Octopus Overlords

The only thing taken out of my gross to get to AGI is the $1100 in student loan interest.

Other items in that section are Educator expenses, IRA deduction, Student loan interest, and Tuition and fees.

Jeff V wrote:

stessier wrote: I don't know why married filing separately even exists - it seems like the deductions you lose can't make up for the savings. Maybe it works out for people above 500k or something?

If my wife had carried out her threat to leave me, and neither of us filed for divorce by the end of the year, I could very well see it happening as filing separate, she might break even or get a pittance of a refund while jointly, she gets to share in my annual fisting. The fisting would get an added spiked glove for me filing separate, which would concern her not one bit.

If she is gone six months before the end of the year, you can file as single. I learned this the hard way.

So, for this past year I have been moving between two worksite locations most weeks. Most of the time I have been working out of an office in DC, but I also periodically work out of a home office in Boston. How strong of an argument do I have for deducting travel expenses between the two worksites (Boston - DC and back)?

I know none of you are my tax attorneys, of course, but just wanted to get initial reactions.

looks like $4200. <poof>

So my daughter has moved back home and she is in a hurry to get her refund. I looked at her taxes last year and she didn't like what I came up with and found some guy in LA to do it for her, an accountant. He managed to get her a nice refund. So I told her get your copy of the return and we can look at it to see what he did for this year.

So, she showed me the return. I have no idea what the guy did, but it looks like he somehow reduced her income by about 40% on some statement that isn't attached and isn't using an IRS form. As someone who once worked for the IRS her 2014 Tax Form looks like perfect audit material to me. A quick look on the internet failed to come up with any discounts or income reductions for waitresses.

I think the guy just made up some stuff and charged her for it. Just in case, I have asked her to e-mail him and see if she can get a copy of the "statement" sent to her.

Scuzz wrote:So my daughter has moved back home and she is in a hurry to get her refund. I looked at her taxes last year and she didn't like what I came up with and found some guy in LA to do it for her, an accountant. He managed to get her a nice refund. So I told her get your copy of the return and we can look at it to see what he did for this year.

So, she showed me the return. I have no idea what the guy did, but it looks like he somehow reduced her income by about 40% on some statement that isn't attached and isn't using an IRS form. As someone who once worked for the IRS her 2014 Tax Form looks like perfect audit material to me. A quick look on the internet failed to come up with any discounts or income reductions for waitresses.

I think the guy just made up some stuff and charged her for it. Just in case, I have asked her to e-mail him and see if she can get a copy of the "statement" sent to her.

If she pays him, is he somehow culpable for an audit? I've always wondered how that works.

LordMortis wrote:

Scuzz wrote:So my daughter has moved back home and she is in a hurry to get her refund. I looked at her taxes last year and she didn't like what I came up with and found some guy in LA to do it for her, an accountant. He managed to get her a nice refund. So I told her get your copy of the return and we can look at it to see what he did for this year.

So, she showed me the return. I have no idea what the guy did, but it looks like he somehow reduced her income by about 40% on some statement that isn't attached and isn't using an IRS form. As someone who once worked for the IRS her 2014 Tax Form looks like perfect audit material to me. A quick look on the internet failed to come up with any discounts or income reductions for waitresses.

I think the guy just made up some stuff and charged her for it. Just in case, I have asked her to e-mail him and see if she can get a copy of the "statement" sent to her.

If she pays him, is he somehow culpable for an audit? I've always wondered how that works.

Fortunately for her, IRS is short-staffed these days, they barely have the resources to process tax returns coming in. Most likely, they won't waste time auditing a waitress, they got bigger fish to fry.

LordMortis wrote:

Scuzz wrote:So my daughter has moved back home and she is in a hurry to get her refund. I looked at her taxes last year and she didn't like what I came up with and found some guy in LA to do it for her, an accountant. He managed to get her a nice refund. So I told her get your copy of the return and we can look at it to see what he did for this year.

So, she showed me the return. I have no idea what the guy did, but it looks like he somehow reduced her income by about 40% on some statement that isn't attached and isn't using an IRS form. As someone who once worked for the IRS her 2014 Tax Form looks like perfect audit material to me. A quick look on the internet failed to come up with any discounts or income reductions for waitresses.

I think the guy just made up some stuff and charged her for it. Just in case, I have asked her to e-mail him and see if she can get a copy of the "statement" sent to her.

If she pays him, is he somehow culpable for an audit? I've always wondered how that works.

It depends. If a fraud is committed by the accountant, then the IRS can go after his ability to prepare tax returns, but the taxpayer is still liable for any due taxes. I don't know how they would treat penalties and interest due.

