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

[upsciLLion]

21 year old college student living at home and dependent on parents. Income of $8.8k with $644 withheld. 1040ez says I am going to get $236 back. Does that sound right? I asked a buddy whose dad is an accountant and he said I should get all of it back. 😕 Can anyone help me out? Thanks in advance. 🙂

ups

 

[EagleKeeper]

Originally posted by: v3rrv3
Any help for me? 😀 Background info:
16 year old, part time high school/college student, dependant via my parents. Income of roughly 6k, 400 withheld. I looked at the 1040EZ and it says I'm paying like 161, any way I can get more back? 😀

Thanks,
Kevin

SOL 🙁

You do not have enough income to go play the deductions game.
College tuition costs will go to your parents because you are being claimed as their dependant.

Only option will take money out of your pocket. Put $$$ into an IRA. this will start building up for you, and reduce the tax liability.
You can fund it before 15 April for 2003

 

[EagleKeeper]

Originally posted by: upsciLLion
21 year old college student living at home and dependent on parents. Income of $8.8k with $644 withheld. 1040ez says I am going to get $236 back. Does that sound right? I asked a buddy whose dad is an accountant and he said I should get all of it back. 😕 Can anyone help me out? Thanks in advance. 🙂

ups

See above answer.

I suspect that the accountant may not have considered your status as a dependant.
Accountants are not always tax professionals and many \do not understand the college student dependant situation. (This is something that has just started kicking in the last few years)

Those that do our own taxes with a student are becoming familiar with this now.

 

[EagleKeeper]

Originally posted by: AbsolutZero
This might be an easy one:

My father set up a sub-account in my name at Merril Lynch, the master (non-retirement) account is in his name. Who pays the tax on the interest and dividends on the sub-account?

The broker will send an interest statement with the SS #.
That will be the person who must claim the interest.

 

[alkemyst]

Originally posted by: EagleKeeper

Only option will take money out of your pocket. Put $$$ into an IRA. this will start building up for you, and reduce the tax liability.
You can fund it before 15 April for 2003

Did you mean 2004? I am going to look into IRA and other investments....I don't know if I can write off all my taxes this year to even pay out $0.

If I could use that money myself that would be better than sending it to uncle sam. So far I am thinking I may owe about $3,000.

If there is anywhere I can redirect that this year to lower my taxes for 2003 I love to hear.

Å

 

[EagleKeeper]

Originally posted by: alkemyst

Originally posted by: EagleKeeper

Only option will take money out of your pocket. Put $$$ into an IRA. this will start building up for you, and reduce the tax liability.
You can fund it before 15 April for 2003

Did you mean 2004? I am going to look into IRA and other investments....I don't know if I can write off all my taxes this year to even pay out $0.

If I could use that money myself that would be better than sending it to uncle sam. So far I am thinking I may owe about $3,000.

If there is anywhere I can redirect that this year to lower my taxes for 2003 I love to hear.

Å

IRAs can be funded for 2003 up until April 15, 2004. When you send in the $$$, you need to let the account handlers know that the funds are earmarked for the 2003 year.

Damm, I am good - 10 year old memory still works 😱
FAQ Link Question covers different year (2002), but is still valid

Tax Tip 2003-65, April 2, 2003

If you haven?t put any money into an Individual Retirement Arrangement (IRA) for tax year 2002, or if you?ve put in less than the maximum allowed, you still have time. You can contribute to either a traditional or Roth IRA until the April due date of your tax return.

Be sure to tell the IRA trustee that the contribution is for 2002. Otherwise, the trustee may report the contribution as being for 2003, when it is received.

You may contribute up to $3,000 of your earnings for 2002 or up to $3,500 if you are age 50 or more. You may fund a traditional IRA, a Roth IRA (if you qualify), or both, but your total contributions cannot be more than these amounts. These limits will also apply for 2003 and 2004.

You may be able to take a tax deduction for the amounts you put into a traditional IRA, depending on whether you ? or your spouse, if filing jointly ? are covered by an employer?s pension plan and how much total income you have. You cannot deduct Roth IRA contributions, but the earnings on a Roth IRA may be tax-free if you meet the conditions for a qualified distribution.

