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furushotakeru
Jul 20, 2004

Your Honor, why am I pink?!
Well, the last thread had grown to over 125 pages over 2 and a half years, so we figured it was time to start a new thread. Many thanks to Zeta Taskforce for taking time out of his busy day of plowing gardening to write the majority of this OP.

I can't speak for any other contributor, but please note that I personally will be ignoring any question that can be answered by reading this OP, so please take a look before posting your question

New US Income tax Megathread. The old one can be found here.

What this thread is FOR

  1. To answer general questions about the US tax code and state tax codes, deductions, credits, planning, accounting
  2. To help anyone attempting to do taxes on their own
  3. To provide resources and direction to anyone with issues that are beyond the scope of this thread

What this thread is NOT for

  1. To ask about how to cheat. There is a difference between seeking out tax advantaged ways to handle money and using legitimate tax breaks to lower your tax obligations and fraud. No one will help you break the law, no matter how entitled you feel you are to the government's money
  2. To complain about how big the government is and why the income tax illegal, in spite of the 16th amendment.
  3. To complain about items like the Earned Income Tax Credit (EITC), Additional Child Tax Credit, or anything else you think is Socialism. :ussr:
  4. Any type of complaining not already mentioned
  5. The expectation that someone will do your taxes for free
  6. Questions about Turbo Tax. You can ask, maybe you will get an answer, but please understand that the vast majority of tax professionals do not use Turbo Tax to prepare returns, and therefore we probably won't know why you keep getting error messages.


The following is a glossary of common tax terms that you will see over and over. It is by no means close to complete.

  • Credit: A subtraction of tax liability allowed for various purposes
  • Deduction: A subtraction of taxable income
  • Dependent: A person who meets the 5 tests of dependency and can be claimed on another individuals tax return.
  • Adjusted Gross Income (AGI) Gross income minus certain allowable reductions
  • Standard Deduction: The amount of income that is not subject to tax. This varies based on filing status, age, and if you are blind. The standard deduction is yours, it can not be given to someone else or removed from you
  • Personal Exemption: A reduction of income that is multiplied by all the persons on a tax return. Your exemption can move around. When one talks of “Claiming someone” they are claiming that persons personal exemption.




As you begin to think about your taxes, there are some questions you need to ask.

First, what is my filing status? Note that your filing status is what you are on the last day of the year.

If you are unmarried, you are divorced or legally separated, have no dependents, you are single.

If you are married, you can not file single. Your choices are Married Filing Joint (MFJ) or Married Filing Separate (MFS) Please note that the MFS does not stand for Married Filing Single! Nearly every time one benefits by filing joint with their spouse. In fact, if you are trying to compare the two and find that MFS is even slightly more advantageous than MFJ, I can almost guarantee that you are overlooking something.

If you are unmarried or your spouse abandoned you for at least the last 6 months of the year, and have cared for a dependent for more than half the year you may qualify for Head of Household filing status. This filing status has more favorable tax brackets and a higher standard deduction compared to filing as single or MFS, meaning you will pay less tax for any given income.

If your spouse passed away within the last 2 years, have not remarried, and have a dependent, you can file as a Qualifying Widow/Widower. Your tax brackets and standard deduction are the same as MFJ.

Second, will you will itemize or not?

Everyone gets a standard deduction. Every filing status has a certain amount. You don't have to do anything to claim the standard deduction, but they give you a crack at adding up a series of unrelated deductions, and if you can do better, you then choose to itemize. They include, but are not limited to mortgage interest and property taxes on a first and second house, income taxes paid to your state and city, charitable contributions, unreimbursed work expenses that exceed 2% of your AGI, and medical expenses that exceed 7.5% of your AGI.

Third, are you a dependent or not?
Are you under 19, or under 24 and a full time student for at least 5 months of the year or permanently disabled? If so, did someone else provide more than half your support? If you answered yes to both questions, you are a dependent. A dependent may be required to file, but they do not get their personal exemption, nor are they able to claim most credits.

Fourth, will you hire someone to do your taxes for you?