With the explosion of new tax preparation places there are some rules in place as to who is supposed to be preparing the tax returns.

gilraen wrote:

LordMortis wrote:

Scuzz wrote:So my daughter has moved back home and she is in a hurry to get her refund. I looked at her taxes last year and she didn't like what I came up with and found some guy in LA to do it for her, an accountant. He managed to get her a nice refund. So I told her get your copy of the return and we can look at it to see what he did for this year.

So, she showed me the return. I have no idea what the guy did, but it looks like he somehow reduced her income by about 40% on some statement that isn't attached and isn't using an IRS form. As someone who once worked for the IRS her 2014 Tax Form looks like perfect audit material to me. A quick look on the internet failed to come up with any discounts or income reductions for waitresses.

I think the guy just made up some stuff and charged her for it. Just in case, I have asked her to e-mail him and see if she can get a copy of the "statement" sent to her.

If she pays him, is he somehow culpable for an audit? I've always wondered how that works.

Fortunately for her, IRS is short-staffed these days, they barely have the resources to process tax returns coming in. Most likely, they won't waste time auditing a waitress, they got bigger fish to fry.

The IRS uses a lot of formulas using lines on the tax return as audit points. Everything is computerized of course, has been for 30 years, so returns that qualify are easily found. Anything "strange" on one of those lines can get you audited, or if not audited they can trigger an automatic letter notifying you that you need to either prove your item or pay the refigured tax. I have seen that done before to someone who didn't make much more than my daughter.

gilraen wrote:
Fortunately for her, IRS is short-staffed these days, they barely have the resources to process tax returns coming in. Most likely, they won't waste time auditing a waitress, they got bigger fish to fry.

Yeah, like Tea Party members for instance.

Default wrote:looks like $4200. <poof>

I've got you beat!

El Guapo wrote:So, for this past year I have been moving between two worksite locations most weeks. Most of the time I have been working out of an office in DC, but I also periodically work out of a home office in Boston. How strong of an argument do I have for deducting travel expenses between the two worksites (Boston - DC and back)?

I know none of you are my tax attorneys, of course, but just wanted to get initial reactions.

Unreimbursed job-related travel expense is deductible. You've kept a mileage log, right?

Assuming you are using your personal car, you may be able to deduct a portion of the amortized value of your car plus related operating expenses (such as insurance). This helped negate a lot of income I made while doing freelance IT work.

El Guapo wrote:

Default wrote:looks like $4200. <poof>

I've got you beat!

Rub it in, will ya?

Scuzz wrote: The IRS uses a lot of formulas using lines on the tax return as audit points. Everything is computerized of course, has been for 30 years, so returns that qualify are easily found. Anything "strange" on one of those lines can get you audited, or if not audited they can trigger an automatic letter notifying you that you need to either prove your item or pay the refigured tax. I have seen that done before to someone who didn't make much more than my daughter.

Tax prep software tries to anticipate such things and will notify you if something might arouse attention. And I've been the lucky recipient of a few of those letters, often a year or more after the tax year in question, always because they were trying to tax me on the entire proceeds of some stock sale. Since at no time did I ever liquidate securities that were 100% profit, I'd reply back with a counter-offer that included the cost of the securities sold. In one case, there was a small profit, not enough to bother recalculating my entire return so I sent an estimated payment and actually got a check back from the IRS when they calculated I then overpaid. The other time the sale was at a net loss, and received a letter stating the matter was closed.

Jeff V wrote:

El Guapo wrote:So, for this past year I have been moving between two worksite locations most weeks. Most of the time I have been working out of an office in DC, but I also periodically work out of a home office in Boston. How strong of an argument do I have for deducting travel expenses between the two worksites (Boston - DC and back)?

I know none of you are my tax attorneys, of course, but just wanted to get initial reactions.

Unreimbursed job-related travel expense is deductible. You've kept a mileage log, right?

Assuming you are using your personal car, you may be able to deduct a portion of the amortized value of your car plus related operating expenses (such as insurance). This helped negate a lot of income I made while doing freelance IT work.

I'm traveling via planes.

Anyway, I had a nice chat with a gentleman from TurboTax last night about this stuff. It seems a touch complicated. My current understanding is that travel from home to work (even if distant) is considered commuting, BUT that travel between worksites is not and is potentially deductible. I do work at both locations though and usually work on both ends on days I travel.

So...I need to do some more reading of IRS materials, but I might have an argument. Though best case scenario still doesn't seem clear cut, and this is apparently an area the IRS scrutinizes. SO best case scenario is still an elevated audit risk along with a still substantial tax payment.

