Captain Nemo

guccilvr, it sounds like you worked as an independent contractor for the company. If that is the case you should file Schedule C with your 1040. This will allow you to deduct legitimate expenses you incurred while on the project.

kurty[B], you don't get W-2's for the sale of stock. You need to report the sale and any gain (loss) you incurred on Schedule D. As far as E-filing, I punt to Gar, as I E-file all of the returns I prepare directly. I have never used an outside service.

Glory's Sun

ahh I knew it was something like that.. thanks a bunch Nemo

ironchef82

Hello,

So my question revolves around the issue of dependents. I was in college for the first half of last year, graduated, and now I'm in grad school but pretty much financially independent. My parents probably can file me as a dependent, but said that they won't since I can then further reduce my taxable income. Of course I'd love to reduce my taxable income to essentially zero and get a full refund, but is this allowable? The wording that confuses me is that on the tax form it states "Can you be filed as a dependent?" Well, I *can be*, but I'm not going to be claimed.

gar1976

His W-2 info might have some stock info on it (not the w-2 itself, but the year end crud that goes with it). Things like the basis and exervise price, which he might need depending on the plan.

Shit, Lacerte does my efiling for me. Have no idea how you would do it otherwise.....might check the online H&R Block site/Turbotax, you might be able to do your own and efile from there.

Guess I'll take the punt and kneel down for a touchback.

Good luck with the season Nemo.

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Blistex, in regards to crappy games -

They made pong look like a story driven RPG with a dynamic campaign.

Sage

some questions:

1- how much do you have to pay towards health stuff in order to claim it on your taxes? Can i claim the $20 deductible i paid every visit to the chiropractor's over the course of six months on my taxes, or do i have to have a certian amount of medical expenses to write it off on my taxes?

2- i was married on jan 6, so for the 2005 fiscal year can i claim myself as a dependent as i had been doing prior to being married? (my parents don't claim me as a dependent)

3- is it true that the # of dependents in the household is determined by the status of the household as of January 1? So, could i still claim myself as a dependent next year as i wasn't married until the 6 of jan?

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qtpye4u84

ironchef82 and I have the same question almost.

I think I filled out my W2 wrong. The w2 said if your single, and not married put 1 in the box, so I did. The W2 also said, If your single and cant be claimed by someone put a 1 in the box. So on my paycheck it says single: 2 Because I followed the directions.
Is that wrong? Does that mean they are not taking enough money out? So does that mean I will have to pay them this tax season?
If I have to pay them, do they need the money right away cause, I don't have any $

I have co-workers that claimed the same as me cause they followed the directions like i did.
I just know not to expect any money.

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The QTpie

gar1976

1) Lots. Medical costs are reduced by 7.5% of your AGI (bottom line of the first page of your 1040), and you need to itemize first. Standard deduction = no such luck.

2) You can't claim yourself as a dependent. You can claim an exemption for yourself, though. If you're married and file joint, you'd get one exemption for yourself and one for your wife.

3) Don't know where you're getting this one. Looks like for 2005, you'll be MFJ with 2 exemptions.

__________________
Blistex, in regards to crappy games -

They made pong look like a story driven RPG with a dynamic campaign.

marcsantoli

I teach part time at a local community college. Am I able to use the Educator's Expense? I haven't spent that much money out of pocket but I know I have spent some as I tracked it in my personal finance program.

Thanks,
Marc

Captain Nemo

Marc, does this answer your question?

The Internal Revenue Service advised teachers and other educators to save their receipts for books and other classroom supplies. They will be able to deduct up to $250 of such expenses again this year, following recently-enacted legislation.

The Working Families Tax Relief Act of 2004 reinstated the educator expense deduction, which had expired at the end of last year, for both 2004 and 2005. Expenses incurred any time this year may qualify for the deduction, not just those since the Act was signed on October 4.

The deduction is available to eligible educators in public or private elementary or secondary schools. To be eligible, a person must work at least 900 hours during a school year as a teacher, instructor, counselor, principal or aide.

An educator may subtract up to $250 of qualified out-of-pocket expenses when figuring adjusted gross income (AGI). This deduction is available whether or not the taxpayer itemizes deductions on Schedule A.

The IRS suggests that educators keep records of qualifying expenses in a folder or envelope with a label such as "Educator Expense Deduction," noting the date, amount and purpose of each purchase. This will help prevent a missed deduction at tax time.

marcsantoli

Looks like I don't qualify as secondary education. Secondary is high school and college prep. Oh well, it was worth a shot.

