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

[shazbot]

question regarding capital losses.

Heres the situation: In 2002 I had Long Term (I think, could be Shorterm) capital losses of about 12k.
I did not file a capital loss return that year, but I did file a regular tax return.

In 2003 however, I have realized short term gains of about $5500. (My taxable income from work & whatnot is only $770, i'm a student). Is it too late to file my capital losses in 2002? And if I can file it, can I only deduct $3,000 from my cap. gains in 2003? What if my losses in 2002 were short term capital losses, does that mean I can deduct $5500 in 2003, and then carry the rest over to 2004?

*the reason I don't know whether my losses in 2002 were short term or LT was b/c when my broker merged, the trading/pricing data didn't get transfered over, so I'm a bit unclear on the purchase dates, but I do have a rough idea of the purchase price, and i'm currently trying to get the records so I can be sure.

 

[alkemyst]

added in some extra deductions and got my $2200+ owed down to around $1300....IRA will only help me about $12 or something now I may still fund one this year as any extra retirement money is good.

I somehow thought I entered a whole bunch of expenses, but they weren't showing up in the worksheets...I couldn't see that until I paid for the online turbotax and printed.

 

[alkemyst]

Originally posted by: DeathByAnts
I am a college student and filled out (paper format) my 1040 EZ> My FAFSA is asking "Enter the student's (and his/her spouse's) exemptions for 2003 (question 37): " It also says "If the student filed a 1040EZ, and answered Yes on line 5, use EZ worksheet line F to determine the number of exemptions ($3,050 equals one exemption)" (which applies to me).

I don't see an "EZ worksheet" anywhere here: http://www.irs.gov/pub/irs-pdf/i1040ez.pdf

The FAFSA forms/instructions are where that EZ worksheet is going to be, I don't believe that worksheet is an IRS matter.

 

[SarcasticDwarf]

nm

 

[alkemyst]

Originally posted by: DeathByAnts
nm

It's page 2 of http://www.irs.gov/pub/irs-fill/f1040ez.pdf

sorry for the misinfo.

Å

 

[CPA]

Originally posted by: shazbot
question regarding capital losses.

Heres the situation: In 2002 I had Long Term (I think, could be Shorterm) capital losses of about 12k.
I did not file a capital loss return that year, but I did file a regular tax return.

In 2003 however, I have realized short term gains of about $5500. (My taxable income from work & whatnot is only $770, i'm a student). Is it too late to file my capital losses in 2002? And if I can file it, can I only deduct $3,000 from my cap. gains in 2003? What if my losses in 2002 were short term capital losses, does that mean I can deduct $5500 in 2003, and then carry the rest over to 2004?

*the reason I don't know whether my losses in 2002 were short term or LT was b/c when my broker merged, the trading/pricing data didn't get transfered over, so I'm a bit unclear on the purchase dates, but I do have a rough idea of the purchase price, and i'm currently trying to get the records so I can be sure.

The first thing you will need to know is your short term gains, long term gains, short term losses, long term losses. You should be able to pull the dates from your statements you received when you purchased and sold your stock.

Next offset any short term gains with short term losses, and any long term gains with any long term losses. See what is left over. You are allowed to take up to 3K in losses against income per year. Your leftover losses, approximately 9K can be used the next year to offset gains and be used in the 3K loss limit.

Here is a quick down and dirty on capital gains and losses

 

[CPA]

Originally posted by: Mwilding
When I started work for my former employer in 2002 I lived in NY state. Late in 2002, I moved to NJ. My employer kept paying tax to NY into the new year. I have my NY state return sorted out and am getting the over payment back. My NJ return is screwed up (I am using Tax Cut Software).

My W-2 federal info is spot on.
My W-2 also splits my income between NY and NJ
I have a NJ state filing copy that lists about 50% of this income as NJ state wages
I have a NY state filing copy that lists about 50% of this income as NY state wages

Problem The NJ state return is adding my federal income and my NJ state income and giving me a taxable income of ~150% of what I made at that job.