You may file your tax return before you make the IRA contribution, but you must be sure to complete the contribution by the filing deadline. If you report a contribution to a traditional IRA on your return, but fail to make it by the deadline, you must file an amended tax return. If you claimed a deduction for an IRA contribution that you failed to make, you must add that amount back to your income on the amended return and pay tax accordingly.

IRS Publication 590 has detailed information on Individual Retirement Arrangements. It?s also available by phone at I-800-TAX-FORM (1-800-829-3676). Taxpayers needing this or any other IRS publication should act soon to be sure they have the item in time to meet the April deadline.

 

[alkemyst]

Originally posted by: EagleKeeper

Clarification - It used to be this way earlier, I have not checked on it recently If it is still valid then:

IRAs can be funded for 2003 up until April 15, 2004. When you send in the $$$, you need to let the account handlers know that the funds are earmarked for the 2003 year.

Cool, I will hunt down the publications or what not....I need to set up a retirement fund anyway [again]....one huge divorce and two live-in break ups + going back to school + 'misc' has my savings rather dry 🙂....I was going to look into this after the middle of the year, but if I can apply it to 2003 not only can I reduce my tax burden, but also have it directly benefit me.

thanks

Å

 

[AbsolutZero]

Originally posted by: EagleKeeper

Originally posted by: AbsolutZero
This might be an easy one:

My father set up a sub-account in my name at Merril Lynch, the master (non-retirement) account is in his name. Who pays the tax on the interest and dividends on the sub-account?

The broker will send an interest statement with the SS #.
That will be the person who must claim the interest.

Thanks! 🙂

 

[KK]

Would there ever be benefits to filing married filing separate? I briefly ran the figures and it came out alot more doing it that way than filing jointly. I just don't see how that would be better anyway I figure it out with made up figures.

KK

 

[EagleKeeper]

Originally posted by: KK
Would there ever be benefits to filing married filing separate? I briefly ran the figures and it came out alot more doing it that way than filing jointly. I just don't see how that would be better anyway I figure it out with made up figures.

KK

Most time it will not benefit.

There are exceptions (especialy when a Head-Of-Household) status can be brought into play or the combined income level can affect certain deductions.

Schedule A Deductions for medical and employee expenses are based upon the Adjusted Income. Remove one spouse 's income may allow some of the expenses to rise above the other income level.

One should always run a comparison between the situation(s) if possible. Tax s/W makes it easy to do so, becauase expenses can be assigned to the proper person.


People who are at each other throats may wish to file seperate to relieve any responsibiltiy to the other. The following year they may legally have to file seperate from each other 🙁

 

[Nitemare]

Without producing receipts, the most that I can put down for charitable contributions?

Helped organize a Toys for tots kind of thing . Could I safely say I spent x amount of hours on it times my current hourly rate at my main job?

 

[dabuddha]

Situation: Turns out my employer was withholding maryland state income tax from my paycheck instead of virginia (I'm a VA resident) I fixed this back in September when I found out but Turbo Tax is telling me I have to pay a Underpayment penalty ( ~$50.00 ) Is there a way around this because it's my employer's mistake.

 

[alkemyst]

Originally posted by: Nitemare
Without producing receipts, the most that I can put down for charitable contributions?

Helped organize a Toys for tots kind of thing . Could I safely say I spent x amount of hours on it times my current hourly rate at my main job?

No, time spent is *not* deductible. Any actual out of pocket expenses you incur performing those services would be deductible though. I think the loophole (don't know if it is legal) is you bill the charity for yout time, they pay you and you donate the money to them giving you a write off.

You have to figure if this was allowed there would be real problems in handling it .... esp by those self employed which could develop their own hourly rates.

Å

 

[Kaervak]

I just have a quick question about whether I need to file a return at all or not. I didn't work at all in 2003, however I made $242.89 in interest as follows:

ING Account - $50 signup bonus reported as interest and $14.31 in interest on the account balance.
Charter One account - $100 giftcard sign up bonus reported as interest.
Series EE US Savings bond - $75.04.
TCU account - $3.54 (Bling Bling 😀)

Since it's such a small amount I don't think I'll have to file a return but I'm not entirely sure. So if someone in the know can clear things up, I'd appreciate it.