--Marc

Hardknock

Hi, my question has to do with taxes.

Can I deduct any home improvement projects I make to my home to increase its value such as, window replacements, re siding, re-roofing, etc?

Thanks.

taylorspl

I have a question about personal tax returns. How many years back can you file for if you've never filed for any of your returns? I just found out my current girlfriend has never filed for any of her returns, she hasn't ever owed because she claims 0. Thanks.

Xerocrash

I got one for you tax gurus... My company headquarters is in Massachusetts. I live in Rhode Island.. I am a contractor for the govt. in RI... can I deduct my mileage and tolls because my work requires me to work somewhere other than my work headquarters?

intecel

I have a question about charitable donations: If I put $20 cash into the collection tray at church weekly, will I be able to itemize $1040.00 on my taxes without being audited?

I don't have any receipts because nobody gets a receipt for putting money in the tray.

gar1976

No, unless you're using it as a rental/claiming office in home.

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Blistex, in regards to crappy games -

They made pong look like a story driven RPG with a dynamic campaign.

gar1976

Usually three years are held open, so you can do 2001 - 2003.

If she's claiming zero, than she probably is going to get fatty refunds, and you've lost a ton of money. Well, she has. Better tell her to get on it.

And man, if you're going to get serious with this chick, straighten her out with her finances, because if she always acts like this with money.....

__________________
Blistex, in regards to crappy games -

They made pong look like a story driven RPG with a dynamic campaign.

gar1976

I would, but first, see if you can get a receipt from your church just to be on the safe side.

__________________
Blistex, in regards to crappy games -

They made pong look like a story driven RPG with a dynamic campaign.

Hardknock

I do have a home office and I plany to start a business this year. Does that affect things?

Captain Nemo

Two things, first, assuming you are not going to claim a home office deduction, you add remodeling costs to the basis of your home, which lowers your gain when you sell it (although with the current level of gain exclusion, this doesn't have a very dramatic effect anymore). Second, if you are planning on claiming a home office deduction, these costs would (normally) be capitalized and you could claim a depreciation expense for them on an annual basis. See IRS Publication 587 for the particulars on deducting expenses associated with a home office, as the IRS is quite particular when it comes to deducting expenses associated with your home.

Captain Nemo

Oh, and Gar, I just wanted to tell you best of luck with the season yourself. I don't know your marital status, but to give you a quick peek into mine, imagine my household... My wife and I are both tax CPA's. Homelife is fun right now....

Konichiwaneko

Gar or Captain Nemo

You guys are professionals so I'll ask.

What's your opinion on the "National Retail Sales tax" bill by Congressmen John Linder. Do you agree or disagree, and why?. I look forward to your guys answer.


Also this is a silly question, is there personally any state it's better to live in compared to others for tax reason. Personal taxes, not small business or corporate.

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gar1976

I'm a bit of a social liberal, so any sales tax on the national level I'm not going to be too fond of. Plus, I'm not rich, so any sales tax would also increase my tax bill!

IIRC, Alaska has what, a small sales tax and not much else? Same with Montana?

Nevada is a popular place to go and die, with no income/estate taxes.

__________________
Blistex, in regards to crappy games -

They made pong look like a story driven RPG with a dynamic campaign.

Captain Nemo

Being a little more well to do, a national sales tax wouldn't really bother me, but I do feel it would shift a tremendous burden to the lower income class.

Also, for the record here are the states with no sales tax: Alaska, Delaware and Oregon.

And for the states with no income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.

gar1976

I live in Oregon, no sales tax, but a very prohibitive income tax. Up to 9% on all income, including capital gains.

Best tax planning there is around is to hop the river to Vancouver before unloading massive amounts of capital gains, like selling stock in a business.

__________________
Blistex, in regards to crappy games -

They made pong look like a story driven RPG with a dynamic campaign.

Konichiwaneko

I would be interested in seeing you guys post something out of this thread about the National Sales Tax that John Linder is pushing, and get your perspective of it. Because this thread is for your guys help though, I'll end it at that.

You guys are doing an amazing job, and I'll echo everyone elses sentiments, thank you so much for giving your time. I look forward to reading more advice, because it's good to know a little more here and there.

