ATOT's Second Annual Tax Time Thread!

[Squisher]

My idiot son went to H & R Block and they did his return. The problem is that they had him take himself as dependent. The problem is that I claimed him too on my taxes I filed electronically monday.

I had him call to file an amended return, but they said his return would be rejected and he'd just have to come in and redo his return.

Does this sound about right?

 

[Slickone]

EagleKeeper, as discussed on the previous page, I tried to put the $500 on the misc. income (line 21), but when I went through TaxAct's 'checker thing' at the end (forget what they call it), it said:
You entered more than $400 of other income which will be reported on Form 1040, line 21. Please review your entries to determine if this income is subject to self-employment tax and should be reported elsewhere in the return.
Description Amount
Flight services 500.00
You must pay Self-employment (SE) tax if:
1. Your net earnings from self-employment from other than church income were $400 or more
So I had to go through and find their Sch. C, then filed out the SE tax. This lowered my return even more than the other way, which was a lot, considering my small return.


Edit: nevermind about optional state sales tax tables. May have found it.

 

[manly]

Just wanted to confirm Turbotax is accurate:

Form 4137 is used to pay social security/medicare taxes on miscellaneous wages of any kind? The form is titled as being for "unreported tip income".

Especially since you drew un-employment, that income will show up in the IRS system; It would be nice for them to see that is has been accounted for.

I think back in 2002, I collected supplemental Federal unemployment (13 weeks maybe). However, I did not file a tax return since I was not required to. I'm pretty sure I don't have income tax liability for that year.

I don't need to file an insanely late return, do I?

 

[EagleKeeper]

Originally posted by: Squisher
My idiot son went to H & R Block and they did his return. The problem is that they had him take himself as dependent. The problem is that I claimed him too on my taxes I filed electronically monday.

I had him call to file an amended return, but they said his return would be rejected and he'd just have to come in and redo his return.

Does this sound about right?

What Block states is accurate. It may be rejected. IF so, then it can be corrected and re-filed.

IF it is not rejected, then he should file an ammended and if he gets a refund, do not touch the funds.

Maybe now both of you will ensure that he thinks properly and reads the ATOT tax thread for advice on using common sense.

/toots our horn.

 

[EagleKeeper]

Originally posted by: Slickone
EagleKeeper, as discussed on the previous page, I tried to put the $500 on the misc. income (line 21), but when I went through TaxAct's 'checker thing' at the end (forget what they call it), it said:
You entered more than $400 of other income which will be reported on Form 1040, line 21. Please review your entries to determine if this income is subject to self-employment tax and should be reported elsewhere in the return.
Description Amount
Flight services 500.00
You must pay Self-employment (SE) tax if:
1. Your net earnings from self-employment from other than church income were $400 or more
So I had to go through and find their Sch. C, then filed out the SE tax. This lowered my return even more than the other way, which was a lot, considering my small return.


*Anyone: About the publication 600 optional state sales tax tables. I'm not sure if taxact has it (do you know?). So when it asks for income tax, can I just (after figuring it myself) put it there? Since you can put either amount there, if filing electronically how will they know which amount you have there?

Crunchtime! Anyone know?

Tax S/W has the sales tax tables built in.

For most people that live in states that have an income tax, it does not come into play.
It was intended for those of us that are lucky to live in non-income tax states.

The filing of Schedule C was requred based on your income level (I was not aware of the level). It also shows how benificial it is to dig up deductions/expenses regarding sel-employment income.

I would have expected that in order be legally allowed to fly, you have to be physcially checked out. The costs of a medical exam and/or insurance costs are then expenses.

Mileage to the airport, tolls/parking fees if applicable.
You have to file taxes on the income, yet are using the Internet/Computer/ISP to research information regarding the situation. All deductible as business epxenses.


When you start thinking outside the box, many things can happen.

