have them, you just do not realize it or have to account for it yet.

Ain't it the truth?! Everybody payes taxes, constantly. Just look at your phone bill, water bill, utility bill, anything you consume that you pay for. Hell, they may even be taxing free stuff now, I haven't checked lately....

IRS on the Business Use of Your Home



VERY helpful!

I love the "site:irs.gov" feature on google fun! http://www.irs.gov/ <------ IRS site

Thanks for the link, Tanner. I'm sure a lot of us can use these (me included)!

 

[Muse]

Turbotax asks for a total of the cost of prescribed drugs. It indicates that these are drugs prescribed by a physician. My primary care physician had me get a certain drug, that's lately been made available OTC, however was rather expensive. I bought it online, instead. Since this drug is obtainable OTC (as a brand name drug), am I not supposed to include this as a prescribed drug?

 

[EagleKeeper]

Originally posted by: Muse
Turbotax asks for a total of the cost of prescribed drugs. It indicates that these are drugs prescribed by a physician. My primary care physician had me get a certain drug, that's lately been made available OTC, however was rather expensive. I bought it online, instead. Since this drug is obtainable OTC (as a brand name drug), am I not supposed to include this as a prescribed drug?

If you are not getting it via a prescription, then it is not included.

 

[Muse]

Reminder: Drink a glass of water.

 

[EagleKeeper]

Originally posted by: Muse

Originally posted by: EagleKeeper

Originally posted by: Muse
Turbotax asks for a total of the cost of prescribed drugs. It indicates that these are drugs prescribed by a physician. My primary care physician had me get a certain drug, that's lately been made available OTC, however was rather expensive. I bought it online, instead. Since this drug is obtainable OTC (as a brand name drug), am I not supposed to include this as a prescribed drug?

If you are not getting it via a prescription, then it is not included.

OK, I guess a "prescription" is a legal-technical-medical entity, usually a written slip meaning that it's "OK" to sell this person such and such an item. IOW, it does simply not apply to anything "OTC."

Correct

 

[Muse]

Correct.

Thanks.

Related question (sort of): How about eyeglasses? They are, of course, prescribed. You can't buy them without a prescription. Do they get included with "medical equipment?"

 

[EagleKeeper]

EyeGlasses & exam are deductible as medical expenses.

 

[PMFleXXX]

Question on tax planning:

This past year I made a few Gs over the summer interning. Over the course of the year I sold some stuff on eBay I traded for at a nice profit. Should I report this income as business income in case in future years I make losses on stuff I trade for in order to flip on eBay? I understand there is some sort of 3 profitable years out of the last 5 requirement necessary to claim losses, but I?m not sure if this applies in this situation. Basically, should I leave this as hobby income or claim it as business income to protect me from any losses in the future? Any help on planning for future income tax returns is greatly appreciated, thanks!

 

[rnmcd]

Originally posted by: EagleKeeper

Originally posted by: edprush
How much mortgage interest is deductible?

Here's my quandry. I plan to borrow $90k as a mortgage. I can get a mortgage from a lender and be able to deduct the interest OR I can get a personal loan for the same amount from a family member BUT at a lower interest rate.

I don't know how I could deduct the interest on that personal loan so I am wondering how much of the mortgage interest I can deduct...then I'll try to figure which loan option is best for me.

Thanks.

Where the funds come from does not matter with respect for the deductability as long as it is for a residence.

A lender will provide you a statement at the end of the year showing interest paid to them.

A private loan may not. You would then have to determine the interest paid on the private loan and also report the person that you paid the interest to on your Schedule A.

Other than the color of money, as long as it is used for the same purpose, the end effect is the same. The interest is fully deductible.

Make sure on a personal loan that it is indicated that it is for the purchase of property. That covers your tail with respect to the IRS.

Thank you for VERY informative info!!!

Do I have to provide the personal lender any type of 1099 for the interest I paid to them? They will need something like that so they can report this interested earned on their taxes right?

 

[EagleKeeper]

Originally posted by: rnmcd

Originally posted by: EagleKeeper

Originally posted by: edprush
How much mortgage interest is deductible?

Here's my quandry. I plan to borrow $90k as a mortgage. I can get a mortgage from a lender and be able to deduct the interest OR I can get a personal loan for the same amount from a family member BUT at a lower interest rate.