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Captain Nemo

Actually Konichiwaneko, I just read the Fair Tax Act of 2003.

http://thomas.loc.gov/cgi-bin/query/z?c108:h.r.25:

The first thing that comes to mind is that this guy is an idiot. Under his definition of services that would be subject to tax, it appears that if I get into an accident and have to go to the hospital, I would have to pay tax on the medical services I would receive. At least I think that is what it is saying....

This man frightens me......

http://linder.house.gov/index.cfm?Fu...&Resource_id=1

gar1976

The Wall Street Journal, no bastion of liberals that, estimated a national sales tax would need to be around 40-50%, and include capital items (cars, houses, etc.) Vastly different than the yayhoos who throw out 15%, or the congressman who I believe estimated 17%.

I'd believe it would fall around 30-35%, personally.

And most economists agree, having an estate and gift tax helps prevent an unwanted buildup of wealth in a few very wealthy families - these taxes help redistribute wealth back to the rest of society.

And really, under the current tax system poor people don't pay taxes anyways, so the argument that a sales tax would help them out is somewhat moot.

Considering the amount of special interest groups available (eg, what would happen to the charitable deduction? Would mortgage interest still be deductible? Etc.) any overall repeal of an income tax would be improbable at best.

__________________
Blistex, in regards to crappy games -

They made pong look like a story driven RPG with a dynamic campaign.

Konichiwaneko

I think one of the benifits is taxing underground money (drug money, gambling, etc..) which can't be traced anyways. Eventually that money will be used to buy goods.

Also The tax that corporations have to pay for products is deferred to the buyer, so I think we actually pay about 23% tax + the sales tax we normally pay when we purchase a good.



We should start another thread about it though

__________________

iccky

Alright, bit of a complicated state tax question for you guys.

I am a college student going to school in Pennsylvania. During the school year I hold a student job, so I have one W-2 from working in PA.

During the summer I worked at an internership in DC. I was paid, but the company reported it to the IRS using a 1099-misc as "non-employee compensation (I thought is was a bit dodgy legal-wise but their accountant OKed it). While working in DC I resided in Virginia. I continued to work for the same company editing their blog once I went back to school in PA, and they continued to pay me. All of this income was reported on a sigle 1099 form

Finally, my parents live in New Jersey, though I have not lived there for more then a week at a time for two years. Still, they claim me as a dependant on tax forms.

So my question is, where do I file state income taxes (PA, VA, NJ, DC, all?), and for what income in what state?

gar1976

PA for W-2. Non-resident form (depends, see below).
IF DC has a tax, I'd put the entire 1099 amount for there if you feel like being legal. If not, just claim it in your home state.
If your state of residence is still NJ, I'd file a NJ return with no taxable income (except interest and dividends) allocated there. Possibly the 1099 income, if you don't want to file a DC return.

Keep in mind, I work in OR, not that familiar with east coast taxes. This is a SWAG. If it was me, I'd file PA for the W-2 and stuff the rest into my resident state because who wants to hassle mith mutli-state returns?

__________________
Blistex, in regards to crappy games -

They made pong look like a story driven RPG with a dynamic campaign.

iccky

Alright, follow up question. How do I determine my state of residence? Is it whereever I feel like? Where I live most of the year? Or is it NJ because that's where my parents live and they claim me as a dependent. Or (and I have a sneaky suspicion it's gonna be this one) does it depend on the laws of each state?

gar1976

Most times you "establish" your residence by changing your mailing address, signing up to vote, going to church/school/etc, heading to DMV for new licence, that kind of thing.

If you are still in college, I'd go ahead and use NJ as your resident state. It's a "facts and circumstances" kind of determination.

__________________
Blistex, in regards to crappy games -

They made pong look like a story driven RPG with a dynamic campaign.

d9085

Hello..I am using Turbo Tax 2004. I sold an Areostar in june 2004 and picked up a New 2003 Grand Caravan. I used the Aerostar for business and pleasure(my rentals) & used the standard mileage deduction for all the years I owned it. Now because I sold the Aerostar Turbo Tax is asking for me to do the depreciation equivalent.
Here is what it asks:

OLD VEHICLE

Enter the depreciation equivalent of your standard mileage deduction for eeach year including 2004. The amount for AMT should be the same as the amount for regular tax unless you used the actual expense method for any year.

Depreciation Equivalent [ ]

AMT Depreciation Equivalent [ ]

Here are the instructions to go with it:

Depreciation Equivalent To determine the amount to enter for depreciation, multiply your business mileage for each year you used the standard mileage rate by the amounts below. Use these standard amounts for both your regular tax depreciation and your AMT depreciation. However, the total amount you enter cannot exceed the depreciable basis of the vehicle.