 

[EagleKeeper]

Originally posted by: manly
Just wanted to confirm Turbotax is accurate:

Form 4137 is used to pay social security/medicare taxes on miscellaneous wages of any kind? The form is titled as being for "unreported tip income".

Especially since you drew un-employment, that income will show up in the IRS system; It would be nice for them to see that is has been accounted for.

I think back in 2002, I collected supplemental Federal unemployment (13 weeks maybe). However, I did not file a tax return since I was not required to. I'm pretty sure I don't have income tax liability for that year.

I don't need to file an insanely late return, do I?

If you feel confident that you did not need to file a return for 2002, then do not do so now.

The title on Form 4137 indicates that basic use for the form; to catch mics income that is not reported on forms that are filed by an employer and/or payee.

 

[Slickone]

Originally posted by: EagleKeeper
Tax S/W has the sales tax tables built in.

Yep, I edited my post 33mins before you posted. Sorry. It was actually easy in TaxAct. I skipped over it yesterday since it said something about state tax, and I was thinking state...I never file anything state, so skipped over it. If I'd gotten the notice in the mail about it, I would have known. The IRS should send it out to everyone, but they only send it to people that get the tax forms/books, which I didn't since I e-filed last year.

The filing of Schedule C was requred based on your income level (I was not aware of the level).

I don't follow you. I didn't have to file Sch. C if it weren't for the extra $500 misc. income, which I mentioned the amount a few times. I had to use Sch. C because, as it said, it was over $400.

It also shows how benificial it is to dig up deductions/expenses regarding sel-employment income.

Yeah my father has a LOT of these. It was a one time deal for me, so not much there. I even rode w/ him in the car. Yep he has milage, PC for checking weather, etc.

I would have expected that in order be legally allowed to fly, you have to be physcially checked out. The costs of a medical exam and/or insurance costs are then expenses.

I wasn't legally flying the plane. My father was.


This is the second year I've used TaxAct, and must say for the most part, it works pretty well.

 

[EagleKeeper]

Originally posted by: Slickone

Originally posted by: EagleKeeper

The filing of Schedule C was requred based on your income level (I was not aware of the level).

I don't follow you. I didn't have to file Sch. C if it weren't for the extra $500 misc. income, which I mentioned the amount a few times. I had to use Sch. C because, as it said, it was over $400.

We are just stating the same things. I was stating that I not personally aware of the limitation for the misc income level.

It also shows how benificial it is to dig up deductions/expenses regarding sel-employment income.

Yeah my father has a LOT of these. It was a one time deal for me, so not much there. I even rode w/ him in the car. Yep he has milage, PC for checking weather, etc.

They may not be a big deal, but the examples were intended for you to look at ways of reducing the impact of the extra income.

I would have expected that in order be legally allowed to fly, you have to be physcially checked out. The costs of a medical exam and/or insurance costs are then expenses.

I wasn't legally flying the plane. My father was.

It makes not difference who was flying the plane. Based on what you had stated, in order for you to be there, you had to have the training and met the medical requirements. Again, I was showing examples on expenses that could be used to lower the impact of the extra income.


This is the second year I've used TaxAct, and must say for the most part, it works pretty well.

Any comments that I post and also CPA are intended to both answer the direct question posed and also act as guidelines/clues for any others that choose to read the posts and comments taht we have added.

That may be why there is extra verbage added at times that could seem irrelevant to the direct question.
M

 

[elbosco]

I have a quick question concerning income tax and filing.

I hold a seasonal job and my current income level allows me to be exempt from any taxes aside from Social Security and Medicare.

However, I cashed a few Series EE saving bonds during the year and I was wondering if the interest earned on the bonds would be amalgamated to my yearly income or if it falls under a different category?

If the interest earned is added to my income, I would still fall in the exempt bracket and would still not have to file any forms, correct?

 

[IndieSnob]

I shouldn't have saved this till last minute, but I won't give all of my weak excuses...