How do I correct for the fact that ultimately when I get it sorted out I will be reprting all of my taxable income to NJ despite the fact that my W-2 states only 50% counts?

edit: Another problem - the W-2 summary lists ~50% of the income as NY income but the NY state W-2 lists all of the taxable income as NY state income... :|

edit #2 I entered the amount in the NY State earnings summary instead of box 16 and everything seems to be fine - except for the difference between what I am reporting and what is on the NY W-2. However, there is a note on the NY Earnings Summary thatsays, "Note: New York requires total Federal wages to be reported in Box 16"

State tax questions are kind of hit an miss due to the numerous differences between states. We try to concentrate only on fed issues. But, I would think that Box 16 for your state filing is nothing but informational for the state guys. They don't get copies of your Federal filings, so they want to know what you reported in order to do some reasonableness calculations, if your filing even gets kicked out for review.

For NJ, I would take one of two approaches:

1) Ask your employer for a corrected W2 listing the full year earnings for NJ. That way your W2 and what you file are in sync. Otherwise if you report differently than what your W2 reports, then you could be asked to prove some things, which means a lot of wasted time for you. OR,

2) Call your state taxing department for directions to easily rectify this. If they say no corrected W2 is needed, then you should just be able to override the numbers that TaxCut is applying.

 

[CPA]

Originally posted by: Mwilding
Is a stipend earned a director of a charitible organization reported on a 1099-misc self employment income?

In what box is the income reported?

 

[CPA]

Originally posted by: Mwilding
One last question (can you tell I am doing my taxes today?)

I get the following message from my Tax Cut software:

Based on the information you have entered so far, none of your traditional IRA contributions for 2003 will be deductible.

How can that be?

edit: wow , I didn't realize that making more than $55,000 means you can't take any deduction...

more info

edit #2 I was only and active participant in an employee sponsored retirement plan for 1/2 the year. Does that count for anything?

This is why I don't contribute to an IRA. No incentive when you hit the income limit, unless you are maxed out on your 401K.

You participated, period. So you are not eligible to deduct.

I question, though, why you would even participate in an IRA instead of continuing in your 401K. The 401K gives you the same impact, but immediately on your paycheck. Wait, you work with a chartible organization, so, if I recall, that would be a 403b.

 

[slydecix]

I just wanna thank CPA for doing all this. They should give you your own forum for this stuff if you decide to help everyone out again next year

 

[CPA]

Originally posted by: Elitebull
I just wanna thank CPA for doing all this. They should give you your own forum for this stuff if you decide to help everyone out again next year

Thanks. I couldn't do it without the help from EagleKeeper and alkemyst, though. They probably answer more questions than I do.

And yes, it'll be back next year, I've already got ideas on how I might change some things. Own forum, though...well, as long as it doesn't turn out like P&N

 

[GasX]

Originally posted by: CPA

Originally posted by: Mwilding
Is a stipend earned a director of a charitible organization reported on a 1099-misc self employment income?

In what box is the income reported?

non-employee compensation

 

[EagleKeeper]

Originally posted by: alkemyst
added in some extra deductions and got my $2200+ owed down to around $1300....IRA will only help me about $12 or something now I may still fund one this year as any extra retirement money is good.

I somehow thought I entered a whole bunch of expenses, but they weren't showing up in the worksheets...I couldn't see that until I paid for the online turbotax and printed.

That is why one does not use the online system for complicated returns. It does not save you anything and could cost you time.

 

[MustISO]

I'm trying to add up business expenses for a business that was started in 2003. It's out of our home but we don't count it as a home office.
I'm using Turbo Tax 2003 and there's a section for supplies expense and it gives some examples: Toner, CD's, cleaning supplies.

What about things like books, notebooks, paper, etc. How is this stuff handled.

And what about things that already existed before the business was started. We were trying to list those as assets but it's putting those into a depreciation schedule. Is that right?

 

[kalster]

Guys

I need some help.


During the past year, i was a student till april, in California

Since June i have been working in Illinois


During the first month of my job (june to july) my address in the hr record was the address in california for some reason, i changed it after that


Now I got two w-2's from work

enty in box 1 (federal wages tips, ,,,) is same on both the forms


entry in colum 16 (state wages) is different on both obviously

box 16 value for the illinois w2 is equal to the total federal wages (box 1, same in both w-2's)

state wages value for the california w2 is a fraction of the total federal income (first months income)



shudnt the two state wages total be equal to the federal wages


is this an error in the w2 itself?