There is no absolute answer to this question, but in general if your situation is simple (ie: all your income is wages, you are not self employed, do not own property, and your relationships to family members are pretty clear cut) it is probably within your ability to do it yourself. The fact you are a SA Goon who has not been banned and you have read this far means you have some base level of intelligence.

If you have rental property, are self employed, went through a major life change, just received a large inheritance, sold business assets or rental property, not saying you are required to hire someone, but most of these situations may be beyond the grasp of the average person and you might consider hiring someone to help you.

Most people are somewhere in between. It really depends on how much time you have, your aptitude for it, and how scary numbers are to you.


Common questions that come up over and over:

What states do I need to file in?

For tax purposes, you are a resident of the state you live in. This might not be the state you vote in or have your driver’s license from. That means if you go off to school in a different state, you are filing taxes over there as a resident. If you moved from one state to another, you may have to file taxes as a part year resident in both states. If you happened to earn income from a state you never lived in, you have to file a non resident return there, pay tax to them. Then you will file as a resident in the state you live in, include all income regardless of where you earned it, but you will get a credit (generally dollar for dollar) for taxes paid to the other state(s) so you won’t be double taxed most of the time.


How come I have to make quarterly payments/have money taken out of every paycheck? Wouldn’t I be better off if I just send them one big check at the end?

You would, but the government wouldn’t. The financing needs of the government are continuous, and they expect to be paid at the same time you do. Think of filing your taxes not as when you pay them, but more of an end of year accounting. You are figuring out your obligation for the loveliness of being a US citizen/resident and comparing that to how much you actually paid. If you paid too much in, they give you your money back in the form of a refund. If you didn’t pay enough, you then write a check made payable to “United States Treasury”


Why do you tax preparers charge so much for typing in a few tax forms into a computer? I can pay a fraction of the cost and do it myself.

No one is stopping you, and millions of people go that route. However, you are not buying a tax professionals data entry skills. You are buying their knowledge of taxes and finance. You are paying for the hundreds, perhaps thousands of hours of training and coursework they have taken in their careers, the skills they have picked up by doing hundreds or thousands of returns before yours. You are paying to avoid the frustration of dealing with ambiguous situations and for someone to represent you if you get audited or if the IRS questions what you did. It’s the same thing if you are trying to design a
website. There are programs you can buy that do all the formatting for you and give you a reasonably professional looking end product. Yet there are people who design websites for a living and they are charging more than Best Buy does for the CD-ROM.

I'm doing some independent contract work so no one is taking out taxes. How much do I need to pay? How do I do it?

If you download Form 1040-ES, you will get the vouchers on the bottom. It also comes with about 11 pages of instructions, tables, guides, and worksheets to help you decide how much you will owe. You will pull out your hair if you try to absorb all of it. Your goal is to not hit the nail in the head, but rather somewhere in the ballpark. If you pay 25% to 30% of your profits in estimated taxes, you will probably do that. If you are on the lower end of the income spectrum and/or qualify for a bunch of tax credits, you can be on the 25% side of things. If you are on the higher end, especially if you don't have much in the way of credits and deductions, you may want to think about a third. Concerning how much to send in when, your two options for not getting in trouble are to send in 4 equal payments or if you send unequal payments, they have to match your income through the year. The alternative is if you are an employee somewhere, you can have them take out extra to cover your side gig.

I had to buy [fill in the blank] for my job and they didn't pay me back for it. Can I write it off

In theory yes. Maybe. Probably not. You would use Form 2106. You have three obstacles to overcome before you can. First. These expenses need to exceed 2% of your AGI. This is a lot. If you make $50,000, that means the first $1000 you don't get to claim. Second, you have to itemize your taxes. The amount that exceeds 2% goes onto Schedule A, and if the net result (combined with your other itemized deductions) exceeds your standard deduction, then go for it. Third, 2% deductions are an AMT preference item so if you are subject to alternative minimum tax you won't actually get any benefit even if you have more than 2% of your income to deduct and itemize.

I asked a question and was told to go hire a professional to help me! I just wanted you to answer my question for free and not have to pay someone. You guys are all jerks!