Hooray!

Yes, your trip into work is on your own dime. All unreimbursed trips from there can be deducted until your trip home. I have a colleague who lives in North Carolina. I believe he claims his airfare but not auto, and he always flies back after stopping into the Chicago office that day. I expect he identifies office space in NC as his "home office" for attorney registration.

Yea...you can't deduct driving into work, but any driving you are required to make as part of work can be deducted, most likely on a schedule A. You need to buy a log, and keep track of mileage, gas etc for specific uses. There are formulas to figure the stuff if you don't log it but a log is the best method. Unless you do it often it probably isn't worth the hassle.

I have a question about schedule D when using Turbo Tax Deluxe. I haven't sold anything for quite a few years and realize that it has gotten more complicated to fill out forms. Does Turbo Tax Deluxe have form 8949 that I seem to need? Is this form generated by any non-covered cost basis or does everyone using schedule D fill it out?

Thought I was ready to get my taxes done and then discovered I need to fill out my first ever "Schedule K1" for "partnership distributions" and so I'm waiting again. Partnership says they won't send the documents until March and TT says I need to upgrade my software to fill out schedule K1s. <sigh> I want my 1040 EZ. I fear as I plan for my retirement this is going to get more and more complex every year.

The good news is that so far it looks like taking extra money out of my check has finally worked in conjunction with maxing my 401k and I won't be owing money for the first time in fifteen years... Well, that's how it looks so far.

Also TT did not ask me about partnerships and schedule K1s. I had to ask it and I only did so because I saw unaccounted suspicious looking items in my Scottrade account. <whew for looking>

The K1 will give you a single line to fill in on your 1040. If the partnership had a profit your income will increase; if it had a loss your income will decrease. The company's profit/loss is apportioned among all of its shareholders.

The IRS instructions are vastly more complicated than that, but "The K-1 tells you, literally line by line, exactly where each number from the K-1 goes on each part of the 1040 form." So sayeth the internet.

I pay taxes on Curio City's profit (or benefit from its loss) via a K1 every year.

LordMortis wrote:Thought I was ready to get my taxes done and then discovered I need to fill out my first ever "Schedule K1" for "partnership distributions" and so I'm waiting again. Partnership says they won't send the documents until March and TT says I need to upgrade my software to fill out schedule K1s. <sigh> I want my 1040 EZ. I fear as I plan for my retirement this is going to get more and more complex every year.

The good news is that so far it looks like taking extra money out of my check has finally worked in conjunction with maxing my 401k and I won't be owing money for the first time in fifteen years... Well, that's how it looks so far.

Also TT did not ask me about partnerships and schedule K1s. I had to ask it and I only did so because I saw unaccounted suspicious looking items in my Scottrade account. <whew for looking>

K1s are always late. I always used to send them to the accountant after we met (usually in early March). I'd get them like early April a lot of the time.

Done! And the best news is I owe the State ($17) so I don't have to worry about never seeing any money they owe me.

If anyone notices a sudden drop in the federal budget deficit in April - you're welcome.

Filed last week, got both refunds for state and fed. Thank God for home ownership!

Someone give me the odds of getting audited considering I have no small business ownership or expenses, or anything weird like rental houses, etc.

I filed a bit prematurely and left off two things:
1. Amazon Vine "gifts" this year, which they started charging tax for, and the bigger one:
2. Sold shares of my company stock when they vested.

Did not receive a physical form for either of these, so I simply did not include them.

2. is pretty small potatoes...less than $5K I think...and the gains are very small...like 5% at most. So not a lot of money, here.

Interestingly enough, in the "but it's not moral" department, I also realized I did not claim the vehicle tax I paid for the past 2 years, which would far exceed the amount I would owe for 1 and 2 above.

Thoughts, advice and insults accepted, and expected. To refile, or not? Or I guess I would just amend maybe...not sure of the difference - I've never had to (or thought I had to) do this before, so new ground here for me.

My uncle, who is some kind of tax maven apparently, says he does not think it's worth the risk of an audit for the $300-$600 that I would receive from the lost vehicle tax deductions. Indicating that refiling is going to flag my account for auditing (or increase the likelihood).

I finished my part of the tax prep yesterday. Now it goes to Wife, and then to the CPA. We have an outside shot at filing before the deadline this year if Wife will do her part in the next couple of weeks.

Thinking I might do it myself next year. She only had one 1099 this year and it's going to be easy to make that income disappear. Might even end up using the standard deduction instead of itemizing.

Just about finished - just have to figure out a question on Turbo Tax.

