5th Annual Tax Thread - 2007

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trmiv

Lifer
Oct 10, 1999
14,670
18
81
In June of 2007 my wife and I moved from California to North Carolina. In July I got a job here in NC and she got one in August. We were told before we moved by our accountant in California that we would be able to deduct our moving expenses. I'm reading the IRS website and it says I must work full-time for 39 weeks in the first 12 months of living in the new area to be able to deduct it. It hasn't even been 39 weeks since we moved here, so I'm guessing we can't deduct it? If not, will we be able to deduct it from our taxes next year?
 

Wekiva

Senior member
Feb 13, 2001
349
0
76
This question is geared toward TurboTax and it's understanding of my HSA...it's missing something.

I have an HSA plan through my employer. They contributed $2400 toward my plan and I contributed $2500. My plan is a family plan. Somehow I can't find where I tell TurboTax it's a family plan and so it says I've overcontributed. Where do I tell it I have a family plan and not an individual plan.

I'm not sure if you can answer this since it's program specific and not tax general but I thought I'd give it a shot.

Thanks
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
Staff member
Oct 30, 2000
42,589
5
0
Originally posted by: trmiv
In June of 2007 my wife and I moved from California to North Carolina. In July I got a job here in NC and she got one in August. We were told before we moved by our accountant in California that we would be able to deduct our moving expenses. I'm reading the IRS website and it says I must work full-time for 39 weeks in the first 12 months of living in the new area to be able to deduct it. It hasn't even been 39 weeks since we moved here, so I'm guessing we can't deduct it? If not, will we be able to deduct it from our taxes next year?

If you intend on living in the area for 39 weeks, then you can deduct your move in 2007

 

trmiv

Lifer
Oct 10, 1999
14,670
18
81
Originally posted by: EagleKeeper
Originally posted by: trmiv
In June of 2007 my wife and I moved from California to North Carolina. In July I got a job here in NC and she got one in August. We were told before we moved by our accountant in California that we would be able to deduct our moving expenses. I'm reading the IRS website and it says I must work full-time for 39 weeks in the first 12 months of living in the new area to be able to deduct it. It hasn't even been 39 weeks since we moved here, so I'm guessing we can't deduct it? If not, will we be able to deduct it from our taxes next year?

If you intend on living in the area for 39 weeks, then you can deduct your move in 2007

Yea we bought a house here, so we'll be here awhile. Great, thanks for the advice!
 

Mayfriday0529

Diamond Member
Sep 15, 2003
7,187
0
71
Can you or should you file federal taxes when you know you won?t get anything back and you won?t owe anything? My grandma gets all her income from Social Security. In 2007 she got about $8000 in social security. I?m thinking of filing for her because that?s the only way for her to qualify for the recent tax rebate stimulus signed by congress.

 

Ns1

No Lifer
Jun 17, 2001
55,420
1,599
126
Originally posted by: Jnetty99
Can you or should you file federal taxes when you know you won?t get anything back and you won?t owe anything? My grandma gets all her income from Social Security. In 2007 she got about $8000 in social security. I?m thinking of filing for her because that?s the only way for her to qualify for the recent tax rebate stimulus signed by congress.

Yes.

http://biz.yahoo.com/cnnm/0802...rs.html?.v=7&.pf=taxes
 

watdahel

Golden Member
Jun 22, 2001
1,657
11
81
www.youtube.com
Originally posted by: EagleKeeper
Originally posted by: erwin1978
I went to the IRS website to try out the Sales Tax Deduction Calculator. It computer $500 general sales tax for me. Does that mean on average people paid $500 in sales tax in my area? Am I entitled to get that back then?
The sales tax is able to be used as a deduction instead of the state income tax on the Schedule A.

The calculation is dependent on your income level. Sales tax on big ticket items can also then be added to the calculated amount.

Or you can collect every receipt for 2007 and add up the sales tax paid.

Your choice.

If you do not itemize, the sales tax deduction is meaningless to you.