Please recognize that many of the people who answer questions in this thread (including myself) do this professionally for a living and are participating out of the kindness of our little accountant hearts. Some topics are simply too complex to go into over an internet forum, or require a lot of experience and expertise to answer properly. If you are told that this is the case for your question, I assure you we are (probably) not just being jerks, and that you probably really need to go seek professional assistance.

DISCLAIMER: Please note that this OP is not meant to be an all encompassing guide to how to do your taxes. It barely scratches the surface on the very basics. All information given in this thread by definition came from a goon, and therefore should be used for entertainment value only, and no one may be held responsible for messing up your life if you choose to follow it. That is especially true if the person giving you advice doesn't like you.

furushotakeru fucked around with this message at 01:26 on Feb 15, 2019

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Casull
Aug 13, 2005

:catstare: :catstare: :catstare:
Might as well get the ball rolling:

I'm using FreeTaxUSA to file my forms, and I believe I paid 9.95 last year to file my state forms (CA, if it matters) and 5.95 for Deluxe in the event I was audited for whatever reason. I vaguely remember a section that asked if I had paid any fees last year, though I can't remember it at the moment. Would the money I paid for deluxe/state return count as those fees?

Captain Beans
Aug 5, 2004

Whar be the beans?
Hair Elf
They go on schedule A and count as tax prep fees.

If you use the standard deduction you don't need to worry about them.

scribe jones
Sep 17, 2008

One of the key problems in the analysis of this puzzling book is to be able to differentiate a real language from meaningless writing.

Captain Beans posted:

They go on schedule A and count as tax prep fees.

If you use the standard deduction you don't need to worry about them.

there's also a 2% AGI floor, so he's most likely out of luck twice over :)

entris
Oct 22, 2008

by Y Kant Ozma Post
lovin' the new OP, that's pretty great work guys.

Jows
May 8, 2002

In 2010 I was without a job and drawing unemployment for the entire calendar year. When I lost my job I stopped my automatic savings into my ING account and told Fidelity to skip several of the upcoming months for automatic deductions into my Roth IRA, thinking the time I gave myself to "skip" was more than sufficient for me to find a job. I generally ended up forgetting about it though until I saw the deduction notice in my bank account. This happened a few times throughout the year, as I was always more overconfident in my ability to find work than reality allowed.

What this boils down to is I made mistakenly made $1200 worth of Roth IRA contributions when I had no earnings in the year and my only income was from unemployment. I always do my taxes myself, but I plugged everything into turbotax for shits and grins this year and it told me this is a no-no (Roth IRA contributions being maxed at earnings up to $5k). Is there an easy fix for this or do I need to talk to someone?

furushotakeru
Jul 20, 2004

Your Honor, why am I pink?!

Jows posted:

In 2010 I was without a job and drawing unemployment for the entire calendar year. When I lost my job I stopped my automatic savings into my ING account and told Fidelity to skip several of the upcoming months for automatic deductions into my Roth IRA, thinking the time I gave myself to "skip" was more than sufficient for me to find a job. I generally ended up forgetting about it though until I saw the deduction notice in my bank account. This happened a few times throughout the year, as I was always more overconfident in my ability to find work than reality allowed.

What this boils down to is I made mistakenly made $1200 worth of Roth IRA contributions when I had no earnings in the year and my only income was from unemployment. I always do my taxes myself, but I plugged everything into turbotax for shits and grins this year and it told me this is a no-no (Roth IRA contributions being maxed at earnings up to $5k). Is there an easy fix for this or do I need to talk to someone?

Your Roth custodian should be able to undo your contributions for the year if you contact them and let them know that you put more in than you were allowed. If you do this by 4/18 you should not be penalized for the contributions, but will pay tax and penalty on any earnings.

Jows
May 8, 2002

furushotakeru posted:

Your Roth custodian should be able to undo your contributions for the year if you contact them and let them know that you put more in than you were allowed. If you do this by 4/18 you should not be penalized for the contributions, but will pay tax and penalty on any earnings.

Okay, that doesn't seem so bad. Thanks for the quick response. I'm glad I didn't wait until April 12ish to do my taxes this year like usual :)

Viral Warfare
Aug 4, 2010

~~a n d I a m c a l m~~
When do trusts have to legally send K-1 forms out by? I still haven't gotten mine and it's peeving me off.