 

[MarklarMarklar]

My tax situation: Full-time student with $2450 in tuition payments, $4500 in income, and a $1600 distribution from a 401k. Will I pay any taxes? If more info is needed just ask. Thank you.

 

[dxkj]

25k Income

1802 taken out Federal
682 taken out State


Completed our taxes online and we got

1802 Federal Refund
30 State refund.


Is it common for the state refund to be that low vs the Federal Refund?

 

[CPA]

Originally posted by: dxkj
25k Income

1802 taken out Federal
682 taken out State


Completed our taxes online and we got

1802 Federal Refund
30 State refund.


Is it common for the state refund to be that low vs the Federal Refund?

Generally yes, but all states are different. If you are comfortable with the numbers then you probably have everything correct.

 

[Falloutboy525a]

I'm a fulltimestudent and I support my self. I made about 15k last year. I didn't pay any of my tution last year just put in on student loans. will the amount put on student loans count towards the hope credit or am I just stuck with what I payed myself such as books/ supplies projects...etc

 

[palad]

OK, here's my question:

Single income, married filing jointly, 2 kids, total taxable income ~25K. Last year we got back everything we paid in, this year our tax preparer showed us getting back MORE than we paid in (what with EIC, child care tax credit, etc). Is it unusual that we would get a refund larger than what we paid in in the first place?

 

[CPA]

Originally posted by: MarklarMarklar
My tax situation: Full-time student with $2450 in tuition payments, $4500 in income, and a $1600 distribution from a 401k. Will I pay any taxes? If more info is needed just ask. Thank you.

Not only will you have to file, but you will have to file a 1040 because of the early distribution from the 401K. You will have to show it as well as pay a 10% penalty.

 

[CPA]

Originally posted by: Kaervak
I just have a quick question about whether I need to file a return at all or not. I didn't work at all in 2003, however I made $242.89 in interest as follows:

ING Account - $50 signup bonus reported as interest and $14.31 in interest on the account balance.
Charter One account - $100 giftcard sign up bonus reported as interest.
Series EE US Savings bond - $75.04.
TCU account - $3.54 (Bling Bling 😀)

Since it's such a small amount I don't think I'll have to file a return but I'm not entirely sure. So if someone in the know can clear things up, I'd appreciate it.

Based on your information, you will not have to file a return. The minimum requirement for unearned income is $750. You are well below that.

 

[CPA]

Originally posted by: palad
OK, here's my question:

Single income, married filing jointly, 2 kids, total taxable income ~25K. Last year we got back everything we paid in, this year our tax preparer showed us getting back MORE than we paid in (what with EIC, child care tax credit, etc). Is it unusual that we would get a refund larger than what we paid in in the first place?

No this is not unusual, not with the EIC and child credits.

 

[palad]

Cool, thanks. I was a little worried that he had made a mistake somewhere.

Thanks for the quick response.

 

[CPA]

Originally posted by: Falloutboy525
I'm a fulltimestudent and I support my self. I made about 15k last year. I didn't pay any of my tution last year just put in on student loans. will the amount put on student loans count towards the hope credit or am I just stuck with what I payed myself such as books/ supplies projects...etc

Good News!

According to Publication 970

Paid with borrowed funds. You can claim a Hope credit for qualified education expenses paid with the proceeds of a loan. You use the expenses to figure the Hope credit for the year in which the expenses are paid, not the year in which the loan is repaid. Treat loan payments sent directly to the educational institution as paid on the date the institution credits the student's account.

 

[CPA]

Originally posted by: dabuddha
Situation: Turns out my employer was withholding maryland state income tax from my paycheck instead of virginia (I'm a VA resident) I fixed this back in September when I found out but Turbo Tax is telling me I have to pay a Underpayment penalty ( ~$50.00 ) Is there a way around this because it's my employer's mistake.

Your situation is similar to another member (read above). Basically, you should ask your employer to reimburse you the amount, since it is their mistake. If they won't do it (any good employer should easily be able to handle this adjustment), then you will need to go through the Maryland tax offices. The should have a form that will allow you to claim the error and receive your money back.