I'm still confused. What do I need to itemize? I thought I'll just get the $500 rebate in the mail just for filing. I don't think I even paid $500 in sales tax for the year but if the IRS says I did then I'll take it. Can't I just make up a number like say $10000 in sales tax? How will the IRS confirm that anyway?
 

Ns1

No Lifer
Jun 17, 2001
55,420
1,599
126
Originally posted by: erwin1978
Originally posted by: EagleKeeper
Originally posted by: erwin1978
I went to the IRS website to try out the Sales Tax Deduction Calculator. It computer $500 general sales tax for me. Does that mean on average people paid $500 in sales tax in my area? Am I entitled to get that back then?
The sales tax is able to be used as a deduction instead of the state income tax on the Schedule A.

The calculation is dependent on your income level. Sales tax on big ticket items can also then be added to the calculated amount.

Or you can collect every receipt for 2007 and add up the sales tax paid.

Your choice.

If you do not itemize, the sales tax deduction is meaningless to you.

I'm still confused. What do I need to itemize? I thought I'll just get the $500 rebate in the mail just for filing. I don't think I even paid $500 in sales tax for the year but if the IRS says I did then I'll take it. Can't I just make up a number like say $10000 in sales tax? How will the IRS confirm that anyway?

You get a standard deduction of some 5k on your tax return. If you itemize your deductions, you only get a benefit if you have more than the standard deduction or else it is wasted.

They won't know until they audit you, and then you'll regret you ever posted the question.

seriously, 10k in sales tax paid is like 120k in items purchased.
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
Staff member
Oct 30, 2000
42,589
5
0
Originally posted by: erwin1978
Originally posted by: EagleKeeper
Originally posted by: erwin1978
I went to the IRS website to try out the Sales Tax Deduction Calculator. It computer $500 general sales tax for me. Does that mean on average people paid $500 in sales tax in my area? Am I entitled to get that back then?
The sales tax is able to be used as a deduction instead of the state income tax on the Schedule A.

The calculation is dependent on your income level. Sales tax on big ticket items can also then be added to the calculated amount.

Or you can collect every receipt for 2007 and add up the sales tax paid.

Your choice.

If you do not itemize, the sales tax deduction is meaningless to you.

I'm still confused. What do I need to itemize? I thought I'll just get the $500 rebate in the mail just for filing. I don't think I even paid $500 in sales tax for the year but if the IRS says I did then I'll take it. Can't I just make up a number like say $10000 in sales tax? How will the IRS confirm that anyway?

1) You need to itemize using the Schedule A for the sales tax to have any effect.

2) The IRS has a table in which they estimate your sales tax paid based on income.

3) If your declared number exceeds that amount then it better be because you purchased some big ticket items or you have the receipts to back it up the total sales tax paid.

4) I would expect that the IRS may allow up to $4-5K worth of big ticket items to be purchased within a year and add in the sales tax. Above that, it should raise an audit check flag.

For verification, you better have the receipts showing the big ticket items purchased, showing sales tax paid when Uncle comes knocking.

And if the IRS finds a sales tax receipt from out of state, they may notify your local state Dept of Revenue for cross checking with your state return if you are required to file a state and declare out of state purchases.

 

watdahel

Golden Member
Jun 22, 2001
1,657
11
81
www.youtube.com
I get it now. So the $500 estimate the IRS website gave me means all the sales tax I paid must be above that amount in order to get it back? So if I paid $501 then I can get back $1?

The problem is the $500 estimate was for income <$20,000 I believe. That's kind of high.
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
Staff member
Oct 30, 2000
42,589
5
0
Originally posted by: erwin1978
I get it now. So the $500 estimate the IRS website gave me means all the sales tax I paid must be above that amount in order to get it back? So if I paid $501 then I can get back $1?

The problem is the $500 estimate was for income <$20,000 I believe. That's kind of high.
1) Without itemizing it makes no difference.
2) The sales tax paid is used to reduce your taxable income, it is not directly part of a refund.