AbbiTheDog
May 21, 2007

Jethro Tull posted:

When do trusts have to legally send K-1 forms out by? I still haven't gotten mine and it's peeving me off.

Depends on what month the trust ends on (maybe December, maybe not). If it's a December year-end, you might not get your K-1 until september, and they've got the legal right to do so.

Ask the trustee to check with their CPA and get an estimate.

Viral Warfare
Aug 4, 2010

~~a n d I a m c a l m~~

AbbiTheDog posted:

Depends on what month the trust ends on (maybe December, maybe not). If it's a December year-end, you might not get your K-1 until september, and they've got the legal right to do so.

Ask the trustee to check with their CPA and get an estimate.

Does that mean I'm going to need to get an extension, or what?

Kwik
Apr 4, 2006

You can't touch our beaver. :canada:

Jethro Tull posted:

Does that mean I'm going to need to get an extension, or what?

You could always file without the K-1 and amend later once you receive it, depending on what sort of an effect that the K-1 will have on the return. Remember though, the extension is only an extension to file, not to pay. If you are going to owe, you do have to pay that by April 18th, lest you owe penalties and/or interest.

Viral Warfare
Aug 4, 2010

~~a n d I a m c a l m~~

Kwik posted:

You could always file without the K-1 and amend later once you receive it, depending on what sort of an effect that the K-1 will have on the return. Remember though, the extension is only an extension to file, not to pay. If you are going to owe, you do have to pay that by April 18th, lest you owe penalties and/or interest.

I know at this point that without the K-1, I won't have to file. I'm pretty close to the limit, though (I've made about 8.5k in scholarships and stuff, not W-2 income per se but still taxable). So if the K-1 on a 50k irrevocable trust puts me above 9.5k (or whatever it is this year), then I will have to file. So it's sort of a sticky situation.

AbbiTheDog
May 21, 2007

Jethro Tull posted:

I know at this point that without the K-1, I won't have to file. I'm pretty close to the limit, though (I've made about 8.5k in scholarships and stuff, not W-2 income per se but still taxable). So if the K-1 on a 50k irrevocable trust puts me above 9.5k (or whatever it is this year), then I will have to file. So it's sort of a sticky situation.

Depends on whether the trust is "simple" or "complex" (this can change from year to year). Also depends on how much in withdrawals were taken during the year that would "push out" the trust income to your personal return.

Viral Warfare
Aug 4, 2010

~~a n d I a m c a l m~~

AbbiTheDog posted:

Depends on whether the trust is "simple" or "complex" (this can change from year to year). Also depends on how much in withdrawals were taken during the year that would "push out" the trust income to your personal return.

Well, I received a one-time deposit for $50,000 last year from the trust, around July. I receive these deposits every three years after my eighteenth birthday. The actual trust itself is in the $200,000 range, I think - does that lump sum amount (the $50,000) count as income with either a simple or a complex trust? Or would it only be a fraction of that amount?

Dogcow
Jun 21, 2005

I moved from New York state to Illinois while keeping the same job but my employer took forever to switch my tax status over to Illinois so for the last two months of 2010 I was living and working in Illinois but my paycheck still said New York. I only have a W-2 for NY, not for IL.

So I know you're supposed to report all income in both states if you moved and are filing as a part year resident however I have no W-2 for IL. Do I have to get a separate W-2 from my employer for IL? Is that even possible after the fact like this when I've already received the paychecks and have paid withheld tax to NY?

My other theory as to this mess is that since I was still considered to be based out of the NY office (for the last 2 months of the year I was actually living in IL) that means I file a part year return and a non-resident return for NY. If that's the case what do I file for IL? Can I simply report the income to IL and have it credited as tax paid already paid to NY without having a W-2 for IL?

I'm using TaxSlayer for the state returns and it was fine last year but when I just do all the forms for it (entering my NY W-2) I get what appears to be the correct tax for NY but $0 owed to IL. I'm doubting it's doing everything right given the situation but that's what I get with using what I assume is the correct forms (part year resident).

entris
Oct 22, 2008

by Y Kant Ozma Post

Jethro Tull posted:

Well, I received a one-time deposit for $50,000 last year from the trust, around July. I receive these deposits every three years after my eighteenth birthday. The actual trust itself is in the $200,000 range, I think - does that lump sum amount (the $50,000) count as income with either a simple or a complex trust? Or would it only be a fraction of that amount?

