CPA's Annual Tax Time Help - Filing Day is over. This thread can be unstickied.

[EagleKeeper]

Some states will cross check the tax payments being reported by the employer quarterly against the unemployment rolls. All it takes is a simple computer program.

If one gets paid un-employment while having a reported paycheck, the state gets very upset. Most unemployment voucher will come by mail. Accepting the check while working amounts to mail fraud. That can get Uncle involved also.

Best bet is to pay the state back as soon as possible before they either find out or start nasty paperwork. At a minimum it can prevent collecting unemployment in that state in the future.

 

[cthulhu]

Thanks for the thread.

My wife is a teacher. She is having to go to graduate school to get her teaching certificate. The school is not reimbursing us for the tuition, books, or milage. I normally use a 1040A. When I did my taxes I saw where you can take a deduction for tuition - lifetime learning credit or something. A coworker told me I could deduct all of our expenses - tuition, books, and mileage as an unreimbursed business expense. To take an unreimbursed business expense I have to use form 2106 or 2106ez and report that on schedule A form 1040.
If I go this route so that I can deduct the books and mileage, do I have to itemize all of my deductions or can I still use the standard deduction of say 9500 for married filing jointly? I ask becuase I don't think my deductions would be more than the standard.

 

[CPA]

Originally posted by: cthulhu
Thanks for the thread.

My wife is a teacher. She is having to go to graduate school to get her teaching certificate. The school is not reimbursing us for the tuition, books, or milage. I normally use a 1040A. When I did my taxes I saw where you can take a deduction for tuition - lifetime learning credit or something. A coworker told me I could deduct all of our expenses - tuition, books, and mileage as an unreimbursed business expense. To take an unreimbursed business expense I have to use form 2106 or 2106ez and report that on schedule A form 1040.
If I go this route so that I can deduct the books and mileage, do I have to itemize all of my deductions or can I still use the standard deduction of say 9500 for married filing jointly? I ask becuase I don't think my deductions would be more than the standard.

Your friend is correct. This is something I have actually done.

But, it's either itemize or standard. You can't do both. And if you don't have more itemized deductions than your standard deductions, then your only option is to take the standard deduction and look into the Lifetime Learning Credit or Hope Credit.

 

[Carrot44]

Originally posted by: CPA

Originally posted by: Carrot39
Can somebody receiving SSI benefits and only SSI benefits file for earned income credit?

No. One of the qualifications to receive the EIC is that a person must work.

Also, SSI is not considered income, it is not taxable.

Thanks 😀

Ken

 

[EagleKeeper]

Originally posted by: cthulhu
Thanks for the thread.

My wife is a teacher. She is having to go to graduate school to get her teaching certificate. The school is not reimbursing us for the tuition, books, or milage. I normally use a 1040A. When I did my taxes I saw where you can take a deduction for tuition - lifetime learning credit or something. A coworker told me I could deduct all of our expenses - tuition, books, and mileage as an unreimbursed business expense. To take an unreimbursed business expense I have to use form 2106 or 2106ez and report that on schedule A form 1040.
If I go this route so that I can deduct the books and mileage, do I have to itemize all of my deductions or can I still use the standard deduction of say 9500 for married filing jointly? I ask becuase I don't think my deductions would be more than the standard.

The Lifetime Learning will cover the tuition and books. Mileage is not allowed there. You must use the 2106 which will reuire you to exceed the standard deduction.
The Lifetime Learning can be used with the 1040A.

 

[Cat]

I just did a quick run-through to see what my refund would be, using TurboTax. I claimed the Single and One Job exemptions during the year, but also switched jobs in June. TurboTax reports that I get a refund for my first job, but once I add in my second W-2, I end up owing money to the IRS. Is this normal, or is TurboTax taking two W-2s as a nullification of the Single Job exemption? I've never done my own taxes before, so I may have some terms mixed up. It says S02 for both federal and state filing status on my W-2s.

Thanks!

 

[CPA]

Cat,

I'm unfamiliar with the Single Job Exemption term. It may be something native to Turbotax.