In past years I've had to file a K-1 for a stock I owned. That is no longer the case - the shares were converted to a regular stock in 2014 - but Turbo Tax still sees the K-1 form from last year and wants me to fill it out. To do that, I have to upgrade to the Premiere product - but I just want to delete it. Does anyone know if I upgrade to Premiere to delete it if I can then go back to Deluxe to file? I'd really rather not pay the extra $20 just to delete a form.

Edit: I found it - go under My Account -> Forms and just delete the K1. Everything else worked from there.

My effective tax rate is 8.6%.

I've had good luck contacting Turbo Tax with a question about a change I made that I didn't see on the form. I was directed where to look in the forms to see it was made. She waited while I found the form and answered my questions. Very helpful.

I tried calling, but the wait was 80 minutes (they were going to call me). While I was waiting, I figured it out. They called 15 minutes later, naturally.

Everybody dies.

Wohoo! I am -$4 for this year. That's what I get for being a single dude with no writeoffs. I mean children. Crotchlets. Whatever it is you breeders call them.

So, thanks to a "nice" business loss and the educational credit for my daughter at Fresno State we got a refund. This was really nothing to celebrate though as all it did was verify what a crappy year financially we had.

Scuzz wrote:So, thanks to a "nice" business loss and the educational credit for my daughter at Fresno State we got a refund. This was really nothing to celebrate though as all it did was verify what a crappy year financially we had.

You're taking all of the fun out of my first refund in over a decade.

LordMortis wrote:

Scuzz wrote:So, thanks to a "nice" business loss and the educational credit for my daughter at Fresno State we got a refund. This was really nothing to celebrate though as all it did was verify what a crappy year financially we had.

You're taking all of the fun out of my first refund in over a decade.

My best years have almost always concluded with owing the IRS money. The way I look at it is that that means I made much more than I figured I would, so my withholding/ES payments didn't cover the tax. Paying those taxes is just a part of the process.

LordMortis wrote:

Scuzz wrote:So, thanks to a "nice" business loss and the educational credit for my daughter at Fresno State we got a refund. This was really nothing to celebrate though as all it did was verify what a crappy year financially we had.

You're taking all of the fun out of my first refund in over a decade.

In those rare years when we get a "refund" it just gets applied to reducing the next year's quarterly estimated payments.

I bought clothes and a video game and tax return fees and went out to a restaurant and will still have enough to tuck away to eventually put in the stockmarket to eventually retire on.

Of course I don't have my check yet, so right now all I have is a big credit card bill waiting.

I paid off my car. The title is probably in that envelope on my desk.

I'm not sure if it's the tax system down there or if you're employers are not taking enough away but the amount of people who owe is baffling to me. I got an extra 25$ taken off each paycheck this year, the wife 15$ and we're getting back 1200$. So take away that 1040$ and we'd be right on the money.

I don't get it.

tjg_marantz wrote:I'm not sure if it's the tax system down there or if you're employers are not taking enough away but the amount of people who owe is baffling to me. I got an extra 25$ taken off each paycheck this year, the wife 15$ and we're getting back 1200$. So take away that 1040$ and we'd be right on the money.

I don't get it.

I claim 0 every year but I am the only person in my household. I have no deductions. At my wage that meant I owed about $2,000 a year. However, this last year my health insurance obligations on my W2 went up quite a bit and I maxed my 401k deposits, essentially gambling on the market and professional investors my company works with and deferring my tax obligations until retirement or the utmost dire need.[/RotK]

TuboTax says me effective tax rate 15.10%. I have no idea what the means in reality. Like I said, I'm deferring taxes on around 20% of my income and then I pay state taxes and pay roll taxes and my company is taxed at some rate for employing me and those taxes don't even show up on my check.

tjg_marantz wrote:I'm not sure if it's the tax system down there or if you're employers are not taking enough away but the amount of people who owe is baffling to me. I got an extra 25$ taken off each paycheck this year, the wife 15$ and we're getting back 1200$. So take away that 1040$ and we'd be right on the money.

I don't get it.

Wife's income is a moving target. Most comes from her day job, and that's predictable. She also teaches (W-2 income that withholds taxes, but not enough) and freelances (1099 income with no withholding and self-employment tax owed). I squirrel away some of that income for anticipated taxes, which the government wants me to send them quarterly. Some years I get it right, some years I don't, but the current year's estimated tax payments are based on the prior year's income and deductions. Also, if Curio City makes a profit we have to pay taxes on that, whereas when it shows a loss we get a deduction, and I never know which way it's going to go until December.

IOW, it's complicated.