I need to go back and file for 2000 and 2002. In 2000, I was considered a contractor my first two months of employment at a job I had in Seattle. My income was reported on a 1099-Misc. Earlier that tax year I had two other jobs that gave me a W2, along with the contracting job when I moved to an actual position with them. How would I go about doing the 1099-Misc along with the W2's?

One more question also. These printouts are abit confusing, in that the names of taxes, etc. are different than a standard W2. The one's I am confused about are "FICA TX WH" (Some sort of tax withold, I gather) and T FICA WAG (What was taxable wages ? ) Any help on this would be greatly appreciated.

 

[imported_earthslash]

As I understand it, the educational credits (hope and lifetime learning) are NON-Refundable credits, meaning it will lower the tax owed based on your taxable income. My tax on my taxable income is between 650 and 750, meaning either educational credit I claim I can only get a max of that amount. Am I correct in what I've stated so far?. The credits have confused me and when I learned I wouldn't be able to get more of a credit because my lower tax on my taxable income, I just sort of wondered.


Another question, the hope credit is said to be valid for your first two years of education. I'm claiming the Lifetime Learning Credit this year as I wouldn't be able to get more if I claimed the Hope Credit anyways. I'm most likely not going to be "Jr." status in college after using the hope credit next year (I'm currently a freshman in college)/ Can I claim the Hope credit the next year after that, or is strictly limited to the first two years in college (in terms of time frame) or does it refer to class standing (Fr/So/Jr/Sr/etc)?. Also I'm now assuming through experience it is better for the parent to claim the educational credits since they are more likely to have more tax to reduce through the credit, thus making it more beneficial by getting more money back? For some strange reasons I am claiming myself this year so I had to file for the credit, but I'm just wondering for the future. Hope that makes at least a bit of sense, thanks!.

- Steve

 

[EagleKeeper]

Originally posted by: elbosco
I have a quick question concerning income tax and filing.

I hold a seasonal job and my current income level allows me to be exempt from any taxes aside from Social Security and Medicare.

However, I cashed a few Series EE saving bonds during the year and I was wondering if the interest earned on the bonds would be amalgamated to my yearly income or if it falls under a different category?

If the interest earned is added to my income, I would still fall in the exempt bracket and would still not have to file any forms, correct?

Correct; However, because Uncle will receive paperwork regarding the bonds, it would be wise to file to keep them happy.

 

[EagleKeeper]

Originally posted by: IndieSnob
I shouldn't have saved this till last minute, but I won't give all of my weak excuses...

I need to go back and file for 2000 and 2002. In 2000, I was considered a contractor my first two months of employment at a job I had in Seattle. My income was reported on a 1099-Misc. Earlier that tax year I had two other jobs that gave me a W2, along with the contracting job when I moved to an actual position with them. How would I go about doing the 1099-Misc along with the W2's?

One more question also. These printouts are abit confusing, in that the names of taxes, etc. are different than a standard W2. The one's I am confused about are "FICA TX WH" (Some sort of tax withold, I gather) and T FICA WAG (What was taxable wages ? ) Any help on this would be greatly appreciated.

The 1099-Misc will go on the lovely Schedule C. Also, any business type expenses can also go on the Schedule C to offset that income (plus more).
the W2s will be handled normally. You will have to go to the IRS to get the tax forms for that far back. Have fun digging up the documentaiton for the expenses; however, you had better figure out some way of doing so. Filing a return that far back may generate some scrutiny. Also, there are going to penalties for late filing and possible interest on any amounts due puls on the penalties.


FICA is a Federal abreviation for the Social Security taxes.

 

[EagleKeeper]

Originally posted by: earthslash
As I understand it, the educational credits (hope and lifetime learning) are NON-Refundable credits, meaning it will lower the tax owed based on your taxable income. My tax on my taxable income is between 650 and 750, meaning either educational credit I claim I can only get a max of that amount. Am I correct in what I've stated so far?. The credits have confused me and when I learned I wouldn't be able to get more of a credit because my lower tax on my taxable income, I just sort of wondered.