Anyway, it doesn't make much of a difference, because if you received 2 W2s then you have to report both. Income is income, the program looks at total income, then deductions and exemptions, then taxable income to come up with total tax. It's quite possible that your total income bumps you into another tax bracket or you claimed too many withholdings on your 2nd job.

 

[Cat]

CPA Guy -

Reading my W4:

Enter "1" for yourself if no one else can claim you as a dependent ___

Enter "1" If you are single and have only one job or ... ___

I just came up with the Singe Job term to encompass that second item.

Add lines A through G and enter the total here ____

So I did this last year and came up with 2. Both jobs have the same filing status. (S2/S2). I'm still confused. I understand that I must file both W-2s. I'm trying to understand why I owe money; a wild guess is that the software I'm using thinks that I'm no longer eligible to enter '1' in that second box, because it thinks I have two jobs at once, rather than having two different, non-overlapping jobs. This would mean that I don't actually owe money. BUT, I would think that TurboTax is smart enough to check the dates, and I actually do owe money. I just don't see why, unless my total income has bumped me into a higher bracket. I was under the assumption that almost everyone gets a refund unless they take too many exemptions.

 

[EagleKeeper]

Originally posted by: Cat
I just did a quick run-through to see what my refund would be, using TurboTax. I claimed the Single and One Job exemptions during the year, but also switched jobs in June. TurboTax reports that I get a refund for my first job, but once I add in my second W-2, I end up owing money to the IRS. Is this normal, or is TurboTax taking two W-2s as a nullification of the Single Job exemption? I've never done my own taxes before, so I may have some terms mixed up. It says S02 for both federal and state filing status on my W-2s.

Thanks!

Your withholding exemptions seem to be two on the W2. With one job, your income was low enough that it may not have mattered. With two jobs, you have stuck your head up high enough that it can be seen.

You may wish to check your W4 at work and ensure that you are only claiming one if you are single. By claiming more than one, not enough withholding is being done automatically and you are in the current situation. You owe Uncle $$$, which is good for your economic health - you did not provide an interest free loan to him. It may be bad for your current finances because, the difference was not put away.

Tax tables/calculations expect that you have a base amount of income that will not be taxed. Both jobs made this assumption. In reality, only one should have.

Dig deep. 😛

 

[CPA]

Originally posted by: Cat
CPA Guy -

Reading my W4:

Enter "1" for yourself if no one else can claim you as a dependent ___

Enter "1" If you are single and have only one job or ... ___

I just came up with the Singe Job term to encompass that second item.

Add lines A through G and enter the total here ____

So I did this last year and came up with 2. Both jobs have the same filing status. (S2/S2). I'm still confused. I understand that I must file both W-2s. I'm trying to understand why I owe money; a wild guess is that the software I'm using thinks that I'm no longer eligible to enter '1' in that second box, because it thinks I have two jobs at once, rather than having two different, non-overlapping jobs. This would mean that I don't actually owe money. BUT, I would think that TurboTax is smart enough to check the dates, and I actually do owe money. I just don't see why, unless my total income has bumped me into a higher bracket. I was under the assumption that almost everyone gets a refund unless they take too many exemptions.

ahhh, I got it now.

The W4 worksheet is almost worthless. I have never had it calculate close to what I should have withheld. Basically, you are a single person, claiming 2 withholdings due to the worksheet. But when you actually file, you are only allowed to claim 1. Additionally, the W4 does not ask you how much you expect to earn, which has a big impact on overall tax. So basically, because of the worksheet you had too little withheld.

That is where the problem lies with the W4. It is meant as a worksheet/guesstimate only. You should always re-examine your tax standing mid-year and adjust accordingly (you can file as many W4s with your employer that you wish). Additionally, at a minimum, until you have a good feel for your taxes, never use more withholdings than you can actually file for. You should choose 1 or 0 from now on.

As far as dates are concerned, dates of employment should not be a factor in Turbotax nor any other tax s/w. The IRS doesn't care when you earned the money as long as you received it in the current taxable year. In fact, no dates should even be present on your W2.

edit: Also, as Eaglekeeper stated, it is better to have to give then receive when it comes to taxes at the end of the year. Just make sure you put the money aside.