I don't know how I could deduct the interest on that personal loan so I am wondering how much of the mortgage interest I can deduct...then I'll try to figure which loan option is best for me.

Thanks.

Where the funds come from does not matter with respect for the deductability as long as it is for a residence.

A lender will provide you a statement at the end of the year showing interest paid to them.

A private loan may not. You would then have to determine the interest paid on the private loan and also report the person that you paid the interest to on your Schedule A.

Other than the color of money, as long as it is used for the same purpose, the end effect is the same. The interest is fully deductible.

Make sure on a personal loan that it is indicated that it is for the purchase of property. That covers your tail with respect to the IRS.

Thank you for VERY informative info!!!

Do I have to provide the personal lender any type of 1099 for the interest I paid to them? They will need something like that so they can report this interested earned on their taxes right?

You will need the lenders Social Security Number and address for your itemization on Schedule A.

The lender will just have to declare the interest as income. Because it is personal, then it will be classified as misc income unless they have another way of reporting it. That becomes their problem, not yours.

 

[Muse]

I'm unclear on the home office rules. My job is part time telecommute and it requires me, when working, to work in my home office. I need a computer of sufficient power and configuration, a high bandwidth internet connection, a printer, a cell phone (which my employer compensates me for up to $40/month, although it costs me a bit more because of taxes), an answering machine, and certain software for analysis and testing purposes.

So, I have a home office. I can't say in all honesty that I do nothing in this office but service my employer. I do some other stuff. I get email, I browse the internet when I want or need to, I have a projector in the room and occasionally watch movies with it. I have a TV card in one of my two computers and sometimes watch TV using it.

Can I deduct part of the equipment in this space as business related expenses? Without it, I couldn't do my job. This is the sole space where I work for my employer. Thanks for any input.

 

[shimsham]

forgive me if im asking a ? thats already been answered, but this thread is 24 pages long and im afraid im not very good at digging. anyway, heres my situation and question.

my work caught on fire the mon. before christmas, and ive been on reduced pay (not unemployment, as i still draw a check from my employer, just not my full salary). well, weve been ok financially up until now, and its crunch time. my wife has some student loans she defaulted on before we got married, so since weve been together we have filed an injured spouse claim to save my part of our return (they demand we pay 800 a month, which is impossible for us so we just let them take her refund each year). but this year, we need my money quickly. so my question is how big is the penalty for me to go married but filing seperately, with me claiming our 2 children and interest paid on our home? the reason i ask is i desperately need car repairs so i was considering efile or maybe even rapid refund. so how much, in general, would i lose as a % ? i dont expect an exact amount, but a ball park % would be great.

thanks in advance fellas:beer:

 

[dakata24]

been awhile since ive filed by mail. but this is my first year that i owe the feds money. i dont want to pay the $50-60 convience charge to do it by credit card...

should i rely on regular snail mail or should i play it safe and send it cerified mail or something?

 

[CPA]

Originally posted by: Muse
I'm unclear on the home office rules. My job is part time telecommute and it requires me, when working, to work in my home office. I need a computer of sufficient power and configuration, a high bandwidth internet connection, a printer, a cell phone (which my employer compensates me for up to $40/month, although it costs me a bit more because of taxes), an answering machine, and certain software for analysis and testing purposes.

So, I have a home office. I can't say in all honesty that I do nothing in this office but service my employer. I do some other stuff. I get email, I browse the internet when I want or need to, I have a projector in the room and occasionally watch movies with it. I have a TV card in one of my two computers and sometimes watch TV using it.

Can I deduct part of the equipment in this space as business related expenses? Without it, I couldn't do my job. This is the sole space where I work for my employer. Thanks for any input.

You would pass the test of home office use from your explanation above. You could expense the majority of that office equipment fully, including the computer.