Distributions from trusts can be income for you, or they can be non-taxed distributions of "principal" or "corpus." The answer revolves around something called "distributable net income" (DNI), and you really don't want to try and figure out the rules for that. That's your trustee's job (or, really, the job of the accountant handling the trust accounting.)

On your K-1, your trustee should clearly delineate how much of the distribution is taxable income to you, and how much is a non-taxable distribution of principal/corpus.

Jd7154
Jul 15, 2004
Alright I have kind of a weird situation right now. I already filled out my taxes for both federal and state, took the standard deduction and got my refund. But I was talking to a friend and he gave me some advice and told me I should amend both this year and last years taxes. So heres the story:

I was in college until June 2009 at which time I got a job with my current company. My position was to work for 1 year overseas doing 4 90 day trips with about 1 week in between each trip back working in the US office that I am employeed by. The company said they were classifying these as business trips to avoid having to get me a work visa(pretty sure this was illegal in the country I was visiting, but didn't violate and US laws), and instead of getting a 2000 moving allowance I was originally promised, I got a 2000 total classified as per diem expenses for the first 90 day trip, and got no other money from the company for the entirety of the trip. My friend used to be a business accountant, hes in law school now, he told me that I should be able to write off the rent I paid overseas(500 euro a month for 6 months in 2009, and 6 months in 2010) and take the standard daily deduction for meal allowance from the irs website and multiply it by each day I was abroad and take that as a business expense as well. Doing this gives me about 10k of meal expenses and 4k of living expenses to write off for both 2009 and 2010. Does this sound legitimate? What would I need to prove the per diem, just proof of plane tickets for those dates bought by my company? What about my rent?

To complicate things I moved from MD to DC in October and never updated my residency, I wasnt really worried about it since it was only 3 months of getting paid, But if I'm ammending two years of taxes I figure I should probably make sure I get this right because I'd imagine the chance of an audit is rather high. I read MD and DC have tax reciprocity or something to prevent me from getting double taxed, but I assume that just means that I will have to get the 3 months of extra MD taxes I paid back and pay them to DC but not have to pay them both, is this correct? Somewhat relatedly, if I pay taxes in DC can I still keep my permanent residence as my parents home MD? Most of my posessions are still there and my car is registered to that address as well, I don't really want to change all of my things to DC since I plan on moving back to MD in August or September.

Any advice would be appreciated, I may end up taking this to an actual tax specialist since this does seem to be reasonably complicated and 100 bucks or so vs the thousands of difference I may get in refunds seems to be worth it. The last two years I did my taxes using turbo tax online for free, would going to an h&r block office be a good idea since they most likely have access to all that data?

Zeta Taskforce
Jun 27, 2002

Jd7154 posted:

Alright I have kind of a weird situation right now. I already filled out my taxes for both federal and state, took the standard deduction and got my refund. But I was talking to a friend and he gave me some advice and told me I should amend both this year and last years taxes. So heres the story:

I was in college until June 2009 at which time I got a job with my current company. My position was to work for 1 year overseas doing 4 90 day trips with about 1 week in between each trip back working in the US office that I am employeed by. The company said they were classifying these as business trips to avoid having to get me a work visa(pretty sure this was illegal in the country I was visiting, but didn't violate and US laws), and instead of getting a 2000 moving allowance I was originally promised, I got a 2000 total classified as per diem expenses for the first 90 day trip, and got no other money from the company for the entirety of the trip. My friend used to be a business accountant, hes in law school now, he told me that I should be able to write off the rent I paid overseas(500 euro a month for 6 months in 2009, and 6 months in 2010) and take the standard daily deduction for meal allowance from the irs website and multiply it by each day I was abroad and take that as a business expense as well. Doing this gives me about 10k of meal expenses and 4k of living expenses to write off for both 2009 and 2010. Does this sound legitimate? What would I need to prove the per diem, just proof of plane tickets for those dates bought by my company? What about my rent?