 

[EagleKeeper]

Work dates have no impact on taxes.

Total income for the tax year is what counts from all employment.
Total withholding payments from all jobs and advanced payments.

Total tax owed based on income and deductions.


Key word is total

Now bend over and then take it like a man just like the rest of the country. 😀

 

[Cat]

Ugh, YES, I UNDERSTAND THIS. I merely wanted to know if TT was saying that I could not take the single with ONE JOB exemption, because I had two different employers in the same year. Thanks for both of your responses, though. 🙂

 

[cthulhu]

Originally posted by: EagleKeeper
The Lifetime Learning will cover the tuition and books. Mileage is not allowed there. You must use the 2106 which will reuire you to exceed the standard deduction.
The Lifetime Learning can be used with the 1040A.

Thanks CPA and Eaglekeeper.

Eaglekeeper, the way I read the lifetime learning credit it did not cover books. I guess I should read it again.

 

[alkemyst]

Originally posted by: Cat
Ugh, YES, I UNDERSTAND THIS. I merely wanted to know if TT was saying that I could not take the single with ONE JOB exemption, because I had two different employers in the same year. Thanks for both of your responses, though. 🙂

I think you are reading something incorrectly. I use TurboTax and the only 1 job deal is speeding you through the data acquistion part. If you specify you had one W2 job it doesn't ask you details on other income.

Thing is, it'd be impossible to have a 1 job = exemption to anything. It's all based on income regardless of # of jobs. What had happened is you fell under the low income bracket with one job and got probably several tax credits....once the second job's income fell into the mix you were out of that category.

If your single job paid the same money as the two combined you'd be in the same boat.


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[cthulhu]

Originally posted by: cthulhu

Originally posted by: EagleKeeper
The Lifetime Learning will cover the tuition and books. Mileage is not allowed there. You must use the 2106 which will reuire you to exceed the standard deduction.
The Lifetime Learning can be used with the 1040A.

Thanks CPA and Eaglekeeper.

Eaglekeeper, the way I read the lifetime learning credit it did not cover books. I guess I should read it again.

Eaglekeeper, quoting general instructions for the lifetime learning credit:
What expenses qualify? Qualified expenses do not include amounts paid for: Course-related books, supplies, equipment, and nonacademic activities, except for fees required to be paid to the institution as a condition of enrollment or attendence.
I take it that no books are deductible. Am I wrong?

 

[alkemyst]

Originally posted by: cthulhu

Eaglekeeper, quoting general instructions for the lifetime learning credit:
What expenses qualify? Qualified expenses do not include amounts paid for: Course-related books, supplies, equipment, and nonacademic activities, except for fees required to be paid to the institution as a condition of enrollment or attendence.
I take it that no books are deductible. Am I wrong?

Yes and no....normally not...however if the books are priced with the tuition (mandatory) you can.

Å

 

[SuperTool]

Why does my brokerage only send me a form with proceeds and doesn't list out cap gains?

 

[cthulhu]

Originally posted by: alkemyst

Originally posted by: cthulhu

Eaglekeeper, quoting general instructions for the lifetime learning credit:
What expenses qualify? Qualified expenses do not include amounts paid for: Course-related books, supplies, equipment, and nonacademic activities, except for fees required to be paid to the institution as a condition of enrollment or attendence.
I take it that no books are deductible. Am I wrong?

Yes and no....normally not...however if the books are priced with the tuition (mandatory) you can.

Å

Well, thinking back to when I was in college, I would have considered all of my books mandatory to pass my classes. When you say "priced with the tuition," do you mean included in the tuition?

 

[alkemyst]

Originally posted by: cthulhu

Originally posted by: alkemyst

Originally posted by: cthulhu

Eaglekeeper, quoting general instructions for the lifetime learning credit:
What expenses qualify? Qualified expenses do not include amounts paid for: Course-related books, supplies, equipment, and nonacademic activities, except for fees required to be paid to the institution as a condition of enrollment or attendence.
I take it that no books are deductible. Am I wrong?