Example: Income of 20K
Sales tax for locality 5%
worst case estimate would be 1K in sales taxes IF everything you spent $$ on was taxable.
Given that you will loose at least 15% due to Federal taxes and probably at least 6K in non taxable rent, you would only have 10K in taxable spending which equates to about $500 using the rough numbers.

As a single person, you would have to have over $5K in deductions (housing interest, property taxes, charity, medical, & misc expenses) for the sales tax to have any effect.



 

Mayfriday0529

Diamond Member
Sep 15, 2003
7,187
0
71
Originally posted by: Ns1
Originally posted by: Jnetty99
Can you or should you file federal taxes when you know you won?t get anything back and you won?t owe anything? My grandma gets all her income from Social Security. In 2007 she got about $8000 in social security. I?m thinking of filing for her because that?s the only way for her to qualify for the recent tax rebate stimulus signed by congress.

Yes.

http://biz.yahoo.com/cnnm/0802...rs.html?.v=7&.pf=taxes

Wow thats, thats the perfect article to answer my question.
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
Staff member
Oct 30, 2000
42,589
5
0
Originally posted by: Jnetty99
Originally posted by: Ns1
Originally posted by: Jnetty99
Can you or should you file federal taxes when you know you won?t get anything back and you won?t owe anything? My grandma gets all her income from Social Security. In 2007 she got about $8000 in social security. I?m thinking of filing for her because that?s the only way for her to qualify for the recent tax rebate stimulus signed by congress.

Yes.

http://biz.yahoo.com/cnnm/0802...rs.html?.v=7&.pf=taxes

Wow thats, thats the perfect article to answer my question.

Original post was updated to indicate this situation

 

Eeezee

Diamond Member
Jul 23, 2005
9,922
0
76
I'm a graduate student attending UC Irvine. Tuition and fees are deductible, and I receive a "tuition statement." It tells me how much I've received from my fellowship for tuition+fees+living expenses and then how much I've paid in tuition+fees (which is the tax deductible part). I made about $29,000 from my fellowship and paid about $15000 in tuition+fees, leaving about $14000 in taxable income. Sounds fine at first. This isn't counting the lifetime learning credit, moving expenses, and other things that I'm deducting this year (including a W2 form from my job). This post is purely regarding my tuition statement and a potential discrepancy on the amount reported as deductible income.

I decided I'd go online and compare my student bills with the tuition statement. I noticed that I paid an additional $1600 in fees that was not reported on my tuition statement. I went back and calculated the numbers, and there was only one fee that was not included. It was the GSHIP Fee.

As part of being a graduate student, I am required to pay a "GSHIP Fee" for about $800 every 3 months ($1600 last year, I'm a new grad student). The GSHIP is graduate student health insurance, and you can't opt out of it. I noticed that my tuition+fee statement was not including this GSHIP Fee - in other words, I think I should be able to deduct $16600 instead of $15000. It's listed right on my Bursar's account, right along side other fees like Student Center Construction Fee and tuition.

I've e-mailed a few people (in my department's graduate affairs office) asking about this just now, but I wanted to ask some ATOT tax gurus about it as well. Would there be any reason for the "GSHIP Fee" to not be tax deductible? It's not optional. If you're a graduate student in the physics department, you get charged for it one way or another (just like any other fee - student center fee for a student center I don't use, athletics center fee for an athletics center I don't use, etc. etc.)
 

alkemyst

No Lifer
Feb 13, 2001
83,769
19
81
not everything tied to school is deductable whether it's optional or not. It's outlined though clearly in the booklet. Being that GSHIP is health insurance even though required I do not think you can deduct that. You also want to make sure your moving expenses qualify.
What are the "Out of Pocket Payments for Qualified Tuition and Related Expenses"?

"Out of Pocket Payments for Qualified Tuition and Related Expenses" are payments made to a college for fees and tuition (not including the cost of books and supplies) and other academically related activities (not including gym, student government, health or student activities fees), minus any "untaxed educational benefit" (e.g., most grants, scholarships, fellowships, and fee waivers).