 

[CPA]

Originally posted by: shimsham
forgive me if im asking a ? thats already been answered, but this thread is 24 pages long and im afraid im not very good at digging. anyway, heres my situation and question.

my work caught on fire the mon. before christmas, and ive been on reduced pay (not unemployment, as i still draw a check from my employer, just not my full salary). well, weve been ok financially up until now, and its crunch time. my wife has some student loans she defaulted on before we got married, so since weve been together we have filed an injured spouse claim to save my part of our return (they demand we pay 800 a month, which is impossible for us so we just let them take her refund each year). but this year, we need my money quickly. so my question is how big is the penalty for me to go married but filing seperately, with me claiming our 2 children and interest paid on our home? the reason i ask is i desperately need car repairs so i was considering efile or maybe even rapid refund. so how much, in general, would i lose as a % ? i dont expect an exact amount, but a ball park % would be great.

thanks in advance fellas:beer:

I'm not quit sure I fully understand what you're trying to do, but if you file married but seperately you should be okay as long as your wife does to. Have you put the numbers in any tax s/w yet.

 

[CPA]

Originally posted by: dakata24
been awhile since ive filed by mail. but this is my first year that i owe the feds money. i dont want to pay the $50-60 convience charge to do it by credit card...

should i rely on regular snail mail or should i play it safe and send it cerified mail or something?

snail mail has always been fine for me when I have owed. Just make sure it's postmarked by or on the 15th.

 

[shimsham]

no i havent tried to figure anything yet.

usually when we file together it takes 6-8 weeks for the irs to determine my portion and send the refund, but i cant afford to wait that long. if i could somehow get an idea of the percentage of the penalty for filing seperate then i could make a decision. for example, if im going to lose 50% of what i would normally get by filing together, then ill just file together and have to wait. but if im only going to lose 10%, then id rather have the refund as soon as possible for bills and such, and will probably do a rapid refund.

bah, im a little stressd and just babbling, so let me ask it this way: what, if any, is the normal % penalty (rough estimate) for filing seperately instead of together? ive always been under the impression that filing seperately would basically lose money on the return.

 

[Muse]

Originally posted by: dakata24
been awhile since ive filed by mail. but this is my first year that i owe the feds money. i dont want to pay the $50-60 convience charge to do it by credit card...

should i rely on regular snail mail or should i play it safe and send it cerified mail or something?

Personally, I wouldn't sweat it. I've always sent my returns regular first class mail. You just need to have it postmarked by April 15 unless you get an extension. For a little additional security in something like this, I bring it right to the post office, not a box on the street, unless it's the one in front of the post office. Nowadays I efile my fed return because that's free with Turbotax (after mail-in rebate). I'd have to pay for efiling state, so I send that first class.

Thanks for the tips, EagleKeeper and CPA. Quite helpful!

 

[Muse]

Here's an interesting question, I think. I've been using Turbotax since my 1999 return, every year. Somehow, I neglected to keep my 2003 Turbotax return. They all have a .tax extension, I do believe. I have all my others, but not TY2003. TT must have tucked it under the installation tree and I uninstalled. I installed new HD's, and kept my data tree, but my TY2003 file wasn't there. I scoured all my HD's (installed and not) and it isn't on any of them.

When I installed TT 2004, I was asked if I did my taxes with TT in 2003. I directed it to TY2002 TT file, to see if it would use info from that (my situation hasn't much changed), but it refused to do that. So, I've been entering my return from scratch.

So, my question is whether or not my TY2003 return is possibly downloadable from Intuit. When I efiled, I had to basically upload my return to Intuit and they handled the efiling with the IRS. Is it possible that Intuit could provide me with my 2003 return? Thanks for any info.

 

[EagleKeeper]

Originally posted by: Muse
Here's an interesting question, I think. I've been using Turbotax since my 1999 return, every year. Somehow, I neglected to keep my 2003 Turbotax return. They all have a .tax extension, I do believe. I have all my others, but not TY2003. TT must have tucked it under the installation tree and I uninstalled. I installed new HD's, and kept my data tree, but my TY2003 file wasn't there. I scoured all my HD's (installed and not) and it isn't on any of them.

When I installed TT 2004, I was asked if I did my taxes with TT in 2003. I directed it to TY2002 TT file, to see if it would use info from that (my situation hasn't much changed), but it refused to do that. So, I've been entering my return from scratch.

So, my question is whether or not my TY2003 return is possibly downloadable from Intuit. When I efiled, I had to basically upload my return to Intuit and they handled the efiling with the IRS. Is it possible that Intuit could provide me with my 2003 return? Thanks for any info.

SOL

I always burn a copy of the tax file(s) onto a new CD that also contains the Tax program for that year. If I lose the hard drive or the OEM tax program CD, I am still safe.