Another question, the hope credit is said to be valid for your first two years of education. I'm claiming the Lifetime Learning Credit this year as I wouldn't be able to get more if I claimed the Hope Credit anyways. I'm most likely not going to be "Jr." status in college after using the hope credit next year (I'm currently a freshman in college)/ Can I claim the Hope credit the next year after that, or is strictly limited to the first two years in college (in terms of time frame) or does it refer to class standing (Fr/So/Jr/Sr/etc)?. Also I'm now assuming through experience it is better for the parent to claim the educational credits since they are more likely to have more tax to reduce through the credit, thus making it more beneficial by getting more money back? For some strange reasons I am claiming myself this year so I had to file for the credit, but I'm just wondering for the future. Hope that makes at least a bit of sense, thanks!.

- Steve

The educational credit can not return more money than the tax liability.

In otherwords; if you have 1000$ in credit but only owe $800 in taxes; you will not get a $200 refund.

The HOPE credit is intended for people who are enrolled (more than half time) in a 2 or 4 year college and have not completed the first two years.

IRS - FAQ - Educational Credits

To claim the Hope Credit, the student for whom you pay qualified tuition and related expenses must be an eligible student. This is a student who meets all of the following requirements.

1) Did not have expenses that were used to figure a Hope Credit in any 2 earlier tax years.

2) Had not completed the first 2 years of postsecondary education (generally, the freshman and sophomore years of college) before 2004.

3) Was enrolled at least half-time in a program that leads to a degree, certificate, or other recognized educational credential for at least one academic period beginning in 2004.

4)Was free of any federal or state felony conviction for possessing or distributing a controlled substance as of the end of 2004.

 

[IndieSnob]

Originally posted by: EagleKeeper

Originally posted by: IndieSnob
I shouldn't have saved this till last minute, but I won't give all of my weak excuses...

I need to go back and file for 2000 and 2002. In 2000, I was considered a contractor my first two months of employment at a job I had in Seattle. My income was reported on a 1099-Misc. Earlier that tax year I had two other jobs that gave me a W2, along with the contracting job when I moved to an actual position with them. How would I go about doing the 1099-Misc along with the W2's?

One more question also. These printouts are abit confusing, in that the names of taxes, etc. are different than a standard W2. The one's I am confused about are "FICA TX WH" (Some sort of tax withold, I gather) and T FICA WAG (What was taxable wages ? ) Any help on this would be greatly appreciated.

The 1099-Misc will go on the lovely Schedule C. Also, any business type expenses can also go on the Schedule C to offset that income (plus more).
the W2s will be handled normally. You will have to go to the IRS to get the tax forms for that far back. Have fun digging up the documentaiton for the expenses; however, you had better figure out some way of doing so. Filing a return that far back may generate some scrutiny. Also, there are going to penalties for late filing and possible interest on any amounts due puls on the penalties.


FICA is a Federal abreviation for the Social Security taxes.

First off, thanks again for your help!

I just have another quick question then on that schedule c. I found a copy of the 2000 schedule c and downloaded it, so I assume I could use that. I was wondering if I should do the schedule c ez though since I made just $1,368, and had no expenses. It was really just a temp job, and they paid me as a contractor.

 

[EagleKeeper]

Originally posted by: IndieSnob


First off, thanks again for your help!

I just have another quick question then on that schedule c. I found a copy of the 2000 schedule c and downloaded it, so I assume I could use that. I was wondering if I should do the schedule c ez though since I made just $1,368, and had no expenses. It was really just a temp job, and they paid me as a contractor.

Look at my posts yesterday on the subject and consequences of not digging out expenses.

With no expenses to offset that income, you are liable for 15% of that money for SS taxes. = $205

It is your choice and your $$.

 

[MrBlahh]

Thanks for the help EagleKeeper

 

[CPA]

Originally posted by: grooveman
Hi, kindly tax people!