To complicate things I moved from MD to DC in October and never updated my residency, I wasnt really worried about it since it was only 3 months of getting paid, But if I'm ammending two years of taxes I figure I should probably make sure I get this right because I'd imagine the chance of an audit is rather high. I read MD and DC have tax reciprocity or something to prevent me from getting double taxed, but I assume that just means that I will have to get the 3 months of extra MD taxes I paid back and pay them to DC but not have to pay them both, is this correct? Somewhat relatedly, if I pay taxes in DC can I still keep my permanent residence as my parents home MD? Most of my posessions are still there and my car is registered to that address as well, I don't really want to change all of my things to DC since I plan on moving back to MD in August or September.

Any advice would be appreciated, I may end up taking this to an actual tax specialist since this does seem to be reasonably complicated and 100 bucks or so vs the thousands of difference I may get in refunds seems to be worth it. The last two years I did my taxes using turbo tax online for free, would going to an h&r block office be a good idea since they most likely have access to all that data?

I don’t know if anyone else wants to take a stab at what you can deduct and what you are eligible for, but H&R Block or for that matter, no professional preparer will be able to pull up your information from Turbo Tax or whatever you did last year and this year. You have a specialized situation, a lot of time could be involved, and I would expect to pay more than $100 for someone to amend these returns. I used to work for Block, and it gets a reputation as the supercuts of tax prep, but there are people there that can handle these returns, but perhaps not in every office, so you will need to call ahead to make sure your situation is properly matched with the skills of the tax professional. My other advice is that they are not as busy now as they will be 3 weeks from now, or 5 weeks from now so get it taken care of now. Or wait until after April 15th . It will be less hectic. You have 3 years to amend this years, 2 years to amend last years.

Hufflepuff or bust!
Jan 28, 2005

I should have known better.
Before Furu can get to it: tax specialist. The DC/MD thing is kind of a pain in the butt, but I think you basically have it right. Your amended return will reduce your MD tax burden and result in a refund, and when you file in DC you'll tell them how much you paid to MD for what months, and they'll reduce your tax by same (I did this for this year...basically told DC to exclude income earned in MD, and MD to exclude income earned while in DC).

Zeta Taskforce
Jun 27, 2002

Since I wrote most of the OP, I'm going to ask of all things a Turbo Tax question!

I zipped through virtually my entire return last night without incident. Everything ground to a halt the moment I had to enter prior year depreciation on my rental. Turbo tax is trying to walk me through calculating my basis. If I know that it is for example $229,947, and I know I am entitled to take lets just say $8362, and I know my prior is $12,195 is there any difference between just saying the original basis is $229,947 and it is used 100% for business? Or do I need to fight with their little wizard thing and put in the original purchase price, additions to basis, the land, the 71.23% that I am renting out, and fight with it until I get $229,947?

OR AM I RAVING MAD RIGHT NOW AND NEED TO TAKE A loving HAPPY PILL?!!!!!

Admiral101
Feb 20, 2006
RMU: Where using the internet is like living in 1995.
Client received a tax notice over a 1099-Q for a state QTP distribution. The recipient of the 1099Q is not the beneficiary, and I'm not sure why she's receiving a notice claiming that she owes tax. Even if the distribution wasn't used for educational purposes (which it was), the tax/penalty is the burden of the beneficiary - not the benefactor.

Any of you have a clue on what the deal is? Now that I think about it, how does the IRS even know who the beneficiaries are? The social security numbers aren't listed on the 1099's.

AbbiTheDog
May 21, 2007

Admiral101 posted:

Client received a tax notice over a 1099-Q for a state QTP distribution. The recipient of the 1099Q is not the beneficiary, and I'm not sure why she's receiving a notice claiming that she owes tax. Even if the distribution wasn't used for educational purposes (which it was), the tax/penalty is the burden of the beneficiary - not the benefactor.

Any of you have a clue on what the deal is? Now that I think about it, how does the IRS even know who the beneficiaries are? The social security numbers aren't listed on the 1099's.