 

[MustISO]

One more question. I'm doing my state return now and TT is asking what part of the federal adjusted gross income is my wife's. If I've entered in all my financial info why would they be asking me for a figure. They have all out W2 info and her business info.

How do I calculate for AGI?


They also want to know what portion of the state refund from last year is hers. Would I just divide it by 2?

 

[EagleKeeper]

Originally posted by: MustISO
I'm trying to add up business expenses for a business that was started in 2003. It's out of our home but we don't count it as a home office.
I'm using Turbo Tax 2003 and there's a section for supplies expense and it gives some examples: Toner, CD's, cleaning supplies.

What about things like books, notebooks, paper, etc. How is this stuff handled.

And what about things that already existed before the business was started. We were trying to list those as assets but it's putting those into a depreciation schedule. Is that right?

What about things like books, notebooks, paper, etc. How is this stuff handled.

I always use the supplies area for anything that I would purchase from a place like Office Depot that is not technology releated.

And what about things that already existed before the business was started. We were trying to list those as assets but it's putting those into a depreciation schedule. Is that right?

All assets that can be depreciated should be. This allows you to plan for replacement.

The state calculations may be because of the fact that you are also having a shared business.

All AGI is is the original gross income adjusted for additions and subtractions listed on the front of the 1040 form.

 

[EagleKeeper]

Originally posted by: kalster
Guys

I need some help.


During the past year, i was a student till april, in California

Since June i have been working in Illinois


During the first month of my job (june to july) my address in the hr record was the address in california for some reason, i changed it after that


Now I got two w-2's from work

enty in box 1 (federal wages tips, ,,,) is same on both the forms


entry in colum 16 (state wages) is different on both obviously

box 16 value for the illinois w2 is equal to the total federal wages (box 1, same in both w-2's)

state wages value for the california w2 is a fraction of the total federal income (first months income)



shudnt the two state wages total be equal to the federal wages


is this an error in the w2 itself?

Your Illinois W2 seems to be incorrect.
Contact your HR and have the issue a correct one.

It may take a few days.

If they are going to issue a new one, then you can still do your Federal and CA with the correct W2.
You should be able to prepare the Illinios return using what you think is the correct numbers, but do not send it in until you get a corrected W2.

If the W2 does not arrive within a week, get on HR.

 

[dabuddha]

Last question (I hope!)
As before, I need to file a Virginia Tax Return. My wife was a part year resident but she didn't work at all in Virginia so all of her income is not taxable by Virginia. So I decided to file a full year resident form instead of a part year resident form. I'm using Turbo tax deluxe 2003. It printed out a 760CG form instead of a 760 form. From what I was able to find online, CG is for computer generated and should be ok.

Questions:
[*]Full year resident should be ok instead of part year? Wife became a resident after may 2003 and didn't work at all in Virginia.
[*]I don't think I need to attach my W2's with my return. Just want to verify it with someone else whose done it or knows about it. I'll be filing the 760CG form if the answer to #1 is "Sounds good to me!"
[*]Do I staple the check to my 760CG form or just paper clip it to it

TIA!

Printing Form 760CG


If you decide to use a certified tax preparation package on your personal computer, you may file your return electronically through the vendor's web site, or you may print the return and mail it and the related schedules to TAX. The form that is printed from a tax software is called a 760 CG (computer generated) and it will look different from the standard Form 760 that comes with the tax instruction booklet. If applicable, the print out will also include Schedule ADJ/CG, Schedule INC/CG and Schedule CR/CG. Schedule INC/CG takes the place of your Forms W-2 and 1099 statements. If you use the Form 760 CG and Schedule INC/CG, you do not have to attach your W-2's or Form 1099's to your return. The Form 760CG and related schedules have been specifically designed to enhance our scanning efficiency. You should send us the original 760 CG from your printer, and not a photocopy.

We also recommend that you make sure your printer and print cartridge are in good working order before printing the return. The return must be printed in black ink on white paper (preferably 20lb. stock). Please do not send us returns that are printed in other colors or returns printed on colored paper.