I just wanted to check in on something. I've just started a small, small, small business. (Sole proprietorship; started in late January)

Normally, a person in this situation would file quarterly to pay their taxes. (Self-employment tax, etc.) I was peering at some forms on the IRS site, and they made it sound like it was not necessary to file quarterly under certain circumstances. If I read the form right, if a person had an estimated tax liability of less than $1,000 for the year or didn't have any tax liability the previous year, quartely filing was not necessary. Alas, both of those circumstances apply to me.

I just wanted to make sure that I read everything properly. I might have a long night ahead otherwise.

No matter what, I think I've got to make an appointment to see a CPA soon. *Sighs*

Thanks very kindly - you all are wonderful!

Groove

you are correct sir.

BTW, did you form as a single-member LLC?

 

[CPA]

Originally posted by: LordSnailz
I'm going to feel stupid about this one -- just filed both my federal and state but realized that I did not include my interest earned from ingdirect ... the interet was about 240? Should I fill out an amendment for both state and federal or just forget about it?

play on the safe side and file the 1040X.

 

[CPA]

Originally posted by: Lazee
thank you eaglekeeper

edit: whoa, how come you are not elite? :|

I'd like to know that too.

 

[CPA]

Originally posted by: Squisher
My idiot son went to H & R Block and they did his return. The problem is that they had him take himself as dependent. The problem is that I claimed him too on my taxes I filed electronically monday.

I had him call to file an amended return, but they said his return would be rejected and he'd just have to come in and redo his return.

Does this sound about right?

Why would his 1040X be rejected and not theirs?

In any case, if they will do it for free, then just use them.

 

[CPA]

Originally posted by: elbosco
I have a quick question concerning income tax and filing.

I hold a seasonal job and my current income level allows me to be exempt from any taxes aside from Social Security and Medicare.

However, I cashed a few Series EE saving bonds during the year and I was wondering if the interest earned on the bonds would be amalgamated to my yearly income or if it falls under a different category?

If the interest earned is added to my income, I would still fall in the exempt bracket and would still not have to file any forms, correct?

IIRC, if you used the bonds to pay for educational expenses then it would be exempt. Barring that, you will have to look at your overall liability to determine if you need to file.

 

[Zee]

Originally posted by: EagleKeeper

Originally posted by: Lazee

Originally posted by: EagleKeeper

Originally posted by: Lazee

Originally posted by: EagleKeeper

Originally posted by: Lazee
Wow this is cutting it close.

Questions please.

Mother in USA with me. Father in foreign country.
They are filing Married but filing separately.
Mother - savings account interest.
Father - savings and retirement fund (1099-int and R)

Easy stuff. However I have filed Mother as a dependent under me since she has no real income and i pay more then 50% of everything in the home. My father's filing through Turbotax was rejected today. Me and my mother's was Accepted.

Error Code 0509: The secondary taxpayer's social security number was used as a dependent's social security number or used as qualifying child's social security number on Schedule EIC on the current return or a previous return. <OR> The dependent's social security number was used as a secondary taxpayer's social security number on the current return or a previous return. <OR> The qualifying child's social security number on Schedule EIC was used as a secondary taxpayer's social security number on the current return or a previous return.

Did I do something wrong? Because I filed my mother as a dependent under me, were they allowed to file married but separate ?

edit: apparently i have to do it by mail. nevermind, thanks

Nope - Married Seperately voids using a parent as a dependent.

You Dad will have to file as Single to get around that roadblock.

He's legally considered married though. won't that create problems filing as single?

You have already created the problem by claiming your parent as an dependent.

A person can be be classified as a dependent of two people at the same time. Being classified as married-seperately is supposed to prevent that person from being a dependent. Look closely at the rules for dependency.

IRS - FAQ - Dependency

Married persons living apart. If you live apart from your spouse and meet certain tests, you may be considered unmarried.