Probably because when it was setup she listed herself as the beneficiary. Probably need to copy the tuition paid, statements, etc. and respond to the CP-2000.

AbbiTheDog
May 21, 2007

Zeta Taskforce posted:

Since I wrote most of the OP, I'm going to ask of all things a Turbo Tax question!

I zipped through virtually my entire return last night without incident. Everything ground to a halt the moment I had to enter prior year depreciation on my rental. Turbo tax is trying to walk me through calculating my basis. If I know that it is for example $229,947, and I know I am entitled to take lets just say $8362, and I know my prior is $12,195 is there any difference between just saying the original basis is $229,947 and it is used 100% for business? Or do I need to fight with their little wizard thing and put in the original purchase price, additions to basis, the land, the 71.23% that I am renting out, and fight with it until I get $229,947?

OR AM I RAVING MAD RIGHT NOW AND NEED TO TAKE A loving HAPPY PILL?!!!!!

Holy crap, what a pain in the butt. I'd do it right, since you don't want have to argue why the basis is changing from year-to-year if audited. Or you might change the percentage down the road and need the official amounts.

furushotakeru
Jul 20, 2004

Your Honor, why am I pink?!
I agree - best to do it right, sorry.

Zeta Taskforce
Jun 27, 2002

I figured. In a way, it wouldn't matter this year. Form 4562 would be the same either way. But yeah, if I ever converted some part or moved to a different part of the house...I know.

silvergoose
Mar 18, 2006

IT IS SAID THE TEARS OF THE BWEENIX CAN HEAL ALL WOUNDS




So I'm living with my girlfriend, and I'm providing all of the income. From what I can see, I can claim her as a dependent if:

She's lived with me for the entire 2010 calendar year
I provide more than 50% of the income
She makes less than the standard deduction (none, in fact)
She's not claimed as a dependent by anyone else
She's a US citizen
She has no joint returns with anyone
No state or local laws against cohabitation

She qualifies for all of these. Two questions:

Does she have to file, with no income?
I already filed my return, so I'll have to file an amendment...will this complicate anything, especially with the former question?

Zeta Taskforce
Jun 27, 2002

silvergoose posted:

So I'm living with my girlfriend, and I'm providing all of the income. From what I can see, I can claim her as a dependent if:

She's lived with me for the entire 2010 calendar year
I provide more than 50% of the income
She makes less than the standard deduction (none, in fact)
She's not claimed as a dependent by anyone else
She's a US citizen
She has no joint returns with anyone
No state or local laws against cohabitation

She qualifies for all of these. Two questions:

Does she have to file, with no income?
I already filed my return, so I'll have to file an amendment...will this complicate anything, especially with the former question?

Sounds like she meets all the dependency tests. Filing an amendment isn't that complicated. She is not required to file, so unless there is some reason why she might need to for something else, like if she is going back to school or trying to get some government benefit, there isn't any point.

its all nice on rice
Nov 12, 2006

Sweet, Salty Goodness.



Buglord
I've got a question about paying what I owe off:
I owe about $2,200 this year; can I set up some sort of "multiple payment plan", or do I have to pay it all at once?

Zeta Taskforce
Jun 27, 2002

Pope Mobile posted:

I've got a question about paying what I owe off:
I owe about $2,200 this year; can I set up some sort of "multiple payment plan", or do I have to pay it all at once?

You can do a payment agreement with the IRS, but it is so stacked against you, you would do better getting a loan somewhere. You would do better getting a cash advance on a credit card if it came to that.

Analytic Engine
May 18, 2009

not the analytical engine
Is there a good resource for tax questions regarding graduate student stipends and graduate/undergraduate scholarships? My old university was incredibly unhelpful on this front, and I don't expect great things from my new program. Or should I just ask the IRS directly and save myself some fretting over the uncertainty?

furushotakeru
Jul 20, 2004

Your Honor, why am I pink?!

Zeta Taskforce posted:

You can do a payment agreement with the IRS, but it is so stacked against you, you would do better getting a loan somewhere. You would do better getting a cash advance on a credit card if it came to that.