It is important to note that the new law requires all nontaxable scholarships and grants to be deducted from the qualified tuition and expenses paid, before a tax payer may claim a HOPE Scholarship or Lifetime Learning tax credit.
Who can claim a Lifetime Learning Tax Credit?

Taxpayers who:

* are students not claimed as dependent on anyone else's tax return;
* are non-students entitled to claim the student as a tax dependent;
* do not have an adjusted gross income greater than $42,000-$52,000 for single filers or $85,000-$106,000 for couples filing jointly; and
* have not already claimed more than a total of $2,000 for the Lifetime Learning tax credit in the same tax year.
 

lokiju

Lifer
May 29, 2003
18,526
5
0
How is the amount of tax per pay check that is withheld determined?

Is it based off of the earnings for that check? or is it based off of a tax bracket you've been put into from the previous years earnings?

This past year (2007) I made about double what I made the year before but it was broken into two W2's since I had two different employers. When I run TurboTax and enter in my tax information from the first employers W2, I see that I'll be getting back money. Then I enter in the W2 information from the second W2, which is my current employer and I then owe nearly a grand.

Both W2's were as married and with 0 dependents, whcih should be the maximum withholdings possible without specifying a dollar amount extra to be held.

How can it be possible to owe so much when the withholdings were the same?

The only thing I can come up with is that the tax that was withheld/taken out of each check was not enough due to being based off of the previous years tax bracket. But I have no idea if that is how it'd done.

Can someone enlighten me?

:beer:
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
Staff member
Oct 30, 2000
42,589
5
0
Originally posted by: lokiju
How is the amount of tax per pay check that is withheld determined?

Is it based off of the earnings for that check? or is it based off of a tax bracket you've been put into from the previous years earnings?

This past year (2007) I made about double what I made the year before but it was broken into two W2's since I had two different employers. When I run TurboTax and enter in my tax information from the first employers W2, I see that I'll be getting back money. Then I enter in the W2 information from the second W2, which is my current employer and I then owe nearly a grand.

Both W2's were as married and with 0 dependents, whcih should be the maximum withholdings possible without specifying a dollar amount extra to be held.

How can it be possible to owe so much when the withholdings were the same?

The only thing I can come up with is that the tax that was withheld/taken out of each check was not enough due to being based off of the previous years tax bracket. But I have no idea if that is how it'd done.

Can someone enlighten me?

:beer:
Tax withheld is based on the TOTAL.

As you surmised, the sum of the parts may exceed the indivigual parts combined.

Each W2 has the taxes withheld based on the income that was known.

Federal taxes are based on ALL income.

 

lokiju

Lifer
May 29, 2003
18,526
5
0
Originally posted by: EagleKeeper
Originally posted by: lokiju
How is the amount of tax per pay check that is withheld determined?

Is it based off of the earnings for that check? or is it based off of a tax bracket you've been put into from the previous years earnings?

This past year (2007) I made about double what I made the year before but it was broken into two W2's since I had two different employers. When I run TurboTax and enter in my tax information from the first employers W2, I see that I'll be getting back money. Then I enter in the W2 information from the second W2, which is my current employer and I then owe nearly a grand.

Both W2's were as married and with 0 dependents, whcih should be the maximum withholdings possible without specifying a dollar amount extra to be held.

How can it be possible to owe so much when the withholdings were the same?

The only thing I can come up with is that the tax that was withheld/taken out of each check was not enough due to being based off of the previous years tax bracket. But I have no idea if that is how it'd done.

Can someone enlighten me?

:beer:
Tax withheld is based on the TOTAL.

As you surmised, the sum of the parts may exceed the indivigual parts combined.

Each W2 has the taxes withheld based on the income that was known.

Federal taxes are based on ALL income.

So then I would be correct that they withheld taxes for less than the Total combined income for the year and that is why I owe money? It was basically like I was paying taxes based off of half the Total income for the whole year and now I owe money since in reality I'm in a higher bracket, right?
 