Nonresident alien spouse. You are considered unmarried for head of household purposes if your spouse was a nonresident alien at any time during the year and you do not choose to treat your nonresident spouse as a resident alien.

Im sorry but I read that page 3 times and i dont understand where the problem lies. According to table 4, since i can claim my mother as an exemption, why does that void my father's married but separate return? I can't find where it says that if 2 parents are filing married but separate, then one of them can't be my dependent.

Help please?

Thank you so much in advance...

When one files as married filing seperately, one has to include the spouse's SS#;
the other spouse must also filed as married seperately.

By you claiming your mother as a dependant, she she canot do this; it creates a conflict.

Therefore for your father to file, he must fileg as single becuase you have already claimed your mother.

The guidelines contain an exceptions which allows this condition between your parents.

quick help!

Ok i my father's "single" return got rejected as well.

Do i have to amend my return so that i dont declare my mother as a dependent even though I did pay most of the household things and she made less than 3100?

 

[CPA]

Originally posted by: Lazee

Originally posted by: EagleKeeper

Originally posted by: Lazee

Originally posted by: EagleKeeper

Originally posted by: Lazee

Originally posted by: EagleKeeper

Originally posted by: Lazee
Wow this is cutting it close.

Questions please.

Mother in USA with me. Father in foreign country.
They are filing Married but filing separately.
Mother - savings account interest.
Father - savings and retirement fund (1099-int and R)

Easy stuff. However I have filed Mother as a dependent under me since she has no real income and i pay more then 50% of everything in the home. My father's filing through Turbotax was rejected today. Me and my mother's was Accepted.

Error Code 0509: The secondary taxpayer's social security number was used as a dependent's social security number or used as qualifying child's social security number on Schedule EIC on the current return or a previous return. <OR> The dependent's social security number was used as a secondary taxpayer's social security number on the current return or a previous return. <OR> The qualifying child's social security number on Schedule EIC was used as a secondary taxpayer's social security number on the current return or a previous return.

Did I do something wrong? Because I filed my mother as a dependent under me, were they allowed to file married but separate ?

edit: apparently i have to do it by mail. nevermind, thanks

Nope - Married Seperately voids using a parent as a dependent.

You Dad will have to file as Single to get around that roadblock.

He's legally considered married though. won't that create problems filing as single?

You have already created the problem by claiming your parent as an dependent.

A person can be be classified as a dependent of two people at the same time. Being classified as married-seperately is supposed to prevent that person from being a dependent. Look closely at the rules for dependency.

IRS - FAQ - Dependency

Married persons living apart. If you live apart from your spouse and meet certain tests, you may be considered unmarried.

Nonresident alien spouse. You are considered unmarried for head of household purposes if your spouse was a nonresident alien at any time during the year and you do not choose to treat your nonresident spouse as a resident alien.

Im sorry but I read that page 3 times and i dont understand where the problem lies. According to table 4, since i can claim my mother as an exemption, why does that void my father's married but separate return? I can't find where it says that if 2 parents are filing married but separate, then one of them can't be my dependent.

Help please?

Thank you so much in advance...

When one files as married filing seperately, one has to include the spouse's SS#;
the other spouse must also filed as married seperately.

By you claiming your mother as a dependant, she she canot do this; it creates a conflict.

Therefore for your father to file, he must fileg as single becuase you have already claimed your mother.

The guidelines contain an exceptions which allows this condition between your parents.

quick help!

Ok i my father's "single" return got rejected as well.

Do i have to amend my return so that i dont declare my mother as a dependent even though I did pay most of the household things and she made less than 3100?

What was the reason?

 

[EagleKeeper]

It might be best for your father to file a paper return with a statement detailing the situation. Who knows what the flags are on his SS# becuase of the filing situation between married joint, married seperately and now single.

This is a perfect example why all use of dependant exemptions need to be coordinated between the filers who can either claim them and/or responsible for the dependant..