I dunno about that, cash advances usually carry a 3% service charge and 30% interest, and even the IRS isn't that draconian. If he wants to pay with a credit card he should just do so - same 3% service charge but ordinary interest rates.

furushotakeru
Jul 20, 2004

Your Honor, why am I pink?!

Analytic Engine posted:

Is there a good resource for tax questions regarding graduate student stipends and graduate/undergraduate scholarships? My old university was incredibly unhelpful on this front, and I don't expect great things from my new program. Or should I just ask the IRS directly and save myself some fretting over the uncertainty?

There is decent information available at http://fingate.stanford.edu/students/taxinfo/tax_citizen_residalien.html, and it isn't necessarily specific to Stanford.

entris
Oct 22, 2008

by Y Kant Ozma Post

Analytic Engine posted:

Is there a good resource for tax questions regarding graduate student stipends and graduate/undergraduate scholarships? My old university was incredibly unhelpful on this front, and I don't expect great things from my new program. Or should I just ask the IRS directly and save myself some fretting over the uncertainty?

Maybe read through the scholarship portion of http://www.irs.gov/publications/p970/ch01.html

Zeta Taskforce
Jun 27, 2002

furushotakeru posted:

I dunno about that, cash advances usually carry a 3% service charge and 30% interest, and even the IRS isn't that draconian. If he wants to pay with a credit card he should just do so - same 3% service charge but ordinary interest rates.

Unfortunately that’s probably true in a lot of cases. My primary job is managing the day to day operations of my credit union’s credit card program. We charge 10.25% and no fees for cash advances on platinum. Even our classic isn’t that bad at 14.99%, still no fees. To me that seems high, but I often forget how truly awful a lot of the big banks are.

AbbiTheDog
May 21, 2007

Zeta Taskforce posted:

Unfortunately that’s probably true in a lot of cases. My primary job is managing the day to day operations of my credit union’s credit card program. We charge 10.25% and no fees for cash advances on platinum. Even our classic isn’t that bad at 14.99%, still no fees. To me that seems high, but I often forget how truly awful a lot of the big banks are.

Considering he can't scrape up the $2k he owes, I'm going to venture he might not have a platinum card.

Dixon Cider
Oct 21, 2008

Pope Mobile posted:

I've got a question about paying what I owe off:
I owe about $2,200 this year; can I set up some sort of "multiple payment plan", or do I have to pay it all at once?

The IRS will let you set up a payment plan that pays it off over as long as five years without a whole lot of work on your part with that small of a debt. You really just need to send in a Form 9465:

http://www.irs.gov/pub/irs-pdf/f9465.pdf

Zeta Taskforce posted:

You can do a payment agreement with the IRS, but it is so stacked against you, you would do better getting a loan somewhere. You would do better getting a cash advance on a credit card if it came to that.

I completely disagree. The IRS charges interest rates that fluctuate based on the Federal Reserve short-term rate, so right now they are pretty drat low (4%). As long as you file your return on time, you can avoid the late filing penalty which is the big one (5% for every month that it's late).

So, let's say you can pay off your $2,200 bill over one year. You're going to pay 0.5% late payment penalty per month, so 6% penalty for the entire year ($132). And you're going to pay 4% interest on both the principal and penalty, compounded daily.

If you can pay it in a year, you'll pay a total of around $2,427. That's an effective interest rate, even taking the penalty into account, of just over 10.3%. I seriously doubt a credit card can beat that, especially on a cash advance.

Just don't get a late filing penalty, that makes it much more expensive! :)

furushotakeru
Jul 20, 2004

Your Honor, why am I pink?!
Well to be fair you should probably also factor in the installment agreement fee of $105 ($52 if you agree to have the payments auto debited from a bank account rather than mailed in by check), which brings the effective cost to 15.1% or 13.6%, respectively (using your figures). Which is still a lot cheaper than a cash advance for the majority of credit cards.

Dixon Cider
Oct 21, 2008
True, fair enough. I'm used to that $105 being inconsequential, but with this small of a debt it makes a difference. :)

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its all nice on rice
Nov 12, 2006

Sweet, Salty Goodness.



Buglord
Hmm, thanks for the info. The smart thing to do would be tightening my belt and paying it all off.

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