EagleKeeper

Discussion Club Moderator<br>Elite Member
Staff member
Oct 30, 2000
42,589
5
0
Originally posted by: lokiju
Originally posted by: EagleKeeper
Originally posted by: lokiju
How is the amount of tax per pay check that is withheld determined?

Is it based off of the earnings for that check? or is it based off of a tax bracket you've been put into from the previous years earnings?

This past year (2007) I made about double what I made the year before but it was broken into two W2's since I had two different employers. When I run TurboTax and enter in my tax information from the first employers W2, I see that I'll be getting back money. Then I enter in the W2 information from the second W2, which is my current employer and I then owe nearly a grand.

Both W2's were as married and with 0 dependents, whcih should be the maximum withholdings possible without specifying a dollar amount extra to be held.

How can it be possible to owe so much when the withholdings were the same?

The only thing I can come up with is that the tax that was withheld/taken out of each check was not enough due to being based off of the previous years tax bracket. But I have no idea if that is how it'd done.

Can someone enlighten me?

:beer:
Tax withheld is based on the TOTAL.

As you surmised, the sum of the parts may exceed the indivigual parts combined.

Each W2 has the taxes withheld based on the income that was known.

Federal taxes are based on ALL income.

So then I would be correct that they withheld taxes for less than the Total combined income for the year and that is why I owe money? It was basically like I was paying taxes based off of half the Total income for the whole year and now I owe money since in reality I'm in a higher bracket, right?
Correct

 

Kroze

Diamond Member
Apr 9, 2001
4,052
1
0
how long should i hold onto my old tax return before throwing them away?
 

Falloutboy

Diamond Member
Jan 2, 2003
5,916
0
76
I rent an apartment. my brother who is in college stays with me about half the year, when he is here he pays a nominal sum of the rent. (utils + rent cost me 800ish I charge him 250 a month when he stays with me) when he is at school he lives in school sponsored housing, his residence is with me (files from this address and his drivers licence shows as such) would this allow me to file as head of household? if I do so would that affect his return?
 

MrChad

Lifer
Aug 22, 2001
13,507
3
81
I moved from NY to VA this year. I went through this process before (moving from MD to NY), but this time its trickier since I didn't change employers and all my income is on a single W-2.

1. I need to calculate my NY wages for the state return. Box 16 on my W-2 reports the same amount as my federal wages (box 1). Box 19 (local NYC wages) reports the correct partial wages that I earned while in NY (up until 7/31). My guess is that box 19 (which indicates the correct portion of my total wages that I earned while in NY) is the correct amount to report. Does this sound right?

2. My wife was a teacher in NY but resigned at the end of the school year (due to the move). Teachers salaries are prorated over the entire year, so she received paychecks up until the end of August (after we had moved to VA). Should her NY income be counted entirely to the NY return and be excluded entirely from the VA return?
 

alkemyst

No Lifer
Feb 13, 2001
83,769
19
81
Originally posted by: Kroze
how long should i hold onto my old tax return before throwing them away?

Personally I don't see why anyone would throw them out unless they have gotten rid of all other junk in their house first.

I believe 7 years is the limit they still give, but if you get audited, they can keep going back another 7 years from the time of the indescripancy and then another 7 should they find another, rinse and repeat...so in reality they can go back forever.

If you own a small business you should never get rid of them. If you are doing a simple 1040EZ there is really nothing much except reporting your W2's anyway and are easily reproducable.
 

alkemyst

No Lifer
Feb 13, 2001
83,769
19
81
Originally posted by: Falloutboy
I rent an apartment. my brother who is in college stays with me about half the year, when he is here he pays a nominal sum of the rent. (utils + rent cost me 800ish I charge him 250 a month when he stays with me) when he is at school he lives in school sponsored housing, his residence is with me (files from this address and his drivers licence shows as such) would this allow me to file as head of household? if I do so would that affect his return?

I doubt it...if you owned the apartment it may be different....that part of it is just the same as a roommate situation.

If you are supporting him (actually paying for things for him vs him paying you for things for him) then you may be able too. However he'd have to claim himself as your dependant on his taxes.

 
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