Yes and no....normally not...however if the books are priced with the tuition (mandatory) you can.

Å

Well, thinking back to when I was in college, I would have considered all of my books mandatory to pass my classes. When you say "priced with the tuition," do you mean included in the tuition?

yes such as the case in many private schools.

 

[cthulhu]

Originally posted by: alkemyst
yes such as the case in many private schools.

Alkemyst, thanks for the help.

 

[EagleKeeper]

Originally posted by: SuperTool
Why does my brokerage only send me a form with proceeds and doesn't list out cap gains?

How would the brokerage know what the capital gains are.
They will have to keep track of all the details that you are supposed to.

Also, sometimes, you can provide stocks (certificates) that you own or received to a borkerage. They have no knowledge of what the value is when you actually obtained them.

 

[crt1530]

I received a $10K gift that is being classified as 1099 interest. I have $50K of tax loss carry forward. I have no other income this year and believe it would behoove me to pay the taxes out of pocket as the $50K of tax loss carry forward will do more for me next year when I will have much higher income. Any help is greatly appreciated.

 

[EagleKeeper]

Originally posted by: crt1530
I received a $10K gift that is being classified as 1099 interest. I have $50K of tax loss carry forward. I have no other income this year and believe it would behoove me to pay the taxes out of pocket as the $50K of tax loss carry forward will do more for me next year when I will have much higher income. Any help is greatly appreciated.

Capital Losses that are carried forward from the previous year are used against capital gains for the current year.

The $10K as interest should not count against the Capital Gain loss that is being carried forward.
If the loss is not a Capital Gain, then my answer is worthless to you

IRQ - FAQ - Gift Giving

The person who received your gift does not have to report the gift to the IRS or pay either gift or income tax on its value

If you received the $10K as a gift, then it should not have been reported on a 1099. You also do not need to report it. You should have the situation corrected.

 

[StageLeft]

Quick question: Does federal filing status affect my state at all? I found that doing a married filing separately we can get about $300 more than doing a joint, because all of the deductions were based in my name, so that's what I'm doing. I won't bother with state until the end of the month, since I'll probably owe money anyway - but will be it affected by whether we did married joint or married sep? Thanks!

Oh yeah another question: since our home loan is in my name only it seems to me that we'll always get a much bigger return out of doing a married filing separately, because my itemized deductions will be so high, even if Mrsskoorb gets only the standard one, that we'll always do better. Why isn't this the case for more people?

 

[alkemyst]

Originally posted by: Skoorb
Quick question: Does federal filing status affect my state at all? I found that doing a married filing separately we can get about $300 more than doing a joint, because all of the deductions were based in my name, so that's what I'm doing. I won't bother with state until the end of the month, since I'll probably owe money anyway - but will be it affected by whether we did married joint or married sep? Thanks!

Oh yeah another question: since our home loan is in my name only it seems to me that we'll always get a much bigger return out of doing a married filing separately, because my itemized deductions will be so high, even if Mrsskoorb gets only the standard one, that we'll always do better. Why isn't this the case for more people?

You are not doing your taxes correctly probably...usually this results in a worst tax debt unless significant medical or casualty losses.....

http://www.fool.com/taxes/2000/taxes000526.htm for more details.

From IRS.gov:
My spouse and I are filing separate returns. How can we split our itemized deductions?

If you and your spouse file separate returns and one of you itemizes deductions, the other spouse will have a standard deduction of zero. Therefore, the other spouse should also itemize deductions.

You may be able to claim itemized deductions on a separate return for certain expenses that you paid separately or jointly with your spouse. Deductible expenses that are paid out of separate funds, such as medical expenses, are deductible by the spouse who pays them. If these expenses are paid from community funds, the deduction may depend on whether or not you live in a community property state. In a community property state, the deduction is, generally, divided equally between you and your spouse. For more information refer to Publication 504, Divorced or Separated Individuals; and Publication 555, Community Property.


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