 

[kalster]

Originally posted by: EagleKeeper

Originally posted by: kalster Guys I need some help. During the past year, i was a student till april, in California Since June i have been working in Illinois During the first month of my job (june to july) my address in the hr record was the address in california for some reason, i changed it after that Now I got two w-2's from work enty in box 1 (federal wages tips, ,,,) is same on both the forms entry in colum 16 (state wages) is different on both obviously box 16 value for the illinois w2 is equal to the total federal wages (box 1, same in both w-2's) state wages value for the california w2 is a fraction of the total federal income (first months income) shudnt the two state wages total be equal to the federal wages is this an error in the w2 itself?

Your Illinois W2 seems to be incorrect. Contact your HR and have the issue a correct one. It may take a few days. If they are going to issue a new one, then you can still do your Federal and CA with the correct W2. You should be able to prepare the Illinios return using what you think is the correct numbers, but do not send it in until you get a corrected W2. If the W2 does not arrive within a week, get on HR.

thanks

a lot

 

[alkemyst]

Originally posted by: MustISO
I'm trying to add up business expenses for a business that was started in 2003. It's out of our home but we don't count it as a home office.
I'm using Turbo Tax 2003 and there's a section for supplies expense and it gives some examples: Toner, CD's, cleaning supplies.

What about things like books, notebooks, paper, etc. How is this stuff handled.

And what about things that already existed before the business was started. We were trying to list those as assets but it's putting those into a depreciation schedule. Is that right?

If you are using turbo tax it's all part of schedule C (or K, and other corporate forms for non-sole proprietors) filing. Anything you need for your business is usable as an expense, however, you can't buy a ream of paper and use 2 sheets to print 'company' letters and the rest to print family pics.

Thing that existed before have to be property....like furniture, computers, etc used for the business. You enter it as far as 'Date of Service' your basis is the value at that date of service and it goes into a depreciation model....you recover the full value over the depreciation period.

For instance if you bought a car for $20k in 2001, but didn't put it into the business until 2003 and it was worth $12,500 at the time you would use that as the basis and in 5 years (excepting special cases) you will recover the $12,500 if used 100% for business. It's complicated, but that's the idea.

You cant start going through you home and listing equipment at full MSRP from 5-6 years ago , people do that, but it's not legal. The problem is there is no 'what was the year the equipment was originally purchased?' question.

Å

 

[xSauronx]

Originally posted by: alkemyst

Originally posted by: xSauronx
i just remembered that my wife, working on commission...doesnt know where to start to take care of her quarterly taxes. is it best to use certain software for this? or is it simple enough that just filling out a couple of forms shouldnt be a problem? there shouldnt be anything complicated about her tax situation, she keeps up with he incomes and expenses...ive just never had to mess with this before and dont know what woudl be the easiest way to get it done. :/

The easiest way is to get your tax software to generate it for next year....it's based on total tax owed though.

Otherwise it's just a matter of filling out a 1040-ES payment Voucher and if starting today mailing it in on 4/15/2004, 6/15/2004, 9/15/2004, 1/18/2005

Å

what happens to be the preferred tax software here anyway? i didnt get any for....reasons im not pleased about

 

[Michael]

I like TaxCut because you get the State taxes for free after rebate when you buy the deluxe version. Most head to head cometitions put TurboTax slightly ahead because the interview is considered to be better.

I finished my taxes tonight and owed money (Yeah!), but not too much.

Michael

 

[BenSkywalker]

For 1099-R and form 5329- how do you figure out the amount that is not subject to the additional 10% tax?

I have one 1099-R and have an exemption code of 2 on it, but this is for a couple making ~$90K(~$80K without the 1099-R) a year at their current jobs and neither are 59 1/2 yet(her brother left his pension plan in her name). Is the entire amount not subject to the additional tax due to the code 2, or is there some worksheet I'm missing?

Any help greatly appreciated.

 

[alkemyst]

Originally posted by: xSauronx

what happens to be the preferred tax software here anyway? i didnt get any for....reasons im not pleased about

Taxcut, Turbo Tax, etc all seem to be pretty good...each has levels as well...I like Turbo Tax's Home and Business for the Web edition.

The thing is until you pay for the web version you can't see anything other than summaries. If you are going to do it with a complicated return (anything but a 2-3 pager) you are going to want to check and double check each step of the way. Also it's always good to go on paper at the same time to make sure there is no error or omission. Now that part is harder as the software is not telling you where the values are going...however at the end if you print and rework through it you can see what forms it used.

The main problem most have is not the software, but forgetting what they spent money on and what is deductable.


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