Remember, if you used the actual expense method ian any year, you must use the depreciation computed for that year instead of the mileage amounts.

2004........16 cents

2003........16 cents

2002........15 cents

2001........15 cents

2000........14 cents

1994-1999...12 cents

MY QUESTION IS:

DO I TAKE THE MILEAGE FROM 1995 TO 2004 AND MULTIPLY TIMES THE RATE ABOVE AND ADD THEM TOGETHER? OR JUST FROM 2004? WHAT DO I DO FOR THE AMT?

Thank you to anyone who can help!

slushi999

In February I sold a rental property with a gain of $50K. I have owned the property for 15 years. I have been depriciating the property during the tax time. What kind of tax implications, I will be facing?

RocketScientist

I just googled over here and had such a great time reading this thread, I registered. Perhaps YOU can answer this seemingly easy question:

What is the formula for finding out exactly how much money one W-4 exemption change will get you?

I like to live on the bleeding edge of my fiscal responsibility to the IRS. They upped the top end recently to owing $1000 (or 10% of the tax?) w/o penalty on your 1040. I got an accursed $250 back this year. I want to be able to change my W-4 so that I pay about $700 (which gives me a buffer). The "Exemption Worksheet" is way too conservative.

mandal

Wow, if you could help me I will praise you. I've even tried going to a tax person, but what they calculated seems wrong. PLEASE and I mean PLEASE help, I've looked everywhere for help, but none was out there, here's the situation:

Over the summer I participated in a Research Experience for Undergraduates program funded by the NSF. I hope you are familiar with this as what happened in terms of payment of this program was unique. I basically did research for a university with due dates on papers and such and they paid me in intervals corresponding to due dates. All in all they paid me 3,000 plus 1500 that was supposed to be for housing. so 4500 overalll. So when tax season comes along, I expect a W-2 or something similar, but instead recieve a 1099-misc with 4500 filled in box 7 (non employee compensation). I should note that when i got my money none was taken out for taxes. Anywho, so bascially my parents took it to a guy who calculated that I owe over 700 dollars in state and federal tax. My parents did not explain my situation to them though, they basically just gave him my form and it was a sort of asian ghetto place. It seems that most of the money comes from line 57 on the 1040 federal form, which is self employment tax. So here is my question, is this done right? I mean is it possible they expect me to pay about 750$ now when I have already spent the money and considering the payment was only 4500. It seems crazy to me that they would put students in such a situation, also it seems odd that i'm getting charged self employment tax. ps. I am a dependent. Well, if you could help me out in anyway it would be real awesome. I'd even be willing to pay you if you could as it would save me 750$.

hope you can help a student with very little money.

Captain Nemo

Gar, quick question for you. I have approximately 2,000 employees working on various engagements throughout the country. These employees perform engagements both in their states of residency, as well as in other states. Ignoring reciprocity arrangements, what are my withholding requirements for pay earned when performing services in a non-resident state. I know every state is different, but I am trying to determine if there is a common "bright line" test that I can apply across the board.

Last week I attended a seminar in DC, and the person who was running it was an old Andersen person who said that it is a "control" issue. I.e., if the services are being controlled from within the non-resident state, then that state can tax the payroll. She claimed that is the position Andersen took after they were sued by the Attorney General in Colorado.

However, after digging into the various state statutes, I don't think it is that simple.

Thoughts?

dizuke

I'm in the neophyte stages of Real Estate investing. I've formed an LLC, mainly because of other people opinions & books that i've read...did i do the right thing???

Thanks...Dizuke

gar1976

If it was a rental, you might have passive loss carryforwards, that might help offset the gain.

Assuming no AMT, this will more than likely be taxed at long-term capital gains rates for federal, and then whatever your state tax lumps on.

Safe estimate would be 25% of your gain should be saved for taxes.

__________________
Blistex, in regards to crappy games -

They made pong look like a story driven RPG with a dynamic campaign.

gar1976

Look at the IRS web site, www.IRS.gov

Under forms and publications, look for circular E, which is the employer tax guide. There, search for your filing status (single, married) and your pay frequency (weekly, semi-monthly, monthly, etc.). Charts will show you your change.

__________________
Blistex, in regards to crappy games -

They made pong look like a story driven RPG with a dynamic campaign.